DiMercurio v. Equilon Enterprises LLC

Background

Marco Dimercurio, Charles Gaeth, John Langlitz, and Malcolm Synigal sued Equilon Enterprises LLC, doing business as Shell Oil Products US. The plaintiffs alleged that they were current or former Shell refinery operators at the Martinez facility and that Shell required operators to work regular 12-hour shifts and to be available for designated 12-hour standby shifts twice a day.

During the standby periods, operators had to be available by telephone for 1.5-hour periods. If Shell could not reach an operator, the operator could be disciplined. If Shell called an operator to work, the operator had to report to the refinery within two hours. Shell paid operators when they actually worked a standby shift but did not compensate them for the standby periods themselves. The plaintiffs alleged that these requirements restricted their ability to earn other income, attend classes, care for dependent family members, and engage in recreation.

The plaintiffs asserted a reporting-time pay claim under California Industrial Welfare Commission Wage Order 1-2001. They also asserted related claims for unpaid wages at termination, inaccurate wage statements, unfair competition under California’s Unfair Competition Law, and civil penalties under the Private Attorneys General Act. The case was brought as a proposed class action, but this order did not decide whether a class should be certified.

Judicial notice

Shell asked the court to take judicial notice—formally recognize certain facts or documents without requiring ordinary proof—of collective bargaining agreements and related agreements, as well as court documents from an earlier settlement involving Shell. The court granted judicial notice of the collective bargaining agreements because they governed the employment relationship and were relevant to Shell’s federal-preemption argument.

The court declined to take judicial notice of the earlier-settlement documents at that time. Although those documents would ordinarily be proper subjects of judicial notice and involved two plaintiffs in this case, Shell cited them only in a footnote and did not rely on them in its dismissal arguments. The court concluded that they were not necessary to decide the motion.

Federal labor-law preemption

Shell argued that section 301 of the Labor Management Relations Act preempted the plaintiffs’ California claims. Section 301 preemption can apply when a state-law claim is based directly on a collective bargaining agreement or substantially depends on interpreting one.

The court held that the reporting-time pay claim was based on a right created by California law, not by the collective bargaining agreement. The claim therefore would exist with or without the agreement. The court also held that deciding whether telephone availability constituted “reporting for work” required interpreting the California wage order, not interpreting the collective bargaining agreement. The agreement only needed to be consulted to confirm the existence and terms of Shell’s standby policy.

The court rejected Shell’s reliance on another district court decision because that case involved alleged ambiguities and specific agreement provisions that required interpretation. The court found no comparable interpretive problem here. It therefore denied the motion to dismiss to the extent it relied on federal labor-law preemption.

Failure to state a claim

A motion under Federal Rule of Civil Procedure 12(b)(6) tests whether a complaint alleges enough facts to state a legally plausible claim. The court generally accepts well-pleaded factual allegations as true at this stage, but it does not accept bare legal conclusions as true.

Reporting-time pay. The court identified three elements: the employer required the employee to report for work, the employee did report, and the employee was not put to work. Relying on the California Court of Appeal’s decision in Ward v. Tilly’s, Inc., the court explained that reporting for work does not always require physically appearing at the workplace. It can mean presenting oneself in the manner the employer requires.

The court held that the plaintiffs plausibly alleged that Shell required them to report for work by remaining available to receive a call during the standby periods. The policy restricted what they could do because they had to remain reachable and within two hours of the refinery. The court also held that the plaintiffs plausibly alleged that they reported by making themselves available and were not put to work when Shell did not call them. The court denied the motion to dismiss this claim.

Wages owed at termination. Shell challenged the termination-pay claim only as to Synigal, arguing that the complaint did not allege that he personally had been subject to standby coverage during the relevant period. The court disagreed, finding that the complaint alleged that Synigal worked as an operator, left Shell’s employment shortly before the original complaint was filed, and was subject to the standby policy during the relevant period. The court denied the motion to dismiss this claim.

Wage statements. The plaintiffs alleged that Shell’s wage statements did not accurately report or calculate reporting-time pay, including total hours, wages, and applicable rates. The court held that reporting-time pay is a form of wages and that the allegations plausibly showed that the plaintiffs could not promptly and easily determine from their wage statements whether they had been properly paid. The court denied the motion to dismiss the wage-statement claim.

Unfair competition. The plaintiffs alleged that Shell’s conduct violated California’s Unfair Competition Law by being unlawful and unfair. Because the court allowed the underlying Labor Code claims to proceed, it also allowed the claim based on allegedly unlawful conduct to proceed. The court further held that the plaintiffs plausibly sought restitution—return of money allegedly owed to them—because they alleged that reporting-time pay was earned wages due and payable. The court denied the motion to dismiss the unfair-competition claim.

Private Attorneys General Act claim. The plaintiffs sought civil penalties under California’s Private Attorneys General Act, which allows an allegedly aggrieved employee to sue on behalf of the employee and other current or former employees for certain Labor Code penalties. Shell argued that the claim was preempted by federal labor law and depended on Labor Code claims that failed. Because the court rejected the preemption argument and allowed the underlying Labor Code claims to proceed, it denied the motion to dismiss the Private Attorneys General Act claim.

Disposition

The court denied Shell’s motion to dismiss in full. The order disposed of Docket No. 19. It did not decide whether the plaintiffs ultimately proved their claims or whether the proposed class should be certified. Judge Corley issued the order on January 15, 2020.