Kent Sachs v. Charles Pankow Builders, Ltd.
2:21-cv-07742
C.D. Cal.Dec 28, 2021Background
- Plaintiff Kent Sachs, an hourly, non-exempt carpenter employed by Charles Pankow Builders, filed a state-court class action alleging multiple California Labor Code and UCL violations (overtime, meal/rest premiums, minimum wages, wage statements, unreimbursed expenses, etc.).
- Plaintiff’s employment was governed by a collective bargaining agreement (CBA). Defendant disputes some employment dates alleged by Sachs.
- Defendant removed the case to federal court, asserting federal-question jurisdiction based on LMRA § 301 preemption of state-law claims. Sachs moved to remand.
- The Court applied the Ninth Circuit two-step Burnside test to assess § 301 preemption: (1) whether the right asserted exists solely by virtue of the CBA, and if not, (2) whether resolution substantially depends on interpreting the CBA.
- The Court held the overtime and meal-period premium claims (first two causes of action) are preempted because California statutes and the applicable IWC wage order exclude employees covered by a valid CBA (Lab. Code § 514 and related Wage Order language). The remaining eight state-law claims were retained under supplemental jurisdiction because they arise from the same core facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether overtime claim is § 301-preempted | Sachs: claim rests on independent state-law rights (Cal. Lab. Code § 510 / IWC order) so no preemption | Pankow: § 514 and the CBA displace § 510; the right exists only under the CBA | Held: Preempted — § 510/ IWC order do not apply because valid CBA controls; right exists solely via CBA |
| Whether meal-period premium claim is § 301-preempted | Sachs: claim arises under state law (Cal. Lab. Code §§ 226.7, 512 and Wage Order) | Pankow: § 512(e) and Wage Order exclude construction employees covered by a valid CBA that provides meal periods and arbitration; thus CBA governs | Held: Preempted — statutory/Wage Order exemptions apply; right exists solely via CBA |
| Whether remaining state-law claims are preempted under Burnside step two (substantial dependence) | Sachs: these claims are state-law and should be remanded | Pankow: resolution may require interpreting the CBA, invoking § 301 preemption | Held: Unclear whether preemption applies; court declines to remand and instead keeps these claims under federal jurisdiction via supplemental jurisdiction |
| Whether court should retain supplemental jurisdiction over non-preempted claims | Sachs: seeks remand of all claims to state court | Pankow: removal proper as to preempted claims; court can retain related claims | Held: Court exercises supplemental jurisdiction over the remaining eight claims because they derive from the same nucleus of operative fact as the preempted claims |
Key Cases Cited
- Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust, 463 U.S. 1 (U.S. 1983) (§ 301 preemption can displace state-law causes of action)
- Burnside v. Kiewit Pacific Corp., 491 F.3d 1053 (9th Cir. 2007) (two-step test for § 301 preemption)
- Valles v. Ivy Hill Corp., 410 F.3d 1071 (9th Cir. 2005) (state-law rights independent of CBA are not preempted)
- Livadas v. Bradshaw, 512 U.S. 107 (U.S. 1994) (preemption requires interpreting a CBA, not merely consulting it)
- Kobold v. Good Samaritan Reg’l Med. Ctr., 832 F.3d 1024 (9th Cir. 2016) (clarifies when interpretation of a CBA is required for preemption)
- Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102 (9th Cir. 2000) (distinguishes reliance on CBA from required interpretation)
- United Mine Workers v. Gibbs, 383 U.S. 715 (U.S. 1966) (supplemental jurisdiction over state claims sharing a common nucleus of operative fact)
- Leite v. Crane Co., 749 F.3d 1117 (9th Cir. 2014) (party invoking removal bears the burden to allege facts supporting federal jurisdiction)