Giles v. Canus Corporation

Background

Martinez Andre Giles filed two related cases in California state court. One was a putative class action, and the other asserted a representative claim under California’s Private Attorneys General Act. Giles alleged that Canus failed to pay minimum and overtime wages, provide required meal and rest periods, issue complete and accurate wage statements, and pay wages when due. He also alleged wrongful termination after complaining about Canus’s employment practices.

Giles worked for Canus as a nonexempt employee from January 2015 through May 2021. Canus removed both cases to federal court, arguing that the claims were completely preempted by section 301 of the Labor Management Relations Act. Complete preemption can convert a state-law claim into a federal claim for purposes of removal when the claim depends on a collective bargaining agreement.

Motions to Remand

Giles moved to remand both cases to state court, arguing that the federal court lacked subject-matter jurisdiction. The court denied both motions.

The court found that Giles was covered by two collective bargaining agreements between Canus and the International Brotherhood of Electrical Workers Local Union 1245. The agreements covered the relevant periods and met the statutory requirements discussed by the court.

The court held that the overtime claims were completely preempted because the applicable California overtime rules did not apply to an employee covered by a qualifying collective bargaining agreement. Under those circumstances, the right to overtime existed solely because of the agreements.

The court likewise held that the meal-period claims were completely preempted. The court found that Giles worked in a construction occupation and that the collective bargaining agreements met the requirements for an exemption from California’s meal-period rules. As a result, his right to meal periods existed solely because of the agreements.

For the minimum-wage claims, Canus did not argue that the collective bargaining agreements created the right to minimum wages. Instead, Canus argued that resolving the claims would require interpreting agreement terms such as “actual time worked” and “show-up pay.” The court agreed because Giles alleged that he was not paid for off-the-clock activities, including work during meal periods, mandatory testing, and screening before clocking in. The court therefore held that the minimum-wage claims were completely preempted.

The court also held that Giles’s wage-statement, waiting-time, wrongful-termination, and unlawful-business-practices claims were preempted to the extent they were derivative of the preempted minimum-wage, overtime, and meal-period claims. The court exercised supplemental jurisdiction—authority to hear related state-law claims—instead of remanding Giles’s rest-period claims and the portions of the other claims that were not derivative, because they shared a common set of facts with the federal claims.

Judgment on the Pleadings

Canus moved for judgment on the pleadings, a request for judgment based on the written pleadings under a standard similar to dismissal for failure to state a claim. Canus sought judgment on the minimum-wage, overtime, and meal-period claims in their entirety, and on the wage-statement, waiting-time, wrongful-termination, and unlawful-business-practices claims to the extent they were derivative of the preempted claims.

The court agreed that the identified claims were completely preempted. It granted Canus’s motions for judgment on the pleadings, but did not enter judgment. Instead, the court dismissed the minimum-wage, overtime, and meal-period claims in their entirety and dismissed the other identified claims to the extent they were derivative of those claims. The court afforded Giles leave to amend to plead any or all of the dismissed claims as claims under the Labor Management Relations Act. Any amended pleading had to be filed by September 13, 2022.

Other Direction

The court directed Canus to resubmit courtesy copies of its removal notices, declarations, exhibits, and related documents in single-sided format no later than August 19, 2022.

Disposition

Judge Maxine Chesney denied Giles’s motions to remand. She granted Canus’s motions for judgment on the pleadings as described above, dismissed the specified claims, granted leave to amend, and directed Canus to resubmit the courtesy copies.