Felix Gunawan v. Transdev Alternative Services, Inc., 4:22-cv-04141

Plaintiffs (named employees) filed a PAGA action in California state court alleging wage-and-hour violations: inaccurate wage statements, missed meal/rest breaks, unpaid minimum and overtime wages, unpaid sick pay, unreimbursed expenses, and untimely wages.
Defendant Transdev removed to federal court, asserting federal-question jurisdiction under LMRA §301 (preemption) and diversity jurisdiction (amount in controversy over $75,000).
Defendant relied on collective-bargaining agreements (CBAs) to argue §301 preemption and that Labor Code §514 exempts overtime claims for CBA-covered employees.
The CBAs submitted show training wages below the 30%-above-minimum threshold required by Cal. Lab. Code §514 for all covered employees.
The Court found Defendant did not show §301 preemption (CBAs do not meet §514 and Defendant failed to show CBA interpretation was necessary) and did not prove the amount in controversy exceeded $75,000.
Court granted Plaintiffs’ motion to remand to San Francisco Superior Court and closed the federal case.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Burnside Step One: Do asserted rights exist solely from the CBA?	Plaintiffs: Rights arise from state law (PAGA/Labor Code), not the CBA.	Transdev: §514 exempts overtime claims because CBAs cover overtime.	Held: §514 does not apply because CBAs fail §514’s 30% wage threshold for all employees; rights are state-law based (no preemption at step one).
Burnside Step Two: Would adjudication require interpreting the CBA?	Plaintiffs: Resolution only requires looking to CBAs, not interpreting them.	Transdev: Broad PAGA class includes union/non-union employees so CBA interpretation is necessary.	Held: Defendant failed to show that adjudication requires interpretation; hypothetical connections insufficient — no §301 preemption at step two.
Diversity jurisdiction: Does amount in controversy exceed $75,000?	Plaintiffs: Aggregated penalties estimated ~$48,900; named plaintiffs’ pro rata fees unknown and insufficient to reach $75k.	Transdev: Aggregating statutory penalties plus estimated attorneys’ fees (billing assumptions) likely exceeds $75k.	Held: Defendant did not meet its burden; failed to show named plaintiffs’ pro rata share of fees would push amount over $75k — no diversity jurisdiction; remand granted.

Curtis v. Irwin Indus., 913 F.3d 1146 (9th Cir. 2019) (scope of §301 preemption; interpret narrowly to protect arbitration)
Metro. Life Ins. Co. v. Taylor, 481 U.S. 58 (Sup. Ct. 1987) (§301 can convert state-law complaint into federal claim for preemption purposes)
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (Sup. Ct. 1985) (state rules defining CBA terms are preempted)
Livadas v. Bradshaw, 512 U.S. 107 (Sup. Ct. 1994) (§301 does not preempt nonnegotiable state-law rights)
Burnside v. Kiewit Pac. Corp., 491 F.3d 1053 (9th Cir. 2007) (two-step test for §301 preemption: rights-from-CBA and need-to-interpret)
McCray v. Marriott Hotel Servs., 902 F.3d 1005 (9th Cir. 2018) (not every employment dispute touching a CBA is preempted)
Cramer v. Consol. Freightways, 255 F.3d 683 (9th Cir. 2001) (hypothetical or speculative CBA connections do not establish preemption)
Urbino v. Orkin Servs. of Cal., 726 F.3d 1118 (9th Cir. 2013) (defendant bears burden by preponderance to show amount in controversy for diversity jurisdiction)