Greer v. Gas

• Decision Date: 28 December 2015
• Docket Number: Case No. 1:15-cv-01066-EPG
• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
• Parties: BECKY GREER, TIMOTHY C. BUDNIK, ROSARIO SAENZ, and IAN CARTY, individually and as class representatives, Plaintiffs, v. PACIFIC GAS AND ELECTRIC COMPANY, and DOES 1 through 10, inclusive, Defendants.

BECKY GREER, TIMOTHY C. BUDNIK, ROSARIO SAENZ,and IAN CARTY, individually and as class representatives, Plaintiffs, v. PACIFIC GAS AND ELECTRIC COMPANY,and DOES 1 through 10, inclusive, Defendants.

Case No. 1:15-cv-01066-EPG

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

December 28, 2015

ORDER RE: DEFENDANT PACIFIC GAS AND ELECTRIC COMPANY'S MOTION TO DISMISS

(ECF No. 13)

I. INTRODUCTION

Defendant Pacific Gas and Electric ("Defendant" or the "PG&E") has moved to dismiss Plaintiffs' First Amended Complaint, which alleges that certain PG&E service representatives were not paid the wage due to them because PG&E failed to adjust their pay scale to reflect their "directly related clerical job experience" as set out in the relevant collective bargaining agreement. Defendant moves to dismiss on the grounds that: (1) Plaintiffs failed to adequately allege that the union representing them breached its duty of fair representation and, absent this allegation, Plaintiff should be bound by the results of the Union grievance process; (2) Plaintiffs' complaint is time barred because it was filed more than six months after Plaintiffs had actual knowledge that they were being underpaid; and (3) Plaintiffs' claims are preempted by 29 U.S.C. § 185(a), or § 301 of the Labor Management Relations Act.

While the Court agrees that certain of Plaintiffs' claims are preempted and should be dismissed, the claim for breach of contract and certain other claims should proceed. Plaintiffs have sufficiently alleged facts indicating that the Union breached its duty of fair representation, including by participating in a process that cherry-picked certain resumes and inadequately investigated prior work experience, and by refusing to continue the grievance process to later stages including a hearing. Such an allegation need not be in a separate cause of action, and the Court finds that the factual allegations are sufficient to raise this issue.

In any event, Defendants are incorrect that such an allegation is needed in order to proceed with Plaintiffs' breach of contract claim. Whether a grievance process is meant to be final, precluding any judicial oversight, is based on terms of the collective bargaining agreement itself. Here, where the grievance process was cut-off after only the initial stages, no hearing was held, Plaintiffs were not given any specific reason why their individual grievances were denied, and the agreement states that decisions at this stage are "without prejudice to the position of either party," the Court cannot find at the pleading stage that the result of this grievance process was intended to bind all Plaintiffs without appeal to the Courts.

Plaintiffs' claims are also not barred by the statute of limitations because Plaintiffs filed the case within six months of learning that the Union was halting the grievance process and no longer pursuing additional pay for Plaintiffs. Defendants are incorrect in their assertion that the six month statute of limitations for challenging results of a collective bargaining agreement process began to run upon learning that Plaintiffs were not paid what they believed to be owed. Plaintiffs were required to exhaust their remedies under the Collective Bargaining Agreement first. Here, PG&E continued to work with the Union and adjust pay for certain employees through May 2015 and Plaintiffs filed within six months of the conclusion of the grievance process.

Finally, some, but not all, of Plaintiffs' claims are preempted by § 301. While the precise boundaries of § 301 preemption are not clearly drawn, the Ninth Circuit has routinely found state claims that are "substantially dependent" on a collective bargaining agreement preempted. Thus,Plaintiffs' claims are preempted to extent they rest on rights conferred by the collective bargaining agreement or require significant interpretation of the collective bargaining agreement for their resolution. That said, the primary claim for breach of the collective bargaining agreement is properly before this Court.

II. BACKGROUND

This is a case involving unpaid wages and the breach of a collective bargaining agreement. Plaintiffs worked for PG&E as Customer Service Representatives in PG&E's Customer Contact Centers in Fresno, San Jose, and Sacramento. At the time they applied for their jobs, PG&E was advertising Customer Service Representative I positions as receiving pay at the rate of $23.88 per hour. When making job offers to Plaintiffs, however, PG&E informed them that the starting rate of pay would be only $18.36 per hour. PG&E informed Plaintiffs that because of Plaintiffs' previous call center experience, however, they could qualify for higher rates of pay. Plaintiffs accepted the offers.

As Customer Service Representatives, Plaintiffs' wage rates were governed, in part, by a collective bargaining agreement between PG&E and the International Brotherhood of Electrical Workers (the "CBA"). Under the terms of the CBA, Customer Service Representatives received different wage rates depending on the amount of "directly related clerical job experience" they possessed as measured in six month intervals. For example, a representative who possessed between six to twelve months of "directly related clerical job experience" would be paid "at the 6-month rate of the applicable clerical classification," while employees with between twelve to eighteen months of "directly related clerical job experience" would be paid at the "one-year rate of the applicable clerical classification." (First Amended Complaint (the "FAC") ¶ 39, ECF No. 12.) Plaintiffs contend that, based on the amount of directly related clerical job experience they possessed, they should have been paid at the $23.88 per hour rate, rather than the $18.36 per hour rate.

In November 2013, in response to a grievance related to the definition of "directly related clerical job experience," the Review Committee of the International Brotherhood of ElectricalWorkers (the "Union") issued a letter clarifying the application of the pay scale system.¹ In particular, the letter explained that PG&E had been erroneously applying the system by defining "directly related clerical job experience" as only experience that had been obtained working as a Customer Service Representative at PG&E within the past twelve months. Instead, the Review Committee found, PG&E should have considered, for instance, customer service experience in call centers with other large companies.

PG&E and the Union then began a joint review process to determine whether any existing employees would need to be reclassified based on the new understanding of the CBA's pay scale. PG&E and the Union began this process by determining how much money PG&E was willing to spend and "pre-selecting" which employees would receive that money under the new classification scheme. The joint review process did not include interviews with affected employees or, according to Plaintiffs, a thorough review of applicant records. Rather, Plaintiffs assert, the joint review only reviewed certain resumes based on key words and assessed eligibility for reclassification without any other investigation. In December 2014, PG&E issued settlement payouts for back pay to 30 Customer Service Representatives. Notably, this was the first time that Plaintiffs were notified of the review process.

After complaints from Plaintiffs and other employees, PG&E conducted a second round of resume reviews in April 2015. Based on the second round of reviews, PG&E made 100 additional settlement payouts for back pay in May 2015. PG&E then informed Plaintiffs that "the decisions made by the union and company are final" and that no additional payouts would be awarded. Id. at ¶ 56. Plaintiffs allege that they have no further avenues for redress under the CBA, despite the fact that they should have been reclassified and paid based on the new definition of "directly related clerical job experience."

On July 10, 2015, Plaintiffs filed a Complaint on behalf of themselves and a putative class of similarly situated employees. On August 28, 2015, Plaintiffs filed the FAC alleging eleven causes of action:

• First Cause of Action (Breach of Contract);

• Second Cause of Action (Breach of Covenant of Good Faith and Fair Dealing);

• Third Cause of Action (Declaratory Relief);

• Fourth Cause of Action (Failure to Pay Wages in Violation of California Labor Code § 204);

• Fifth Cause of Action (Failure and Refusal to Pay Agreed Wages in violation of California Labor Code §§ 201 et seq.);

• Sixth Cause of Action (Violation of California Labor Code § 216);

• Seventh Cause of Action (Failure to Pay Wages in Violation of California Labor Code §§ 201, 202, and 203)²;

• Eighth Cause of Action (Knowing and Intentional Failure to Comply with Itemized Employee Wage Statement Provisions in Violation of California Labor Code §§ 226(a), 1174, and 1175);

• Ninth Cause of Action (Promissory Fraud in Violation of California Civil Code § 1572(4);

• Tenth Cause of Action (Promissory Estoppel);

• Eleventh Cause of Action (Violation of California Business and Professions Code § 17200 et seq.)

Defendant has now moved to dismiss the FAC under Federal Rule of Civil Procedure 12(b)(6), claiming that: (1) the results of the grievance process should be binding because Plaintiffs have not sufficiently alleged that the Union breached its duty of fair representation; (2) Plaintiffs failed to meet the applicable statute of limitations in bringing their claims; and (3) all of Plaintiffs' claims are pre-empted by the federal Labor Management Relations Act.

On November 19, 2015, the Court heard oral argument on the Motion. Both parties appeared through counsel. After the hearing, both parties submitted supplemental briefing on the issue of federal preemption of Plaintiffs' claims. After reviewing the briefing and for the reasons set forth below and on the record at the hearing, the Court determines that the Motion to Dismiss will be...