Diaz v. Chevron Corporation

Background

Carlos Diaz filed a wage-and-hour lawsuit in state court in 2020 against Chevron Corporation, Nooter, and Contra Costa Electric (CCE). Diaz settled his claims against Chevron and Nooter. CCE removed the case to federal court in April 2025, and the court allowed the removal to stand because Diaz had not sought a remand based on the asserted timing defect.

Diaz alleged that CCE failed to pay him and similarly situated employees for employer-required travel between refinery parking lots or entrances and their actual worksites. He also alleged that CCE sometimes docked pay when employees left designated parking lots before the end of their shifts. Diaz worked at Chevron’s Richmond refinery from approximately October 2018 through January 2019. His operative complaint also included allegations involving Chevron’s El Segundo refinery.

The pending motions concerned only Diaz’s claim under California’s Private Attorneys General Act (PAGA), which permits an employee to seek relief on behalf of other allegedly affected employees.

CCE’s Collective-Bargaining-Agreement Argument

CCE argued that California Labor Code section 2699.6 barred some construction-industry employees from obtaining PAGA relief because they were covered by collective bargaining agreements. Under the statute, PAGA does not apply to covered construction work when the agreement satisfies specified requirements, including provisions concerning wages, hours, working conditions, grievance procedures, arbitration, waiver of PAGA requirements, and available remedies.

Diaz argued that CCE had waived its right to rely on section 2699.6 because it litigated the case for approximately five years in state court, including discovery, mediation, and motion practice, without pursuing that argument. Diaz also argued that one of the statute’s requirements had not been met, but the court did not address that argument because it agreed that CCE had waived its right to invoke section 2699.6.

The court found that CCE had impliedly waived its right to rely on section 2699.6. Although CCE had mentioned the statute in its answers, it had not asserted the current argument there and did not pursue the argument during the substantial state-court litigation. The court concluded that CCE’s conduct was inconsistent with an intent to enforce the statutory right and could reasonably lead Diaz to believe that CCE had relinquished it.

The court also found that CCE had waived its right to seek arbitration. CCE had identified arbitration as an affirmative defense in its original and amended answers, but did not pursue that defense during five years of state-court litigation. The court held that CCE had acted inconsistently with its claimed right to arbitrate.

Scope of the PAGA Notice

CCE separately argued that some employees could not receive PAGA relief because they had not been subject to the specific practices described in Diaz’s PAGA notice. CCE contended that the notice covered only employees required to report at specified times to a designated parking lot associated with the Kellum entrance, and not employees using the Richmond refinery’s Gate 91 or the El Segundo refinery’s Gate 10A.

Diaz argued that the notice gave broader notice of a failure to pay for employer-mandated travel, including travel by company-controlled buses from inside refinery entrances to the actual worksites. The court agreed with Diaz. It held that the notice was not limited to travel beginning at a parking lot or to employees reporting to a particular entrance. Instead, the notice extended to uncompensated employer-mandated travel time more broadly.

The court rejected, however, Diaz’s contention that the notice also covered time spent putting on or removing protective gear or equipment. The court treated travel time and protective-equipment time as distinct subjects and found that the notice did not sufficiently identify the latter.

Disposition

The court granted in part and denied in part CCE’s motion for partial summary judgment and granted in part and denied in part Diaz’s motion for partial summary judgment. It rejected CCE’s section 2699.6 and PAGA-notice-scope arguments, while rejecting Diaz’s position that the notice covered time spent putting on or removing protective equipment. The order disposed of Docket Nos. 27 and 30.