NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 1 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DANIELLE ESTRADA; ROBERT No. 15-15133
HERNANDEZ; ARMANDO SANCHEZ;
STEVEN SPERLING; MARCINELLA D.C. No. 4:14-cv-04465-DMR
CALL; SHIRLEY NELSON,
Plaintiffs-Appellants, MEMORANDUM*
v.
KAISER FOUNDATION HOSPITALS;
THE PERMANENTE MEDICAL GROUP,
INC.; KAISER FOUNDATION HEALTH
PLAN, INC.; SOUTHERN CALIFORNIA
PERMANENTE MEDICAL GROUP,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Donna M. Ryu, Magistrate Judge, Presiding
Argued and Submitted December 16, 2016
San Francisco, California
Before: HAWKINS, BERZON, and MURGUIA, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Plaintiffs-Appellants (“Plaintiffs”) appeal the district court’s order denying
Plaintiffs’ motion to remand on the grounds that Plaintiffs’ California state law
claims were preempted by Section 301 of the Labor Management Relations Act, 29
U.S.C. § 185(a) (“Section 301”). We review de novo the denial of a motion to
remand, Or. Bureau of Labor & Indus. v. U.S. W. Commc’ns, Inc., 288 F.3d 414,
417 (9th Cir. 2002), and a district court’s finding of Section 301 preemption,
Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 689 (9th Cir. 2001) (en banc).
We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
Section 301 “preempts the use of state contract law in [collective bargaining
agreement (“CBA”)] interpretation and enforcement.” Kobold v. Good Samaritan
Reg’l Med. Ctr., 832 F.3d 1024, 1032 (9th Cir. 2016) (quoting Cramer, 255 F.3d at
689). If the asserted state law cause of action involves a right that exists
independently of the CBA, which is undisputed in this case, then we consider
whether the state law claim is “substantially dependent on analysis of a collective-
bargaining agreement.” Burnside v. Kiewit Pac. Corp., 491 F.3d 1053, 1059 (9th
Cir. 2007) (quoting Caterpiller Inc. v. Williams, 482 U.S. 386, 394 (1987)). To
determine whether a claim is substantially dependent on analysis of a CBA, the
court must analyze “whether the claim can be resolved by looking to versus
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interpreting the CBA. If the latter, the claim is preempted; if the former, it is not.”
Id. at 1060 (emphasis added) (alterations, internal quotation marks, and citation
omitted). We focus on the allegations in the complaint in determining whether a
claim is preempted. See Caterpillar Inc., 482 U.S. at 398–99.
Here, the relevant CBAs relied upon in the complaint are a series of National
Agreements, negotiated and agreed to by Kaiser and a coalition of local labor
unions, which refer to Local Agreements, negotiated and agreed to by Kaiser and
the local union that represents Kaiser’s California employees, including Plaintiffs.
Section 2.A.1 of each of the National Agreements provides across-the-board yearly
wage increases of between 3% and 5%. Section 1.B.3 of the National Agreement,
the so-called “LMP Trust Provision,” states: “[a]n amount equal to nine cents per
hour per employee will be contributed to the [LMP Trust] throughout the term of
this Agreement, consistently across the Program.”1
Plaintiffs filed a class action in California state court against Kaiser, alleging
1
This language reflects the 2012 National Agreement. The 2005 and 2010
versions of the National Agreement read: “An amount equal to nine cents per hour
per employee will continue to be contributed to the Partnership Trust throughout
the term of this Agreement, using the current or jointly acceptable alternative
methodologies.” The relevant Local Agreements, which the complaint does not
specifically mention, contain tables setting forth “[N]egotiated [W]age [R]ates” for
each of Kaiser’s California positions.
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violations of California Labor Code §§ 222 and 226. Plaintiff’s theory is that the
LMP Trust Provision constitutes an unlawful deduction under California Labor
Code § 222, and that the $.09-per-hour contribution was not listed on Plaintiffs’
wage statements, in violation of California Labor Code § 226. Plaintiffs further
allege that this practice constituted a violation of the California Unfair Competition
Law (“UCL”), California Business & Professions Code § 17200, et seq. After
Kaiser removed the case to federal court, the district court denied Plaintiffs’
motion to remand and concluded that Section 301 preempted Plaintiffs’ state law
claims. We affirm.
We conclude that resolving Plaintiffs’ claims as alleged would require a
court to interpret the CBA.
1. California Labor Code § 222 makes it unlawful “in case of any wage
agreement arrived at through collective bargaining, either willfully or unlawfully
or with intent to defraud an employee . . . to withhold from said employee any part
of the wage agreed upon.” Identifying the “wage agreed upon” is therefore a
necessary first step to resolve Plaintiffs’ section 222 claim. Plaintiffs allege that
the “wage agreed upon” can be discerned from the National Agreement. They
claim that “[t]he agreed-upon wage terms of the 2005, 2010 and 2012 National
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Agreements are stated in section 2.A.1 of each agreement as across-the-board wage
increases of a specific percentage” and that the terms of the National Agreements
concerning the LMP Trust Provisions indicate that the employees are responsible
for the $.09-per-hour contribution. Plaintiffs further allege that the National
Agreements “superseded their local collective bargaining agreements,” except
where local agreements provided superior wages or benefits. Kaiser, on the other
hand, argues that the $.09-per-hour contribution was one of several factors used to
calculate the agreed-upon wage, which is set forth in the Local Agreement’s
Negotiated Wage Rates tables.
Because the complaint advances a contested interpretation of the National
Agreement, resolving the parties’ dispute requires the court to interpret how the
National and Local Agreements interact with each other and, more specifically, to
determine what combination of the LMP Trust Provision (National Agreement
Section 1.B.3), across-the-board percentage wage increase provision (National
Agreement Section 2.A.1), and Negotiated Wage Rates table in the Local
Agreement constitutes the wage the parties agreed would be paid. Thus, resolving
the parties’ dispute over whether the agreed-upon wage is set forth in the National
Agreement’s across-the-board wage increases or in the Local Agreement’s
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“Negotiated Wage Rates” would require interpreting the parties’ CBAs. See, e.g.,
Kobold, 832 F.3d at 1035–36 (noting that the state statute at issue requires
employees to be paid “the wages due and owing to them,” but that the statute fails
to “provide any means with which to assess whether wages are ‘due and owing,’”
and concluding that “because of a particular provision of the [] CBA that is in
dispute, a court must interpret, not just refer to or look at, the [] CBA”). Since a
court must interpret the parties’ CBA to resolve Plaintiffs’ section 222 claim,
Section 301 preempts the section 222 claim. Burnside, 491 F.3d at 1059–60.
2. Resolving Plaintiffs’ section 226 claim would also require a court to
determine whether the LMP Trust Provision was a deduction from the agreed-upon
wage or a factor in determining the agreed-upon wage. As described above, this
analysis would require interpretation of the CBA. The section 226 claim is
therefore preempted. See Burnside, 491 F.3d at 1059–60.
3. Finally, since Plaintiffs allege in their complaint that the sections 222 and
226 violations form the basis of Plaintiffs’ UCL claim, the UCL claim is derivative
of the sections 222 and 226 claims. Given that the sections 222 and 226 claims are
preempted, the derivative UCL claim also fails. See, e.g., Alcantar v. Hobart
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Serv., 800 F.3d 1047, 1051 (9th Cir. 2015) (acknowledging UCL claims that derive
from violations of the California Labor Code).
AFFIRMED.
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