Lazare v. Unifirst Corporation

Background

Tyler Lazare filed the action in the Superior Court of California for Alameda County. He challenged Unifirst Corporation’s employment practices involving non-exempt hourly workers employed in California as Route Service Representatives from November 10, 2023, to the present. The complaint alleged several California Labor Code violations and sought civil penalties under California’s Private Attorneys General Act, a California law allowing an employee to seek certain labor-law penalties on behalf of the state and other affected employees.

Unifirst removed the case to federal court based on diversity jurisdiction. Diversity jurisdiction generally requires every plaintiff to be a citizen of a different state from every defendant, along with an amount in controversy exceeding $75,000. Lazare moved to remand, meaning he asked the federal court to return the case to state court.

Complete Diversity

The parties agreed that Lazare was a California citizen and Unifirst was a Massachusetts citizen. Lazare argued, however, that California was the real party in interest because the California Labor and Workforce Development Agency receives 75% of penalties recovered in these actions. A state is not treated as a citizen for diversity-jurisdiction purposes.

The court declined to decide whether the state’s involvement defeated complete diversity. It explained that, even assuming complete diversity existed, Unifirst had not shown that the amount in controversy exceeded $75,000.

Amount in Controversy

The parties disputed whether the state agency’s 75% share of penalties should count toward the jurisdictional amount. The court followed what it described as the greater weight of authority and counted only the 25% share allocated to employees. Unifirst estimated that total potential penalties were $58,599.40, while Lazare estimated $20,949.40. The court did not need to resolve that disagreement because, even using Unifirst’s higher figure, the employee share was $14,649.85.

Attorney’s fees authorized by statute can also count toward the amount in controversy. Unifirst offered a reasonable estimate of $138,450 and a conservative estimate of $65,000, but it did not estimate the portion attributable to Lazare’s own claims. Because the action was representative of other affected employees, the court held that only Lazare’s pro rata share of the fees could be counted. Even using the higher fee estimate and assuming only three qualifying employees, Lazare’s share would be $46,150. Combined with the $14,649.85 penalty figure, that amount would still be below $75,000. The court therefore held that Unifirst failed to meet its burden of proving the required amount in controversy.

Leave to Amend and Disposition

Unifirst asked for permission to amend its notice of removal to address deficiencies. The court denied that request because Unifirst did not identify any incorrect statements in the notice that needed correction.

Judge Jon S. Tigar granted Lazare’s motion to remand. The action was remanded to the Superior Court of California for the County of Alameda. The order resolved the federal court’s jurisdictional question and did not decide the underlying labor-law claims.