Outside the Clause, But Heading for Arb Nonetheless

Melendez v. S.F. Baseball Assocs. LLC, No. A149482 (D1d3 Oct. 17, 2017)

Security guards at AT&T Park bring a wage and hour case against the SF Giants. Plaintiffs, who are less than full time workers, are not consistently employed by the Giants. So their theory is that they are periodically “discharged,” and thus entitled to immediate payment of their wages under Labor Code § 701. There is a complication, however, because Plaintiffs are members of the SEIU and parties to a collective bargaining agreement. The Giants move to dismiss because the claim is preempted by the Labor Management Relations Act, or in the alternative, to compel arbitration under the terms of the CBA.

The Court of Appeal holds that the dispute is not over the terms of the CBA—it is based on a violation of the Labor Code. It thus isn’t covered under the CBA's arbitration clause, which addresses only disputes over beaches of the CBA itself.

But the claim is nonetheless preempted by the LMRA. LMRA preemption is “complete” and applies when ever a claim calls for the interpretation of a CBA, even collaterally. Unlike other types of preemption where federal law just renders conflicting state law inoperative, complete preemption transforms a state claim into a federal one. And then if the claim doesn’t fit into one of the types of claims permissible under the federal regime, plaintiff is out of luck.

A pure state-law claim that doesn’t require the interpretation of a CBA is not preempted. But the central question here is whether plaintiffs are “discharged” periodically during and at the end of the baseball season. While what it means to be “discharged” is a question of state wage-and-hour law, the Court holds that whether that standard is satisfied as a matter of fact will depend to some degree on the terms of employment between Plaintiffs and the Giants. And that question cannot be answered without at least looking to the CBA. So even though the CBA’s express arbitration clause doesn’t require these claims to be sent to arbitration, § 301 of the LRMA—which requires arbitration of disputes over CBA interpretation—does.

Reversed.