I have often blogged about the need for defense lawyers to look for a labor law preemption defense when a wage hour action, single or FLSA collective action, is lodged. If the preemption argument succeeds, it is a magic bullet that makes the case totally go away. There has to be, however, some direct connection between the wage claim made and the labor contract. That is often easier said than done, as a recent California case shows where the Judge rejected such a defense. The case is entitled McGhee v. Tesoro Refining & Marketing Co. LLC et al. and was filed in federal court in the Northern District of California.

The Court noted that although some of the named plaintiff’s claims did require the Court to look at various collective bargaining agreements, the claims did not require the interpretation of contractual provisions or a close look at those clauses. As the Judge observed, “although the court may ‘look’ at the relevant CBAs as evidence of those [allegedly illegal] procedures, the focus remains on [Tesoro’s] actions, not the CBAs’ authorizations.”

The plaintiff’s theory was that the Company required workers to be on-call before and after work, but did not pay the workers for that time. The incoming workers had to confer with or “huddle” with outgoing workers prior to their shifts beginning as well as rounding down their time cards to the quarter-hour. The Company also allegedly made workers stay late to make up for meals they ate off premises.

In order to determine if preemption is appropriate, the Ninth Circuit has fashioned a two-part test. First, the Court looks at whether the issue is based upon a state statute or a labor contract. If the claim is deemed to be based on state law, then the Court must scrutinize whether a resolution of the claim is dependent on interpretation of the labor contract. If it requires such interpretation, then the court does not have jurisdiction over the controversy.

The Court herein held that the workers’ claims do not meet this standard as they only have a “hypothetical connection” to the labor contract. The Judge observed that the issue relating to the on-call policy “require determining defendants actual policies” without hinging on the CBAs, as do claims the companies miscalculated pay for meal breaks”

The Takeaway

The preemption defense should always be examined to see if it is viable. It is not enough, however, just to contend that a labor contract is “in the picture.” The defense lawyer must craft/find an argument that interpretation of certain labor contract articles is necessary to resolve the matter and it is not a matter of state or FLSA.

Keep looking for that magic bullet…