Melendez v. San Francisco Baseball Assocs. LLC

• Court: California Supreme Court
• Writing for the Court: Opinion of the Court by Chin, J.
• Citation: Melendez v. San Francisco Baseball Assocs. LLC, 7 Cal.5th 1, 439 P.3d 764, 246 Cal.Rptr.3d 287 (Cal. 2019)
• Decision Date: 25 April 2019
• Docket Number: S245607
• Parties: George MELENDEZ et al., Plaintiffs and Respondents, v. SAN FRANCISCO BASEBALL ASSOCIATES LLC, Defendant and Appellant.

7 Cal.5th 1

439 P.3d 764

246 Cal.Rptr.3d 287

George MELENDEZ et al., Plaintiffs and Respondents,

v.SAN FRANCISCO BASEBALL ASSOCIATES LLC, Defendant and Appellant.

S245607

Supreme Court of California.

April 25, 2019

Sheppard, Mullin, Richter & Hampton, Nancy Pritikin, Palo Alto, Babak Yousefzadeh, San Francisco, Karin Dougan Vogel, San Diego, and Brian S. Fong, San Francisco, for Defendant and Appellant.

Sheppard, Mullin, Richter & Hampton, Richard J. Simmons, Jason W. Kearnaghan, Daniel J. McQueen and Ryan J. Krueger, Los Angeles, for Los Angeles Dodgers LLC, Athletics Investment Group LLC, Padres L.P., and San Jose Arena Management, LLC, as Amici Curiae on behalf of Defendant and Appellant.

Sahag Majarian II, Tarzana; Moss Bollinger and Dennis F. Moss, Los Angeles, for Plaintiffs and Respondents.

Opinion of the Court by Chin, J.

Under California’s labor laws, "[i]f an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately." ( Lab. Code, § 201, subd. (a).) Plaintiffs, security guards at what used to be named AT & T Park in San Francisco and is now named Oracle Park (the park), are suing San Francisco Baseball Associates LLC (the Giants) for allegedly violating this provision. They claim they are discharged after every Giants homestand, at the end of the baseball season, and after other events at the park, and they are entitled under Labor Code section 201 to receive their unpaid wages immediately after each such discharge. The Giants deny that the security guards are discharged on those occasions. They contend that Labor Code section 204, which generally requires semimonthly payment of employees’ wages, applies to the guards.

The merits of this action are not now before us. Rather, we must consider the Giants’ contention that this lawsuit requires interpretation of the collective bargaining agreement (hereafter sometimes CBA) that the guards’ union has entered into with the Giants. If so, this lawsuit is preempted under federal law and must be submitted to arbitration. (See, e.g., Livadas v. Bradshaw (1994) 512 U.S. 107, 114 S.Ct. 2068, 129 L.Ed.2d 93 ( Livadas ).)

We conclude that, although the agreement between the union and the Giants may be relevant to this lawsuit and may need to be consulted to resolve it, the parties’ dispute turns on an interpretation of state law — namely, the meaning of "discharge" under Labor Code section 201 — rather than an interpretation of the agreement itself. Because no party has identified any provision of the agreement whose meaning is uncertain and that must be interpreted to resolve plaintiffs’ claim, this lawsuit is not preempted and state courts may decide it on the merits. We reverse the judgment of the Court of Appeal, which concluded otherwise.

I. FACTUAL AND PROCEDURAL HISTORY

We draw these facts, which are generally undisputed, primarily from the Court of Appeal opinion. ( Melendez v. San Francisco Baseball Associates LLC (2017) 16 Cal.App.5th 339, 224 Cal.Rptr.3d 285 ( Melendez ).)

George Melendez, a security guard at the park, is the lead plaintiff in this putative class action against the Giants. He "contends that he and other security guards were employed ‘intermittingly’ for specific job assignments (baseball games or other events) and were discharged ‘at the end of a homestand, at the end of a baseball season, at the end of an inter-season event like a fan fest, college football game, a concert, a series of shows, or other events,’ and that therefore under Labor Code section 201 [they] were entitled to but did not receive immediate payment of their final wages upon each such ‘discharge.’ " ( Melendez , supra , 16 Cal.App.5th at p. 341, 224 Cal.Rptr.3d 285.) Plaintiffs seek to recover penalties under Labor Code section 203 for the Giants’ failure to pay them immediately after each such discharge.

The Giants contend that the "security guards are not intermittent employees but are ‘year-round employees who remain employed with the Giants until they resign or are terminated pursuant to the CBA.’ " ( Melendez , supra , 16 Cal.App.5th at p. 341, 224 Cal.Rptr.3d 285.) To support this contention, they cite provisions of the agreement entered into between the Giants and the union that represents the security guards, the Service Employees International Union, United Services Workers West of San Francisco. ( Ibid . )

As relevant here, the Giants moved to compel arbitration, arguing that the action is preempted by the Labor Management Relations Act of 1947. The trial court denied the motion. It "held that resolution of the controversy does not require interpretation of the CBA, but simply a determination of whether the security guards are discharged within the meaning of Labor Code section 201 at the conclusion of an event or series of baseball games." ( Melendez, supra , 16 Cal.App. 5th at pp. 345-346, 224 Cal.Rptr.3d 285.) The Giants appealed. (See Code Civ. Proc., § 1294, subd. (a) [an aggrieved party may appeal from "[a]n order dismissing or denying a petition to compel arbitration"].)

The Court of Appeal agreed with the Giants and reversed the order denying the motion to compel arbitration. It explained that, "[a]lthough no provision of the CBA provides an explicit answer, the duration of the employment relationship must be derived from what is implicit in the agreement."

( Melendez , supra , 16 Cal.App.5th at p. 346, 224 Cal.Rptr.3d 285.) It cited numerous provisions of the agreement that it believed must be interpreted to resolve this controversy: "There are numerous provisions from which inferences may logically be drawn. The classification of employees is based on the number of hours worked in a year, itself suggesting that employment is considered to continue beyond the conclusion of each event. Continued classification as a ‘regular’ employee requires at least 1,700 hours of work in a year. ‘All employees shall be probationary employees for their first five hundred (500) hours of work with the Giants.’ Employees rise to ‘senior’ and ‘super senior’ status by working a minimum of 300 hours each year for the last five or 10 years, hardly possible if each event is deemed a separate employment. ... [T]he CBA provides that ‘All new applicants for employment as security personnel shall be subject to prehire drug screening and background investigation’; the language seems to imply that such screening and investigation will occur only once prior to the start of a single employment, and practice under the agreement confirms this interpretation. The specification of holidays in the CBA certainly implies yearlong employment. And under the CBA, the Giants have the right to discharge an employee only for cause. Other provisions may also support inferences as to the intended term of employment." ( Id . at pp. 346-347, 224 Cal.Rptr.3d 285.)

We granted plaintiffs’ petition for review limited to the question of whether this action is preempted because it requires interpretation of a collective bargaining agreement.

II. DISCUSSION

Section 301(a) of the Labor Management Relations Act of 1947 ( 29 U.S.C. § 185(a) ) (hereafter section 301(a) ) provides: "Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties." (See Lingle v. Norge Division of Magic Chef, Inc. (1988) 486 U.S. 399, 403, 108 S.Ct. 1877, 100 L.Ed.2d 410 ( Lingle ).) "Courts typically refer to the statutory provisions at issue as ‘section 301(a)’ rather than by citation to the United States Code." ( Knutsson v. KTLA, LLC (2014) 228 Cal.App.4th 1118, 1126, 176 Cal.Rptr.3d 376.)

"In a series of opinions, the Supreme Court concluded that § 301’s jurisdictional grant required the ‘complete preemption’ of state law claims brought to enforce collective bargaining agreements." ( Balcorta v. Twentieth Century-Fox Film Corp. (9th Cir. 2000) 208 F.3d 1102, 1107 ( Balcorta ).) The main policies behind this preemption rule are to "ensure nationwide uniformity with respect to the interpretation of collective bargaining agreements and preserve arbitration as the primary means of resolving disputes over the meaning of collective bargaining agreements." ( Sciborski v. Pacific Bell Directory (2012) 205 Cal.App.4th 1152, 1163, 140 Cal.Rptr.3d 808 ( Sciborski ), citing Lingle , supra , 486 U.S. at p. 404, 108 S.Ct. 1877, Allis-Chalmers Corp. v. Lueck (1985) 471 U.S. 202, 211, 219, 105 S.Ct. 1904, 85 L.Ed.2d 206 ( Allis-Chalmers ).)

After reviewing the high court opinions that developed the preemption rule, the Balcorta court explained that "[a]lthough the language of § 301 is limited to ‘[s]uits for violation of contracts,’ courts have concluded that, in order to give the proper range to § 301’s policies of promoting arbitration and the uniform interpretation of collective bargaining agreement provisions, § 301 ‘complete preemption’ must be construed to cover ‘most state-law actions that require interpretation of labor agreements.’ [Citations.] One reason for expanding complete preemption beyond the textual confines of § 301 is that any claim the resolution of which requires the interpretation of a collective bargaining agreement presents some risk to the policy of uniformity if state law principles are employed in that interpretation, even if the claim is not one for breach of contract. [Citing Lingle , supra , 486 U.S. at pp. 405-406 [108 S.Ct. 1877], Livadas , supra , 512 U.S. at pp. 121-123 [114 S.Ct. 2068].] Moreover, extending complete preemption to cover claims involving interpretation of collective bargaining agreements promotes the federal policy favoring arbitration of labor disputes ...." ( Balcorta , supra , 208 F.3d at p. 1108, fn. omitted.)

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