Ian McCray v. Marriott Hotel Services
902 F.3d 1005
9th Cir.2018Background
- San Jose enacted a $10/hour minimum-wage ordinance (with an opt-out for bona fide collective bargaining agreements where allowed by federal law).
- Marriott and Unite Here, Local 19 executed a CBA addendum that expressly waived the ordinance’s minimum-wage requirement for covered employees in exchange for other benefits.
- Ian McCray, a Marriott server earning $9/hour (with tips), sued in state court claiming Marriott violated the San Jose ordinance and sought class relief and unpaid wages.
- Marriott removed to federal court, arguing § 301 of the LMRA preempts McCray’s state-law claims; the district court denied remand and granted summary judgment for Marriott on the ground McCray failed to exhaust the CBA grievance process.
- The Ninth Circuit majority vacated the district court’s denial of remand and summary judgment, holding McCray’s claims arise under local/state law and do not require interpretation of the CBA (only a look to the waiver if the ordinance permits waivers), and remanded to state court. A dissent would have affirmed federal jurisdiction and dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 301 LMRA preempts McCray’s state-law claims and supports federal jurisdiction | McCray: Claims arise under San Jose/state law (right to the $10 minimum) and do not depend on interpretation of the CBA; preemption is inappropriate | Marriott: Resolution requires interpreting the CBA wage-and-opt-out provisions, so § 301 preempts and federal court has jurisdiction | Held: No § 301 preemption; claims arise independently under state law and only require statutory interpretation; if waiver matters, court need only "look to" the CBA, not interpret it. Remand ordered. |
| Whether the case requires interpretation of the CBA (substantial dependence) | McCray: Case turns on whether the ordinance allows waiver; if not, the CBA waiver is ineffective and CBA interpretation is unnecessary | Marriott: The dispute substantively depends on the CBA because it establishes the contractual wage and the waiver; federal law governs CBA interpretation | Held: The claim does not substantially depend on interpreting the CBA at this stage—resolving the ordinance question is primary; potential later CBA disputes are speculative and do not justify preemption now. |
| Whether failure to exhaust CBA grievance procedure bars suit in federal court | McCray: Procedural posture argued for remand and state adjudication of statutory claims; exhaustion not a threshold for jurisdictional remand | Marriott: McCray failed to exhaust mandatory grievance process per the CBA, so summary judgment was appropriate | Held: Court did not reach merits (including exhaustion) because it lacked jurisdiction; vacated district court summary judgment so exhaustion ruling is vacated. |
| Whether defendant could remove later if plaintiff later disputes the CBA | McCray: (implicit) plaintiff’s pleadings control forum; future CBA challenges are not before court now | Marriott: If plaintiff subsequently raises CBA-based claims/grounds, removal would then be proper | Held: If McCray later directly challenges or raises issues requiring CBA interpretation, Marriott can seek removal under 28 U.S.C. § 1446(b)(3). |
Key Cases Cited
- Caterpillar Inc. v. Williams, 482 U.S. 386 (U.S. 1987) (recognizing complete preemption in certain labor-contract contexts)
- Franchise Tax Bd. v. Constr. Laborers Vacation Tr. for S. Cal., 463 U.S. 1 (U.S. 1983) (discussing § 301 preemption creating federal cause of action)
- Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (U.S. 1985) (state-law claims substantially dependent on CBA terms are preempted)
- Livadas v. Bradshaw, 512 U.S. 107 (U.S. 1994) (distinguishing mere reference to a CBA from interpretation requiring preemption)
- Burnside v. Kiewit Pac. Corp., 491 F.3d 1053 (9th Cir. 2007) (state-law wage claim arose independently and was not preempted despite CBA waiver possibility)
- Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102 (9th Cir. 2000) (interpretation required, not merely reference, triggers § 301 preemption)
- Kobold v. Good Samaritan Reg'l Med. Ctr., 832 F.3d 1024 (9th Cir. 2016) (distinguishing when CBA interpretation is necessary vs. when courts may only look to unambiguous CBA terms)
- MacKay v. Pfeil, 827 F.2d 540 (9th Cir. 1987) (remand required when federal court lacks jurisdiction)