Garza v. Winco Holdings, Inc.

Docket Number1:20-cv-01354-JLT-HBK
Decision Date28 March 2022
PartiesEVERARDO GARZA JR., on behalf of himself and all others similarly situated, Plaintiff, v. WINCO HOLDING, INC. dba WINCO FOODS, an Idaho Corporation; and DOES 1-50, inclusive, Defendants.
CourtU.S. District Court — Eastern District of California

(Docs. 7, 10)


Everardo Garza asserts WinCo Holdings violated California employment laws and failed to pay all wages due to employees. Garza seeks to hold WinCo liable for the violations, stating claims on behalf of himself and other similarly situated, non-exempt employees. (See generally Doc. 2 at 22-42.)

Garza asserts the action was not properly removed from the state court, and WinCo fails to show the Court has jurisdiction pursuant to the Class Action Fairness Act, 28 U.SC. § 1332(d), or the Labor Management Relations Act. (Doc. 10.) WinCo opposes the request for remand and seeks dismissal of the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim. (Doc. 7.) For the reasons set forth below, the motion to remand is DENIED, and the complaint is DISMISSED with leave to amend.


Garza filed his original complaint, on behalf of himself and similarly situated employees, in the Superior Court of California, in Stanislaus County, on August 21, 2020. (Doc. 2 at 22-42.) Garza asserts seven causes of action arising under California state law including: (1) failure to pay overtime wages in violation of California Wage Orders and Labor Code §§ 204, 510, 558, 1194, and 1198; (2) failure to pay minimum wages in violation of Labor Code §§ 1194, 1197 and 1182.12; (3) rest period violations under Wage Orders and Labor Code § 226.7 and 516; (4) failure to provide accurate itemized wage statements in violation of Labor Code § 226; (5) waiting time penalties under Labor Code §§ 201, 202, and 203; (6) unfair competition under California Business and Professional Codes §§ 17200, et seq.; and (7) civil penalties under the Private Attorneys General Act pursuant to Labor Code § 2698. (Id.)

Garza's claims arise from his employment as a non-exempt employee at WinCo, which operates grocery stores and a distribution and transportation network across California. (Id. at 25.) Garza alleges WinCo imposed a rounding policy when accounting for employee work hours. (Id.) This rounding policy allegedly resulted in both unpaid regular hours worked and overtime hours. (Id. at 25-26.) For the overtime hours which WinCo did account for, Garza also alleges WinCo improperly calculated the overtime rate. (Id. at 26.) Garza further contends WinCo failed to pay Garza and other non-exempt employees non-discretionary bonus payments related to overtime hours worked. (Id.)

With respect to the rest period violations, Garza alleges WinCo failed to provide the required rest breaks for non-exempt employees because they were “often unable to take uninterrupted, duty-free rest periods due to the operating requirements of the job.” (Id. at 28.) Garza contends Defendants did not authorize and permit Plaintiffs and members of the Classes to take any rest periods to which they were legally entitled.” (Id. at 35.)

Garza asserts WinCo's rounding and rest period policies resulted in the providing of inaccurate itemized wage statements and waiting time penalties under the California Labor Code, giving rise to its fourth and fifth cause of action, respectively. (Id. at 36-38.) Garza's sixth and seventh causes of action provide an additional basis of recovery for these allegedly unlawful employment practices. (Id. at 38-39.)

On September 23, 2020, WinCo timely removed the case to federal court. (Doc. 2.) WinCo asserts the Court has subject matter jurisdiction over all claims under the Class Action Fairness Act (“CAFA”). (Id. at 2.) WinCo also contends original federal jurisdiction exists for Garza's claim related to overtime wages under the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, and supplemental jurisdiction pursuant to 28 U.S.C. § 1367. (Id.)

On October 7, 2020, WinCo moved to dismiss all claims for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (Doc. 7 at 2.) WinCo contends Garza's first cause of action is preempted and subject to dismissal under the LMRA because Garza's employment was governed by a collective bargaining agreement (“CBA”). (Id. at 2-7.) For Garza's remaining causes of action, WinCo contends the complaint is not sufficiently plead. (Id. at 14-22.) Garza filed his opposition to the motion on October 21, 2020 (Doc. 9), to which WinCo filed its reply on October 28, 2020 (Doc. 12).

On October 22, 2020, Garza filed a motion to remand to state court contending that his overtime claim is not preempted by the LMRA, and WinCo has not shown the amount in controversy exceeds the jurisdictional threshold under 28 U.S.C. § 1332(d)(2). (Doc. 10.) WinCo filed its opposition to the motion on November 5, 2020 (Doc. 14), to which Garza filed a reply on November 12, 2020 (Doc. 15).[1]

The Court will first address the challenge to its jurisdiction. Finding federal subject matter jurisdiction does exist, the Court subsequently will address the motion to dismiss.

A. Elison Declaration

With its notice of removal, WinCo submitted a declaration from its payroll manager, Robert Elison. (Doc 2-1 at 1-4.) WinCo relies on the Elison Declaration to support its calculations for the amount the in controversy and to authenticate the two CBAs submitted by WinCo. (Doc. 2 at 8-10, 13.) Mr. Elison explains he has access to the electronic payroll system and electronic databases used to maintain records for WinCo's employees. (Doc. 2-1 at 2.) Mr. Elison searched and filtered the data, for selected employees and timeframes, to determine the average hourly rates, number of workweeks and pay periods, average shift length, and number of shifts. (Id.) From the databases, Mr. Elison also determined the number of employees terminated from WinCo during August 21, 2017, to September 14, 2020, in accordance with statutory period of relief for Garza's waiting time penalty claim. (Id. at 3.)

Garza objects to WinCo's reliance on the Elison declaration because Mr. Elison “merely relies on his access to Winco's [sic] records and ‘using various search and filter functions' but “fails to explain what electronic payroll information and data was used.” (Doc. 10 at 17-18; citing Doc. 2-1 at 2.) Although Mr. Elison did not identify the payroll software by name, it does not appear this information is relevant. Rather, the Court finds the information provided-namely that Mr. Elison had access to the systems and set appropriate data filters-was sufficient. See Byrd v. Masonite Corp., No. EDCV 16-35 JGB (KKX), 2016 WL 2593912, at *2 n.4 (C.D. Cal. May 5, 2016) (finding sufficient evidence from a declaration of an employee who accessed defendant's records and ran queries that defendant “ordinarily rel[ies] upon in the course of business” to identify relevant class members). Moreover, [t]here is no obligation by defendant to support removal with production of extensive business records to prove or disprove liability and/or damages.” Muniz v. Pilot Travel Centers, LLC, No. CIV. S-07-0325 FCD EFB, 2007 WL 1302504, at *4-5 (E.D. Cal. May 1, 2007) (finding a defendant is not required to submit the “underlying documents which support its [amount-in-controversy] calculations”). Thus, Garza's objections are overruled. See Ibarra, 775 F.3d at 1197 (indicating a defendant may submit declarations to support its estimates).

B. Collective Bargaining Agreements

With its notice of removal, WinCo also submitted two CBAs, which it contends governed the entire relevant term of employment for which Garza seeks relief. (Doc. 2 at ¶ 44; Doc. 2-1 at 5-45 (Exhibit A to Elison Declaration), 46-82 (Exhibit B to Elison Declaration).) The first CBA, attached as Exhibit A to the notice of removal, pertains to the employment period from August 11, 2014, through August 10, 2019. (Id. at 6.) The second CBA, attached as Exhibit B, covers employment from August 11, 2019, through August 10, 2024. (Id. at 47.) Both CBAs contain similar provisions for employees' wage scale (Doc. 2-1 at 36, 44, 73, 81); hours of work, including pay differentials for overtime pay (Doc. 2-1 at 13-16, 53-55); and various sections outlining working conditions for employees, such as nondiscrimination provisions, terms for lunch and rest periods, vacations, and absences (Doc. 2-1 at 12-25, 52-69). WinCo relies on the information contained in these two CBAs in its motion to dismiss and in its opposition to Garza's motion for remand. (See, e.g., Doc. 7-1 at 10, Doc. 14 at 11 n.4.)

WinCo requests the Court take judicial notice of these CBAs in support of its motion to dismiss. (Doc. 7-2.) Garza, in his opposition, did not address WinCo's request for judicial notice of the CBAs. (See generally, Docs. 9, 10 15.) To the extent Garza's argument that Defendant improperly relies on outside documents, including various Collective Bargaining Agreements” (Doc. 9 at 8) may be construed as an evidentiary objection, this argument fails. Courts regularly take judicial notice of collective bargaining agreements on a motion to dismiss when the documents are “not subject to reasonable dispute.” See, e.g. Jones v. AT & T, No. C 07-3888 JF, 2008 WL 902292, *2 (N.D. Cal. Mar. 31, 2008) (“relevant case law supports the proposition that the Court may take judicial notice of a CBA in evaluating a motion to dismiss); Garcia v. Wine Grp., LLC, No. 1:19-cv-01222-DAD-JDP, 2020 WL 6445023, at *2, n.2 (E.D. Cal. Nov. 3, 2020) (citing Jones and taking...

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