Ian McCray, an individual, and on behalf of himself, and on behalf of all other persons similarly situated, Plaintiff-Appellant,
Marriott Hotel Services, Inc., a Delaware corporation; SJMEC, Inc., a California corporation, Defendants-Appellees.
and Submitted June 11, 2018 San Francisco, California
from the United States District Court No. 5:16-cv-02092-NC
for the Northern District of California Nathanael M. Cousins,
Magistrate Judge, Presiding
L. Pagano (argued) and Ian A. Kass, Pagano & Kass APC,
San Jose, California, for Plaintiff-Appellant.
William J. Dritsas (argued), Seyfarth Shaw LLP, San
Francisco, California; Michael W. Kopp, Seyfarth Shaw LLP,
Sacramento, California; for Defendants-Appellees.
L. More, McCracken Stemerman & Holsberry LLP, San
Francisco, California, for Amicus Curiae Unite Here Local 19.
Before: Mary M. Schroeder, Ronald M. Gould, and Albert Diaz,
panel vacated the district court's grant of summary
judgment in favor of the defendant and its denial of the
plaintiff's motion to remand to state court an action
alleging violation of a City of San Jose minimum wage
defendant had removed the case from state court on the basis
that the plaintiff's claims were preempted by § 301
of the Labor Management Relations Act. The panel held that
the district court lacked subject matter jurisdiction to hear
the case, which amounted to an interpretive challenge to the
San Jose ordinance, rather than a lawsuit that required
substantial analysis of the plaintiff's union's
collective-bargaining agreement. The panel remanded with
instructions for the district court to return the case to
state court for further proceedings.
Judge Schroeder wrote that she would affirm the district
court because the case substantially depended upon analysis
of the terms of the collective-bargaining agreement, which
should be interpreted in accordance with federal law.
the City of San Jose enacted an ordinance that established a
minimum wage of $10/hour, the San Jose Marriott Hotel
continued to pay Ian McCray and other employees less. It
turned out that McCray's union had negotiated with
Marriott and agreed to waive the ordinance's minimum-wage
requirement so that it could bargain for other benefits for
sued Marriott in state court. He says that the ordinance
doesn't allow for waiver, and so Marriott owes him the
difference between what he was paid and the new minimum wage.
Marriott removed the case to federal court on the basis that
McCray's claims are preempted by § 301 of the Labor
Management Relations Act (the "LMRA"), 29 U.S.C.
§ 185. The district court concluded that McCray failed
to first exhaust his claim through a required grievance
process and granted summary judgment to Marriott.
McCray's claims were exhausted or not, the district court
was without jurisdiction to hear this case. While we
recognize the strong preemptive force of § 301,
McCray's lawsuit amounts to an interpretive challenge to
the San Jose ordinance, not one that requires substantial
analysis of his union's collective-bargaining agreement.
We therefore vacate the district court's denial of remand
and grant of summary judgment. We remand this case so that it
may be returned to state court for further proceedings.
2012, voters in San Jose, California, considered a ballot
initiative that would establish a new minimum wage for most
of the city's workers. Under the proposed ordinance,
employees would be paid a minimum wage of $10 an hour,
subject to cost-of-living adjustments over time. See
San Jose, Cal., Mun. Code § 4.100.040. The ordinance
also purported to give employers and employees the ability to
waive the minimum wage requirements through collective
bargaining. "To the extent required by federal
law," the proposed law provided, "all or any
portion of the applicable requirements of this Chapter may be
waived in a bona fide collective bargaining agreement,
provided that such waiver is explicitly set forth in such
agreement in clear and unambiguous terms." Id.
Ian McCray was employed at the Marriott Hotel in San Jose.
There, he performed several hospitality-related jobs,
including working as a busser, then later a server, in the
hotel's restaurant. As a busser, McCray received an
hourly wage of $10.80. When McCray became a server, his
hourly wage decreased to $9, but he generally wound up taking
home more pay than he had as a busser because of tips he
received from customers.
his employment with Marriott, McCray was represented by the
union Unite Here, Local 19. The terms of McCray's
employment were governed by a collective-bargaining agreement
(a "CBA") entered into between Unite Here and
Marriott. Anticipating the passage of San Jose's minimum
wage ordinance, Marriott and the union executed an addendum
to the CBA, prospectively opting out of the minimum wage
requirement. The waiver explained that should the ordinance
become law, the "Employer and the Union, through
collective bargaining, have agreed to explicitly waive as
part of the parties['] collective bargaining agreement,
all provisions and requirements of the City of San Jose
Minimum Wage Ordinance." EOR 119. The ballot initiative
passed, and the ordinance and waiver took effect in 2012.
thereafter, McCray, then earning $9 an hour as a server,
spoke with a Marriott human resources employee and a
representative from his union and asked why he was being paid
less than the new minimum wage. McCray was told that the union
had opted out of the minimum wage ...