Mora v. Webcor Constr., L.P.

• Decision Date: 05 February 2018
• Docket Number: A148264
• Citation: 20 Cal.App.5th 211,228 Cal.Rptr.3d 813
• Court: California Court of Appeals Court of Appeals
• Parties: Steven MORA, Plaintiff and Appellant, v. WEBCOR CONSTRUCTION, L.P., Defendant and Respondent.

20 Cal.App.5th 211

228 Cal.Rptr.3d 813

Steven MORA, Plaintiff and Appellant,

v.WEBCOR CONSTRUCTION, L.P., Defendant and Respondent.

A148264

Court of Appeal, First District, Division 5, California.

Filed February 5, 2018

Diversity Law Group, Larry W. Lee, Los Angeles, Nicholas Rosenthal ; Polaris Law Group, William L. Marder, Hollister for Plaintiff and Appellant.

Simpson, Garrity, Innes & Jacuzzi, Ronald F. Garrity and Sarah Lucas, South San Francisco for Defendant and Respondent.

SIMONS, Acting P.J. California Labor Code section 226, subdivision (a) ( Section 226(a) ),¹ requires employers to provide employees wage statements itemizing, among other things, all wages earned, including the hours worked and applicable rates of pay. Plaintiff and appellant Steven Mora (appellant) contends defendant and respondent Webcor Construction, L.P. (respondent) violated Section 226(a) by failing to list the hours and hourly rate associated with a payment described as "Union Vacation" on his wage statements. It is undisputed the amounts were payments to a union vacation trust fund authorized by the Labor Management Relations Act of 1947 (LMRA), also known as the Taft–Hartley Act ( 29 U.S.C. § 141 et seq. ). The trial court sustained respondent's demurrer without leave to amend and we affirm, concluding the payments are not within the scope of Section 226(a).

BACKGROUND

In July 2015, appellant filed this putative class action in Alameda County Superior Court and, in February 2016, appellant filed a First Amended Complaint (FAC). The FAC alleges violations of Section 226(a) and seeks penalties under the Private Attorneys General Act of 2004 (PAGA) (§ 2698 et seq.). The FAC seeks to allege the claims on behalf of all persons employed by respondent after July 2014.

The FAC alleges appellant was employed by respondent from March 7 through May 14, 2015. Appellant's employment was subject to a collective bargaining agreement (CBA)—the 2014–2019 Laborers' Master Builders Agreement—entered into between respondent and the Northern California District Council of Laborers of the Laborers' International Union of North America;² the CBA is attached to the FAC as Exhibit A. Among many other things, the CBA sets forth "wages" applicable to different employment classifications. The CBA also separately requires employers to "pay hourly contributions for each hour paid for and/or worked" to various union trust funds at specified rates, including to the Laborers Vacation Holiday Dues Supplement Trust Fund for Northern California (Union Vacation Trust Fund) at $2.63 an hour effective June 2014.³

The FAC alleges that, "[p]ursuant to the terms of the CBA, [appellant] was paid a specific hourly rate of vacation pay for each hour worked," but "the applicable rate of pay and hours for such vacation wages were not identified on the wage statements" he received from respondent. The FAC alleges this was in violation of Section 226(a).

In March 2016, respondent filed a demurrer, arguing the payments at issue were outside the scope of Section 226(a) and, in any event, appellant's claims were preempted by the LMRA. In opposing the demurrer, appellant requested that the trial court take judicial notice of weekly wage statements he received from respondent. The wage statements clarify the nature of appellant's claims.⁴ Each wage statement⁵ contains a heading on the left side entitled "Current Pay Period," under which are listed three categories: "Regular," "Overtime," and "Union Vacation." On each statement, the "Regular" and "Overtime" lines list hours worked as well as the pay rate for each hour worked, as well as a total amount in a column entitled "Current Amount." On the other hand, the number of applicable hours worked and the applicable hourly rate are not included for the "Union Vacation" line. Instead, there is only a total dollar amount in the "Current Amount" column.

On the right side of each wage statement appears a section entitled "Deductions," which includes three columns: "Deductions Description," "Current," and "YTD Amount." On each wage statement the only listed deduction is described as "Union Vacation," and the amount listed in the "Current" column is always the same as the amount listed for "Union Vacation" in the "Current Pay Period" section. Thus, whatever amounts appellant received in the "Union Vacation" category each month were then deducted from the ultimate payment. Appellant alleges, and respondent does not dispute, that the wage statements list the deductions after taxes , meaning that appellant was taxed on the "Union Vacation" payments that were ultimately deducted.

Appellant's claims in the present lawsuit are based on the failure to state the number of hours and hourly rate for the "Union Vacation" payment category on the wage statements. He contends those payments were part of his wages and, therefore, itemization of the hours and applicable rate was required under Section 226(a). Although the FAC does not expressly so allege, the parties agree and the CBA attached to the FAC makes clear that the "Union Vacation" amounts on the wage statements are payments to a Taft-Hartley trust—specifically, the Union Vacation Trust Fund.

In April 2016, following a hearing, the trial court sustained respondent's demurrer without leave to amend. The court concluded the payments to the Union Vacation Trust Fund were not "wages" within the meaning of Section 226(a), in part because appellant "never had possession or control of these payments, or the right to control them." The court also concluded appellant's claims were preempted by the LMRA because the CBA would need to be interpreted in order to determine "whether and when [appellant] becomes entitled to the hourly payments listed, whether any conditions attach, and when and how such conditions are satisfied."

This appeal followed.

DISCUSSION

"On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the ‘reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.’ [Citation.] It ‘is error for a trial court to sustain a demurrer [if] the plaintiff has stated a cause of action under any possible legal theory.’ [Citation.] We apply a de novo standard in reviewing the court's ruling sustaining the demurrer." ( Soto v. Motel 6 Operating, L.P. (2016) 4 Cal.App.5th 385, 389, 208 Cal.Rptr.3d 618.)

I. Legal Background

A. The LMRA/Taft–Hartley Act

As explained previously, the alleged "wages" respondent failed to itemize on appellant's wage statements were payments to a Taft-Hartley vacation trust fund. The LMRA "prohibits employers from making any payments to representatives of its employees, [but] permits employers and unions to create employer-financed trusts to fund employee benefits for union employees. ( 29 U.S.C. § 186(c)(5).) These ‘Taft–Hartley trusts' are funded by employer contributions, but are operated for the ‘sole and exclusive benefit’ of the employees. The basis for the payment of benefits must be outlined in a detailed written agreement between the union and the employer ( 29 U.S.C. § 186(c)(5)(B) ), the fund must be subject to an annual audit, kept separate from other union welfare funds, and the trustees of the funds are charged with equally representing the interests of the employer and its employees. ( 29 U.S.C. § 186(c)(5)(B).)" ( Great-West Life Assurance Co. v. State Bd. of Equalization (1993) 19 Cal.App.4th 1553, 1558, fn. 2, 25 Cal.Rptr.2d 1 ( Great-West ); see also N.L.R.B. v. Amax Coal (1981) 453 U.S. 322, 328-329, 101 S.Ct. 2789, 69 L.Ed.2d 672 ( Amax Coal ); Cox v. Superior Court . (1959) 52 Cal.2d 855, 858, fn. 1, 346 P.2d 15.) The fund assets are " ‘held in trust,’ and ... administered ‘for the sole and exclusive benefit of the employees ... and their families and dependents....' " ( Amax Coal , at p. 329, 101 S.Ct. 2789.)

The LMRA gives federal courts exclusive jurisdiction to hear "[s]uits for violation of contracts between an employer and a labor organization." ( 29 U.S.C. § 185(a) ; see also Burnside v. Kiewit Pacific Corp. (9th Cir. 2007) 491 F.3d 1053, 1058–1059 ( Burnside ).) "Congress charged federal courts with a ‘mandate ... to fashion a body of federal common law to be used to address disputes arising out of labor contracts.’ [Citations.] As a result of this broad federal mandate ..., the ‘preemptive force of [ 29 U.S.C. § 185(a) ] is so powerful as to displace entirely any state cause of action for violation of contracts between an employer and a labor organization.’ " (Burnside , at p. 1059.) Additionally, the LMRA requires preemption of a state law claim "if the resolution of [that] claim depends upon the meaning of a collective-bargaining agreement." ( Detabali v. St. Luke's Hosp . (9th Cir. 2007) 482 F.3d 1199, 1203.) However, a " ‘reference to or consideration of the terms of a collective bargaining agreement is not the equivalent of interpreting the meaning of the terms.’ " ( Ibid. ; see also Burnside , at pp. 1059–1060.)

B. Section 226(a)

Section 226(a) requires employers to "semimonthly or at the time of each payment of wages, furnish each of his or her employees ... an accurate itemized [wage] statement." The wage statement must include: (1) "gross wages earned," (2) "total hours worked" except by salaried and exempt employees, (3) "piece-rate units earned," (4) "all deductions," (5) "net wages earned," (6) "the inclusive dates of the period for which the employee is paid," (7) "the name of the employee" and "the last four digits of [the employee's] social security number or an employee identification number," (8) "the name and address of the legal entity that is the employer," and (9) "all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee." (Ibid .)

"The Legislature enacted section 226 to ensure an employer ‘document[s] the basis of the employee...