John Doe v. Google, Inc.

San Francisco, CA - Employment Law Lawyer



Google, Inc. and Alphabet, Inc. (collectively, Google), and Adecco USA,

Inc. (Adecco) require their employees to comply with various confidentiality

policies. John Doe, David Gudeman, and Paola Correa, who are current and

former Google and Adecco employees, sued Google and Adecco under the

Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698

et seq.), alleging the employers’ confidentiality policies restricted their

employees’ speech in violation of California law. The trial court sustained

defendants’ demurrers without leave to amend, concluding plaintiffs’ claims

were preempted by the National Labor Relations Act (NLRA or Act) (29

U.S.C. § 151 et seq.) under San Diego Bldg. Trades Council v. Garmon (1959)

359 U.S. 236, 244–245 (Garmon). Plaintiffs contend the trial court erred in

finding the NLRA preempted their PAGA claims. They further challenge the

trial court’s denial of a petition to coordinate this case with another case

pending in a different trial court.

2

We conclude that, although many of plaintiffs’ claims relate to conduct

that is arguably within the scope of the NLRA, the claims fall within the local

interest exception to Garmon preemption and may therefore go forward. We

also conclude that plaintiffs’ challenge to the trial court’s coordination

petition is not properly before us. We will therefore reverse the trial court’s

orders sustaining defendants’ demurrers without leave to amend and remand

for further proceedings.

BACKGROUND

Because this appeal comes to us on demurrer, the following facts are

based on the allegations in plaintiffs’ pleadings and the requests for judicial

notice.1

Litigation Regarding Confidentiality Policies

Doe works as a product manager in a supervisory capacity at Google.

He began work at Google in July 2014, had his employment terminated in

April 2016, and was reinstated in June 2016. After being terminated and

before being reinstated, Doe sent notice under PAGA to the California Labor

and Workforce Development Agency that he intended to file this suit on

behalf of himself and other current and former Google employees. Doe

alleged that Google required employees to sign a confidentiality agreement

1 Google and plaintiffs have requested judicial notice of various

submissions to and rulings by the NLRB’s regional director and general

counsel. The requests are unopposed. With one exception, we grant the

requests for notice of these documents as official acts or records of the

executive department or a court of record of the United States. (Evid. Code,

§§ 452, subds. (c)-(d), 459; PG&E Corp. v. Public Utilities Com. (2004) 118

Cal.App.4th 1174, 1220, fn. 38 [taking judicial notice of briefs filed before

administrative agency]; Heston v. Farmers Ins. Group (1984) 160 Cal.App.3d

402, 413 [approving of judicial notice of brief filed with the NLRB as court

record].) We deny Google’s request for notice of Doe’s unfair labor practice

charge as unnecessary, because that document is already in the record.

3

and imposed certain related confidentiality policies on its employees, and

that these policies violated the Labor Code. Six months later, Doe filed this

case in San Francisco Superior Court. (John Doe et al. v. Google Inc. et al

(Super. Ct. S.F. City & County, 2016, No. CGC-16-556034) (Doe).)

Gudeman is a former Google employee, and Correa is a former Google

employee who also worked for Adecco as a temporary employee placed at

Google. Doe’s second amended complaint included them as named plaintiffs,

and added claims against Adecco based on Correa’s experience there.

Shortly after plaintiffs filed their second amended complaint, Rachel

Moniz filed a complaint against Adecco in San Mateo Superior Court alleging

claims based on Adecco’s confidentiality policies. (Moniz v. Adecco (Super. Ct.

San Mateo County, 2017, No. 17-CIV-01736) (Moniz).) Ten days later,

plaintiffs filed their third amended complaint against Google and Adecco.

The Harms Alleged

Plaintiffs’ third amended complaint alleges 17 causes of action under

PAGA based on defendants’ confidentiality policies. Plaintiffs’ confidentiality

claims fall into three subcategories; restraints of competition, whistleblowing,

and freedom of speech.

In their competition causes of action plaintiffs allege that Google’s

confidentiality rules violate state statutes by preventing employees from

using or disclosing the skills, knowledge, and experience they obtained at

Google for purposes of competing with Google. For example, the policies

prevent Googlers from disclosing their wages in negotiating a new job with a

prospective employer, and from disclosing who else works at Google and

under what circumstances such that they might be receptive to an offer from

a rival employer. The complaint grounds these PAGA claims on alleged

4

violations of Business & Professions Code sections 17200, 16600, and 167002

and various provisions of the Labor Code (see Lab. Code, §§ 232, 232.5,

1197.5, subd. (k)).

Plaintiffs’ whistleblowing causes of action allege that Google’s

confidentiality rules prevent employees from disclosing violations of state and

federal law, either within Google to their managers or outside Google to

private attorneys or government officials. (See Bus. & Prof. Code, §§ 17200 et

seq.; Lab. Code, § 1102.5.) They also allege the policies unlawfully prevent

employees from disclosing information about unsafe or discriminatory

working conditions, or about wage and hour violations. (See Lab. Code,

§§ 232, 232.5.)

In their freedom of speech claims, plaintiffs allege that defendants’

confidentiality rules prevent employees from engaging in lawful conduct

during non-work hours and violate state statutes entitling employees to

disclose wages, working conditions, and illegal conduct. (See Lab. Code,

§§ 96, subd. (k), 98.6, 232, 232.5, 1197.5, subd. (k).) This lawful conduct

includes the exercise of an employee’s constitutional rights of freedom of

speech and economic liberty. As a practical matter, plaintiffs argue, they are

forbidden even to write a novel about working in Silicon Valley or to reassure

their parents they are making enough money to pay their bills, matters

untethered to any legitimate need for confidentiality.

Google’s confidentiality rules contain a savings clause stating that the

company’s rules were not intended to limit employees’ right to discuss wages,

terms, or conditions of employment with other employees, or their right to

2 The fifth amended complaint expressly grounds the Business &

Professions Code section 17200 allegation on violation of Business &

Professions Code sections 16600 and 16700.

5

communicate with government agencies regarding violations of law.

However, plaintiffs allege these clauses are meaningless and contrary to

Google’s policies and practices of enforcement, which threaten employees for

disclosing any information at all.

Plaintiffs allege Adecco was liable for both its own confidentiality

policies and Google’s because Adecco was Correa’s joint employer when she

was placed at Google. Adecco admits that in ruling on the demurrers “there

is no meaningful difference between [the] claims against Google and those

against Adecco.”

Demurrers

Google demurred to the entire complaint. As relevant here, Google

argued the NLRA preempted plaintiffs’ confidentiality claims. The trial court

sustained Google’s demurrer to the confidentiality claims without leave to

amend. It overruled the demurrer only as to a single remaining cause of

action—alleging defendants required employees to sign illegal releases of

potential claims as a condition of being hired—and the parties eventually

settled that claim.

Adecco demurred to the third amended complaint as well, shortly after

it filed a similar demurrer in Moniz. The Moniz court overruled the

demurrer, but the Doe court sustained Adecco’s demurrer to the

confidentiality claims, with leave to amend, for the same reasons that it

sustained Google’s demurrer.

Proceedings Specific to Adecco

Plaintiffs tried to cure the defects identified by the Doe court as to their

claims against Adecco by filing a fourth amended complaint. This complaint

retains the allegation that Adecco is jointly liable under PAGA for Google’s

confidentiality rules, but adds separate claims on behalf of Adecco employees

6

statewide based on Adecco’s own confidentiality rules. The new causes of

action against Adecco fall into the same competition, whistleblowing, and free

speech categories as the claims against Google in the third amended

complaint. Plaintiffs also allege Adecco had an unlawful policy prohibiting

temporary employees placed at Google from working directly for Google

without Adecco’s consent.

Adecco again demurred, and the trial court sustained the demurrer,

this time without leave to amend. Plaintiffs then amended their Doe

complaint a final time to add an illegal release claim against Adecco, a claim

the parties subsequently settled.

Before Adecco filed its demurrer to the third amended complaint, it

filed with the Judicial Council a petition to coordinate the action with Moniz.

After plaintiffs filed their fourth amended complaint and shortly before

Adecco demurred to it, the coordination judge continued proceedings on

Adecco’s petition until after the ruling on Adecco’s forthcoming demurrer.

Then, after the Doe court sustained Adecco’s demurrer to the fourth amended

complaint without leave to amend, the coordination judge denied the petition

to coordinate, explaining that the sole then-remaining cause of action in Doe

(the illegal release claim) was not at issue in Moniz, the claims in Moniz

covered more employees than the claim in Doe, and the Moniz litigation had

advanced further.

Adecco filed a petition for writ of mandate in this court seeking review

of the coordination judge’s denial of its coordination petition. Plaintiffs

likewise filed a petition for writ of mandate, seeking review of the Doe court’s

orders sustaining Google’s and Adecco’s demurrers. This court summarily

denied Adecco’s writ and denied plaintiffs’ writ as untimely. (Adecco USA,

Inc. v. Superior Court for the City & County of San Francisco (Feb. 6, 2018,

7

A153470) [nonpub. opn.]; Doe et al. v. Superior Court for the City & County of

San Francisco (Mar. 29, 2018, A153726) [nonpub. opn.].)

The trial court in Doe entered final judgment, and plaintiffs timely

appealed.

NLRB Files Then Settles Complaint Against Google

At the same time as Doe sent the PAGA notices anticipating this case,

he also filed an unfair labor practice charge against Google with the National

Labor Relations Board (NLRB or Board). Doe alleged Google’s confidentiality

rules violated section 8 of the NLRA by prohibiting employees from exercising

their rights under section 7 of the Act, which entitles employees to engage in

“concerted activities for the purpose of collective bargaining or other mutual

aid or protection.” (29 U.S.C. § 157) Doe alleged that Google violated section

8 by terminating him because he exercised his section 7 rights.

On the same day that plaintiffs filed their third amended complaint in

Doe, the regional director of the NLRB issued a complaint against Google

based on Doe’s unfair labor practice charge. However, the regional director’s

complaint did not include certain allegations from Doe’s charge, including the

allegation relating to Doe’s termination, because the regional director

determined Doe had been a supervisor and therefore was not protected by the

NLRA. Doe appealed that decision, but the NLRB’s general counsel denied

the appeal.

After plaintiffs filed their opening brief in this court, the NLRB’s

regional director and Google reached an informal settlement on the NLRB’s

complaint.3 As part of that settlement, Google agreed to post a notice for 60

3 We discuss the proceedings on the regional director’s complaint that

transpired after the trial court entered judgment because they are not in

dispute and come to us by way of judicial notice. (Reserve Insurance Co. v.

Pisciotta (1982) 30 Cal.3d 800, 813.)

8

days informing employees that they had the right “to discuss wages, hours,

and working conditions with other employees, the press/media, and other

third parties, and [Google] WILL NOT do anything to interfere with

[employees’] exercise of those rights.” The notice further stated that Google

would “NOT prohibit [employees] from discussing or sharing information

relating to [their] performance, salaries, benefits, discipline, training, or any

other terms and conditions of [their] employment and” had rescinded any

such limitations in its confidentiality rules. In exchange, the NLRB regional

director would withdraw her complaint, but this would not prevent the courts

or the Board from proceeding with other cases.

DISCUSSION

I. The NLRA and Garmon Preemption

Plaintiffs contend the trial court erred in finding the NLRA preempts

their confidentiality claims. We review this question de novo. (Wal-Mart

Stores, Inc. v. United Food & Commercial Workers Internat. Union (2016)

4 Cal.App.5th 194, 201 (Wal-Mart).) Likewise, de novo review applies to a

trial court’s decision sustaining a demurrer. (Traders Sports, Inc. v. City of

San Leandro (2001) 93 Cal.App.4th 37, 43). As we shall explain, we conclude

that these causes of action fall within the local interest exception to

preemption.

A. Legal Principles

Congress intended the NLRA to serve as a comprehensive law

governing labor relations; accordingly, “the NLRB has exclusive jurisdiction

over disputes involving unfair labor practices, and ‘state jurisdiction must

yield’ when state action would regulate conduct governed by the NLRA.

(Garmon, [supra, 359 U.S.] at pp. 244–245.)” (Wal-Mart, supra,

4 Cal.App.5th at pp. 200–201.) Because it is for the NLRB to determine, in

9

the first instance, whether conduct is in fact governed by the NLRA, the Act’s

preemptive effect may extend beyond conduct that the NLRA directly governs

to “activities which ‘arguably’ constitute unfair labor practices under the

Act.” (Balog v. LRJV, Inc. (1988) 204 Cal.App.3d 1295, 1303 (Balog); see

Garmon, at pp. 244–245.) Such conduct is “presumptively pre-empted.”

(Belknap, Inc. v. Hale (1983) 463 U.S. 491, 498 (Belknap).)

But Garmon preemption must not be applied in a “ ‘literal, mechanical

fashion’ ” (Local 926, Internat. Union of Operating Engineers, AFL-CIO v.

Jones (1983) 460 U.S. 669, 676 (Jones)), and it is subject to exceptions where

the activity in question is a “merely peripheral concern” of the NLRA, or

where “the regulated conduct touche[s] interests so deeply rooted in local

feeling and responsibility that, in the absence of compelling congressional

direction, we could not infer that Congress had deprived the States of the

power to act.” (Garmon, supra, 359 U.S. at pp. 243–244.) Although framed

as separate exceptions, these two factors are often analyzed together, as we

will do here. (See, e.g., Linn v. United Plant Guard Workers (1966) 383 U.S.

53, 61 (Linn); Balog, supra, 204 Cal.App.3d at p. 1304.)

B. Federal and State Interests at Stake

Garmon preemption “has its greatest force when applied to state laws

regulating the relations between employees, their union, and their employer.”

(Sears, Roebuck & Co. v. San Diego County Dist. Council of Carpenters (1978)

436 U.S. 180, 193 (Sears).) However, “the general applicability of a state

cause of action is not sufficient to exempt it from pre-emption.” (Farmer v.

United Brotherhood of Carpenters and Joiners of America, Local 25 (1977)

430 U.S. 290, 300 (Farmer).) Rather, we conduct a “balanced inquiry” into

the federal and state interests at stake and the potential to interfere with the

10

NLRB’s jurisdiction. (Ibid.) With this in mind, we consider the interests at

stake in this action.

The NLRA “was designed to ‘eliminate the causes of certain substantial

obstructions to the free flow of commerce . . . by encouraging the practice and

procedure of collective bargaining, and by protecting the exercise by workers

of full freedom of association, self-organization, and designation of

representatives of their own choosing, for the purpose of negotiating the

terms and conditions of their employment or other mutual aid or protection.’ ”

(Balog, supra, 204 Cal.App.3d at p. 1301, quoting 29 U.S.C. § 151.) To this

end, section 7 of the NLRA gives non-exempt employees the right to selforganize, bargain collectively, and “engage in other concerted activities for

the purpose of collective bargaining or other mutual aid or protection.” (29

U.S.C. § 157.) The NLRA also defines certain actions as unfair labor

practices. (Balog, at p. 1302, citing 29 U.S.C. §§ 158, 160.) As pertinent here,

section 8 of the NLRA declares it an “unfair labor practice for an employer . . .

[¶] to interfere with, restrain, or coerce employees in the exercise of the rights

guaranteed in” section 7. (29 U.S.C. § 158.) The focus of these provisions is

on workers joining together for mutual benefit.

By contrast here, plaintiffs seek to enforce Labor Code provisions that

protect their activities as individuals. For example, one provision prohibits

employers from preventing an employee “from disclosing the amount of his or

her wages” (Lab. Code, § 232), a statute that was enacted at the urging of

women’s groups to protect employees sharing information necessary to the

enforcement of laws against sex discrimination. (See, e.g., Sen. Com. on

Industrial Relations Staff Analysis of Assem. Bill No. 3193 (1983-1984 Reg.

Sess.) as amended March 21, 1984.) Another provision provides analogous

protection for an employee disclosing “information about the employer’s

11

working conditions” (Lab. Code, § 232.5), manifesting California’s public

policy to “prohibit[] employer restrictions on, or punishment for, speech

regarding conditions of employment” (Glassdoor, Inc. v. Superior Court (2017)

9 Cal.App.5th 623, 633). A third protects the rights of any employee to

disclose information about a violation of state or federal law to someone with

the power to address the problem—“to a government or law enforcement

agency, to a person with authority over the employee, or to another employee

who has authority to investigate, discover, or correct” the violation. (Lab.

Code, § 1102.5.) A fourth provision protects employees who complain about

underpayment of wages to the Labor Commissioner. (Lab. Code, § 98.6; see

also Lab. Code, § 1102.5 [protecting right to disclose information to state

agencies].) And a fifth protects an employee from retaliation for his or her

“lawful conduct occurring during nonworking hours away from the employer’s

premises” (Lab. Code, § 96, subd. (k)), so employers do not seek to control

non-work aspects of their employees’ lives. Plaintiffs allege that defendants’

confidentiality policies violate these provisions of California law.

Plaintiffs also allege violations of section 16600 of the Business and

Professions Code, which prohibits any contract that would improperly

restrain an employee from securing new employment with a competitor. This

statute “evinces a settled legislative policy in favor of open competition and

employee mobility” (Edwards v. Arthur Anderson LLP (2008) 44 Cal.4th 937,

946), a policy that has been seen as instrumental in the success of

California’s technology industry (see Gilson, The Legal Infrastructure of High

Technology Industrial Districts: Silicon Valley, Route 128, and Covenants

Not to Compete (1999) 74 N.Y.U.L. Rev. 575, 609 [“Silicon Valley’s legal

infrastructure, in the form of Business and Profession[s] Code section 16600’s

prohibition of covenants not to compete, provided a pole around which Silicon

12

Valley’s characteristic business culture and structure precipitated”]; see also

Saxenian, Regional Advantage: Culture and Competition in Silicon Valley

and Route 128 (1994) pp. 34–37.)

Keeping these very different federal and state interests in mind, we

now analyze Garmon preemption in this case.

C. Arguably Protected or Prohibited Activity

The first step of a Garmon analysis asks whether the conduct at issue

is arguably protected or prohibited by the NLRA. (Jones, supra, 460 U.S. at

p. 676.) The trial court concluded all of plaintiffs’ confidentiality claims are

presumptively preempted in their entirety because they involve policies

against disclosure of wages and working conditions (in the case of the

competition claims and some freedom of speech claims) or against disclosures

intended to affect the terms or conditions of employment (in the case of the

whistleblowing and some freedom of speech claims). We do not doubt that

some of the conduct at issue at least arguably falls within the NLRA. (See

Luke v. Collotype Labels USA, Inc. (2008) 159 Cal.App.4th 1463, 1470

[discussions among workers about working conditions are protected activity

under NLRA].) Indeed, the fact that the regional director brought a

complaint challenging Google’s confidentiality policies indicates that she so

concluded.

However, plaintiffs also allege conduct that clearly falls outside the

scope of the NLRA. For instance, plaintiffs’ competition claims allege

defendants’ confidentiality rules inhibit an employee seeking new

employment elsewhere and competing with defendants. They also allege

Adecco prevents its employees from working with companies where Adecco

has placed them, unless Adecco consents. These matters are, on their face,

unrelated to “mutual aid or protection” (29 U.S.C. § 157) of fellow employees

13

at Google or Adecco. Similarly, some of plaintiffs’ whistleblowing causes of

action allege defendants’ confidentiality policies prevent them from

discussing with the government legal violations unconnected to working

conditions, such as an employer’s violations of securities laws, false claims

laws, the federal Foreign Corrupt Practices Act, and other laws unrelated to

employees’ terms and conditions of employment. The NLRB has

authoritatively rejected the argument that whistleblowing about employer

conduct unrelated to working conditions is protected activity, so the NLRA

does not protect an employee reporting concerns about patient care in a

nursing home. (Orchard Park Health Care Center, Inc. (2004) 341 NLRB 642,

645.) But we need not belabor this point because, as we shall next discuss,

regardless of whether the challenged policies reach employee conduct that

the NLRA arguably protects or prohibits, plaintiffs’ state-law causes of action

fall within the local interest exception to Garmon preemption.

D. The Local Interest Exception

The local interest exception vindicates interests “ ‘deeply rooted in local

feeling and responsibility.’ ” (Sears, supra, 436 U.S. at p. 195.) Two factors

relevant to the application of this exception, in a case where an employer’s

policies are arguably prohibited by the NLRA, are: (1) whether there is “a

significant state interest in protecting the citizen from the challenged

conduct” and (2) whether “the exercise of state jurisdiction over the tort

claim [for trespass] entailed little risk of interference with the regulatory

jurisdiction of the Labor Board.” (Id. at pp. 196–197.)

The local interest exception has been applied in a range of

circumstances. As explained in Inter-Modal Rail Employees Assn. v.

Burlington Northern & Santa Fe Ry. Co. (1999) 73 Cal.App.4th 918 (InterModal), “the Supreme Court has declined to preempt a variety of state law

14

claims even though they arose in a labor law context [involving, for example,]

trespass by peaceful picking . . . intentional infliction of emotional distress

. . . [and] defamation . . .’ ” (Id. at p. 925; see Sears, supra, 436 U.S. at p. 198

[trespass by picketing]; Farmer, supra, 430 U.S. at pp. 299–300 [intentional

infliction of emotional distress]; Linn, supra, 383 U.S. at pp. 61–62

[defamation].) The local interest exception has also been applied to a cause of

action challenging an employer’s retaliation against employees for raising

concerns about workplace safety (Inter-Modal, at pp. 922–923, 925, citing

Balog, supra, 204 Cal.App.3d at p. 1304), and to controversies where the

NLRB could not have provided relief to the plaintiffs because their injury was

not relevant to its functions (Service by Medallion, Inc. v. Clorox Co. (1996)

44 Cal.App.4th 1807, 1815–1816 (Clorox) [service provider’s contract

negotiations with company took place against “backdrop” of union

campaign]).

Defendants do not deny that plaintiffs’ claims grow from deeply-rooted

local interests. This is no surprise, as plaintiffs bring this case under PAGA,

which means plaintiffs are serving “ ‘as the proxy or agent of the state’s labor

law enforcement agencies.’ ” (Kim v. Reins Internat. California, Inc. (2020)

9 Cal.5th 73, 81, italics omitted.) Courts have long recognized the importance

of state labor regulation that “provides protections to individual union and

nonunion workers alike, and thus ‘neither encourage[s] nor discourage[s] the

collective-bargaining processes that are the subject of the NLRA.’ ” (Fort

Halifax Packing Co. v. Coyne (1987) 482 U.S. 1, 20–21.) “[P]re-emption

should not be lightly inferred in this area, since the establishment of labor

standards falls within the traditional police power of the State.” (Id. at p. 21;

accord Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th

348, 388 [“enactment and enforcement of laws concerning wages, hours, and

15

other terms of employment is within the state’s historic police power”—

powers that “ ‘ “courts should assume . . . are not superseded ‘unless that was

the clear and manifest purpose of Congress’ ” ’ ”].) The state statutes

plaintiffs seek to enforce are all labor standards of this sort, statutes that

preserve the freedom of all employees to practice their profession or trade

(Bus. & Prof. Code, § 16600), to report wage-and-hour violations or unsafe

working conditions to government agencies (Lab. Code, § 1102.5), and to

speak as they choose about their work lives (Lab. Code, §§ 232, 232.5, 96,

subd. (k)). In sum, these statutes establish as a minimum employment

standard an employee anti-gag rule.

Not only are the interests protected by these statutes matters of

traditional local concern, but they may reasonably be seen as peripheral to

the NLRA. Nothing about the NLRA manifests a purpose to displace state

labor laws regulating wages, hours, and other terms of employment, as the

NLRA is “aimed at ‘safeguard[ing], first and foremost, workers’ rights to join

unions and to engage in collective bargaining.’ ” (Epic Sys. Corp. v. Lewis

(2018) __ U.S. __ [138 S.Ct. 1612, 1630] (Epic); see also Inter-Modal, supra,

73 Cal.App.4th at p. 926 [focus of NLRA is “ ‘an equitable bargaining

process[;] . . . Congress did not intend to preempt all local regulations that

touch or concern the employment relationship’ ”].) It is thus well established

that a state may set minimum employment standards without running afoul

of the NLRA. (Castillo v. Toll Bros., Inc. (2011) 197 Cal.App.4th 1172, 1207

[“state wage-and-hour statutes . . . raise no Garmon preemption concerns”].)

The state laws plaintiffs assert here govern matters similarly far afield from

the concerns underlying the NLRA.

Unable to refute the local interests at stake, defendants instead argue

that because the NLRB issued a complaint at Doe’s behest, to allow this case

16

to proceed in state court would risk interfering with the jurisdiction of the

NLRB. Were this a serious concern, it would render the local interest

exception unavailable. (See Sears, supra, 436 U.S. at pp. 196–197; Hillhaven

Oakland Nursing etc. Center v. Health Care Workers Union (1996) 41

Cal.App.4th 846, 855 (Hillhaven); Rodriguez v. Yellow Cab Cooperative, Inc.

(1988) 206 Cal.App.3d 668, 678–679.) But the NLRB has settled its claim

with no admission of wrongdoing by Google and no findings of fact by the

Board. Nothing the state court does at this juncture could interfere with the

NLRB’s exercise of its primary jurisdiction.

Asked about this point at oral argument, counsel for Google responded

with two concerns: (1) that the state court could reach “a different finding on

the merits,” in that “the NLRB . . . issued a complaint and [Google] entered

into a settlement on it, so there could be a different result in state court on

liability,” and (2) that state courts cannot impose “a different remedial

scheme for NLRA violations,” especially a scheme of punitive remedies as

was found preempted in Wisconsin Dept. of Industry v. Gould, Inc. (1986) 475

U.S. 282 (Wisconsin Dept. of Industry). Responding to these concerns in turn,

neither is substantial.

First, it would be impossible for the state court to reach “a different

result . . . on liability,” since the NLRB settled its case without resolving

liability issues. The settlement agreement between the Board and Google is

informal and of limited scope. It requires Google to post for 60 days a notice

informing its employees of their rights under “FEDERAL LAW,” and if

Google upholds its end of the bargain then the NLRB promises to take no

further action in the case. The reference to federal law is a signal that the

question on liability that underlay the NLRB case (i.e., whether defendants

violated the NLRA) is completely different from the liability questions in this

17

case (i.e., whether defendants violated California labor laws). Moreover, the

agreement expressly “does not prevent . . . the Board and the courts from

finding violations with respect to matters” occurring before the agreement

was approved, or from “mak[ing] findings of fact and/or conclusions of law

with respect to” evidence obtained in the case. With this provision, the Board

itself has given courts license to proceed with claims addressing the same or

similar facts. The terms of the agreement itself suggest that, whatever

California courts would ultimately decide on plaintiffs’ claims, the Board sees

in plaintiffs’ case no threat to its own jurisdiction.

As for Google’s second concern—duplicative and punitive remedies for

an NLRA violation—this argument founders at the outset because none of

plaintiffs’ claims requires proof of an NLRA violation. The difference

between this case and Wisconsin Dept. of Industry illustrates the point.

There, the state of Wisconsin had adopted a law debarring from state

contracting any company “found by judicially enforced orders of the National

Labor Relations Board to have violated the NLRA” three times in five years.

(Wisconsin Dept. of Industry, supra, 475 U.S. at pp. 283–284.) The NLRA

preempts this statute “[b]ecause Wisconsin’s debarment law functions

unambiguously as a supplemental sanction for violations of the NLRA.” (Id.

at p. 288.) By contrast, the California laws that plaintiffs seek to enforce

make no reference to the NLRA, the NLRB, or the rights of workers to

organize. They do not supplement sanctions for a violation of the NLRA, but

instead extend unrelated protections to conduct that may, or may not, also be

addressed by the NLRA. In such circumstances, the availability of a remedy

in state court that is unavailable under the NLRA may be a reason not to find

a case preempted. (Linn, supra, 383 U.S. at pp. 63–64; Clorox, supra, 44

Cal.App.4th at p. 1816.)

18

In sum, analyzing the two factors the United States Supreme Court has

identified as dispositive—the significance of the local interest and the risk of

interference with the jurisdiction of the Board—we see no basis for

preemption here. (See Sears, supra, 436 U.S. at pp. 196–197; Farmer, supra,

430 U.S. at p. 300.) But the parties have argued, citing competing precedents

and legal tests ostensibly derived from them, for alternative ways of

analyzing the local interest exception, so we now turn to consider these

alternatives.

1. Sears, Linn, and the “Critical Inquiry”

In Sears, after the Supreme Court set forth the two relevant factors we

have just examined, it synthesized them into a single “critical inquiry” for

preemption of claims based on arguably prohibited conduct. That inquiry is

“whether the controversy presented to the state court is identical to . . . or

different from” a controversy that could have been presented to the NLRB.

(Sears, supra, 436 U.S. at p. 197.) Answering that question in Sears meant

an employer’s state-court trespass case against a union was not preempted—

even though the picketing in question might have been protected or

prohibited by the NLRA—because the issues involved in the trespass case

were “different from” the issues the NLRB would have considered in

assessing the legality of the same picketing under federal law. (Id. at

pp. 197–198; see also Wal-Mart, supra, 4 Cal.App.5th 194 [same].) By

contrast, a controversy “ ‘identical to’ ” one that could have been presented to

the NLRB was an attempt to enforce the Pennsylvania Labor Relations Act,

whose relevant language was “ ‘almost identical to’ ” language in the NLRA.

(Sears, at pp. 192, 197, discussing Garner v. Teamsters, Chauffeurs & Helpers

Local Union (1953) 346 U.S. 485, 487–489, fns. 3 & 5 [employer’s attempt to

19

enforce Pennsylvania Labor Relations Act against peaceful union picketing is

preempted].)

Sears’s focus on whether the legal issue in the two controversies is the

same or different also animates the Supreme Court’s decision in Linn. There,

the Court held a state-court libel action was not preempted, explaining:

“When the Board and state law frown upon the publication of malicious libel,

albeit for different reasons, it may be expected that the injured party will

request both administrative and judicial relief.” (Linn, supra, 383 U.S. at

p. 66.)

Under the formulations of either of these cases, plaintiffs’ claims are

not preempted. The Board may “frown upon” an employer’s confidentiality

policy because it interferes with workers’ rights to undertake concerted

action, but California law disapproves such policies for a different reason:

because they interfere with every employee’s right to bring workplace issues

to the attention of supervisors, state agencies, courts, and the public. (See

Linn, supra, 383 U.S. at p. 66.) And, although there may be overlap in the

operative facts, whether an employer’s confidentiality policy constitutes an

unfair labor practice under the NLRA is a “different” controversy from the

question of whether it violates provisions of the state Labor Code. (See Sears,

supra, 436 U.S. at p. 197.)

Highlighting that the controversy here is different from the controversy

that was, or could have been, placed before the NLRB is the Board’s decision

in Boeing Co. (2017) 2017 NLRB Lexis 634 (Boeing), which elucidates how

the NLRB would evaluate whether Google’s confidentiality policies comply

with the NLRA. In Boeing, the NLRB announces a new standard for

determining whether an employer’s adoption of a facially neutral workplace

rule that potentially interferes with Section 7 rights is an unfair labor

20

practice. The Board concludes it must evaluate and weigh “(i) the nature and

extent of the potential impact on NLRA rights,” and (ii) an employer’s

“legitimate justifications associated with” business requirements. (Id. at

pp. *60–*63.) This process could lead the NLRB to uphold confidentiality

rules that risk inhibiting NLRA-protected activity, especially if that activity

is peripheral, rather than central, to the NLRA’s concerns, or the risk of

intruding on NLRA-protected rights is “ ‘comparatively slight.’ ” (Id. at

p. *66.) Not surprisingly, there is no suggestion that a state’s interests

underlying its own statutes will figure in this weighing process at all. The

issues and concerns before the NLRB in deciding a challenge to defendants’

confidentiality policies would be wholly different from the state-law issues in

this case, and by the same token the issues the state court must adjudicate in

this case will require no consideration of the Section 7 rights that animate

the NLRB. Thus, under the “critical inquiry” enunciated in Sears (Sears,

supra, 436 U.S. at p. 197), plaintiffs’ claims are not preempted.

2. Jones and the “Crucial Element”

Although Google acknowledges Sears and Linn remain good law, it

urges us to focus instead on a subsequent Supreme Court case in which

preemption was found, Jones, supra, 460 U.S. 669. In that case, Jones filed

an NLRB charge against a union representing employees at his former

company, where he had been hired as a supervisor but then quickly let go.

Jones alleged that because he was not a member of the union, the union

“ ‘procured’ his discharge, ‘and thereby coerced [the Company] in the selection

of its supervisors and bargaining representative,’ ” an unfair labor practice

under the NLRA. (Id. at p. 672.) The regional director refused to issue a

complaint, concluding “there was insufficient evidence to establish that the

Union had caused Jones’ discharge;” the union had “merely participated in

21

discussions” about “changes in the Company’s supervisory structure.” (Id. at

pp. 672–673.) Rather than appealing this decision to the General Counsel of

the NLRB, Jones filed a state-court action alleging the union had interfered

with his employment contract. (Id. at p. 673.)

The high court held this action was preempted for several reasons,

including that Jones was seeking to prove the union coerced his discharge, a

claim that was “concededly preempted” as an unfair labor practice (Jones,

supra, 460 U.S. at pp. 681–682); that asking the state court to police the line

between a coerced or uncoerced discharge would have required the court to

adjudicate issues of federal labor law (id. at pp. 682); and that if Jones

attempted to prove non-coercive interference with his employment there

would be two further problems. He would still need to prove the union had

caused his ouster—a “crucial element” of the NLRA claim that the Regional

Director had already decided against Jones—and he would be seeking to

impose liability for union conduct that the NLRA arguably protects. (Id. at

pp. 682–684.)

Relying on Jones, defendants argue the local interest exception does not

apply in this case because the dispute in this case and a dispute properly

before the Board share a “crucial element,” namely, whether defendants’

policies actually restrict employees from discussing wages and working

conditions. But we do not read Jones to create a rule that if the state-law

controversy shares a factual element—“crucial” or otherwise—with a matter

properly before the NLRB, then the case is necessarily preempted. Such a

rule would eviscerate the local interest and peripheral concern exceptions,

since a court only considers these exceptions if some common set of facts

gives rise to both the state-law claims and a dispute arguably within the

purview of the NLRB, as with the picketing activity in Sears.

22

The Jones court does not announce any such revision of settled law.

Instead, Jones recognizes the continuing force of Sears and seeks to

distinguish it on the ground that the focus of the unfair labor practice charge

in Sears was unrelated to that of the trespass action challenging the same

picketing activity. (Jones, supra, 460 U.S. at pp. 682–683.) Although Jones

does use the phrase “crucial element” in explaining one of several reasons

that together explain the court’s preemption finding, the Court does not hold

the phrase out as any sort of dispositive test, nor attempt to explain how a

court would decipher when an “element” is “crucial.” (Id. at p. 682.) Instead,

Jones follows Sears and Farmer in directing courts to undertake “a sensitive

balancing” of potential harms to the Congressional scheme for regulating

labor-management relations and to a state’s power to protect its citizens.

(Jones, at p. 676.)

Even if we were to attempt application of a “crucial element” test here,

we disagree that the “crucial element” in this case is whether defendants’

policies restrict employees from discussing their wages and working

conditions. This factual question about the scope of the employers’ policies

may be an area of overlap between this case and a dispute properly before the

Board, but the question is antecedent to those questions that bring to bear

legal considerations that differ for the two disputes. The crucial elements for

the state-law confidentiality claims are whether defendants’ policies infringe

on an employee’s right to practice a profession or trade, disclose wrongdoing,

and exercise free speech as protected by California law. The crucial elements

in the Board’s determination of whether the confidentiality policies are an

unfair labor practice are the extent to which the policies interfere with

NLRA-protected activity, how central any such protected activity is to the

organizing and bargaining activities that are the NLRA’s core concerns, and

23

whether the employer’s business justifications offset any interference with

NLRA rights. (Boeing, supra, 2017 NLRB Lexis 634, at pp. *60–*63, *66; 29

U.S.C. § 151.) These elements are not common to the two disputes.

Our case is different from Jones in other respects as well. First and

foremost, there is in our case no issue of federal labor law that the state court

would be required to adjudicate. (Cf. Jones, supra, 460 U.S. at p. 682.)

California courts can and should decide whether Google and Adecco violated

California law without considering whether, in so doing, they also committed

unfair labor practices under the Act. Second, the regional director has made

no factual determination that is fatal to plaintiffs’ claims, as occurred in

Jones. (Id. at p. 682.) Thus, plaintiffs can proceed in state court without ever

taking a position inconsistent with one already adopted by the Board or its

regional director. Third, neither Google nor Adecco argues that its policies

are protected by federal labor law, as the union’s conduct in Jones arguably

was. (Id. at pp. 672–673.) This factor is important because federal

supremacy is “implicated to a greater extent when labor-related activity is

protected than when it is prohibited.” (Sears, supra, 436 U.S. at p. 200; see

also Belknap, supra, 463 U.S. at pp. 498–499 [courts must balance state’s

interest against interference with NLRB’s jurisdiction and risk that the state

will sanction conduct the NLRA protects].) Finally, in this case there is no

union. The absence of a union is significant, for the argument in favor of

preemption “has its greatest force when applied to state laws regulating the

relations between employees, their union, and their employer.” (Sears, supra,

436 U.S. at p. 193; see also Epic, supra, 138 S.Ct. at p. 1630 [NLRA “

‘safeguard[s] first and foremost, workers’ rights to join unions and to engage

in collective bargaining’ ”].)

24

Because our case differs from Jones in all of these substantial ways and

because even Jones did not offer “crucial element” as a dispositive test,4 we

decline defendants’ invitation to defeat the local interest exemption on this

basis.

3. Hillhaven and Bright-Line Rules

Google also argues that Hillhaven, supra, 41 Cal.App.4th 846, is “the

dispositive precedent” defeating the local interest exemption in this case. In

Hillhaven, another division of our court held that the NLRA preempted statecourt action against a union alleged to have overrun a nursing home,

disrupting patient care and intimidating workers. (Id. at pp. 850, 862.) The

union was “the certified bargaining representative of employees at

Hillhaven,” and was in the midst of negotiating a new collective bargaining

agreement at the time. (Id. at pp. 849–850.) In finding preemption, the

Hillhaven court relied on common factual issues between the state-court suit

4 The concurring and dissenting opinion accuses us of “ignor[ing]

Jones’s reasoning” and “the analytical path the Supreme Court has set forth

for the local interest exception.” (At pp. 4, 13, post.) But there is nothing

“novel” about our analyzing “competing interests.” (At p. 7, post.) The

Supreme Court requires that we conduct a “balanced inquiry into such factors

as the nature of the federal and state interests in regulation and the

potential for interference with federal regulation” (Farmer, supra, 430 U.S. at

p. 300), give “careful consideration [to] the relative impact . . . on the various

interests affected” (Sears, supra, 436 U.S. at p. 188), and, in the language of

Jones, engage in “a sensitive balancing” of harm to the NLRA’s regulatory

scheme and to the state’s interest in protecting its citizens. (Jones, supra,

460 U.S. at p. 676). While in Sears the Supreme Court distilled this

balancing of competing interests into a single “critical inquiry” (Sears, at

p. 197), the concurring and dissenting opinion dismisses that analytical

approach as “of only academic interest” based on a comment made in dissent

in Jones. (At p. 10, post.) But no dissenting opinion has the power to

overrule precedent, and we have shown that plaintiffs’ claims clear the

“identical controversy” hurdle Sears sets forth. (Sears, supra, 436 U.S. at

p. 197.)

25

and a complaint already settled before the NLRB and also, more importantly,

two factors with no parallel in the case before us that go to the heart of the

NLRB’s authority. First was the likelihood “that resolution of some of the

state court claims would require . . . interpretation of the collective

bargaining agreement between the parties.” (Id. at pp. 860–861 [e.g.,

“number of union representatives allowed to enter the facility, and where

those representatives were permitted access” likely turned on interpretation

of collective bargaining agreement].) Second was the “real possibility of

conflict” between the injunctive relief Hillhaven sought in state court and

“NLRB rulings on issues such as union access to employees at their place of

work.” (Id. at p. 861.) Obviously, our case involves no collective bargaining

agreement, no union, and no risk that the state court will punish or prohibit

conduct that NLRB rulings protect.

Defendants extract from the facts of Hillhaven a bright-line rule they

would have us apply, that where the regional director has filed a complaint

addressing conduct that is also the subject of a state-court action, the statecourt action is preempted. We think defendants make too much of an

observation in Hillhaven that the court was unaware of any decision failing

to find preemption once the regional director had issued a complaint.

(Hillhaven, supra, 41 Cal.App.4th at p. 859.) Hillhaven itself acknowledges

that “simultaneous jurisdiction of the NLRB and state court is possible for

conduct arguably prohibited under the” NLRA (ibid., italics omitted), and

other courts have indeed adjudicated controversies after the NLRB issued

and settled a related complaint (see, e.g., Belknap, supra, 463 U.S. at 496,

508–509; United Food & Commercial Workers Internat. Union v. Wal-Mart

Stores, Inc. (2017) 453 Md. 482, 490–491, 508–511).

26

Where the local interest is strong, even the possibility of findings that

conflict with an NLRB complaint need not be fatal. In Linn, the regional

director of the NLRB declined to file a complaint against a union because

factual investigation led him to conclude “the union was not responsible for”

the offending conduct—there, the distribution of the allegedly libelous

leaflets. (Linn, supra, 383 U.S. at p. 57.) Yet, the Supreme Court allowed

Linn’s libel case against the union to proceed based on the peripheral concern

and local interest exceptions, untroubled that the factual issue of the union’s

responsibility for the leaflets might be decided differently in the state-court

case. (Id. at pp. 61–62, 67.) Although Linn does not, as plaintiffs suggest,

create an opposite bright-line rule—that state-court actions may always

proceed in parallel to NLRB proceedings when an employer’s conduct violates

both the NLRA and state law—its reasoning does establish that with a strong

local interest and a peripheral NLRA concern, the possibility of conflicting

findings does not foreclose a state-court action.

4. Conclusion

The first step of a Garmon preemption analysis sweeps broadly,

presumptively preempting conduct that may, in the end, be of only peripheral

concern to (or even lie outside the scope of) the NLRA. The local interest

exception is vital to protecting workers in such cases. And even where

certain aspects of a dispute do, or could, attract the enforcement efforts of the

NLRB, “defendants should not be able to escape the jurisdiction of California

courts simply because, in addition to allegedly undertaking violations of

health and safety regulations which are of compelling local importance and

interest, they had the good fortune to also undertake the commission of

NLRB-defined unfair labor practices.” (Balog, supra, 204 Cal.App.3d at

27

p. 1308 [plaintiff may proceed with wrongful termination claim to extent it is

based on theories not preempted by NLRA].)

The complaint in this case makes no mention of union organizing or

other concerted activity, and it alleges violations of state law that can be

proven without considering whether defendants’ actions also amounted to

unfair labor practices under the NLRA.5 Because the asserted statutes

protecting competition, whistleblowing, and free speech fit comfortably

within our state’s historic police powers and address conduct affecting

individual employees, as distinct from the NLRA’s focus on concerted activity,

and because this state-court action poses no threat to the NLRA’s exercise of

its own jurisdiction, our courts retain the power to decide these claims.

II. Denial of the Petition to Coordinate

In addition to challenging the trial court’s demurrer rulings, plaintiffs

argue the coordination judge should not have continued the hearing on

Adecco’s coordination petition and then denied Adecco’s petition to coordinate

petitioners’ case with Moniz. Defendants argue that we may not review the

substance of the order on the coordination petition because such orders are

reviewable only via writ petition. We agree with defendants that the

coordination order is not properly before us.

We begin by examining the procedures for coordination. When an

individual wants to coordinate two or more actions pending in different

courts, he or she must submit a petition to the Chairperson of the Judicial

5 We disagree with the concurring and dissenting opinion that our

decision will require California courts to decide issues of federal labor law—

specifically, whether plaintiffs’ evidence involves concerted activity. (At

p. 15, post.) That question is immaterial to the state-law causes of action

plaintiffs allege, and we see no reason to litigate it here.

28

Council. (Code Civ. Proc., § 404; remaining statutory references are to the

Code of Civil Procedure.) The Chairperson assigns the petition “a special

title and coordination proceeding number.” (Cal. Rules of Ct., rule 3.550(c).)

The Chairperson then assigns (or authorizes a presiding judge to assign) a

coordination judge to decide whether coordination is appropriate. (§ 404.) If

the coordination judge decides coordination is appropriate, he or she selects

an appellate court to review decisions from the coordinated proceeding.

(§ 404.2.) The Chairperson of the Judicial Council then assigns (or authorizes

a presiding judge to assign) a judge to hear the coordinated actions. (§ 404.3.)

After service of notice of entry of an order relating to coordination, “any party

may petition the appropriate reviewing court for a writ of mandate to require

the court to make such order as the reviewing court finds appropriate.”

(§ 404.6.)

This framework demonstrates that coordination petitions are not

necessarily decided under the jurisdiction of any one of the courts in which

the actions potentially subject to coordination are pending. Rather, the

coordination proceeding is its own type of special proceeding, with a separate

caption and number. (Cal. Rules of Ct., rule 3.550(c).) When the coordination

judge grants or denies a petition for coordination, that order is not filed in the

trial court on its own; the party that requested coordination must file it in all

included actions. (Cal. Rules of Ct., rule 3.529(a).) As a result, a coordination

order is not part of the bundle of orders reviewable via appeal from final

judgment in any one of the actions for which coordination was sought.

The fact that the judge presiding over the Doe action was also assigned

to decide the coordination motion here changes nothing. Were the

coordination order reviewable after final judgment, as plaintiffs contend, it

would be subject to multiple appeals after final judgment in each of the

29

included actions, with the unacceptable potential for inconsistent rulings.

Alternatively, if the coordination order were reviewable after final judgment

in the included action only if that action is pending in the coordination

judge’s own court (even though no statute or rule requires the coordination

judge to be one of the judges hearing an included action), then the parties in

that action alone would be able to appeal the order after final judgment. The

parties in the other actions for which coordination was sought would be

relegated to the writ review procedure in section 404.6, an unequal and

unjust result. Consequently, although plaintiffs are correct that section

404.6 does not explicitly say so, we hold that section 404.6 is the exclusive

method for appellate review of coordination orders. (Cf. Lautrup, Inc. v.

Trans-West Discount Corp. (1976) 64 Cal.App.3d 316, 317–318 [coordination

orders are not separately appealable orders under section 904.1; appellate

review of such orders is via writ of mandate under section 404.6].)

Plaintiffs having failed timely to file a petition seeking writ relief from

the trial court’s decision not to coordinate this matter with Moniz, they may

not take a second bite at the coordination apple on their appeal from the trial

court’s orders on demurrer.

The judgment is reversed, as are the orders sustaining defendants’

demurrers without leave to amend. We dismiss as untimely the appeal from

the order denying coordination with Moniz, and remand the case for further

proceedings consistent with this opinion. Plaintiffs are entitled to their costs on appeal. (See Cal. Rules of Court, rule 8.278(a)(3).)