George Melendez v. San Francisco Baseball Associates, LLC

Defendant San Francisco Baseball Associates LLC (the Giants)1

appeals from the

denial of its motion to compel arbitration of the wage and hour claims of plaintiff George

Melendez.2

Plaintiff, a security guard employed by the Giants at AT&T Park, contends

that he and other security guards were employed “intermittingly” for specific job

assignments (baseball games or other events) and were discharged “at the end of a

homestand, at the end of a baseball season, at the end of an inter-season event like a fan

fest, college football game, a concert, a series of shows, or other events,” and that

therefore under Labor Code section 201 were entitled to but did not receive immediate



1

The Giants were erroneously sued as “San Francisco Giants Baseball Club LLC.” The

correct entity was originally San Francisco Baseball Associates LP, which has

subsequently undergone restructuring and is now the San Francisco Baseball Associates

LLC.

2

Separate actions were brought by plaintiffs Wilfredo Rivas and George Melendez.

Rivas having been terminated by the Giants for misconduct, the parties stipulated that the

actions would be consolidated and that Melendez would be designated as the class

representative of the putative class action. Melendez is the employee whose situation is

addressed in the briefing in the trial court and this court. The claims of the two plaintiffs

are identical.

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payment of their final wages upon each such “discharge.” The Giants contend that

payment immediately after each such event is not required because under the terms of the

collective bargaining agreement (CBA) between the Giants and the Service Employees

International Union, United Service Workers West of San Francisco (the union),

Melendez and all such security guards are not intermittent employees but are “year-round

employees who remain employed with the Giants until they resign or are terminated

pursuant to the CBA.” The Giants moved to compel arbitration or to dismiss the action

under the arbitration provision of the CBA and on the ground that the action is preempted

by section 301 of the Labor Management Relations Act, 29 United States Code,

section 185(a). The trial court rejected both grounds. We agree that the present dispute is

not within the scope of the arbitration provision in the CBA but conclude that arbitration

is required by section 301 of the Labor Management Relations Act.

Background

The following facts were established by declarations submitted in support of the

Giants’ motion and are largely undisputed.

AT&T Park in San Francisco is used by the Giants for baseball games and for

concerts and other events during the off-season and between “homestands” (defined as

between three and 10 or more consecutive games at the home ballpark). Numerous nonbaseball

events are held at the ballpark throughout the year.

Melendez has been employed by the Giants as a security guard at AT&T Park

since March 2005. As required by the terms of the CBA he has at all times been a

member of the union and the terms of his employment are governed by the provisions of

the CBA.

The CBA confirms that the union is the sole collective bargaining agency for

security personnel employed by the Giants at AT&T Park. The agreement defines several

classifications of employees. “Regular” employees are the 13 employees who in 2012

worked the most total hours and who continue to work at least 1700 hours in succeeding

years. These employees have priority in scheduling over other classifications of

employees and receive benefits not provided to other employees. Any vacancy in these

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13 positions “shall be filled by the person who worked the most hours in the previous

year from among those employees not classified as ‘regular employees.’ ” All other

employees (other than “supervisory” employees and “probationary” employees) are

labelled “seasonal” employees. The CBA also defines “senior seasonal” employees

(seasonal employees who have worked a minimum of 300 hours each year for the last

five years) and “super senior seasonal” employees (seasonal employees who have worked

a minimum of 300 hours each year for the last 10 years), who receive increased hourly

wages.

All security personnel are required to meet specified employment qualifications.

These qualifications include obtaining a valid California Guard Card, which requires

“enrolling in and completing necessary coursework and training, passing the required

examination, passing the required background check” and meeting any other applicable

requirements. The CBA also provides that “All new applicants for employment as

security personnel shall be subject to pre-hire drug screening and background

investigation.” The Giants “have the right to discipline or discharge any regular, senior

seasonal or seasonal employee for cause.” The term of the CBA is from January 1, 2013,

through December 31, 2017, and from year-to-year thereafter unless either party requests

modification 60 days prior to the anniversary date.

The CBA contains a schedule of hourly wages for all classifications of employees.

The agreement provides that the Giants “retain[] the right to establish what shall

constitute a normal workday and to schedule employees at its discretion.” All nonprobationary

employees “shall be entitled to overtime pay for Martin Luther King Jr.

Day, President’s Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving,

Christmas & New Year’s Day.”

According to the Giants’ Senior Director of Security, “security guards do not turn

in their uniforms or badges at the end of each homestand or baseball season.” They “do

not reapply for work or submit new hire paperwork at the beginning of each homestand

or baseball season. Nor do they have to undergo security background checks at the

beginning of each homestand or baseball season. [¶] . . . The Giants do not terminate their

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security guards at the end of each homestand or baseball season. On the contrary, security

guards remain on the Giants’ payroll between homestands and baseball seasons, unless

their employment otherwise ends (by resignation or pursuant to the CBA).” Many Giants’

security guards “regularly work between baseball seasons or year-round. . . . Based on

review of his payroll records, [Melendez] himself regularly worked between baseball

seasons. In fact, he worked every pay period in 2015 and each and every pay period in

2016 to date, often working almost as many hours in the ‘off-season’ as those during the

baseball seasons.” (Italics in original.)

Without having invoked the grievance procedures specified in the CBA, plaintiffs

filed their complaints with common allegations. Melendez alleges that he and other

security guards are hired by the Giants “intermittently during the baseball season and

throughout the rest of the calendar year” and that the Giants fail to comply with Labor

Code section 201 “in no less than three (3) ways. (1) At the end of the baseball season

defendants do not pay intermittingly employed persons on the last day they work during

the season. (2) During the baseball season, defendants do not immediately pay

intermittently employed employees on the last day they work during a home-stand. (3)

Between baseball seasons, when intermittently employed persons are employed for

events such as concerts, college football games, theatrical performances, fan appreciation

days, a run of Cirque du Soleil shows, etc., defendants do not immediately pay

intermittently employed employees at the end of their work at these events.”

The Giants have timely appealed from the trial court’s denial of its motion to

compel arbitration of these claims as assertedly required by the arbitration provision of

the CBA and by section 301 of the Labor Management Relations Act.

Discussion

1. The dispute does not come within the arbitration provisions of the CBA.

Section Fourteen of the CBA, entitled Grievance & Arbitration, requires an effort

to resolve grievances informally and, failing informal resolution, arbitration of the

grievance. A “grievance” is defined as “any dispute between the employer and an

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employee or the union, regarding the interpretation, application or alleged violation of

any of the terms of this agreement.” The complaint is this action does not allege a

violation of the terms of the CBA. The complaint is based solely on the alleged violation

of Labor Code section 201. The trial court correctly ruled that the alleged statutory

violation does not come within the scope of the contractual arbitration provision. (E.g.,

Flores v. Axxis Network & Telecommunications, Inc. (2009) 173 Cal.App.4th 802, 808-

810.)

2. Section 301 of the Labor Management Relations Act requires that the dispute be

arbitrated.

“[A] long line of United States Supreme Court cases hold[] that under section 301

[of the Labor Management Relations Act], although state courts have concurrent

jurisdiction over controversies involving agreements between unions and employers, the

substantive law governing union-management labor relations is exclusively a matter for

arbitration under federal law. [Citations.] . . . [¶] The Ninth Circuit, sitting en banc,

recently summarized section 301 preemption law as follows: ‘If the plaintiff’s claim

cannot be resolved without interpreting the applicable CBA . . . it is preempted. . . . [T]he

need to interpret the CBA must inhere in the nature of the plaintiff’s claim,’ however, in

order for preemption to apply. [Citation.] ‘[I]f the claim may be litigated without

reference to the rights and duties established in the CBA . . . [and] plainly is based on

state law,’ it is not preempted, even if ‘the defendant refers to the CBA in mounting a

defense.’ ” (Levy v. Skywalker Sound (2003) 108 Cal.App.4th 753, 762-763, fn. omitted.)

As the Ninth Circuit recognized in Newberry v. Pacific Racing Assn. (9th Cir. 1988) 854

F.2d 1142, 1147, section 301 of the Labor Management Relations Act “does not preempt

every employment dispute tangentially involving the labor agreement.” The test of

whether preemption applies is: “Does the application of state law ‘require[] the

interpretation of a collective-bargaining agreement,’[citation], or ‘substantially depend[]

upon analysis of the terms of the agreement made between the parties in a labor

contract?’ ” (854 F.2d at p. 1147.)

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Here, plaintiffs seek the recovery of penalties under Labor Code section 203 on

the ground that the Giants’ failure to pay security guards immediately after the

termination of each instance of what they describe as “intermittent employment” violates

Labor Code section 201.

3

Section 201, subdivision (a) begins: “If an employer discharges

an employee, the wages earned and unpaid at the time of discharge are due and payable

immediately.”4

The Giants’ position is that it does not “discharge” its security guards

after every game, homestand, baseball season or event at which the guards work. Rather,

it contends, the guards remain employed under the provisions of the CBA, subject to

scheduling by the Giants, unless and until a guard resigns or is terminated for cause under

the terms of the CBA.

Melendez’s contrary position is based upon our Supreme Court’s decision in Smith

v. Superior Court (L’Oreal) (2006) 39 Cal.4th 77. In L’Oreal, the court concluded that

“an employer effectuates a discharge within the contemplation of Labor Code sections

201 and 203, not only when it fires an employee, but also when it releases an employee

upon the employee’s completion of the particular job assignment or time duration for

which he or she was hired.” (39 Cal.4th at p. 90.) In that case, the plaintiff was hired to be

a “hair model” at a single show featuring the employer’s products, with the understanding

that she would be paid $500 for the one day’s work. (Id. at p. 81.) The employer waited

over two months before paying the plaintiff, who successfully claimed that Labor Code



3

Labor Code section 203 provides that an employer’s willful failure to pay wages to a

discharged employee in accordance with Labor Code section 201 subjects the employer

to penalties.

4

Labor Code section 201, subdivision (a) continues with this exception: “An employer

who lays off a group of employees by reason of the termination of seasonal employment

in the curing, canning, or drying of any variety of perishable fruit, fish or vegetables,

shall be deemed to have made immediate payment when the wage of said employees are

paid within a reasonable time as necessary for computation and payment thereof;

provided, however, that the reasonable time shall not exceed 72 hours . . . .” Other

sections provide different final payment provisions for specified classes of employees,

none of which apply here. (Lab. Code, §§ 201.3, 201.5, 201.7, 201.9.) Melendez argues

that the absence of such a provision applicable to his employment emphasizes that the

requirement of immediate payment applies in this case.

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sections 201 and 203 “protect employees such as herself who are hired for a particular

job assignment or time duration, and that the statutory discharge element is met when the

employment relationship is terminated upon completion of the specified employment.”

(39 Cal.4th at p. 82.) Melendez asserts that L’Oreal applies to his situation, while the

Giants contend the case is inapplicable because its security guards are not hired “for a

particular job assignment or time duration.”

Turning to the preemption issue, the trial court held that resolution of the

controversy does not require interpretation of the CBA, but simply a determination of

whether the security guards are discharged within the meaning of Labor Code section 201

at the conclusion of an event or series of baseball games. The court observed that the

dispute can be resolved without interpretation of “any specific language in the CBA.” It

reasoned that none of the provisions in the CBA, such as those “relat[ing] to vacations;

how employees are assigned work; and so on . . . [have] any connection . . . to whether

plaintiffs here were or were not terminated, the core (if not only) factual issue pertinent to

the statutory claims.”

We disagree with this analysis. While resolution of the controversy may not turn

on the interpretation of any specific language in the CBA, it does not follow that the

meaning of the CBA is irrelevant to the outcome of the dispute. The underlying legal

issue, as all parties recognize, is whether plaintiffs were “discharged” within the meaning

of Labor Code section 201. But in order to determine whether the conclusion of a

baseball game or season or other event constitutes a discharge as interpreted in L’Oreal,

it is necessary to first determine the terms of employment. (Smith v. Superior Court

(L’Oreal), supra, 39 Cal.4th 77.) In L’Oreal the plaintiff was hired for only a single day’s

work, so that when the day ended her employment terminated and she was therefore

discharged within the meaning of the statute. Here, plaintiffs are union members and the

terms of their employment are governed by the CBA. It is essential to determine,

therefore, whether the CBA provides for employment of security guards for only a single

game or homestand or season or other event, or whether the agreement contemplates

extended employment from season to season, event to event, year to year, recognizing

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that not every day will be a day of work. If the latter, there is no termination of

employment, and therefore no “discharge,” at the conclusion of each baseball game,

homestand, season or other event.

Although no provision of the CBA provides an explicit answer, the duration of the

employment relationship must be derived from what is implicit in the agreement. There

are numerous provisions from which inferences may logically be drawn. The

classification of employees is based on the number of hours worked in a year, itself

suggesting that employment is considered to continue beyond the conclusion of each

event. Continued classification as a “regular” employee requires at least 1,700 hours of

work in a year. “All employees shall be probationary employees for their first five

hundred (500) hours of work with the Giants.” Employees rise to “senior” and “super

senior” status by working a minimum of 300 hours each year for the last five or ten years,

hardly possible if each event is deemed a separate employment. As indicated above, the

CBA provides that “All new applicants for employment as security personnel shall be

subject to pre-hire drug screening and background investigation”; the language seems to

imply that such screening and investigation will occur only once prior to the start of a

single employment, and practice under the agreement confirms this interpretation. The

specification of holidays in the CBA certainly implies year-long employment. And under

the CBA, the Giants have the right to discharge an employee only for cause. Other

provisions may also support inferences as to the intended term of employment. We do not

here purport to definitively interpret the CBA but simply emphasize that resolution of the

controversy requires interpretation of the scope of employment under the CBA.

Other cases on which Melendez relies for the argument that mere reference to a

collective bargaining agreement does not give rise to preemption under section 301 of the

Labor Management Relations Act are distinguishable. In Livadas v. Bradshaw (1994)

512 U.S. 107, the plaintiff’s claim under Labor Code sections 201 and 203 was not

preempted because there was no need to look to the terms of the collective bargaining

agreement under which plaintiff had been employed to determine whether section 201

had been violated. There was no dispute that plaintiff had been terminated and that final

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payment had been delayed. “Beyond the simple need to refer to bargained-for wage rates

in computing the penalty, the collective-bargaining agreement [was] irrelevant to the

dispute (if any) between Livadas and [the employer].” (512 U.S. at p. 125.) The

Commissioner of Labor in that case had erroneously concluded that she was prohibited

from enforcing section 201 whenever the employee had worked under a collective

bargaining agreement, even if there was no dispute as to the meaning of the agreement or

need to interpret it to determine liability under the statute. Similarly, in Balcorta v.

Twentieth Century-Fox Film Corp. (9th Cir. 2000) 208 F.3d 1102, 1110, “determining

whether Balcorta was discharged [did] not require a court to interpret the collective

bargaining agreement between Fox and Local 728, and thus [did] not render Balcorta’s

claims subject to complete preemption.” The other cases cited by Melendez are to the

same effect. (Meyer v. Irwin Industries, Inc. (C.D. Cal. 2010) 723 F.Supp.2d 1237, 1245

[“analysis [of plaintiff’s Labor Code claims] can be accomplished without any reference

to the CBA”]; Avalos v. Foster Poultry Farms (E.D. Cal. 2011) 798 F.Supp.2d 1156,

1162 [“Here, the CBA does not contain a complex wage structure that requires analysis

to resolve the claims.”]; Bonilla v. Starwood Hotels & Resorts Worldwide, Inc. (C.D. Cal.

2005) 407 F.Supp.2d 1107, 1112, 1113 [“Plaintiff’s claims by themselves do not require

an analysis of the CBA”; “Defendant does not demonstrate that the CBA must be

‘interpreted’ rather than simply referenced to determine unpaid compensation for missed

breaks”].)

Since in this case application of Labor Code section 201 necessarily “ ‘require[s]

the interpretation of [the CBA]’ ” and “ ‘substantially depend[s] upon analysis of [its]

terms’ ” (Newberry v. Pacific Racing Assn., supra, 854 F.2d at p. 1147), federal

preemption applies and the dispute must be resolved pursuant to the grievance procedure

and arbitration under the CBA.

The order denying the motion to compel arbitration is reversed