Wood v. Marathon Refining Logistics Service LLC

Background

This was the second round of briefing on the plaintiffs’ claims for California reporting-time pay arising from Marathon’s standby-shift system. In an earlier order, the court granted Marathon’s motion to dismiss with leave to amend after finding that the claims, as pleaded, were preempted by section 301 of the Labor Management Relations Act. Preemption means that federal labor law displaces a state-law claim when deciding the claim would substantially depend on interpreting a collective bargaining agreement.

The plaintiffs filed a first amended complaint and then the operative second amended complaint. The second amended complaint added a claim under California’s Private Attorneys General Act and attached collective bargaining agreements. Marathon again moved to dismiss, arguing both that the claims were preempted and that the plaintiffs lacked a plausible legal theory for reporting-time pay.

Labor-law preemption

The court distinguished between two theories of the standby system. It held that the claims were preempted insofar as they were based on a voluntary standby system. Under that theory, employees allegedly had maximum flexibility to volunteer for standby assignments, and resolving the claims would require addressing the agreements and related guidelines. The court stated that such claims were more appropriately resolved by arbitrators.

The court denied the motion insofar as the claims were based on a mandatory standby system. The second amended complaint alleged that the collective bargaining agreements described standby shifts as mandatory, gave Marathon ultimate discretion to determine how many employees would be required to stand by, and required employees to respond within a maximum period of 3.5 hours. The plaintiffs also alleged that voluntary overtime lists were used before employees on the mandatory standby list were called. The court found that this narrower theory did not require interpreting the collective bargaining agreements.

Reporting-time pay claim

The court next considered whether the non-preempted claims stated a plausible claim for relief. Marathon argued that California Wage Order 1-2001 and the California Court of Appeal’s decision in Ward v. Tilly’s Inc. did not support the plaintiffs’ claims. The court disagreed, relying on Ward and the Ninth Circuit’s decision in Herrera v. Zumiez, Inc. for the principle that reporting for work can include presenting oneself as ordered by the employer, rather than only physically appearing at the workplace or calling in.

Applying that reasoning, the court found that the alleged standby system could trigger reporting-time pay requirements. The plaintiffs alleged that standby shifts restricted their ability to earn income, attend school, care for family members, and engage in personal activities, while allowing Marathon to maintain a pool of contingent workers without paying them unless called to work. The court concluded that the allegations stated a plausible claim under Wage Order 1-2001. It did not decide whether the multifactor test discussed in Mendiola v. CPS Security Solutions, Inc. was the proper standard or whether Marathon would satisfy that test; those matters could involve factual determinations at a later stage.

Rulings and next steps

The court granted in part and denied in part Marathon’s motion to dismiss. It granted the motion as to claims based on a voluntary standby-shift system because those claims were preempted by section 301 of the Labor Management Relations Act. It denied the motion as to claims based on a mandatory standby-shift system.

The court granted Marathon’s request for judicial notice of the two collective bargaining agreements and related guidelines. It denied requests for judicial notice of an arbitration award and settlement agreements, denied as moot the plaintiffs’ request concerning filings in two other matters, and terminated Docket Numbers 29, 35, and 36. Marathon was ordered to file an answer to the remaining allegations by May 1, 2020, and the court set a case-management conference for May 18, 2020. Judge Yvonne Gonzalez Rogers signed the order.