Prachasaisoradej v. Ralphs Grocery Co., No. B165498.

CourtCalifornia Court of Appeals
Writing for the CourtDoi Todd
Citation122 Cal.App.4th 68,18 Cal.Rptr.3d 514
PartiesEddy Korkiat PRACHASAISORADEJ, Plaintiff and Appellant, v. RALPHS GROCERY COMPANY, Inc., Defendant and Respondent.
Decision Date08 September 2004
Docket NumberNo. B165498.,No. B168668.
18 Cal.Rptr.3d 514
122 Cal.App.4th 68
Eddy Korkiat PRACHASAISORADEJ, Plaintiff and Appellant,
v.
RALPHS GROCERY COMPANY, Inc., Defendant and Respondent.
No. B165498.
No. B168668.
Court of Appeal, Second District, Division Two.
September 8, 2004.
Rehearing Denied October 7, 2004.
Review Granted December 15, 2004.

[18 Cal.Rptr.3d 517]

Kumetz & Glick, Fred Kumetz, Stephen Glick, Los Angeles; Law Offices of Ian Herzog, Ian Herzog, Santa Monica; Daniels, Fine, Israel & Schonbuch, Paul R. Fine, Scott A. Brooks and Craig S. Momita, Los Angeles, for Plaintiff and Appellant.

Thelen Reid & Priest, Thomas E. Hill, Los Angeles, and Robert Spagat, San Francisco, for Defendant and Respondent.

DOI TODD, J.


Plaintiff and appellant Eddy Prachasaisoradej appeals from a judgment of dismissal and award of attorney fees following the trial court's sustaining a demurrer without leave to amend in favor of defendant and respondent Ralphs Grocery Company. Appellant alleged, both individually and as an asserted class representative, that Ralphs's bonus calculations violated Business and Professions Code section 17200 and certain Labor Code provisions. The trial court concluded that appellant's claims were preempted by section 301 of the Labor Management Relations Act (29 U.S.C. § 185(a)).

We reverse. We hold that appellant's claims are not preempted because they involve independent rights that neither derive from nor require interpretation of a collective bargaining agreement. Moreover, none of the other grounds raised in Ralphs's demurrer provides a basis for affirmance. Accordingly, we reverse both the judgment of dismissal and the award of attorney fees to Ralphs.

FACTUAL AND PROCEDURAL BACKGROUND

On appeal from a judgment of dismissal following a demurrer sustained without leave to amend, we assume the truth of all well-pleaded facts, as well as those that are judicially noticeable. (Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809, 814, 107 Cal. Rptr.2d 369, 23 P.3d 601; Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.)

Appellant is employed by Ralphs as a produce manager. Throughout his employment, he and other similarly situated employees were paid a bonus "that was calculated using a formula which includes deductions for any expenses and losses due

18 Cal.Rptr.3d 518

to cash shortages, merchandise shortages and shrinkage, workers' compensation, tort claims by non-employees, and other losses beyond Plaintiffs [sic] control. . . ." According to appellant, "[t]hrough this method of compensation, Defendants wrongfully deduct expenses from the wages of their employees, including Plaintiffs, which expenses are required by law to be borne by the Defendant employers. In other words, the Plaintiffs carry the burden of losses from their respective stores."

Appellant filed his original complaint on July 13, 2001 and his first amended complaint on July 27, 2001. Appellant sought to bring a class action alleging that Ralphs's improper calculation of earnings violated Business and Professions Code section 17200 and Labor Code sections 221, 400-410 and 3751. He sought injunctive relief and damages.

On September 10, 2001, Ralphs filed a motion to remove the matter to federal court on the ground that section 301 of the Labor Management Relations Act (29 U.S.C. § 185(a)) (section 301) preempted appellant's action, as appellant's employment was governed by a collective bargaining agreement (CBA). Once the case had been removed, appellant filed a motion to remand the matter in the United States District Court for the Central District of California. Appellant contended that removal was improper because his complaint alleged no federal claim. According to appellant, his state-law claims were not based on any asserted breach of a CBA, were wholly independent of any rights provided by a CBA, and were not substantially dependent on an analysis of any CBA.

On the same date that appellant filed his motion to remand, the Honorable Edward Rafeedie, Senior United States District Judge, remanded the case to state court for lack of subject matter jurisdiction. The federal court stated: "Defendants have pointed to no specific language in the CBA that will need to be interpreted in the course of this action. Though the offending formula may be the by-product of the collective bargaining process, it is nowhere to be found in the CBA itself, and thus there is no indication that evaluation of the formula's legality will entail interpretation of the terms of the CBA." The court stated that its conclusion would be no different even if resolution of appellant's claims required reference to the CBA, noting that Ninth Circuit authority has held that where "the `only controversy concerns the legality of the agreements under state law,' there is no federal preemption under § 301."

Following remand, appellant filed the operative, second amended complaint on July 11, 2002. He alleged four causes of action: (1) Unlawful deductions from earnings in violation of Labor Code sections 221, 400-410 and 3751, and title 8 of the California Code of Regulations, section 11070; (2) unlawful and unfair business practices concerning earnings bonus calculations in violation of Labor Code sections 221, 400-410 and 3751, and Business and Professions Code section 17200; (3) unlawful and unfair business practices regarding unlawful deductions for costs for workers' compensation in violation of Labor Code sections 221, 400-410 and 3751, and Business and Professions Code section 17200; and (4) failure to pay wages upon discharge in violation of Labor Code section 201. Appellant sought injunctive and monetary relief.

Ralphs demurred on the grounds that section 301 preempted all causes of action, that the National Labor Relations Act (29 U.S.C. § 151 et seq.) (NLRA) preempted the second and third causes of action, and that appellant alleged no violation of state law. With respect to section 301 preemption, Ralphs asserted that since October

18 Cal.Rptr.3d 519

1995, appellant's employment had been governed by two successive CBA's which provided in pertinent part: "BONUS PAYMENTS. Bonus or lump sum payments to employees, other than regular wage payments, shall not be used to defeat the wage provisions of this [CBA]." In view of this provision, Ralphs contended that because the bonus plan was the product of collective bargaining, appellant's claim for additional bonus payments necessarily stemmed from the CBA provision. According to Ralphs, section 301 therefore preempted appellant's claims because they were founded on rights created by the CBA and because they were substantially dependent on an analysis and interpretation of the CBA.

The trial court sustained the demurrer without leave to amend. The court reasoned that the facts before it showed that appellant was a union member and that, therefore, "his claims for wages pursuant to a bonus plan are founded on rights created by a collective bargaining agreement." The trial court found that section 301 preempted appellant's claims because appellant could not assert any rights independent of those provided by the collective bargaining agreement. The ruling further stated: "Alternatively, evaluation of plaintiff's claim for wages is intertwined with consideration of the terms of the labor contract."

Ralphs then filed a motion pursuant to Labor Code section 218.5 to include an award of attorney fees in the amount of $320,325.52 as an element of costs. The trial court granted Ralphs's motion, ruling that the issuance of such an award was mandatory under Labor Code section 218.5. The court, however, exercised it discretion to reduce the award to $275,000.

Appellant appealed separately from both the judgment and the attorney fee award. We granted appellant's motion to consolidate the appeals.

DISCUSSION

On appeal, we review the trial court's sustaining of a demurrer without leave to amend de novo, exercising our independent judgment as to whether a cause of action has been stated as a matter of law. (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300, 58 Cal.Rptr.2d 855, 926 P.2d 1042.) We assume the truth of properly pleaded allegations in the complaint and give the complaint a reasonable interpretation, reading it as a whole and with all its parts in their context. (Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 558, 71 Cal.Rptr.2d 731, 950 P.2d 1086.) However, we may disregard allegations which are contrary to law or to a fact of which judicial notice may be taken. (Wolfe v. State Farm Fire & Casualty Ins. Co. (1996) 46 Cal.App.4th 554, 559-560, 53 Cal. Rptr.2d 878.) We apply the abuse of discretion standard in reviewing the trial court's denial of leave to amend. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318, 216 Cal.Rptr. 718, 703 P.2d 58.) Appellant bears the burden of proving the trial court erred in sustaining the demurrer or abused its discretion in denying leave to amend. (Ibid.)

We conclude that the trial court erred in sustaining Ralphs's demurrer on the ground that section 301 preempts appellant's claims. The state-law statutory violations alleged in appellant's complaint involve independent rights that neither derive from the CBA nor require an interpretation of the CBA. Further, we conclude that the demurrer would not have been properly sustained on the grounds of NLRA preemption or failure to state a claim. For these reasons, the

18 Cal.Rptr.3d 520

judgment and attorney fee award must be reversed.

A. Section 301 Does Not Preempt Appellant's State-Law Claims.

1. Section 301 preemption.

Section 301 is a jurisdictional statute, under which "[s]uits 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...

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2 practice notes
  • In re Ethan N., No. F045016.
    • United States
    • California Court of Appeals
    • September 8, 2004
    ...interest. In support, she cites In re Elizabeth R., supra, 35 Cal.App.4th 1774, 42 Cal.Rptr.2d 200, and contends the "primary focus 122 Cal.App.4th 68 of the trial court must be to save troubled families, not to create new ones." Elizabeth R., however, did not address denial of reunificatio......
  • In Re G.D. Et Al., E050875
    • United States
    • California Court of Appeals
    • January 21, 2011
    ...be able to show that reunification will serve the best interest of another child or other children will be rare." (Ethan N., supra, 122 Cal.App.4th at 68.) Mother has not demonstrated to us that her case is one of those rare cases. Rather, we have found there is substantial evidence support......
2 cases
  • In re Ethan N., No. F045016.
    • United States
    • California Court of Appeals
    • September 8, 2004
    ...interest. In support, she cites In re Elizabeth R., supra, 35 Cal.App.4th 1774, 42 Cal.Rptr.2d 200, and contends the "primary focus 122 Cal.App.4th 68 of the trial court must be to save troubled families, not to create new ones." Elizabeth R., however, did not address denial of reunificatio......
  • In Re G.D. Et Al., E050875
    • United States
    • California Court of Appeals
    • January 21, 2011
    ...be able to show that reunification will serve the best interest of another child or other children will be rare." (Ethan N., supra, 122 Cal.App.4th at 68.) Mother has not demonstrated to us that her case is one of those rare cases. Rather, we have found there is substantial evidence support......

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