Labor & Employment Law Blog

In Melendez v. San Francisco Baseball Associates LLC (2019) S245607, the California Supreme Court recently held that a security guard’s state law claim for unpaid wages and “waiting time” penalties could proceed over his employer’s objections that they had to be resolved under his union’s agreement.  Because the employee’s claim was founded on a right existing in state law, and not the agreement, he was permitted to proceed with his claim in court even though the agreement was relevant to the claim and would have to be “consulted” and determining it.

George Melendez worked as a security guard at AT&T Park in San Francisco, and filed a lawsuit when he was not paid his final wages immediately after the end of each San Francisco Giant’s home stand, concert, or other event at the stadium that he worked at.  He primarily claimed that the Giants’ failure to pay him wages due at the time of termination entitled him to “waiting time” penalties of up to 30 days’ additional pay after the completion of each assignment.  He principally relied on a 2006 Supreme Court Case, Smith v. Superior Court (2006) 39 Cal.4th 77, which held that a hair dresser who was hired to work for only a single day was required to be paid at the end of that job. 

The Giants argued that there were numerous provisions in its collective bargaining agreement with the Service Employees International Union, Melendez’s collective bargaining representative, which showed that security guards were employed on a continuous year-round basis and were not terminated after single job assignments. These included provisions that classified employees based on the number of hours worked per year, provided for probationary period of 500 hours of work, and required drug screening for new hires. Because of these provisions, the Giants argued that Melendez’s claim was preempted by Section 301 of the Labor Management Relations Act,  because it required “interpretation and application” of the union agreement.

Relying on past cases, including the Ninth Circuit Court of Appeal’s 2000 decision in Balcorta v. Twentieth Century-Fox Film Corp. (9th Cir. 2000) 208 F.3d 1102, the Supreme Court rejected the Giants’ federal preemption defense.  The Court stated that not every claim that requires resort to the language in a labor-management agreement is necessarily preempted, and that this is particularly the case when the meaning of the contract is not in dispute.  The case at hand did not involve a dispute over the terms of the agreement that required a court to interpret them, and preemption could not be found based only on the fact that interpretation of the contract terms was required to determine the validity of the employer’s defense. Instead, because the legal character of the claim relied on a state law right that was not substantially dependent on the contract’s terms, the employee was permitted to proceed in court with his unpaid wages and waiting time penalty claim.

The Melendez case confirms the important principle that unless a claim under a statutory law is expressly made the subject of an agreement to arbitrate under a union agreement, or is clearly and unmistakably provided for in the arbitration clause of the agreement, such a claim may proceed even though the employer’s factual and legal defenses to the claim are based on the provisions of the agreement.

Clients with questions regarding this case or arbitration and grievance procedures in collective bargaining agreements may contact the author or their usual labor law counsel at Atkinson, Andelson, Loya, Ruud & Romo.

On September 25, 2018, the U.S. Ninth Circuit Court of Appeals held that the claims of potentially hundreds of thousands of Uber drivers for misclassification as independent contractors cannot proceed as a class action.  (O’Connor v. Uber Technologies, Ninth Circuit Case No. 16-15595.)  In this case, the drivers signed arbitration agreements containing class action waivers, which the Ninth Circuit initially refused to enforce based on the state of the law at the time.  However, in light of the U.S. Supreme Court’s decision in Epic Systems (Epic Systems Corp. v. Lewis, ––– U.S. ––––, 138 S.Ct. 1612, 200 L.Ed.2d 889 (2018)) which issued in June, the appellate court held that the waivers must be enforced and that the case cannot proceed as a class action.  The court ordered that the arbitration agreements be enforced so that the arbitrations proceed on an individual basis. 

In Golden v. California Emergency Physicians Medical Group, et al., a divided Ninth Circuit panel held that a settlement agreement between a doctor and his former employer violated Cal. Prof. & Bus. Code § 16600 because a “no re-hire” provision of the agreement placed a “restraint of a substantial character” on the doctor’s medical practice.

On July 18, 2018, the Ninth Circuit Court of Appeals threw out a proposed class action lawsuit alleging that Taco Bell had violated California’s meal period and overtime requirements by requiring employees who purchased discounted meals to stay on the premises during their meal period.  The Court held that Taco Bell did not violate California law and affirmed an order granting summary judgment in favor of Taco Bell in a proposed class action suit titled Rodriquez v. Taco Bell Corp. (9th Cir. Case No. 16-15465).