Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-01990/USCOURTS-cand-3_18-cv-01990-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332 Diversity-Fair Labor Standards Act

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JESUS SARMIENTO, et al.,

Plaintiffs,

v.

SEALY, INC., et al.,

Defendants.

Case No. 18-cv-01990-JST 

ORDER RE: MOTION FOR PARTIAL 

JUDGMENT ON THE PLEADINGS

Re: ECF No. 33

Before the Court is Defendants Sealy, Inc. and Sealy Mattress Manufacturing Company, 

LLC’s (collectively, “Sealy”) motion for judgment on the pleadings on several of Plaintiffs’ 

claims. ECF No. 33. The Court will grant the motion in part and deny it in part.

I. BACKGROUND

A. Factual Background

As alleged in their complaint, Plaintiffs Jesus Sarmiento and Juan Chavez are former 

employees of Sealy’s mattress manufacturing facility in Richmond, California. ECF No. 1 

(“Compl.”) ¶¶ 8-9. Sarmiento “worked concurrently as a loader, taper or sewer” during his 

employment. Id. ¶ 8. Pursuant to the collective bargaining agreement (“CBA”), Sarmiento was 

entitled to a different hourly rate for each job. Id. Plaintiffs allege that Sealy did not “pay 

Sarmiento and other putative class members the higher hourly rates when required.” Id. 

Plaintiffs further allege that they regularly worked shifts exceeding twelve hours a day 

without receiving the proper overtime rate, and that Sealy furnished wage statements that omitted 

required information. Id. ¶¶ 10-13.

Finally, Plaintiffs allege that an incident occurred at the facility on May 26, 2017, when 

two Sealy management officials introduced a new points-based disciplinary system. Id. ¶ 14. 

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After the system was introduced, Chavez asked management why they had not informed 

employees of the new system, given that it had already gone into effect on May 1, 2017. Id. ¶ 15. 

The confrontation escalated into shouting, and when Sarmiento attempted to intervene, one of the 

management officials threatened him as well. Id. After the employees dispersed for lunch, 

Sarmiento became ill and decided that he need to go home. Id. ¶ 16. Although Sarmiento 

communicated this reason to a co-worker, he was unable to get in touch with either his supervisor 

or his union representative. Id. Within two hours, Sarmiento received a call informing him that 

he had been terminated for job abandonment. Id. Sarmiento did not receive his final paycheck 

until June 2, 2017. Id. ¶ 17.

Chavez was placed on administrative leave after the May 26, 2017 town hall meeting. Id.

¶ 18. He was terminated on June 7, 2017, but he did not receive his final paycheck until June 16, 

2017. Id. ¶ 18.

B. Procedural History

On March 31, 2018, Plaintiffs filed this putative class action against Sealy. See id. 

Plaintiffs allege six claims on behalf of the class: that Sealy (1) failed to pay overtime wages, Cal. 

Lab. Code § 510; (2) secretly paid lower wages than provided for in the CBA, id. § 223; (3) 

withheld wages due under the CBA, id. § 222; (4) failed to promptly pay wages due upon 

termination, id. §§ 201, 202; (5) as a result of these violations, violated California’s Unfair 

Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq.; and (6) failed to furnish 

complete and accurate wage statements, Cal. Lab. Code § 226(a). Plaintiffs also allege derivative 

claims under the Private Attorney General Act (“PAGA”), Cal. Lab. Code §§ 2698-99.5, based on 

the first through fourth and sixth claims. Further, Plaintiffs allege two individual claims for 

wrongful termination: (7) unlawful retaliation based on California Labor Code section 923; and 

(8) common-law wrongful termination in violation of public policy. Sealy answered the 

complaint on July 10, 2018. ECF No. 18.

On November 13, 2018, Sealy filed this motion for judgment on the pleadings on 

Plaintiffs’ second, third, seventh, and eighth claims. ECF No. 31. Sealy contends that these 

claims are preempted by the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, and 

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the National Labor Relations Act (“NLRA”), 29 U.S.C. §§ 157-58. ECF No. 31 at 8.

II. JURISDICTION

The Court has jurisdiction pursuant to 28 U.S.C. § 1332(a).

III. LEGAL STANDARD

A. Federal Rule of Civil Procedure 12(c)

“After the pleadings are closed – but early enough not to delay trial – a party may move for 

judgment on the pleadings.” Fed. R. Civ. P. 12(c). The analysis for Rule 12(c) motions for 

judgment on the pleadings is “substantially identical to [the] analysis under Rule 12(b)(6).” 

Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (internal quotation marks and 

citation omitted). Under both rules, “a court must determine whether the facts alleged in the 

complaint, taken as true, entitle the plaintiff to a legal remedy.” Id. (quoting Brooks v. Dunlop 

Mfg. Inc., No. C 10–04341 CRB, 2011 WL 6140912, at *3 (N.D. Cal. Dec. 9, 2011)). A plaintiff 

must allege facts that are enough to raise his right to relief “above the speculative level.” Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). “A judgment on the pleadings is 

properly granted when, taking all the allegations in the non-moving party’s pleadings as true, the 

moving party is entitled to judgment as a matter of law.” Fajardo v. County of Los Angeles, 179 

F.3d 698, 699 (9th Cir. 1999) (citation omitted). “Finally, although Rule 12(c) does not mention 

leave to amend, courts have discretion both to grant a Rule 12(c) motion with leave to amend, and 

to simply grant dismissal of the action instead of entry of judgment.” Lonberg v. City of 

Riverside, 300 F. Supp. 2d 942, 945 (C.D. Cal. 2004) (citations omitted).

B. LMRA Section 301 Preemption

LMRA section 301 provides federal jurisdiction over “[s]uits for violation of contracts 

between an employer and a labor organization.” 29 U.S.C. § 185(a). Section 301 encapsulates “a 

congressional mandate to the federal courts to fashion a body of federal common law to be used to 

address disputes arising out of labor contracts.” Allis–Chalmers Corp. v. Lueck, 471 U.S. 202, 

209 (1985) (footnote omitted). “This federal common law, in turn, preempts the use of state 

contract law in CBA interpretation and enforcement.” Matson v. United Parcel Serv., Inc., 840 

F.3d 1126, 1132 (9th Cir. 2016) (internal citation and quotation marks omitted). 

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To give “the policies that animate § 301 . . . their proper range,” its preemptive force 

“extend[s] beyond suits alleging contract violations” to include “questions relating to what the 

parties to a labor agreement agreed, and what legal consequences were intended to flow from 

breaches of that agreement.” Lueck, 471 U.S. 210-11. Despite the strong preemptive force of 

section 301, however, “not every dispute concerning employment, or tangentially involving a 

provision of a collective-bargaining agreement, is preempted by [it].” Id. at 211. “[T]he Supreme 

Court has repeatedly admonished that § 301 preemption is not designed to trump substantive and 

mandatory state law regulation of the employee-employer relationship; § 301 has not become a 

‘mighty oak’ that might supply cover to employers from all substantive aspects of state law.” 

Humble v. Boeing Co., 305 F.3d 1004, 1007 (9th Cir. 2002) (citing Lingle v. Norge Div. of Magic 

Chef Inc., 486 U.S. 399, 408-09 (1988); Livadas v. Bradshaw, 512 U.S. 107, 122 (1994)). “In 

extending the pre-emptive effect of § 301 beyond suits for breach of contract, it would be 

inconsistent with congressional intent under that section to preempt state rules that proscribe 

conduct, or establish rights and obligations, independent of a labor contract.” Lueck, 471 U.S. at 

212 (footnote omitted). 

“The demarcation between preempted claims and those that survive § 301’s reach is 

not . . . a line that lends itself to analytical precision.” Cramer v. Consolidated Freightways, Inc., 

255 F.3d 683, 691 (9th Cir. 2001) (en banc). The Ninth Circuit has articulated a two-prong 

inquiry to analyze whether section 301 preemption applies. Burnside v. Kiewit Pacific Corp., 491 

F.3d 1053, 1059-60 (9th Cir. 2007). A court must first determine “whether the asserted cause of 

action involves a right conferred upon an employee by virtue of state law, not by a CBA. If the 

right exists solely as a result of the CBA, then the claim is preempted and [the court’s] analysis 

ends there.” Id. at 1059 (citation omitted). However, if the court determines the right underlying 

the state claim(s) “exists independently of the CBA” the court then proceeds to the second prong, 

which examines whether the right is “substantially dependent on analysis of a collective 

bargaining agreement.” Id. (internal quotation marks and citation omitted). 

In determining if the first prong is met (whether a right is independent of a CBA) a court 

must evaluate whether the “legal character of a claim” is “independent of rights under the 

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collective bargaining agreement.” Livadas, 512 U.S. at 123 (internal citation and quotation marks 

omitted). Section 301 preempts the claim if it is “founded directly on rights created by collective 

bargaining agreements . . . .” Caterpillar v. Williams, 482 U.S. 386, 394 (1987).

In determining whether the second prong is met (whether the claim is “substantially 

dependent” on a CBA) the Court must evaluate whether the claim can be resolved by “‘look[ing] 

to’ versus interpreting the CBA. If the latter, the claim is preempted; if the former, it is not.” 

Burnside, 491 F.3d at 1060 (internal citations omitted). “When the meaning of contract terms is 

not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in 

the course of state-law litigation plainly does not require the claim to be extinguished.” Livadas, 

512 U.S. at 124 (citation omitted). For example, “[a] collective-bargaining agreement may . . . 

contain information such as rate of pay . . . that might be helpful in determining the damages to 

which a worker prevailing in a state-law suit is entitled,” but that would not mean the claim is 

preempted. Lingle, 486 U.S. at 413 n.12. Additionally, section 301 “cannot be read broadly to 

pre-empt nonnegotiable rights conferred on individual employees as a matter of state law.” 

Livadas, 512 U.S. at 123 (footnote omitted); see also Balcorta v. Twentieth Century-Fox Film 

Corp., 208 F.3d 1102, 1111 (9th Cir. 2000). 

C. Garmon Preemption

“While the NLRA contains no express preemption provision, two categories of state action 

are implicitly preempted: (1) laws that regulate conduct that is either protected or prohibited by the 

NLRA (Garmon preemption), and (2) laws that regulate in an area Congress intended to leave 

unregulated or ‘controlled by the free play of economic forces’ (Machinists preemption).” 

Interpipe Contracting, Inc. v. Becerra, 898 F.3d 879, 887 (9th Cir. 2018) (quoting Chamber of 

Commerce of U.S. v. Brown, 554 U.S. 60, 65 (2008)). Garmon preemption “is intended to 

preclude state interference with the National Labor Relations Board’s [(NLRB)] interpretation and 

active enforcement of the integrated scheme of regulation established by the NLRA.” Brown, 554 

U.S. at 65 (quoting Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 613 (1986)); 

see also San Diego Bldg. Trades Council, Millmen’s Union, Local 2020 v. Garmon, 359 U.S. 236 

(1959). Under Garmon preemption, a State may not “regulate activity that the NLRA protects, 

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prohibits, or arguably protects or prohibits.” Id. (citation omitted). In other words, “[w]hen it is 

clear or may fairly be assumed that the activities which a State purports to regulate are protected 

by § 7 of the [NLRA], or constitute an unfair labor practice under § 8, due regard for the federal 

enactment requires that state jurisdiction must yield” to the NLRB’s primary jurisdiction. Idaho 

Bldg. & Const. Trades Council, AFL-CIO v. Inland Pac. Chapter of Associated Builders & 

Contractors, Inc., 801 F.3d 950, 956 (9th Cir. 2015) (alterations in original) (quoting Garmon, 359 

U.S. at 244).

The Garmon Court also recognized two important limits on the scope of the NLRA’s 

preemptive force. First, “the NLRA did not ‘withdraw[ ] from the States [ ] power to regulate 

where the activity regulated was a merely peripheral concern of the Labor Management Relations 

Act.’” Retail Prop. Tr. v. United Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 952 (9th 

Cir. 2014) (quoting Garmon, 359 U.S. at 244). Second, Garmon preemption does not reach 

instances “where the regulated conduct touched 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.” Id. (quoting Garmon, 359 U.S. at 247).

Finally, “[t]he party claiming preemption bears the burden of demonstrating that the 

challenged activity is arguably prohibited by the NLRA.” Milne Emps. Ass’n v. Sun Carriers, 960 

F.2d 1401, 1414 (9th Cir. 1991).

IV. REQUEST FOR JUDICIAL NOTICE

Pursuant to Federal Rule of Evidence 201(b), “[t]he court may judicially notice a fact that 

is not subject to reasonable dispute because it: (1) is generally known within the trial court’s 

territorial jurisdiction; or (2) can be accurately and readily determined from sources whose 

accuracy cannot reasonably be questioned.” On a motion to dismiss, the court may also “consider 

materials incorporated into the complaint” when “the complaint necessarily relies upon a 

document or the contents of the document are alleged in a complaint, the document’s authenticity 

is not in question and there are no disputed issues as to the document’s relevance.” Coto 

Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). This is true even if “the plaintiff 

does not explicitly allege the contents of that document in the complaint.” Knievel v. ESPN, 393 

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F.3d 1068, 1076 (9th Cir. 2005). The court “must take judicial notice if a party requests it and the 

court is supplied with the necessary information.” Fed. R. Evid. 201(c)(2). However, courts 

“cannot take judicial notice of the contents of documents for the truth of the matters asserted 

therein when the facts are disputed.” Cal. Sportfishing Prot. All. v. Shiloh Grp., LLC, No. 16-CV06499-DMR, 2017 WL 3136443, at *5 (N.D. Cal. July 24, 2017). 

Sealy has attached a copy of the CBA to its motion and requested that the Court take 

judicial notice. ECF No. 31-1. Plaintiffs argue that the CBA does not meet the standards of 

Federal Rule of Evidence 201(b) because it has not been properly authenticated. ECF No. 32 at 

4.1

Courts regularly “take judicial notice of a CBA in evaluating a motion to dismiss.” 

Hernandez v. Sysco Corp., No. 16-CV-06723-JSC, 2017 WL 1540652, at *2 (N.D. Cal. Apr. 28, 

2017). In particular, “[c]ourts routinely take judicial notice of the governing collective bargaining 

agreement where necessary to resolve issues of preemption.” Johnson v. Sky Chefs, Inc., No. 11-

CV-05619-LHK, 2012 WL 4483225, at *1 n.1 (N.D. Cal. Sept. 27, 2012). 

Plaintiffs argue that the CBA’s accuracy “can reasonably be questioned,” ECF No. 32 at 4 

(emphasis added), but do not actually dispute that Sealy has provided an authentic copy of the 

CBA. A party cannot “reasonably . . . question[]” the accuracy of a source, Fed. R. Evid. 

201(b)(2), simply by stating that someone could do so, particularly when the party is aware of and 

presumably has access to the document, see Martinez v. Welk Grp., Inc., No. 09 CV 2883 MMA 

WMC, 2011 WL 90313, at *3 (S.D. Cal. Jan. 11, 2011) (rejecting “attempt to dispute the 

authenticity of [a document as] unsupported”); Keithly v. Intelius Inc., 764 F. Supp. 2d 1257, 1261 

(W.D. Wash. 2011) (reasoning that plaintiff had not “presented any evidence to contradict 

defendants’ representations [as to webpages’ authenticity] and d[id] not affirmatively identify any 

discrepancies between the webpages they saw and those presented by defendants with their 

motion”). 

Moreover, the purpose for which Sealy seeks consideration of the CBA is permissible. 

 

1

In Sealy’s request for judicial notice, signed by its counsel, it avers that the CBA is a true and 

correct copy. ECF No. 31-1 at 2 ¶ 1.

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Sealy does not rely on judicial notice to establish facts outside the CBA, in which case Plaintiffs 

may “reasonabl[y] dispute” whether the CBA actually establishes them. Khoja v. Orexigen 

Therapeutics, Inc., 899 F.3d 988, 1001 (9th Cir. 2018); cf. Sgro v. Danone Waters of N. Am., Inc., 

532 F.3d 940, 943 (9th Cir. 2008) (declining to assume that benefits plan was implemented 

according to its terms). Rather, Sealy seeks to show only that the CBA says what it says, for the 

purpose of determining preemption. Accordingly, the Court GRANTS Sealy’s motion for judicial 

notice.

Alternatively, consideration of the CBA is appropriate under the doctrine of incorporation 

by reference. The Court “may consider extrinsic evidence not attached to the complaint if the 

document’s authenticity is not contested and the plaintiff’s complaint necessarily relies on it.” 

Johnson v. Fed. Home Loan Mortg. Corp., 793 F.3d 1005, 1007 (9th Cir. 2015). Here, Plaintiffs’ 

complaint “necessarily relies upon [the CBA] as the source of [Sealy’s] duty to” pay particular 

hourly rates. Id.; see also Compl. ¶¶ 53, 60. Again, Plaintiffs’ bald allegation that the CBA is not 

authentic does not raise an actual dispute as to the document’s authenticity. Further, as explained 

above, incorporation by reference for Sealy’s purposes would not “dispute facts stated in a wellpleaded complaint.” Khoja, 899 F.3d at 1002. Finally, considering the CBA will further the 

purpose of the doctrine, by preventing Plaintiffs from omitting the CBA in order to avoid 

preemption. See Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007) (one purpose of 

doctrine is to “[p]revent [ ] plaintiffs from surviving a Rule 12(b)(6) motion by deliberately 

omitting . . . documents upon which their claims are based” (quoting Parrino v. FHP, Inc., 146 

F.3d 699, 706 (9th Cir.1998)). 

The Court therefore considers the CBA in evaluating Sealy’s arguments.

V. DISCUSSION

Sealy argues that Plaintiffs’ second, third, seventh, and eighth claims are preempted by 

Section 301 of the LMRA. ECF No. 31 at 9. Alternatively, Sealy contends, Plaintiffs’ seventh 

and eighth claims are preempted by Sections 7 and 8 of the NLRA. Id. 

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A. LMRA

1. Second and Third Claims (Wage Claims)

Plaintiffs’ second claim alleges that Sealy violated California Labor Code section 223, 

which requires that, “[w]here any statute or contract requires an employer to maintain the 

designated wage scale, it shall be unlawful to secretly pay a lower wage while purporting to pay 

the wage designated by statute or by contract.” Compl. ¶ 51 (quoting Cal. Lab. Code § 223). 

Similarly, Plaintiffs’ third claim alleges a violation of California Labor Code section 222, which 

provides that “[i]t shall be unlawful, in case of any wage agreement arrived at through collective 

bargaining, either wilfully or unlawfully or with intent to defraud an employee, a competitor, or 

any other person, to withhold from said employee any part of the wage agreed upon.” Compl. 

¶ 58 (quoting Cal. Lab. Code § 222). Both claims are based on the same factual allegations, 

namely, that “[p]ursuant to the collective bargaining agreement . . . , employees received varied 

hourly rates based on their job assignments,” and that Sealy “failed to pay Plaintiffs and other 

class members a higher hourly rate of pay when they performed task[s] that dictated a higher 

hourly rate of pay as required by the collective bargaining agreement.” Id. ¶¶ 52-53; see also id.

¶¶ 59-60 (same). 

Sealy asserts that Plaintiffs’ claims are expressly based on breaches of the CBA and 

therefore are preempted under the first Burnside prong. Although there is some merit to this 

argument, the Court ultimately finds it unpersuasive. True, the protections conferred section 222 

specifically require a “wage agreement arrived at through collective bargaining,” and section 223 

applies here only because the CBA is a “contract [that] requires an employer to maintain the 

designated wage scale.” The fact that statutory provisions are contingent upon some predicate 

right conferred by the CBA is not dispositive, however. In Alaska Airlines v. Schurke, the en banc 

Ninth Circuit applied the Burnside test to a “state law right to reschedule vacation leave for family 

medical purposes,” where “the worker’s underlying right to vacation leave is covered by a 

[CBA].” 898 F.3d 904, 913 (9th Cir. 2018) (en banc). The court concluded that this right was 

independent of the CBA at step one and would not require interpretation of the CBA at step two, 

even though the plaintiff’s “banked vacation days exist[ed] only by virtue of her having earned 

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them in accordance with a workplace policy incorporated in the CBA.” Id. at 927.

Nor is it sufficient for prong one that section 222 applies only to workers covered by a 

CBA. The Supreme Court has cautioned that “a law could cover only unionized workers but 

remain unpre-empted if no collective-bargaining agreement interpretation was needed to resolve 

claims brought thereunder.” Lingle, 486 U.S. at 399 n.7. As the Ninth Circuit has explained, the 

degree of interpretation must be resolved under the second prong. See Burnside, 491 F.3d at 1066 

(citing Lingle, 486 U.S. at 399 n.7). 

The cases that Sealy cites, on the other hand, involve state-law claims that entirely 

incorporated a breach of contract cause of action. In Young v. Anthony’s Fish Grottos, Inc., the 

plaintiff attempted to bring an individual breach of contract claim for work that was governed by 

the CBA. 830 F.2d 993, 997 (9th Cir. 1987). Because the CBA was controlling over any 

individual agreement, by operation of law, the plaintiff’s claim was necessarily “effectively a 

claim for breach of the CBA.” Id. at 998. Lueck involved a state-law claim for breach of the duty 

of good faith, where the duty derived entirely from the contract, and “the scope of which, 

crucially, is ‘ascertained from a consideration of the contract itself.’” 471 U.S. at 216 (quoting 

Hilker v. W. Automobile Ins. Co., 235 N.W. 413, 415 (Wis. 1931)). The Lueck Court explained 

that, “[b]ecause the right asserted not only derives from the contract, but is defined by the 

contractual obligation of good faith, any attempt to assess liability here inevitably will involve 

contract interpretation.” Id. at 217 (emphasis added). Moreover, a state-law claim may still be 

independent even if premised on the same factual theory. States may provide remedies that “run 

parallel to a CBA violation.” Schurke, 898 F.3d at 921; see also Lingle, 486 U.S. at 409-10 (“In 

other words, even if dispute resolution pursuant to a collective-bargaining agreement, on the one 

hand, and state law, on the other, would require addressing precisely the same set of facts, as long 

as the state-law claim can be resolved without interpreting the agreement itself, the claim is 

‘independent’ of the agreement for § 301 pre-emption purposes.”).

A closer examination of sections 222 and 223 reveals that they confer protections that do

not simply incorporate an employee’s right to receive the wages set in a covered CBA. As the 

California courts have explained, “Labor Code section 221 and related provisions in sections 222 

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through 223 were enacted in 1937 in response to secret deductions or ‘kickbacks’ that made it 

appear as if an employer was paying wages in accordance with an applicable contract or statute, 

whereas, in fact, the employer was paying less.”2 Hudgins v. Neiman Marcus Grp., Inc., 34 Cal. 

App. 4th 1109, 1118 (1995) (citing Kerr’s Catering Serv. v. Dep’t of Indus. Relations, 57 Cal. 2d 

319, 328 (1962)). “In such cases, the employer nominally pays employees the wage required by a 

statute or collective bargaining agreement but then secretly deducts amounts or requires 

employees to pay back a portion of the wages, so that in reality the employees are earning less 

than was required.” Amaral v. Cintas Corp. No. 2, 163 Cal. App. 4th 1157, 1205 (2008). The 

California Court of Appeal has observed, moreover, that these statutory provisions are directed at 

cases where “the underpayment of wages is a secret being kept from applicable enforcement 

authorities – i.e., the Labor Commissioner, the employee’s union, or a contracting party – not 

from the employees themselves, who presumably are well aware of how much they are paid.” Id.

(citations omitted). In Shalz v. Union School District, for instance, the court found that the 

employer had violated section 223 by charging employees an excessive “sham” wage deduction, 

purportedly for lodging incident to their employment, which had the effect of bringing their 

effective pay below the designated wage. 58 Cal. App. 2d 599, 604-05 (1943). 

Courts have also interpreted sections 221, 222, and 223 to require “that all hours must be 

paid at the statutory or agreed rate and no part of this rate may be used as a credit against a 

minimum wage obligation.” Armenta v. Osmose, Inc., 135 Cal. App. 4th 314, 323 (2005); see 

also Quezada v. Con-Way Freight, Inc., No. C 09-03670 JSW, 2014 WL 186224, at *2 (N.D. Cal. 

Jan. 16, 2014). Thus, in Armenta, the court held that those sections prohibited the employer from 

effectively reducing the CBA’s wage rate by averaging times where employees were paid CBA

wages with intermittent unpaid hours during a workday to fulfill the employer’s minimum wage 

obligations. 135 Cal. App. 4th at 323-24. In short, the California courts have interpreted these 

sections as directed at conduct beyond just enforcing the terms of the wage scale, including 

conduct that is consistent with or even authorized by the CBA, but otherwise violates a state wage 

 

2 Labor Code section 221 provides in full: “It shall be unlawful for any employer to collect or 

receive from an employee any part of wages theretofore paid by said employer to said employee.”

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policy.

3

Labor Code section 224 sheds further light on this regulatory scheme. It creates exceptions 

to the wage deduction prohibitions in sections 221, 222, and 223 for certain categories, such as 

deductions required by state or federal law, deductions “expressly authorized in writing by the 

employee” for medical or insurance needs, “other deductions not amounting to a rebate or 

deduction from the standard wage arrived at by collective bargaining or pursuant to wage 

agreement or statute, or when a deduction to cover health and welfare or pension plan 

contributions is expressly authorized by a collective bargaining or wage agreement.” Cal. Lab. 

Code § 224 (emphasis added). Taken together, these sections establish conditions on wage 

deductions that are “independent” of the CBA.

The Court notes that other district courts have taken somewhat divergent approaches in 

applying LMRA section 301 preemption to Labor Code section 222 and 223 claims. Two courts 

in this district have addressed only the second Burnside prong, finding that the plaintiffs’ claims 

would require the court to interpret, rather than merely look to, the CBA. See Estrada v. Kaiser 

Found. Hosps., No. C-14-04465 DMR, 2014 WL 7387958, at *6 (N.D. Cal. Dec. 29, 2014), aff’d, 

678 F. App’x 494 (9th Cir. 2017); Bernardi v. Amtech/San Francisco Elevator Co., No. C 08-

01922 WHA, 2008 WL 2345153, at *4-5 (N.D. Cal. June 5, 2008). Another district court found 

that no inquiry into the CBA would be required under the particular wage deduction theory 

alleged. Espinoza v. Nat’l Beef Cal., L.P., No. 08-CV-01902HNLS, 2008 WL 6630100, at *4 

(S.D. Cal. Dec. 11, 2008). By contrast, one court has held that a section 223 claim was preempted 

under the first prong, reasoning that the allegations of breach “convert[ed] this cause of action into 

a claim for the breach of the CBA.” Navarro v. Servisair, LLC, No. C 08-02716 MHP, 2008 WL 

3842984, at *4 (N.D. Cal. Aug. 14, 2008). Finally, two other courts have found section 222 and 

223 claims preempted under reasoning invoking both prongs. Mendes v. W.M. Lyles Co., No. 

CIVF07-1265AWI GSA, 2008 WL 171003, at *8 (E.D. Cal. Jan. 18, 2008); Cornn v. United 

 

3 Because the Court’s “preemption inquiry is not an inquiry into the merits of a claim,” Schurke, 

898 F.3d at 924, the Court expresses no view as to whether Plaintiffs’ claims satisfy the 

requirements of these statutes. 

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Parcel Serv., No. C03-2001 TEH, 2004 WL 2271585, at *1 (N.D. Cal. Oct. 5, 2004). Critically, 

none of these courts have engaged in any examination of how sections 222 and 223 have been 

applied in California law. Given the lack of uniformity, and the foregoing discussion, the Court 

concludes that Plaintiffs’ claims are not preempted under the first prong.

The Court therefore turns to the second prong of the Burnside test. Here, the parties have 

not provided the Court with enough information to ascertain whether “there is an active dispute 

over ‘the meaning of contract terms.’” Schurke, 898 F.3d at 921 (quoting Livadas, 512 U.S. at 

124); see also Azpeitia v. Tesoro Ref. & Mktg. Co. LLC, No. 17-CV-00123-JST, 2017 WL 

3115168, at *5 (N.D. Cal. July 21, 2017) (concluding that prong two was not satisfied where 

“Defendants’ motion fails to identify any particular CBA provision that must be interpreted”). 

Plaintiffs’ complaint states only that Sealy did not pay the appropriate hourly rate for various job 

assignments. Compl. ¶¶ 8, 53, 60. Sealy theorizes that resolving these claims will require a 

complex evaluation of the CBA’s procedures for determining the appropriate hourly rate, ECF No. 

31 at 14-15, but that is not necessarily so. If, for instance, Sealy simply refused to pay any of the 

higher hourly rates, the Court would need to look to the CBA only to determine the difference 

between what was paid and what was owed. “Under Livadas, this need to consult the CBAs to 

determine the wage rate to be used in calculating liability cannot, alone, trigger section 301 

preemption.” Burnside, 491 F.3d at 1074. Moreover, at the hearing on this motion, the Court 

asked Sealy to identify the precise provisions of the CBA that the Court would need to construe 

and explain why such construction was necessary. Sealy was unable to do so.

Accordingly, the Court concludes that neither Plaintiffs’ second and third claims, nor their 

derivative PAGA claims, are preempted. 

2. Seventh and Eighth Claims (Wrongful Termination Claims)

Plaintiffs’ seventh claim alleges that Sealy terminated them in violation of Labor Code 

section 923, which establishes a public policy that employees “shall be free from the interference, 

restraint, or coercion” in, among other things, “concerted activities for the purpose of collective 

bargaining or other mutual aid or protection.” Plaintiffs allege that their actions at the town hall 

meeting constituted “concerted activities” and that Sealy terminated them in retaliation for those 

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actions. Compl. ¶¶ 82-83. Plaintiffs’ eighth claim asserts a common-law tort claim for wrongful 

termination in violation of public policy, based upon the same theory of retaliation for concerted 

activities. Id. ¶¶ 86-90 (citing Tameny v. Atl. Richfield Co., 27 Cal. 3d 167, 178 (1980)). Though 

delineated as separate causes of action, they do not appear to be distinct claims under California 

law. See Santillan v. USA Waste of Cal., Inc., 853 F.3d 1035, 1047 (9th Cir. 2017) (noting that 

Labor Code section 923 has been recognized as the basis for a common-law wrongful termination 

claim); Gelini v. Tishgart, 77 Cal. App. 4th 219, 224-27 (1999) (discussing Tameny within the 

context of Labor Code section 923).

a. Preemption Analysis

Sealy argues that these claims are preempted under the second prong of the Burnside test 

because their resolution would require the Court to interpret the CBA. ECF No. 31 at 16-19. 

Specifically, Sealy cites section 18.02 of the CBA, which governs Sealy’s management authority 

to, among other things, “make and enforce reasonable shop rules and regulations.” ECF No. 31-1. 

Sealy reasons that whether Plaintiffs were terminated for good cause rather than retaliatory 

reasons depends on these provisions. ECF No. 31 at 17-18. This analysis appears to run contrary 

to Lingle. There, the district court had concluded that a retaliatory discharge claim was preempted 

by the need to interpret the CBA “provision prohibiting wrongful discharge or discharge without 

just cause.” Lingle, 486 U.S. at 402 (citation omitted). The Lingle Court held that the claim was 

not preempted, explaining that, while an employer “must show that it had a nonretaliatory reason 

for the discharge, this purely factual inquiry likewise does not turn on the meaning of any 

provision of a collective-bargaining agreement.” Id. at 407 (citation omitted). 

Moreover, the Ninth Circuit has articulated a different set of guideposts for applying 

section 301 preemption in this context. A wrongful termination in violation of public policy claim 

under California law “is not preempted if it poses no significant threat to the collective bargaining 

process and furthers a state interest in protecting the public transcending the employment 

relationship.” Young, 830 F.2d at 1001. For instance, wrongful termination claims are not 

preempted where they are based on public policies related to health and safety, see Paige v. Henry 

J. Kaiser Co., 826 F.2d 857, 863 (9th Cir. 1987), or anti-discrimination, see Jackson v. S. Cal. Gas 

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Co., 881 F.2d 638, 644 (9th Cir. 1989). On the other hand, a claim is preempted where “it is not 

based on any genuine state public policy or if it is bound up with interpretation of the collective 

bargaining agreement and furthers no state policy independent of the employment relationship.” 

Young, 830 F.2d at 1002 (citations omitted); see id. (opposition to IRS tax audits not protected by 

public policy); Evangelista v. Inlandboatmen’s Union of Pac., 777 F.2d 1390, 1401 (9th Cir. 

1985) (general harassment).

Ultimately, the Court need not address the question because regardless of the answer,

Plaintiffs’ wrongful termination claims are preempted. First, if Plaintiffs’ claims are not 

preempted by section 301, then they are preempted by the NLRA, as explained further below. 

Second, if Plaintiffs’ claims are preempted by section 301, they cannot pursue them for the 

following reasons.4

b. Section 301 Claims

The CBA contains a mandatory grievance and arbitration procedure. See ECF No. 31-1 at 

15-16. Therefore, Plaintiffs generally “cannot succeed in a suit under § 301 to vindicate personal 

contract-based rights unless the contractual grievance-arbitration procedure is invoked on [their] 

behalf or on behalf of a group of employees of which [they are] part.” Kobold, 832 F.3d at 1034; 

see also United Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 37 (1987) (“The 

courts have jurisdiction to enforce collective-bargaining contracts; but where the contract provides 

grievance and arbitration procedures, those procedures must first be exhausted and courts must 

order resort to the private settlement mechanisms without dealing with the merits of the dispute.”). 

An employee may nonetheless pursue an unexhausted claim in federal court only by showing also 

that “the union violated its duty of fair representation by failing to pursue the grievance to 

arbitration, or pursuing it arbitrarily.” Kobold, 832 F.3d at 1034. Courts have referred to this 

procedure as “a hybrid section 301/fair representation claim.” DelCostello v. Int’l Bhd. of 

 

4 Section 301 provides an exception to Garmon preemption “designed to afford the courts 

jurisdiction to resolve labor disputes that focused on the interpretation of the terms of the 

collective bargaining agreement.” Pace v. Honolulu Disposal Serv., Inc., 227 F.3d 1150, 1156 

(9th Cir. 2000) (citation omitted). Because courts have concurrent jurisdiction with the NLRB 

over such claims, the Court need not address Garmon preemption if Plaintiffs’ claims can be 

converted into a section 301 claim.

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Teamsters, 462 U.S. 151, 165 (1983).

Because the Court assumes for the sake of argument that Plaintiffs’ claims are preempted 

by section 301, it likewise assumes that Plaintiffs’ claims fall within the scope of the grievance 

and arbitration procedure. 

Sealy contends, without citation to any material properly before the Court, that Plaintiffs 

have filed grievances related to their terminations. ECF No. 31 at 20 n.7. According to Sealy, 

Chavez’s grievance was settled on December 27, 2017, while Sarmiento’s grievance was denied

on June 8, 2017. Id. Neither Plaintiffs’ complaint nor their opposition addresses these allegations. 

Regardless, Plaintiffs must plead a breach of the duty of fair representation against the 

union in order to bring a hybrid section 301/fair representation claim here. See Carr v. Allied 

Waste Sys. of Alameda Cty., No. C 10-0715 PJH, 2011 WL 4047495, at *4 (N.D. Cal. Sept. 8, 

2011), aff’d, 516 F. App’x 677 (9th Cir. 2013) (“To plead a ‘hybrid’ § 301 breach of contract/duty 

of fair representation claim, the plaintiff must allege not only facts showing that the employer 

breached the collective bargaining agreement, but also facts showing breach of the duty of fair 

representation by the union, before alleging that the employer breached the CBA.”). Plaintiffs 

were required to plead this claim within a six-month statute of limitations. See DelCostello, 462 

U.S. at 172. Whether Plaintiffs would have brought a claim against the union for failing to pursue 

an initial grievance and arbitration, or for acting arbitrarily in pursuit of those remedies, Plaintiffs 

have not pleaded this claim within the requisite time.

The Court therefore concludes that Plaintiffs cannot pursue their wrongful termination 

claims under section 301.

B. NLRA

Sealy also argues that Plaintiffs’ seventh and eighth claims are preempted by the NLRA. 

ECF No. 31 at 21-24. Sealy reasons that Plaintiffs’ allegations that they were terminated “in 

retaliation for their concerted activities to negotiate the terms and conditions of their 

employment,” Compl. ¶ 83; see also id. ¶ 90, are based on acts prohibited or arguably prohibited 

by Sections 7 and 8 of the NLRA. The Court agrees.

As noted above, California Labor Code section 923, on which Plaintiffs’ claims are based, 

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provides that employees “shall be free from the interference, restraint, or coercion of employers of 

labor, or their agents, in the designation of such representatives or in self-organization or in other 

concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 

These protections are mirrored in the NLRA. Section 7 of the NLRA gives employees the right to, 

among other things, “engage in other concerted activities for the purpose of collective bargaining 

or other mutual aid or protection.” 29 U.S.C. § 157. Section 8, in turn, make it an unfair labor 

practice for employers “to interfere with, restrain, or coerce employees in the exercise of the rights 

guaranteed in [Section 7].” Id. § 158(a)(1). Section 8 further prohibits an employer’s ability to

“by discrimination in regard to hire or tenure of employment or any term or condition of 

employment to encourage or discourage membership in any labor organization.” Id. § 158(a)(3).

Where the NLRA’s provisions are “almost identical” to the state statute at issue, there is a 

clear case for Garmon preemption. Sears, Roebuck & Co. v. San Diego Cty. Dist. Council of 

Carpenters, 436 U.S. 180, 192 (1978) (quoting Garner v. Teamsters, Chauffeurs & Helpers Local 

Union No. 776 (A. F. L.), 346 U.S. 485, 488 (1953)); see also Henry v. Intercontinental Radio, 

Inc., 155 Cal. App. 3d 707, 715 (1984) (noting that plaintiff had properly conceded that section 

923 claim was “most susceptible to preemption as it parallels ‘counterpart provisions in the 

NLRA’”). Moreover, “the preemptive effect of Garmon cannot be avoided by reference to 

California ‘public policy’ violations, such as violations of [Labor Code] Section 923.” Pantazis v. 

Fior D’Italia, Inc., No. C 94-1094-FMS, 1994 WL 519469, at *6 (N.D. Cal. Sept. 20, 1994). 

Here, Plaintiffs’ alleged “[v]iolations of an employee’s right to engage in concerted activities are 

within the exclusive jurisdiction of the NLRB.” Buscemi v. McDonnell Douglas Corp., 736 F.2d 

1348, 1350 (9th Cir. 1984); see also Clayton v. Pepsi Cola Bottling Grp., No. CIV.A. CV85-5957-

WMB, 1987 WL 46230, at *7 (C.D. Cal. Mar. 3, 1987) (holding that wrongful discharge in 

violation of section 923 claim “must be viewed as essentially identical to an unfair labor practice 

claim under section 8 of the National Labor Relations Act” and therefore within NLRB’s 

exclusive jurisdiction).

Plaintiffs’ succinct opposition relies solely on a Ninth Circuit case, Paige, to argue that 

their claims are not subject to Garmon preemption because they did not allege a violation of the 

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NLRA. 826 F.2d at 862. In Paige, defendants argued that plaintiffs’ complaints about safety 

conditions “were engaged in a concerted activity which is protected by the NLRA.” Id. The 

Paige court rejected this argument, stating that plaintiffs, “as masters of their complaint, did not 

allege a violation of their rights under the NLRA, but only violations of state statutes and policy. 

By foregoing their claim based on federal law, [plaintiffs] may choose to plead their action as a 

state claim.” Id. (citing Caterpillar, 482 U.S. at 394). 

On its face, it is difficult to reconcile this reasoning with Garmon preemption, which is 

aimed by its own terms at claims pleaded under state law. See Garmon, 359 U.S. at 245 (“When 

an activity is arguably subject to § 7 or § 8 of the Act, the States as well as the federal courts must 

defer to the exclusive competence of the National Labor Relations Board if the danger of state

interference with national policy is to be averted.” (emphasis added)); Smith v. Nat’l Steel & 

Shipbuilding Co., 125 F.3d 751, 755 (9th Cir. 1997) (“Garmon preemption originates from the 

Supremacy Clause of the United States Constitution, and . . . this provision is only implicated 

when a case involves a conflict between a federal and a state law.”); Radcliffe v. Rainbow Const. 

Co., 254 F.3d 772, 780 n.6 (9th Cir. 2001) (“Garmon preemption, however, refers to the 

preemption of state law by the NLRA.”). Under Plaintiffs’ reading, Paige is inconsistent with 

numerous cases finding Garmon preemption of asserted state-law claims unaccompanied by 

allegations of NLRA violations. See, e.g., Local 926, Int’l Union of Oper. Eng’rs, AFL-CIO v. 

Jones, 460 U.S. 669, 674, 683 (1983) (common-law tort claims for interference with contractual 

relations and breach of contract); Local No. 207, Int’l Ass’n of Bridge, Structural & Ornamental 

Iron Workers Union v. Perko, 373 U.S. 701, 703, 708 (1963) (common-law tort claim for 

conspiracy); Bassette v. Stone Container Corp., 25 F.3d 757, 758, 760-61 (9th Cir. 1994)

(wrongful discharge alleged under state employment law); Buscemi, 736 F.2d at 1349-50 

(California law claims for retaliatory discharge, wrongful termination, and intentional infliction of 

emotional distress). For these reasons, a number of courts have questioned Paige’s apparent 

holding. Platt v. Jack Cooper Transp., Co., 959 F.2d 91, 95 n.7 (8th Cir. 1992) (“[T]o the extent 

Paige holds that plaintiffs may avoid Garmon preemption simply by choosing ‘to plead their 

action as a state claim,’ we disagree.” (quoting Paige, 826 F.2d at 862)); see also Casumpang v. 

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Hawaiian Commercial & Sugar Co., No. CIV. 12-00694 ACK-BM, 2014 WL 4322168, at *12 (D. 

Haw. Aug. 29, 2014) (agreeing “that Paige has a questionable ‘precedential effect’ and is more 

concerned about ‘removal jurisdiction than Garmon preemption’” (quoting Mayes v. Kaiser 

Found. Hosps., 917 F. Supp. 2d 1074, 1085 (E.D. Cal. 2013)); Rodriguez v. Yellow Cab Coop., 

Inc., 206 Cal. App. 3d 668, 680 (1988) (“Paige erroneously suggests that artful pleading will save 

a cause of action from Garmon preemption.”). Moreover, no published Ninth Circuit case appears 

to have embraced this rule. But see Raya v. Maryatt Indus. Corp., 940 F.2d 1535 (9th Cir. 1991)

(unpublished).

Despite these critiques, the Court is obligated to follow binding precedent unless clearly 

irreconcilable with subsequent higher authority. Siegal v. Gamble, No. 13-CV-03570-RS, 2016 

WL 1085787, at *9 n.2 (N.D. Cal. Mar. 21, 2016); see also Miller v. Gammie, 335 F.3d 889, 893 

(9th Cir. 2003) (en banc). Here, Paige can be reconciled by reading it, as some district courts have 

suggested, as a decision about removal jurisdiction. In Paige, the action was originally filed in 

state court, and then removed to federal court. 826 F.2d at 859. The issue before the court was 

thus whether there was a basis for federal court jurisdiction. Id. Because Garmon preemption is 

not an exception to the well-pleaded complaint rule, however, it “is not a basis for removal from 

state to federal court jurisdiction,” and its invocation “does not create a federal question for federal 

court jurisdiction.” Hayden v. Reickerd, 957 F.2d 1506, 1512 (9th Cir. 1991). Instead, when an 

action brought in state court is potentially preempted by Garmon, that argument is properly made 

in the state court. Id. The Paige court was correct that “Garmon analysis is therefore not relevant 

to this case” because it lacked jurisdiction to apply a Garmon analysis to a removed state-law 

claim. 826 F.2d at 862. By contrast, the Paige court went on to analyze section 301 preemption 

and Machinists preemption, both of which are “complete preemption” doctrines that provide 

exceptions to the well-pleaded complaint rule. See Retail Prop. Tr., 768 F.3d at 948 & n.5. This 

reading is bolstered by the relevant discussion’s lone citation to Caterpillar, a case concerning the 

well-pleaded complaint rule. 482 U.S. at 396.

Read in this light, Paige’s reasoning is inapposite here, where the action is originally filed 

in federal court. See Bud Antle, Inc. v. Barbosa, 45 F.3d 1261, 1270 (9th Cir. 1994) (observing 

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that a federal district court may conduct a Garmon analysis “when a party has raised Garmon as a 

defense to a state-law claim that is properly before the district court (through diversity or 

supplemental jurisdiction)”). Accordingly, the Court concludes that Paige does not save 

Plaintiffs’ claims from Garmon preemption.

Finally, contradicting the allegations in their complaint – and the basis for their claims –

Plaintiffs’ opposition states that they “do not assert any concerted union activities.” ECF No. 32 

at 9. To the extent that Plaintiffs dispute the legal label attached to the activities alleged in their 

complaint, the Court is not required to accept these assertions. See Ashcroft v. Iqbal, 556 U.S. 

662, 678 (2009). To the extent that Plaintiffs allege that, as a factual matter, no such activities 

occurred, the Court does not consider these new allegations as support for the merits of Plaintiffs’ 

argument. Rather, “[f]acts raised for the first time in plaintiff’s opposition papers should be 

considered by the court in determining whether to grant leave to amend or to dismiss the 

complaint with or without prejudice.” Broam v. Bogan, 320 F.3d 1023, 1026 n.2 (9th Cir. 2003). 

But a plaintiff can only cure the complaint’s deficiencies “with additional allegations that are 

consistent with the challenged pleading and that do not contradict the allegations in the original 

complaint.” United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011) (citation 

omitted). Nor have Plaintiffs explained how they could possibly pursue their section 923 claims 

without those allegations of concerted activities.

The Court therefore concludes that Garmon preemption deprives the Court of jurisdiction 

over Plaintiffs’ seventh and eighth claims.

CONCLUSION

For the foregoing reasons, the Court grants the motion in part and denies it in part. The 

Court holds that Plaintiffs’ second and third claims, including any derivative PAGA claims, are 

not preempted by section 301 of the LMRA. The Court also holds that Plaintiffs’ seventh and 

/ / /

/ / /

/ / /

/ / /

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eighth claims are preempted under Garmon and cannot proceed in the alternative as section 301 

claims. The seventh and eighth claims are accordingly dismissed with prejudice. 

IT IS SO ORDERED.

Dated: February 14, 2019

______________________________________

JON S. TIGAR

United States District Judge

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