Sarmiento v. Sealy, Inc.

• Decision Date: 14 February 2019
• Docket Number: Case No. 18-cv-01990-JST
• Citation: 367 F.Supp.3d 1131
• Parties: Jesus SARMIENTO, et al., Plaintiffs, v. SEALY, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of California

367 F.Supp.3d 1131

Jesus SARMIENTO, et al., Plaintiffs,

v.SEALY, INC., et al., Defendants.

Case No. 18-cv-01990-JST

United States District Court, N.D. California.

Signed February 14, 2019

Scott S. Nakama, Jocelyn Burton, Burton Employment Law, Oakland, CA, for Plaintiffs.

Angela Joy Rafoth, Courtney Marguerite Osborn, Julie A. Stockton, Littler Mendelson, P.C., San Francisco, CA, Theodora Rochelle Lee, Littler Mendelson, P.C., Walnut Creek, CA, for Defendants.

ORDER RE: MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS

Re: ECF No. 33

JON S. TIGAR, United States District Judge

Before the Court is Defendants Sealy, Inc. and Sealy Mattress Manufacturing Company, LLC's (collectively, "Sealy") motion for judgment on the pleadings on several of Plaintiffs' claims. ECF No. 33. The Court will grant the motion in part and deny it in part.

I. BACKGROUND

A. Factual Background

As alleged in their complaint, Plaintiffs Jesus Sarmiento and Juan Chavez are former employees of Sealy's mattress manufacturing facility in Richmond, California. ECF No. 1 ("Compl.") ¶¶ 8-9. Sarmiento "worked concurrently as a loader, taper or sewer" during his employment. Id. ¶ 8. Pursuant to the collective bargaining agreement ("CBA"), Sarmiento was entitled to a different hourly rate for each job. Id. Plaintiffs allege that Sealy did not "pay Sarmiento and other putative class members the higher hourly rates when required." Id.

Plaintiffs further allege that they regularly worked shifts exceeding twelve hours a day without receiving the proper overtime rate, and that Sealy furnished wage statements that omitted required information. Id. ¶¶ 10-13.

Finally, Plaintiffs allege that an incident occurred at the facility on May 26, 2017, when two Sealy management officials introduced a new points-based disciplinary system. Id. ¶ 14. After the system was introduced, Chavez asked management why they had not informed employees of the new system, given that it had already gone into effect on May 1, 2017. Id. ¶ 15. The confrontation escalated into shouting, and when Sarmiento attempted to intervene, one of the management officials threatened him as well. Id. After the employees dispersed for lunch, Sarmiento became ill and decided that he need to go home. Id. ¶ 16. Although Sarmiento communicated this reason to a co-worker, he was unable to get in touch with either his supervisor or his union representative. Id. Within two hours, Sarmiento received a call informing him that he had been terminated for job abandonment. Id. Sarmiento did not receive his final paycheck until June 2, 2017. Id. ¶ 17.

Chavez was placed on administrative leave after the May 26, 2017 town hall meeting. Id. ¶ 18. He was terminated on June 7, 2017, but he did not receive his final paycheck until June 16, 2017. Id. ¶ 18.

B. Procedural History

On March 31, 2018, Plaintiffs filed this putative class action against Sealy. See id. Plaintiffs allege six claims on behalf of the class: that Sealy (1) failed to pay overtime wages, Cal. Lab. Code § 510 ; (2) secretly paid lower wages than provided for in the CBA, id. § 223; (3) withheld wages due under the CBA, id. § 222; (4) failed to promptly pay wages due upon termination, id. §§ 201, 202; (5) as a result of these violations, violated California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200, et seq. ; and (6) failed to furnish complete and accurate wage statements, Cal. Lab. Code § 226(a). Plaintiffs also allege derivative claims under the Private Attorney General Act ("PAGA"), Cal. Lab. Code §§ 2698 -99.5, based on the first through fourth and sixth claims. Further, Plaintiffs allege two individual claims for wrongful termination: (7) unlawful retaliation based on California Labor Code section 923 ; and (8) common-law wrongful termination in violation of public policy. Sealy answered the complaint on July 10, 2018. ECF No. 18.

On November 13, 2018, Sealy filed this motion for judgment on the pleadings on Plaintiffs' second, third, seventh, and eighth claims. ECF No. 31. Sealy contends that these claims are preempted by the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and the National Labor Relations Act ("NLRA"), 29 U.S.C. §§ 157 - 58. ECF No. 31 at 8.

II. JURISDICTION

The Court has jurisdiction pursuant to 28 U.S.C. § 1332(a).

III. LEGAL STANDARD

A. Federal Rule of Civil Procedure 12(c)

"After the pleadings are closed – but early enough not to delay trial – a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). The analysis for Rule 12(c) motions for judgment on the pleadings is "substantially identical to [the] analysis under Rule 12(b)(6)." Chavez v. United States , 683 F.3d 1102, 1108 (9th Cir. 2012) (internal quotation marks and citation omitted). Under both rules, "a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy." Id. (quoting Brooks v. Dunlop Mfg. Inc. , No. C 10-04341 CRB, 2011 WL 6140912, at *3 (N.D. Cal. Dec. 9, 2011) ). A plaintiff must allege facts that are enough to raise his right to relief "above the speculative level." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted). "A judgment on the pleadings is properly granted when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law." Fajardo v. County of Los Angeles , 179 F.3d 698, 699 (9th Cir. 1999) (citation omitted). "Finally, although Rule 12(c) does not mention leave to amend, courts have discretion both to grant a Rule 12(c) motion with leave to amend, and to simply grant dismissal of the action instead of entry of judgment." Lonberg v. City of Riverside , 300 F.Supp.2d 942, 945 (C.D. Cal. 2004) (citations omitted).

B. LMRA Section 301 Preemption

LMRA section 301 provides federal jurisdiction over "[s]uits for violation of contracts between an employer and a labor organization." 29 U.S.C. § 185(a). Section 301 encapsulates "a congressional mandate to the federal courts to fashion a body of federal common law to be used to address disputes arising out of labor contracts." Allis–Chalmers Corp. v. Lueck , 471 U.S. 202, 209, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985) (footnote omitted). "This federal common law, in turn, preempts the use of state contract law in CBA interpretation and enforcement." Matson v. United Parcel Serv., Inc. , 840 F.3d 1126, 1132 (9th Cir. 2016) (internal citation and quotation marks omitted).

To give "the policies that animate § 301 ... their proper range," its preemptive force "extend[s] beyond suits alleging contract violations" to include "questions relating to what the parties to a labor agreement agreed, and what legal consequences were intended to flow from breaches of that agreement." Lueck , 471 U.S. at 210-11, 105 S.Ct. 1904. Despite the strong preemptive force of section 301, however, "not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is preempted by [it]." Id. at 211, 105 S.Ct. 1904. "[T]he Supreme Court has repeatedly admonished that § 301 preemption is not designed to trump substantive and mandatory state law regulation of the employee-employer relationship; § 301 has not become a ‘mighty oak’ that might supply cover to employers from all substantive aspects of state law." Humble v. Boeing Co. , 305 F.3d 1004, 1007 (9th Cir. 2002) (citing Lingle v. Norge Div. of Magic Chef Inc. , 486 U.S. 399, 408-09, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988) ; Livadas v. Bradshaw , 512 U.S. 107, 122, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994) ). "In extending the pre-emptive effect of § 301 beyond suits for breach of contract, it would be inconsistent with congressional intent under that section to preempt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract." Lueck , 471 U.S. at 212, 105 S.Ct. 1904 (footnote omitted).

"The demarcation between preempted claims and those that survive § 301's reach is not ... a line that lends itself to analytical precision." Cramer v. Consolidated Freightways, Inc. , 255 F.3d 683, 691 (9th Cir. 2001) (en banc). The Ninth Circuit has articulated a two-prong inquiry to analyze whether section 301 preemption applies. Burnside v. Kiewit Pacific Corp. , 491 F.3d 1053, 1059-60 (9th Cir. 2007). A court must first determine "whether the asserted cause of action involves a right conferred upon an employee by virtue of state law, not by a CBA. If the right exists solely as a result of the CBA, then the claim is preempted and [the court's] analysis ends there." Id. at 1059 (citation omitted). However, if the court determines the right underlying the state claim(s) "exists independently of the CBA" the court then proceeds to the second prong, which examines whether the right is "substantially dependent on analysis of a collective bargaining agreement." Id. (internal quotation marks and citation omitted).

In determining if the first prong is met (whether a right is independent of a CBA) a court must evaluate whether the "legal character of a claim" is "independent of rights under the collective bargaining agreement." Livadas , 512 U.S. at 123, 114 S.Ct. 2068 (internal citation and quotation marks omitted). Section 301 preempts the claim if it is "founded directly on rights created by collective bargaining agreements...." Caterpillar v. Williams , 482 U.S. 386, 394, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987).

In determining whether the second prong is met (whether the claim is "substantially dependent" on a CBA) the Court must evaluate whether the claim can be resolved by " ‘look[ing] to’ versus interpreting the CBA. If the latter, the claim is preempted; if the former, it is not." Burnside , 491 F.3d at 1060 (internal citations omitted). "When the meaning of contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law...