20 Cal. App. 5th 211
Cal. Ct. App. 5th2018Background
- Plaintiff Steven Mora worked for Webcor under a collective bargaining agreement (CBA) that required employer hourly contributions to several Taft‑Hartley (union) trust funds, including a Union Vacation Trust Fund at $2.63/hour.
- Wage statements showed a line item labeled "Union Vacation" in both the earnings column (a dollar amount) and as an identical deduction on the deductions side; hours and hourly rate were not individually listed for that line.
- Mora sued alleging violation of California Labor Code § 226(a) for failure to itemize hours and applicable hourly rate for the "Union Vacation" amounts, and brought PAGA claims; Webcor demurred arguing the amounts were payments to a trust (not wages) and claims were LMRA‑preempted.
- The trial court sustained the demurrer without leave to amend, concluding the payments were not "wages" under § 226(a) because Mora never possessed or controlled the funds and they were directed to a Taft‑Hartley trust; the court also found potential LMRA preemption.
- On appeal the court reviewed de novo and focused on whether § 226(a) requires listing contributions to employer‑funded union benefit trust funds on wage statements; it resolved the case on statutory interpretation without deciding LMRA preemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 226(a) requires itemizing hours and hourly rates for amounts paid to a Taft‑Hartley (Union Vacation) trust fund | Mora: the Union Vacation amounts are part of "wages earned" because they appear as earnings, increase total earnings, and were taxed, so hours/rate must be listed | Webcor: amounts are employer contributions to a trust (Taft‑Hartley fund), not wages payable to employee; § 227.5 governs disclosures for such payments | Held: § 226(a) does not encompass payments made to Taft‑Hartley trust funds; demurrer properly sustained |
| Whether § 227.5 or other law requires different disclosure | Mora: disclosure under § 226(a) necessary to verify correctness and taxation | Webcor: § 227.5 provides the appropriate mechanism (annual statement upon request) for trust contributions; § 226(a) omission of such payments is intentional | Held: § 227.5’s express coverage of payments to benefit funds supports that § 226(a) was not intended to cover trust contributions |
| Whether policy or taxation treatment compels expansion of § 226(a) disclosures | Mora: taxing the amounts and listing them as earnings creates confusion; policy favors employee information | Webcor: policy arguments cannot rewrite statute; federal tax reporting does not dictate § 226(a) scope | Held: court declines to expand statutory disclosures; policy concerns are for Legislature |
| Whether LMRA preemption bars claim (alternative argument) | Mora did not press CBA interpretation argument on appeal | Webcor: CBA interpretation could be required, invoking LMRA preemption | Held: Court avoided preemption analysis by resolving statutory scope issue; LMRA preemption not decided here |
Key Cases Cited
- Great‑West Life Assurance Co. v. State Bd. of Equalization, 19 Cal.App.4th 1553 (Cal. Ct. App. 1993) (describing Taft‑Hartley trusts as employer‑financed trusts held for exclusive employee benefit)
- N.L.R.B. v. Amax Coal Co., 453 U.S. 322 (U.S. 1981) (Taft‑Hartley trust structure and treatment of fund assets)
- Burnside v. Kiewit Pacific Corp., 491 F.3d 1053 (9th Cir. 2007) (LMRA § 185 preemption and the federal common‑law role in labor contract disputes)
- Suastez v. Plastic Dress‑Up Co., 31 Cal.3d 774 (Cal. 1982) (vacation pay treated as deferred compensation/wages for certain Labor Code purposes)
- Prachasaisoradej v. Ralphs Grocery Co., Inc., 42 Cal.4th 217 (Cal. 2007) (analysis of compensation and deductions in context of incentive payments)
- Murphy v. Kenneth Cole Prods., Inc., 40 Cal.4th 1094 (Cal. 2007) (distinguishing wages from penalties and characterizing pay for Labor Code remedies)
- Soto v. Motel 6 Operating, L.P., 4 Cal.App.5th 385 (Cal. Ct. App. 2016) (§ 226(a) does not require listing accrued vacation value on wage statements)
- Arias v. Superior Court, 46 Cal.4th 969 (Cal. 2009) (PAGA civil penalties hinge on an underlying Labor Code violation)