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NOTICE AND MOTION TO DISMISS

SEYFARTH SHAW LLP

William J. Dritsas (SBN 97523)

wdritsas@seyfarth.com

560 Mission Street, 31st Floor

San Francisco, CA 94105-2930

Telephone: (415) 397-2823

Facsimile: (415) 397-8549

SEYFARTH SHAW LLP

Michael W. Kopp (SBN 206385)

mkopp@seyfarth.com

400 Capitol Mall, Suite 2350

Sacramento, California 95814-4428

Telephone: (916) 448-0159

Facsimile: (916) 558-4839

SEYFARTH SHAW LLP

Timothy M. Rusche (SBN 230036)

E-mail: trusche@seyfarth.com

Mary Manesis (SBN 150372)

E-mail: mmanesis@seyfarth.com

333 S. Hope Street, Suite 3900

Los Angeles, California 90071

Telephone: (213) 270-9600

Facsimile: (213) 270-9601

Attorneys for Defendants

TESORO REFINING AND MARKETING COMPANY

LLC and TESORO LOGISTICS GP, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

CHRIS AZPEITIA, EILEEN FOSTER,

ANTONIO GARCIA, and SAMANTHA SCOTT,

individually and on behalf of all similarly situated

current and former employees,

Plaintiffs,

v.

TESORO REFINING AND MARKETING

COMPANY LLC, TESORO LOGISTICS GP,

LLC, and DOES 1 through 10, inclusive

Defendants.

Case No. 3:17-cv-00123-JST

CLASS ACTION

NOTICE AND MOTION TO DISMISS

Date: April 27, 2017

Time: 2:00 p.m.

Dept: Courtroom 9 - 19th Floor

Judge: Hon. Jon S. Tigar

Complaint Filed: 1/10/17

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TABLE OF CONTENTS

I. INTRODUCTION .......................................................................................................................... 1

II. PLAINTIFFS’ ALLEGATIONS AND FACTUAL BACKGROUND.......................................... 3

A. Summary of Plaintiff’s Factual Allegations and Theory of Liability. .................................3

B. Summary of Governing Collective Bargaining Agreements...............................................4

C. Additional Collectively-Bargained Meal and Rest Period Policies at Wilmington.............8

D. The Collectively-Bargained Class Settlement of the Burgess and Delagarza

Actions. ................................................................................................................................9

III. LEGAL ARGUMENT.................................................................................................................. 11

A. Plaintiffs’ Claims Are Preempted by the LMRA Because They Require

Interpretation of the CBAs and Other Collectively-Bargained Agreements. ....................11

1. Standard for Section 301 Preemption Under the LMRA.......................................11

2. Plaintiffs’ Claims Challenge Collectively Bargained Rest Break Policies,

and Require Interpretation of the CBAs and Negotiated Policies. ........................12

3. Plaintiffs’ Claims Violate the Collectively Bargained Class Settlement,

and Interfere with the Collective Bargaining Obligations of Tesoro and

USW.......................................................................................................................15

4. Plaintiffs’ Claims Should Be Dismissed as Completely Preempted or for

Failure to Exhaust the CBA’s Grievance and Arbitration Procedures. .................17

B. Plaintiffs’ Derivative Claims that Fail to State a Viable Claim for Relief. .......................18

1. The Court Should Dismiss the Second Claim for Violation of Labor Code

Section 226 Because Wage Statements Need Not Include Unearned

Wages.....................................................................................................................18

a. Wage Statements Need Only List “Wages Earned.” .................................18

b. Claims For “Inaccurate Wage Statements” Cannot Be Predicted

Upon Rest Break Violations. .....................................................................19

2. UCL Claims Cannot Be Predicated Upon Rest Break Penalties. ..........................20

3. UCL Claims Cannot Be Predicated on Labor Code Section 226 Violations.........21

4. Plaintiffs May Not Seek Disgorgement of Profits Under the UCL. ......................21

5. Plaintiffs’ PAGA Claim Fails to State a Claim for Relief.....................................22

a. Plaintiffs Have Not Pleaded Facts Satisfying Administrative

Prerequisites for Recovery of PAGA Penalties. ........................................22

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b. Plaintiffs’ PAGA Claim Is Based on Inapplicable Labor Code

Violations...................................................................................................22

i. Plaintiffs Are Not Entitled To PAGA Penalties For Alleged

Wage Statement Violations Because Labor Code Sections

226(e)(1), 226.3, and 226.6 Already Provide For Such

Penalties. ........................................................................................23

ii. Plaintiffs Are Not Entitled To PAGA Penalties For Alleged

Rest Break Violations Under Labor Code Section 226.7(c)..........24

IV. CONCLUSION............................................................................................................................. 25

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TABLE OF AUTHORITIES

Page(s)

Federal Cases

Allis Chalmers Corp. v. Lueck,

471 U.S. 202 (1985).................................................................................................................12, 17, 18

Audette v. International Longshoremen’s and Warehousemen’s,

195 F.3d 1107 (9th Cir. 1999) .............................................................................................................16

Buck v. Cemex, Inc.,

2013 WL 4648579 (E.D. Cal. Aug. 29, 2013).....................................................................................15

Burgess v. Tesoro Refining & Marketing Co.,

C.D. Cal., Case No. 10-5870-DMG.......................................................................................2, 9, 10, 15

Burnside v. Kiewit Pac. Corp.,

491 F.3d 1053 (9th Cir. 2007) .............................................................................................................12

Busey v. P.W. Supermarkets, Inc.,

368 F. Supp. 2d 1045 (2005) ...............................................................................................................18

Carr v. Pacific Maritime Ass’n,

904 F.2d 1313 (9th Cir. 1990) .............................................................................................................18

Cleveland v. Groceryworks.com, LLC,

2016 WL 4140504 (N.D. Cal. Aug. 4, 2016) ......................................................................................14

Cole v. CRST, Inc.,

317 F.R.D. 141 (C.D. Cal. 2016).........................................................................................................14

Coria v. Recology, Inc.,

2014 WL 3885873 (N.D. Cal. Aug. 7, 2014) ......................................................................................14

Curtis v. Irwin Indus.,

2016 WL 4975188 (C.D. Cal. Sept. 16, 2016) (Wright, J.).................................................................17

Delagarza v. Tesoro Refining & Marketing Co.,

N.D. Cal., Case No. 09-05803 EMC............................................................................................ passim

Duerson v. NFL,

2012 WL 1658353 (N.D. Ill. May 11, 2012).......................................................................................14

Frieri v. Sysco Corp.,

2016 WL 71882 (S.D. Cal. Dec. 12, 2016)..........................................................................................20

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General Teamsters, Auto Truck Drivers and Helpers Local 162 v. Mitchell Bros. Truck

Lines,

682 F.2d 763 (9th Cir. 1982) ...............................................................................................................16

Gerardo Ayala v. Destination Shuttle Services LLC,

2013 WL 12092284 (C.D. Cal. Nov. 1, 2013).....................................................................................15

Hernandez v. Towne Park, Ltd.,

2012 WL 2373372 (C.D. Cal. June 22, 2012) ...............................................................................23, 25

Hines v. Anchor Motor Freight, Inc.

424 U.S. 554 (1976).............................................................................................................................18

Jones v. AT & T,

No. C 07–3888 JF, 2008 WL 902292 (N.D. Cal. Mar. 31, 2008) .........................................................4

Jones v. Spherion Staffing LLC,

2012 WL 3264081 (C.D. Cal. August 7, 2012)............................................................................19, 21

Kobold v. Good Sam. Reg’l Med. Ctr.,

832 F.3d 1024 (9th Cir. 2016) .......................................................................................................12, 17

Lingle v. Norge Div. of Magic Chef, Inc.,

486 U.S. 399 (1988).............................................................................................................................12

Nguyen v. Baxter Healthcare Corp.,

2011 WL 6018284 (C.D. Cal., November 28, 2011).....................................................................19, 25

Parson v Golden State FC, LLC,

2016 WL 1734010 (N.D. Cal. May 2, 2016).......................................................................................20

Pette v. Int’l Union of Operating Engineers,

2016 WL 4596338 (C.D. Cal. Sept. 2, 2016) (Pregerson, J.) ..............................................................17

Raphael v. Tesoro Refining and Marketing Co.,

LLC, 2015 WL 3970293 (C.D. Cal. June 30, 2015)................................................................12, 13, 15

Retail Clerks Intern. Ass’n, Local Unions Nos. 128 and 633 v. Lion Dry Goods, Inc.,

369 U.S. 17 (1962)...............................................................................................................................16

U.S. ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc.,

971 F.2d 244 (9th Cir. 1992) .................................................................................................................9

Rosenstein v. Pratt,

2016 WL 308593 (S.D. Cal. Jan. 25, 2016)...................................................................................23, 24

Ruelas v. Costco Wholesale Corp.,

67 F. Supp. 3d 1137 (2014) .................................................................................................................25

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Singletary v. Teavana Corp.,

2014 WL 1760884, at *4 (N.D. Cal. Apr. 2, 2014) .............................................................................25

Tan v. GrubHub, Inc.,

171 F. Supp. 3d 998 (N.D. Cal. 2016) .................................................................................................22

Vaca v. Sipes,

386 U.S. 171 (1967).............................................................................................................................18

In re Wal-Mart Stores, Inc. Wage and Hour Litigation,

505 F. Supp. 2d 609 (N.D. Cal. May 29, 2007)...................................................................................21

Whittlestone, Inc. v. Handicraft Co.,

618 F.3d 970 (9th Cir. 2010) .................................................................................................................3

Woo v. Home Loan Group, L.P.,

2007 WL 6624925 (S.D. Cal. Jul. 27, 2007) .......................................................................................21

Young v. Anthony’s Fish Grottos, Inc.,

830 F.2d 993 (9th Cir. 1987) ...............................................................................................................11

State Cases

Amaral v. Cintas Corp. No. 2,

163 Cal. App. 4th 1157 (2008) ............................................................................................................23

Augustus v. ABM Security Servs., Inc.,

2 Cal. 5th 257 (Dec. 22, 2016)...............................................................................................2, 9, 11, 12

Bright v. 99 Cents Only Stores,

189 Cal. App. 4th 1472 (2010) ......................................................................................................23, 25

Brinker Restaurant Corp. v. Superior Court,

53 Cal.4th 1004 (2012) ........................................................................................................................14

Caliber Bodyworks, Inc. v. Superior Court,

134 Cal. App. 4th 365 (2005) ..............................................................................................................22

Cortez v. Purolator Air Filtration Prods. Co.,

23 Cal. 4th 163 (2000) .............................................................................................................20, 21, 22

Home Depot U.S.A., Inc. v. Superior Ct.,

191 Cal. App. 4th 210 (2010) ..................................................................................................23, 24, 25

Kirby v. Immoos,

53 Cal. 4th 1244 (2012) ...........................................................................................................19, 20, 21

Levy v. Skywalker Sound,

108 Cal. App. 4th 753 (2003) ..............................................................................................................17

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Pineda v. Bank of Am.,

50 Cal.4th 1389 (2010) ........................................................................................................................21

Stagner v. Luxottica Retail N. Am., Inc.,

2011 WL 3667502 (N.D. Cal. Aug. 22, 2011......................................................................................22

Federal Statutes

29 U.S.C. § 185............................................................................................................................................1

29 U.S.C. § 185(a) .....................................................................................................................................11

LMRA § 301...................................................................................................................................... passim

State Statutes

Cal. Bus. & Prof. Code §§ 17200 et seq. ...................................................................................................10

Cal. Lab. Code § 200(a).............................................................................................................................19

Cal. Lab. Code § 203 ...........................................................................................................................19, 21

Cal. Lab. Code § 226 ......................................................................................................................... passim

Cal. Lab. Code § 226(a)(1) ........................................................................................................................19

Cal. Lab. Code § 226(a)(2) ........................................................................................................................19

Cal. Lab. Code § 226(a)(5) ........................................................................................................................19

Cal. Lab. Code § 226(e)(1) ........................................................................................................................23

Cal. Lab. Code § 226.3 ........................................................................................................................23, 24

Cal. Lab. Code § 226.6 ........................................................................................................................23, 24

Cal. Lab. Code § 226.7 ...................................................................................................................... passim

Cal. Lab. Code § 226.7(c)........................................................................................................20, 21, 24, 25

Cal. Lab. Code § 512 .................................................................................................................................18

Cal. Lab. Code § 512(e).............................................................................................................................14

Cal. Lab. Code § 514 .................................................................................................................................14

Cal. Lab. Code § 2699 ...............................................................................................................................22

Cal. Lab. Code § 2699(f) ...............................................................................................................23, 24, 25

Cal. Lab. Code § 2699.3 ............................................................................................................................22

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Cal. Lab. Code § 2699.3(a)........................................................................................................................22

Rules

Fed. R. Civ. P. 12(b)(6)............................................................................................................................1, 3

Fed. R. Civ. P. 12(f).....................................................................................................................................3

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1

NOTICE AND MOTION TO DISMISS

NOTICE OF MOTION AND MOTION

NOTICE IS HEREBY GIVEN that on April 27, 2017, at 2:00 p.m. in Courtroom 9 of this Court,

located at 450 Golden Gate Avenue, San Francisco, CA 94102, 19th Floor, Defendants TESORO

REFINING AND MARKETING COMPANY LLC and TESORO LOGISTICS GP, LLC

(“Defendants’), will and do hereby move the Court for an order under Rule 12(b)(6) of the Federal Rules

of Civil Procedure dismissing Plaintiffs’ claims.

RELIEF SOUGHT

Defendants seek dismissal of Plaintiffs’ Complaint pursuant to Rule 12(b)(6) of the Federal

Rules of Civil Procedure, on the grounds that Plaintiffs’ claims are preempted by the Labor Management

Relations Act (LMRA) and they failed to exhaust mandatory grievance and arbitration procedures.

Plaintiffs’ Complaint also includes several deficient claims and grounds for relief alleged against

Defendants. Specifically, Plaintiffs improperly: (i) seek Labor Code Section 226 penalties based on the

incorrect argument that wage statements must list unearned pay, such as missed rest break penalties; (ii)

allege their Unfair Competition Law (“UCL”) claim based on Labor Code rest break and wage statement

provisions that cannot form the basis of such a claim; (iii) request disgorgement remedies not available

under the UCL, (iv) assert a Private Attorneys General Act (“PAGA”) claim that Plaintiffs did not

exhaust prior to filing suit, (v) seek PAGA penalties for alleged violations that already provide a

statutorily-defined penalty, and (vi) seek relief for putative class claims released in a prior class action.

Accordingly, Defendants moves to dismiss (or in the alternative partially dismiss) Plaintiffs’

Complaint. This motion is based on this Notice and Memorandum of Points and Authorities, the

declaration of Karen Kawano and Exhibits thereto, the Requests for Judicial Notice, the files and records

in this action, and such other further matters adduced at the hearing.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION

I. INTRODUCTION

The Complaint should be dismissed pursuant to FRCP 12(b)(6) because Plaintiffs’ claims are

preempted under Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185.

Plaintiffs filed this putative class wage and hour action only nineteen days after the California

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Supreme Court issued the Augustus v. ABM Security Servs., Inc., 2 Cal. 5th 257 (Dec. 22, 2016)

decision, which Plaintiffs seemingly interpret as announcing it is now unlawful to require employees to

be “on-call” and carry a pager or communication device during rest breaks because they would be under

the direction or control of the employer. Plaintiffs allege that Tesoro’s policies and practices do not

“authorize and permit” compliant rest breaks under Augustus because they allegedly require refinery

Operators to “remain attentive, carry radios, and be reachable at all times during their shifts.” (Compl. ¶

20.) Plaintiffs further allege Tesoro’s policies fail to provide payment of required premiums for missed

rest periods. (Id. ¶ 45.)

Plaintiffs’ claims are preempted by the LMRA in two broad respects. First, they necessarily

require interpretation of a number of collective bargaining agreements (CBAs) addressing the terms and

conditions of Tesoro’s authorization of rest breaks. These CBAs set forth Tesoro’s policies authorizing

and permitting rest periods, the scheduling and length of rest periods, the nature and extent of

employees’ release from duty during rest periods, and employees’ rights to report violations and receive

premium pay for any non-compliant rest breaks. Tesoro has also collectively bargained the terms and

conditions of additional rest break policies supplemental to the CBAs. Plaintiffs’ claims place the terms

of these CBAs, letters of agreement, and negotiated policies squarely at issue. Because Plaintiffs’ claims

are substantially dependent upon and intertwined with these CBAs, they are preempted by the LMRA.

Second, in their rush to court following Augustus, Plaintiffs seek a Court-ordered injunction

restructuring Tesoro’s rest break policies and practices, rather than a collectively-bargained modification

of any allegedly non-compliant policy or practice with respect to radio usage and rest breaks. This

violates and interferes with the terms of the prior class settlement referenced in Plaintiffs’ Complaint,

which resolved the consolidated Delagarza, Burgess, and USW lawsuits. The Union representing

Plaintiffs and the putative class (United Steel Workers [“USW”]) previously entered a collectivelybargained class settlement addressing the issue of radio usage and wage and hour compliance.

Specifically, the class settlement negotiated with USW included a release of rest break claims and

further addressed the usage of radios within Tesoro’s refinery by providing for on-duty meal period

agreements and meal period waivers. The agreement further provided that “any changes in law that

rendered the Agreement unnecessary, illegal or ineffective” (e.g., Plaintiffs allegations here) required the

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Union and the Company to promptly meet to bargain over the terms of a new agreement to address any

purported violation. Rather than do so, the same counsel who represented the USW in the prior

consolidated class actions now seeks to have the Court address and impose court-ordered alterations to

allegedly non-compliant rest break practices and radio usage, in violation of the parties’ prior

collectively-bargained class action settlement agreement.

In sum, Plaintiffs’ Complaint directly places multiple collectively bargained agreements at issue

and interferes with the underlying labor relations and negotiations giving rise to these agreements.

Because their claims are substantially dependent upon and intertwined with the CBAs, Plaintiffs’

Complaint is completely preempted by federal law and can only be brought against Defendants (if at all)

as a converted Section 301 claim under the LMRA. Because Plaintiffs never exhausted the CBA’s

mandatory grievance and arbitration procedures, any Section 301 claim they might raise is barred as a

matter of law, and their Complaint must be dismissed with prejudice.

In addition, Plaintiffs’ Complaint includes several deficient claims. Specifically, Plaintiffs

improperly: (i) seek Section 226 penalties based on the incorrect claim that wage statements must list

unearned pay, such as rest break penalties; (ii) allege their UCL claim based on statutory rest break and

wage-statement provisions that cannot support such a claim; (iii) request disgorgement remedies not

available under the UCL, (iv) assert a PAGA claim that Plaintiffs did not exhaust prior to filing suit, (v)

seek PAGA penalties for violations that already provide a statutorily-defined penalty, and (vi) seek relief

for putative class claims released in a prior class action. These claims and requested remedies thus fail.1

II. PLAINTIFFS’ ALLEGATIONS AND FACTUAL BACKGROUND

A. Summary of Plaintiff’s Factual Allegations and Theory of Liability.

Plaintiffs Eileen Foster, Antonio Garcia and Samantha Scott work as Operators at Tesoro’s

Golden Eagle [“Martinez”] Refinery in Martinez, California. (Comp. ¶¶ 36-39.) Plaintiff Chris Azpeitia

works as an Operator at Tesoro’s Los Angeles Refinery. (Comp. ¶¶ 36.) Tesoro’s “Golden Eagle facility

located in Martinez, California . . . includes an oil refinery, chemical plant, and distribution facilities[.]”

(Compl. ¶ 13.) Tesoro also owns “the Los Angeles Refinery, which includes an oil refinery, sulfur plant,

1 Defendants bring this motion pursuant to Fed. R. Civ. P. 12(b)(6). See Whittlestone, Inc. v. Handicraft

Co., 618 F.3d 970, 973-76 (9th Cir. 2010) (Rule 12(b)(6) motion is the proper procedure - rather than

Rule 12(f) - to challenge facially defective claims and requests for legally unavailable remedies).

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and distribution facilities located in or around Carson and Wilmington, California.” (Compl. ¶ 14.)

Plaintiffs’ claims derive from the core allegation that the California Supreme Court’s recent

Augustus v. ABM Security Services, Inc., decision renders the rest breaks provided at Tesoro’s refineries

unlawful, due to the alleged requirement that “Tesoro requires [them] to remain attentive, carry a radio,

and be reachable at all times during [their] shift.” (Comp. ¶¶ 36-39, 42.)

Plaintiffs seek recovery of damages, restitution, penalties, disgorgement of profits, and

declaratory and injunctive relief on behalf of a putative class, for claims arising from Defendants’

alleged (1) “policy or practice” of failing to authorize and permit duty free rest breaks, and (2) “policy or

practice” of failing to pay one hour of pay when employees were not provided rest breaks. (Compl. ¶¶

44, 45, Prayer for Relief.) Plaintiffs allege four claims based on these predicate allegations: (1) “failure

to authorize and permit rest breaks”; (2) “failure to furnish accurate wage statements”; (3) “Private

Attorneys General Act”; and (4) “unfair business practice and unfair competition.” See Compl. ¶¶ 47-66.

Plaintiffs attempt to assert these claims on behalf of themselves and on behalf of:

All current and former employees of Defendants Tesoro Refining and Marketing Company LLC

and Tesoro Logistics GP, LLC who worked as an operator at the Golden Eagle Refinery in

Martinez, California, since January 10, 2013, and all current and former employees of

Defendants Tesoro Refining and Marketing Company LLC, and Tesoro Logistics GP, LLC who

worked as an operator at the Los Angeles Refinery since July 19, 2013. (See Compl. ¶ 10.)2

B. Summary of Governing Collective Bargaining Agreements.

The terms and conditions of Plaintiffs’ (and the putative class members’) employment are

governed by ten CBAs between Tesoro and Plaintiffs’ collective bargaining representative, United Steel

Workers (USW), applicable to different bargaining units at different locations for different periods of

time covered by the putative class period. (Declaration of Karen Kawano In Support of Motion to

Dismiss (“Kawano Decl.”) ¶¶ 5-31 Exs. A-N.)3 At Tesoro’s Martinez (Golden Eagle) refinery, the

following CBAs and further collectively bargained agreements apply to the putative class:

• USW Golden Eagle Refinery CBA, entitled “Articles of Agreement Between Tesoro Refining

Company Golden Eagle Refinery and United Steelworkers International Union Local 5 and United

Steelworkers International Union, effective February 1, 2012 to January 31, 2015.” (Kawano Decl. Ex.

2 The Complaint incorrectly identifies the Delagarza release period as ending January 10, 2013. See

Request for Judicial Notice, Ex. A ¶¶ 7, 10, 43, Ex. B ¶ 10 (release extends to July 19, 2013).

3 Courts routinely take judicial notice of the governing CBAs where necessary to resolve issues of

preemption. Jones v. AT & T, No. C 07–3888 JF, 2008 WL 902292, *2 (N.D. Cal. Mar. 31, 2008).

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K.)

• USW Golden Eagle Chemical CBA, entitled “Articles of Agreement Between Tesoro Refining

Company Golden Eagle Chemical Plant and United Steelworkers International Union 5, effective March

1, 2012 to February 29, 2015.” (Id., Ex. L.)

• USW Martinez Refinery CBA, entitled “Articles of Agreement Between Tesoro Refining Company

Martinez Refinery and United Steelworkers International Union Local 5 and United Steelworkers

International Union, [effective] February 1, 2015.” (Id., Ex. M.)

• USW Martinez Chemical CBA, entitled “Articles of Agreement Between Tesoro Refining Company

Martinez Chemical Plant and United Steelworkers International Union 5, effective March 1, 2015.” (Id.,

Ex. N.)

• USW Golden Eagle Refinery On-Duty Meal Period Agreement. (Id., Ex. B.)

At Tesoro’s Southern California refineries (the LAR refinery, including the Wilmington and

Carson operations), the following CBAs and additional side letters are applicable to the putative class:

• USW Carson CBA, entitled “Articles of Agreement between BP West Coast LLC Carson Refinery

and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service

Workers International Union, A.F.L.-C.I.O., C.L.C., effective February 1, 2012 to January 31, 2015.”

(Id., Ex. E.)

• USW Pipelines CBA, entitled “Articles of Agreement Between BP Pipelines (North America) Inc.

and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service

Workers International Union, A.F.L.-C.I.O., C.L.C., on behalf of its Local 675, effective February 1,

2012 to January 31, 2015.” (Id., Ex. D.)

• USW Wilmington CBA, entitled “Agreement Between Tesoro Refining and Marketing Company

and United Steelworkers A.F.L. - C.I.O., CLC USW Local 675 Covering Employees of Los Angeles

Refinery and Long Beach Terminal and Wilmington Sales Terminal,” May 12, 2012 through April 30,

2015. (Id., Ex. C.)

• USW Los Angeles Refinery CBA, entitled “Articles of Agreement Between Tesoro Refining &

Marketing Tesoro Los Angeles Refinery Carson Bargaining Unit and United Steel, Paper and Forestry,

Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, A.F.L.-

C.I.O., C.L.C. Effective Feb. 1, 2015.” (Id., Ex. F.)

• USW Tesoro Logistics G.P. CBA, entitled “Articles of Agreement Between Tesoro Logistics G.P.

and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service

Workers International Union, A.F.L.-C.I.O., C.L.C. on Behalf of its Local 675, Effective February 1,

2015 through January 31, 2019 (Id., Ex. G.)

• “Tesoro Los Angeles Refinery (Wilmington Bargaining Unit) Settlement Offer to USW Local 675”

(Id., Ex. H.)

• The Los Angeles Refinery On-Duty Meal Period Agreement. (Id., Ex. A.)

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• The “Memorandum of Agreement Timekeeping, Meal and Rest Wilmington” agreement reached

between Tesoro and USW Local 675 on April 7, 2016. (Id., Ex. I.)

These CBAs and side letter agreements govern Plaintiffs’ wages, hours, and conditions of

employment, and set forth specific provisions addressing the working conditions, entitlement to and

rates of pay, and final and binding arbitration for alleged violations of the CBAs.

Several of the CBAs also specifically address employees’ entitlement to rest breaks, the manner

in which the rest breaks are authorized and permitted, verification of rest breaks, the independent

authority of employees to take duty-free rest breaks, a reporting mechanism for employees to identify

any non-compliant rest breaks, and provisions for when and how much additional compensation will be

paid to an employee for non-compliant rest breaks. These CBAs also provide that disputes pertaining to

compliance with the rest break provisions are subject to the mandatory grievance procedure.

For example, the current CBA between USW covering operators at Tesoro Logistics G.P.’s Los

Angeles Refinery terminals (effective February 1, 2015) extensively details the terms and conditions of

Tesoro’s policy for the authorization and provision of rest breaks in several different provisions.

• Article VII of the CBA establishes that it is intended to define rest break policy and practice:

“The intent of this Article is to effect more specific procedures governing meal periods and rest

periods for all refinery employees represented by USW. Additionally, this Article requires all

employees to comply with Company policy related to meal periods and rest periods, including

timekeeping policies related thereto.”

(Kawano Decl., Ex. G, p. 13.) (emphasis added). It goes on to define in detail the terms and conditions

of the rest breaks authorized and permitted to putative class members. Specifically,

• Article VII.3.a provides for the provision of rest breaks at a frequency in excess of that required

by the DLSE:

“Employees are authorized and permitted to take a ten (10) minute Rest Period for every four (4)

consecutive hours of work or major fraction thereof. A major fraction is defined as anything

more than two (2) consecutive hours of work. Rest periods are to be taken in ten (10 minute

increments. Rest Periods cannot be taken for shorter amounts of time and cannot be combined

together or combined with an Off-Duty Meal Period.”

• Article VII.3.a emphasizes that employees “are not required to perform their job duties during

Rest Periods,” in direct contradiction to Plaintiffs’ theory of recovery. (Kawano Decl. Ex. G, p.

15)

• Article VII.3.b provides failsafe authorizations and reporting mechanisms to ensure the

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authorization and permitting of compliant rest breaks:

“Rest periods should be taken as close to the middle of the four (4) hour increments as

practicable, or as scheduled by management or a supervisor or his or her designee. However,

employees are independently authorized and permitted to take Rest Periods even if such Rest

Periods are not scheduled.”

• Article VII.3.e provides a reporting procedure and a contractual policy for the payment of

premiums of any violation:

“An employee who is forced by management or a supervisor or their designee to forgo a Rest

Period as provided herein must immediately report the failure to the Human Resources

Department. [E]mployees who are forced to forgo a Rest Period as outlined herein shall receive

an additional one (1) hour of pay at the employer’s regular rate of pay for each day a Rest Period

is not permitted. No more than (1) additional hour of pay per day will be paid to any employee

under this provision.”

• Article VII provides that the terms of the CBA may be modified in response to changes in law

regarding meal and rest break requirements:

“The company reserves the right to unilaterally modify the terms and conditions of the

collective bargaining agreement as it relates to meal and rest periods consistent with any changes

or controlling clarifications in state or federal law or other clarifications issued by a state or

federal administrative agency responsible for enforcing wage and hour issues. However, if it is

determined to be more practicable, the Collective Bargaining Agreement may be subject to a side

letter agreement rather than an immediate amendment, if there are any changes or clarifications

with respect to state or federal law regarding these issues.”

• Article VII.5 provides that disputes regarding the provisions of the meal and rest provisions are

subject to the grievance and arbitration procedure:

“Any disputes about the provisions of this article are subject to Section XIX concerning

grievances and employees must exhaust the grievance procedure before seeking other remedies.”

(Kawano Decl., Ex. G, pp. 13-16.) In addition, the prior BP Pipelines CBA (effective Feb. 1, 2012 - Jan.

31, 2015) contained comparable meal and rest period provisions. (Kawano Decl., Ex. D, pp. 13-16.)

The separate CBA between USW and Tesoro applicable to the Carson Bargaining Unit (effective

Feb. 1, 2015) details Tesoro’s policy for authorizing rest breaks at Carson. Specifically:

• Article VIII provides that “[t]he intent of this Article is to affect more specific procedures

governing meal periods and rest periods for all Bargaining Unit employees represented by

USW.” (Kawano Decl., Ex. F, p. 61.)

• Article VIII.C provides:

Employees shall be permitted to take one ten minute rest period for every four hours they work

or major fraction thereof. A major fraction is defined as anything more than two hours for

purpose of calculating rest periods.

• Appendix E confirms Tesoro’s policy of authorizing and permitting rest breaks:

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Employees are permitted a 10-minute paid rest period for each four hours of work or major

fraction thereof. To the extent practicable, rest periods will be taken in the middle of the fourhour work period. Subject to the above, the timing of rest periods will be at the Company’s

reasonable discretion.”

(Kawano Decl., Ex. F, p. 133.)

• Article VIII.D provides a policy for payment of one hour of premium pay for any failure to follow

the rest period requirements, contrary to Plaintiffs’ allegations:

There will be a maximum of an additional one (1) hour of pay per day for an employee for any

combination of any failure to follow the requirements for an Off-Duty Meal Period, On-Duty

Meal Period or Rest Period. Any payment of one (1) additional hour of pay for Meal Period or

Rest Period violations shall not be counted as hours worked for purposes of calculating overtime.

(Kawano Decl., Ex. F, p. 63.)

• Article XX provides detailed and comprehensive procedures for the settlement of disputes under the

Agreement. (Kawano Decl., Ex. F at pp. 79-82.) (emphasis added).

In addition, the prior Carson CBA (effective Feb. 1, 2012 - Jan. 31, 2015) contained comparable meal

and rest period provisions. (Kawano Decl., Ex. E, pp. 61-64; 88-90.)

C. Additional Collectively-Bargained Meal and Rest Period Policies at Wilmington

Tesoro and the USW further collectively bargained the terms and conditions of the meal and rest

period policies at the Wilmington refinery - a policy directly at issue in this litigation. In 2014 Tesoro

presented the USW Local 675 with a proposed Wilmington meal and rest period policy for review and

comment. Negotiations continued off and on through the spring of 2016. (Kawano Decl. ¶ 23.)

In approximately April 2016, after obtaining Union’s negotiated consent, Tesoro distributed the

written meal and rest period policy for the Wilmington refinery. (Id. ¶ 24.) The policy states that it

“supplements but is not intended to conflict with or supersede the Collective Bargaining Agreement

between Tesoro and the United Steel Workers.” Id., Ex. O The policy authorizes rest periods, prohibits

anyone from discouraging employees from taking rest periods, requires employees to report when they

were not permitted to take a full rest period, and provides for premium payment for missed rest periods.

(Id.) The policy further provides that “The Company’s policy is to provide meal and rest periods in

accordance with the requirements of the California Labor Code and California’s applicable Industrial

Welfare Commission Wage Orders, except where the Company’s policy is more generous.” (Id.)

Concurrently, Tesoro and the USW entered a “Memorandum of Agreement Timekeeping, Meal

and Rest Wilmington” to expand the application of the prior agreements to additional positions

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(including operators in the Azpeitia putative class). This agreement was ratified by USW members.

(Kawano Decl. ¶ 17, Ex. J.) In addition, in connection with the April 2016 rollout of the meal and rest

period policy, Tesoro developed an “FAQ” document and training slides to answer anticipated

bargaining unit questions regarding the practical application of the meal and rest period policy, and

provided the Union advanced copies for negotiation and feedback. (Id. ¶¶ 25 -27, Exs. P, Q.) The USW

continued to discuss the practical operation of the rest break policy following implementation. For

example, at the December 20, 2016 meeting between Tesoro and the USW Local 675 (two days before

the Augustus decision), the parties discussed rest breaks for Console Operators and other Operators,

including as to the provision of relief (at issue in the Complaint allegations), and reporting and provision

of penalty payments for any violation. (Id. ¶ 28, Ex. R.) These discussions continued through February

20, 2017, at which time Tesoro and the Union signed off on the December 20, 2016 meeting minutes,

confirming the “Breaks for Console Operators” was a “Closed” item. (Id. ¶ 29, Ex. R.)

D. The Collectively-Bargained Class Settlement of the Burgess and Delagarza Actions.

The USW and Tesoro previously entered into a “Joint Stipulation of Class Action Settlement”

(“Class Settlement”) on March 15, 2013 to resolve three class and putative class actions (Delagarza v.

Tesoro Refining & Marketing Co., N.D. Cal., Case No. 09-05803 EMC [“Delagarza”], Burgess v.

Tesoro Refining & Marketing Co., C.D. Cal., Case No. 10-5870-DMG (PLAx) [“Burgess”], and United

Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO,

CLC, and Richard Floyd and Eduardo Carbajal, on behalf of all similarly situated current and former

employees v. Shell Oil Co., Tesoro Refining & Marketing Co., C.D. Cal., Case No. 08-3693 RGK

[“USW”]. (Compl. ¶ 26; Request for Judicial Notice (hereinafter “RJN”) Ex. A, ¶¶ 1,7, 12, 25, 34, 43.)4

The USW putative class action was filed on April 25, 2008, by the Plaintiffs’ same counsel here,

alleging (1) failure to provide meal periods; (2) failure to provide rest breaks; (3) failure to furnish

timely and accurate wage statements; (4) failure to provide wages due at the time of termination; and (5)

violation of California’s Unfair Competition Law. (RJN, Ex. A, ¶ 26.) After class certification was

denied, various members of the USW putative class, represented by the same counsel, filed Delagarza

4 Federal courts may take judicial notice of other courts’ proceedings. U.S. ex rel. Robinson Rancheria

Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992).

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and Burgess, in which the plaintiffs alleged claims for (1) failure to provide meal periods; (2) failure to

pay all wages due at termination; and (3) violation of California’s UCL. (Id., Ex. A ¶ 27.) The Class

Settlement resolved the USW, Delagarza and Burgess actions, “including without limitation:

claims based upon Tesoro’s alleged failure to provide an off-duty meal period; failure to provide

an on-duty meal period; failure to authorize or permit a rest period; failure to furnish timely and

accurate wage statements due to the failure to provide an off-duty meal period, failure to provide

an on-duty meal period, or failure to authorize and permit a rest period; and failure to pay wages

due upon termination arising from the failure to provide an off-duty meal period, failure to

provide an on-duty meal period, or failure to authorize and permit a rest period; and claims

derivative of those alleged in the complaints filed in USW, Delagarza, or the First Amended

Complaint filed in Burgess arising under the California Labor Code (including Sections 201,

202, 203, 204, 210, 215, 216, 218, 218.5, 221, 222, 223, 224, 226, 226.6, 226.7, 512, 558, and

1199); California’s Unfair Competition Law, codified at Cal. Bus. & Prof. Code §§ 17200 et

seq.; California Industrial Welfare Commission Wage Order 1-2001 sections 7, 11, and 12,

codified at 8 Cal. Code Reg. § 2698 et seq. (“PAGA”).

(RJN, Ex. A, para. 43) (emphasis added).

USW’s consent to the Class Settlement was the product of a collectively-bargained negotiation.

The Class Settlement provided that “USW and Tesoro have engaged in collective bargaining, and, as a

condition of this Agreement, have agreed (or will agree) to certain terms and conditions of employment

regarding Covered Employee’s meal periods. Copies of such agreements are attached hereto as Exhibit

A and are hereby made part of this Agreement.” (RJN, Ex. A, ¶ 38.)

The Class Settlement further provided for a ratification by each local USW membership, and

stated that absent such ratification, Tesoro could void the agreement. (Id., ¶ 40.) The meal period

agreement attached to the Class Settlement specifically referenced that the agreement was negotiated in

reference to “the requirement that they [Covered Employees] generally carry radios or otherwise

remain in contact or available to be contacted during meal periods.” (RJN, Ex. A, p. 46 of 97.)

(emphasis added). Tellingly, the parties (including the USW) did not perceive there to be any radio

usage requirements during rest breaks (or that if there were, that remaining in contact interfered with rest

breaks). The Class Settlement was intended to not only conclusively resolve the meal and rest break

claims in the context of communication requirements in the high hazard, safety sensitive nature of

refinery operations, but to provide a mechanism for the resolution of subsequent issues should there be a

change in law. The attached meal period agreements to the Class Settlement provide: “If a statutory

change, regulation, revision, Court determination, or other change in law renders this Agreement

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unnecessary, illegal, or ineffective, then the Union and the Company shall promptly meet to bargain

over the terms of a new agreement covering provision of meal periods.” (RJN, Ex. A, p. 47 of 97.)This

collectively bargained class settlement was reviewed and approved by the Court.

Through subsequent collective bargaining, Exhibit A to the Class Settlement was ratified as to

Tesoro’s Martinez and LAR refineries, including the requirement that the Union and Tesoro are required

to bargain in the event any Court determination or other change in law impacts the parties’ agreement.

(Kawano Decl., Exs. A, B.) Plaintiffs identify no attempt by the Union to return to the bargaining table

prior to counsel’s filing of the instant action immediately following the Augustus decision.

III. LEGAL ARGUMENT

A. Plaintiffs’ Claims Are Preempted by the LMRA Because They Require

Interpretation of the CBAs and Other Collectively-Bargained Agreements.

The Court should dismiss Plaintiffs’ Complaint because Plaintiffs cannot allege facts that would

entitle them to relief, as their challenge of the rest break policies and practices at Tesoro’s California

refineries is preempted by LMRA section 301. Plaintiffs’ claims are preempted because they require the

Court to interpret the terms of multiple CBAs and collectively-bargained policies applicable to the class,

which address rest break authorization, scheduling, and a reporting and penalty payment process for

non-compliant rest breaks. In addition, Plaintiffs’ claims violate the terms of the collectively bargained

Class Settlement of USW’s prior class action. Once preemption applies, claims are either (1) dismissed

as completely preempted, or (2) converted to a Section 301 claim, provided plaintiffs have exhausted the

grievance process. As discussed below, both procedural paths require dismissal of the Complaint,

because Plaintiffs have not (and cannot) allege exhaustion of the mandatory grievance process.

1. Standard for Section 301 Preemption Under the LMRA.

LMRA section 301 provides federal jurisdiction over “suits for violation of contracts between an

employer and a labor organization.” 29 U.S.C. § 185(a). “The preemptive force of section 301 is so

powerful as to displace entirely any state claim based on a collective bargaining agreement, and any

state claim whose outcome depends on analysis of the terms of the agreement.” Young v. Anthony’s

Fish Grottos, Inc., 830 F.2d 993, 997 (9th Cir. 1987) (citations omitted) (emphasis added).

Although the language of § 301 [of the LMRA] is limited to “suits for violation of contracts,” it has been

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construed quite broadly to cover state-law actions that require interpretation of labor agreements. Allis

Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985) (“When resolution of a state law claim is

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

contract, that claim must either be treated as a § 301 claim, or dismissed as preempted by federal laborcontract law.” (internal citations omitted)) (emphasis added). If the state law claim is either (1) based

directly on rights created by a collective bargaining agreement or (2) substantially dependent on analysis

of a collective bargaining agreement, it is “considered, from its inception, a federal claim,” preempted

by Section 301. Burnside v. Kiewit Pac. Corp., 491 F.3d 1053, 1059 (9th Cir. 2007); Raphael v. Tesoro

Refining and Marketing Co., LLC, 2015 WL 3970293, *3 (C.D. Cal. June 30, 2015) (“To further the

goal of uniform interpretation of labor contracts, the preemptive effect of § 301 has been extended

beyond suits that allege the violation of a collective bargaining agreement . . . [a] state law claim will

be preempted if it is so “inextricably intertwined” with the terms of a labor contract that its resolution

will require judicial interpretation of those terms.”) (emphasis added).

This policy in favor of national uniformity in labor law displaces state law with respect to claims

involving the interpretation or enforcement of collective bargaining agreements. Lingle v. Norge Div. of

Magic Chef, Inc., 486 U.S. 399, 404 (1988). “In addition to promoting the development of a uniform

federal labor law, § 301 preemption doctrine is designed in large part to assure that agreements to

arbitrate grievances would be enforced, regardless of the vagaries of state law and lingering hostility

toward extrajudicial dispute resolution.” Kobold v. Good Sam. Reg'l Med. Ctr., 832 F.3d 1024, 1032

(9th Cir. 2016).

2. Plaintiffs’ Claims Challenge Collectively Bargained Rest Break Policies, and

Require Interpretation of the CBAs and Negotiated Policies.

Plaintiffs’ claims rest on the allegation that operators at Tesoro’s California refineries were not

provided compliant rest breaks under the standard articulated in Augustus, due to (1) “a policy or

practice of failing to authorize and permit Plaintiffs and putative class members to take the rest breaks to

which they are entitled under California law” and (2) “a policy and practice of failing to pay Plaintiffs

and the putative class members who were not provided with a rest break as required an additional one

hour of compensation at each employees’ regular rate of pay.” (Compl. 44, 45.)

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Plaintiffs’ claims necessarily rest upon and require interpretation of the applicable CBAs and

additional negotiated rest period policies. The CBAs contain provisions regarding hours of work,

regular rates of pay, payment of wages and benefits. Of critical importance to Plaintiffs’ claims, several

of the CBAs specifically define the terms and conditions for the provision of authorized rest breaks. In

addition, Tesoro negotiated local rest break policies supplemental to the CBAs with the USW. (Kawano

Decl., Exs. A-S.) The CBAs further provide for final and binding arbitration of any dispute between the

Employer and the Union or between an employee and the Employer. (Id., Exs. D-H, K-N.)

The need to interpret the substantive impact of the various CBAs and negotiated rest break

provisions is not limited to determining the substantive merit of the claims, but is also necessary for

purposes of resolving class certification. The task becomes more complex because there are a number of

CBAs and negotiated rest break policies and interpretive materials applicable to the putative class that

the Court will need to analyze and interpret in connection with considering whether class certification is

appropriate for Plaintiffs’ rest break and derivative claims. See, e.g. Raphael, 2015 WL 3970293 at *6-7

(preemption argument carried even more force where multiple CBAs applied to the putative class). For

example, Plaintiffs’ rest break claim identifies as one the allegedly common questions: “Whether

Defendants maintain or have maintained policies that adequately provide for off-duty rest breaks in

accordance with the requirements of applicable California law.” (Compl. ¶ 30.e.) Several of the CBAs

that applied to members of the putative class directly address and define rest break entitlement,

contractually authorize and permit duty free rest breaks, and provide a reporting mechanism and

premium payment process. (pp. 7-8, supra.) At the Wilmington Refinery, Tesoro and the USW further

negotiated a rest break policy supplemental to the CBA, as well as FAQ’s and additional guidance.

(Kawano Decl. ¶¶ 22-31, Exs. O-Q.) Addressing Plaintiffs’ allegations that these various policies are

non-compliant will require the Court to interpret the CBAs’ rest break provisions, the collectively

bargained rest break policies, what they authorize and provide, whether those provisions authorize and

permit duty free rest breaks, whether those provisions are compliant with California law, and whether

there is a policy for payment of missed rest breaks.5

5 Even partial application during the class period of the CBAs to the putative class requires preemption.

See, e.g., Duerson v. NFL, 2012 WL 1658353, at *3 (N.D. Ill. May 11, 2012) (preemption applies where

the “CBAs were in effect during at least some of the events alleged in the complaint”).

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The interpretation of these CBA provisions and negotiated rest period provisions will be required

both as to liability and the determination of the suitability of the claims to certification. That is because

California law requires an employer to authorize and provide rest breaks, but does not require employers

to ensure that employees actually take their rest breaks. Indeed employees have the discretion to

voluntarily elect not to take a rest break. Unions, as the employees’ exclusive representative, have the

authority to exercise discretion on behalf of their members. This squarely places the terms of the

collectively bargained rest break policies at issue. Where claims fail to demonstrate an unlawful policy,

but rather identify divergent, individuated, non-complaint practices, class certification is properly

denied. Cole v. CRST, Inc., 317 F.R.D. 141, 144-45 (C.D. Cal. 2016) (determining that employer’s

policy authorized compliant breaks, and rejecting the argument that the Brinker6standard that employers

are not required to police breaks applies only to meal periods). An interpretation of what the CBA

authorizes, including how the Union has exercised discretion on behalf of the employees as to rest

breaks, is therefore necessarily at issue, because “an employer is not liable for failure to provide rest

breaks if it authorizes and permits an employee to take his or her rest break and the employee—absent

coercion or encouragement on the part of the employer—foregoes his or her rest break.” Cleveland v.

Groceryworks.com, LLC, 2016 WL 4140504 at *18 (N.D. Cal. Aug. 4, 2016).

Moreover, Plaintiffs’ anticipated argument that the rest break claim is predicated upon state law

rest break entitlements does not permit the claim to avoid the preemptive force of the LMRA, where the

claim requires interpretation of the CBAs. Courts have repeatedly held that when wage and hour suits

under California law are substantially dependent upon interpretation of the parties’ CBA, they are

preempted under the LMRA. See e.g., Coria v. Recology, Inc., 2014 WL 3885873 (N.D. Cal. Aug. 7,

2014) (holding that California state law meal period and overtime claims are preempted by the LMRA

because they require an analysis of the CBA to determine the application of Labor Code § 512(e) and §

514 overtime and meal period exemptions for employees covered by qualifying collective bargaining

agreements); Buck v. Cemex, Inc., 2013 WL 4648579 (E.D. Cal. Aug. 29, 2013) (LMRA preemption

where meal period claim must be resolved by consulting the CBA); Gerardo Ayala v. Destination

Shuttle Services LLC, et al., 2013 WL 12092284 at *4-5 (C.D. Cal. Nov. 1, 2013) (accord).

6 Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004, 1041 (2012).

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This principle carries particular force where, as here, there are multiple CBAs with application to

the claims at issue and the putative class. With direct application here, in Raphael v. Tesoro, 2015 WL

3970293, *6–7, the Court found the plaintiff’s meal period claim preempted under Section 301, noting

that the impact of the interpretive questions on the Section 301 preemption analysis carried particular

force where a number of CBAs applied to Tesoro’s workforce. Id. at *6-7 (“Tesoro has affirmatively

presented the Court with a plethora of provisions in need of interpretation throughout the eight separate

CBAs covering Raphael and the aggrieved employees he seeks to represent.”)

3. Plaintiffs’ Claims Violate the Collectively Bargained Class Settlement, and

Interfere with the Collective Bargaining Obligations of Tesoro and USW.

Plaintiffs’ claims violate the terms of the collectively-bargained Class Settlement of the Burgess,

Delagarza, and USW actions, which directly addressed the issue of certain plant radio usage and

provided a collectively-bargained solution to comport wage and hour practices with the various

communication requirements of Tesoro’s California refineries. In the process of resolving meal and rest

break claims, the parties’ Class Settlement acknowledged “the requirement that [covered employees]

generally carry radios or otherwise remain in contact or available to be contacted during meal periods,”

and fashioned the collectively-bargained solution of providing an on-duty meal period agreement

between Tesoro and the USW. The execution of that on-duty meal period agreement was a condition

precedent to the settlement agreement resolving the Union’s rest break claims. (RJN, Class Settlement,

Ex. A, ¶¶ 38-41, 43, Ex. A.) Although Tesoro denies that there is any radio usage requirement that

interferes with rest breaks, if members of the USW’s bargaining units believe radio usage policies and

agreements interfere with their rest breaks, the Court must look to policies defining radio usage, which

are addressed, among other places, in the parties’ collectively bargained on-duty meal period agreement.

Specifically, that agreement reflects the mutual understanding that carrying radios is only required

during meal periods - not during rest periods. (RJN , Ex. A, Class Settlement, p. 47 of 97.) To the

extent the Union disputes that interpretation, that presents an interpretive issue the Court would have to

resolve. Moreover, the agreement provides that if there are any changes in the law impacting the legality

of the agreement (e.g., including radio usage), the parties are to return to the bargaining table. (RJN, Ex.

A, Class Settlement, p. 47 of 97.) The Union, however, has not sought any such bargaining. Instead, it

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requests a court-imposed (rather than collectively bargained) restructuring of radio or rest break

practices. This violates the collectively-bargained agreement to negotiate any needed changes in reaction

to developments in applicable California law, and interferes with the labor relations and negotiations

giving rise to the Class Settlement and meal period agreements.

Plaintiffs cannot avoid the preemptive force of this agreement by arguing it is outside the CBA.

First, the meal period agreement attached to the Class Settlement was separately and formally agreed to

and ratified by the Union and its membership. (Kawano Decl., Exs. A, B.) Second, it is not simply CBAs

that give rise to preemption. Side agreements, settlement agreements, and other collectively-bargained

agreements give rise to Section 301 preemption where the plaintiffs’ claims require interpretation of

those agreements. For example, in Retail Clerks Intern. Ass’n, Local Unions Nos. 128 and 633 v. Lion

Dry Goods, Inc., 369 U.S. 17, 28 (1962), the U.S. Supreme Court rejected an argument that Congress

limited § 301(a) jurisdiction to contracts that are “collective bargaining contracts,” and held that a strike

settlement agreement was a “contract” for purposes of § 301(a).

“Contract in labor law is a term the implications of which must be determined from the

connection in which it appears . . . It is enough that this is clearly an agreement between

employers and labor organizations significant to the maintenance of labor peace between them . .

. It resolved a controversy arising out of, and importantly and directly affecting, the employment

relationship. Plainly it falls within § 301(a).”

Likewise, the Ninth Circuit held that the term “contracts” under the LMRA extends beyond CBAs. See

General Teamsters, Auto Truck Drivers and Helpers Local 162 v. Mitchell Bros. Truck Lines, 682 F.2d

763, 765 (9th Cir. 1982) (rejecting plaintiff’s argument that under the LMRA, the word “contracts” was

limited to CBAs, and holding that a strike settlement agreement was a contract for LMRA purposes.)

Moreover, “strike settlements” are not the only type of collectively-bargained settlement

agreement subject to Section 301 preemption. In Audette v. International Longshoremen’s and

Warehousemen’s, 195 F.3d 1107 (9th Cir. 1999), an employee sued an employer’s association and her

union in state court, alleging she had been denied registration under the CBA because of her gender in

violation of state law. The parties entered into a settlement agreement. The employee later sued the

employer’s association and union in state court, alleging claims for breach of the settlement agreement.

After defendants removed on the ground of preemption, the district court granted their motion for

summary judgment. The Ninth Circuit found that although the settlement agreement did not settle a

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grievance that arose under the CBA, its “performance implicate[d] various provisions of the CBA” and

thus was preempted, where determining whether a breach of the settlement agreement occurred would

necessarily “require[ ] the interpretation of [the CBA].” (citing Lingle, 486 U.S. at 413). Likewise, in

Levy v. Skywalker Sound, 108 Cal. App. 4th 753 (2003), the court rejected the argument only CBAs can

support LMRA preemption. Id. at 763 (“[Plaintiff] has cited no case holding that the scope of federal

preemption under section 301 depends on whether the labor-management agreement involved in the

case is labeled a ‘collective bargaining agreement’ as opposed to a ‘side letter’ or other such document.).

4. Plaintiffs’ Claims Should Be Dismissed as Completely Preempted or for

Failure to Exhaust the CBA’s Grievance and Arbitration Procedures.

Once Section 301 preemption attaches to Plaintiffs’ claims, there are two potential procedural

outcomes, both of which require the dismissal of Plaintiffs’ claims here: either (1) the claims are

completely preempted under Section 301 and subject to dismissal, or (2) the preempted claims are

converted to Section 301 claims, which can only be prosecuted where the plaintiffs have previously

exhausted the CBAs’ grievance process. Allis Chalmers Corp., 471 U.S. at 220 (“When resolution of a

state law claim is substantially dependent upon analysis of the terms of an agreement made between the

parties in a labor contract, that claim must either [1] be treated as a § 301 claim, or [2] dismissed as

preempted by federal labor-contract law.” (internal citations omitted) (emphasis added).

Here, the Court should dismiss Plaintiffs’ claims as completely preempted, particularly where the

Union and Tesoro are contractually obligated to bargain regarding changes in the law impacting rest

break practices, and the Union has not attempted to plead a Section 301 claim. See Kobold, 832 F.3d at

1033, 1036-37 (9th Cir. 2016) (plaintiff’s state-law wage claims completely preempted and properly

dismissed as a matter of law because they were dependent upon interpretation of a CBA provision);

Pette v. Int’l Union of Operating Engineers, 2016 WL 4596338 at *9-11 (C.D. Cal. Sept. 2, 2016)

(Pregerson, J.) (ordering dismissal of plaintiff’s claims “[b]ecause resolution of [plaintiff’s state law

claim] might substantially depend on interpretation of the CBA”); Curtis v. Irwin Indus., 2016 WL

4975188 at *2-4 (C.D. Cal. Sept. 16, 2016) (Wright, J.) (dismissing claims as completely preempted as a

result of need to look to CBA to determine applicability of overtime exemption in Labor Code § 512).

If not dismissed as completely preempted, Plaintiffs’ preempted claims can only be brought as a

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converted Section 301 claim. Allis Chalmers Corp., 471 U.S. at 220 (once claims is subject to Section

301 preemption, it is either dismissed as completely preempted, or converted to a Section 301 claim,

supra). Plaintiffs, however, fail to satisfy the prerequisites for a Section 301 suit.

It is well established that where collectively-bargained grievance procedures are the exclusive

and final remedy for breach of a CBA, a plaintiff may not sue under Section 301 until timely completing

those procedures. See Hines v. Anchor Motor Freight, Inc. 424 U.S. 554, 563 (1976) (unless an

employee attempted to utilize the contractual procedures for settling his dispute with the employer, his

independent suit against the employer would be dismissed); Vaca v. Sipes, 386 U.S. 171, 184 (1967);

Carr v. Pacific Maritime Ass’n, 904 F.2d 1313, 1317 (9th Cir. 1990) (accord).

Here, Plaintiffs have failed to plead that they exhausted the CBA’s grievance and arbitration

procedures, which are mandatory under the CBAs. (Compl., passim.) There is no question that

exhaustion of these procedures is a mandatory prerequisite to asserting claims under Section 301. Carr,

904 F.2d at 1317 (plaintiffs must exhaust exclusive grievance and arbitration procedures established by

the bargaining agreement prior to commencing suit). Accordingly, the Court should dismiss their

Complaint in the entirety. See Busey v. P.W. Supermarkets, Inc., 368 F. Supp. 2d 1045, 1054-55 (2005)

(where plaintiffs failed to allege exhaustion of the grievance and arbitration remedy in the CBA, Section

301 claims must be dismissed).

B. Plaintiffs’ Derivative Claims that Fail to State a Viable Claim for Relief.

1. The Court Should Dismiss the Second Claim for Violation of Labor Code

Section 226 Because Wage Statements Need Not Include Unearned Wages.

Plaintiffs’ Labor Code section 226 cause of action for wage statement violations is based on the

assertion that their wage statements failed to include missed rest break penalties. See Compl. ¶ 48. The

Court should dismiss the claim because wage statements need not list rest break penalties.

a. Wage Statements Need Only List “Wages Earned.”

Labor Code section 226 specifies the information that must be included on wage statements, and

in terms of wages, it only requires wage statements to include “wages earned.” Cal. Labor Code §

226(a)(1), (2), and (5). See Cal. Labor Code § 226(a)(1) (gross wages earned); § 226(a)(2) (total hours

worked); and § 226(a)(5) (net wages earned). The references to net or gross “wages earned” means

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“amounts for labor performed by employees.” Cal. Lab. Code § 200(a) (emphasis added).

b. Claims For “Inaccurate Wage Statements” Cannot Be Predicted

Upon Rest Break Violations.

Courts have repeatedly held that derivative Section 226 wage statement claims based on the

alleged failure to list rest break premium pay fail to state a claim for relief. In Jones v. Spherion Staffing

LLC, et al., 2012 WL 3264081, at *8 (C.D. Cal. August 7, 2012), the court held that there can be no

Section 226 claim for wage statement violations based on rest break violations or the lack of penalty

pay. “[P]laintiff cannot advance a claim for noncompliant wage statements pursuant to section 226(a) or

failure to pay wages due upon termination pursuant to section 203 solely based on alleged violations of

section 226.7” for missed rest breaks. Id. (emphasis added). The court found such a claim barred

because a 226.7 rest break claim is not for the nonpayment of “wages” such that premium payments are

required to be identified on a wage statement, and predicating a Section 226 claim upon failure to

provide a missed rest break results in an improper double recovery. Id. at *8-9.

In Nguyen v. Baxter Healthcare Corp., 2011 WL 6018284, at *8 (C.D. Cal., November 28,

2011), the court also held that “the plain language of Section 226(a) does not require that [a] wage

statement include an itemized listing of any premium payments owed to [plaintiff] for missed meal

periods.” Id.7The legislative history confirms the purpose of Section 226 was “‘to ensure that

employers provide accurate wage statements to employees, not to govern employers’ obligations with

respect to meal periods.’” Id. “[M]issed meal breaks must be compensated under Section 226.7 and [are]

properly considered liquidated damages, not wages earned for purposes of Section 226(a).” Id. The court

concluded that “[plaintiff] does not offer any legal support -- and the Court is aware of none -- for the

proposition that meal period premiums must be included in an employee’s wage statement.” Id.

The California Supreme Court in Kirby v. Immoos, 53 Cal. 4th 1244, 1256 (2012) held that a

claim to recover rest break premium pay under Labor Code section 226.7 is not a claim for “nonpayment

of wages.” Id. at 1255. As the Court explained, an action for nonpayment of wages “refer[s] to suits

where the allegedly unlawful conduct is the employer’s failure to comply with an obligation to pay

wages or benefits.” Id. at 1257-1258. In contrast, the allegedly unlawful conduct under Labor Code

7

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section 226.7 is “the nonprovision of meal and rest breaks, not for the nonpayment of wages.” Id. at

1255 (emphasis in original). See also id. at 1256 (“Nonpayment of wages is not the gravamen of a

section 226.7 violation.”). As Kirby held that an action for rest break premium pay is not an action for an

obligation to pay wages, the failure to include premium pay on a wage statement cannot support a

Section 226 claim. Accordingly, the Court should dismiss Plaintiffs’ Second Cause of Action.

2. UCL Claims Cannot Be Predicated Upon Rest Break Penalties.

Pay for missed rest breaks under Labor Code Sections 226.7(c) is not recoverable under the UCL

because it is not restitution. Parson v Golden State FC, LLC, 2016 WL 1734010, at *6-7 (N.D. Cal. May

2, 2016) (dismissing UCL claim based on penalties for violations of Labor Code section 226.7); Frieri v.

Sysco Corp., 2016 WL 71882 at *6 (S.D. Cal. Dec. 12, 2016) (citing Jones and Nguyen for the principle

that plaintiff cannot use missed rest breaks as a predicate for the derivative claim).

The California Supreme Court has made clear that the UCL’s restitution remedy is limited. In

Cortez v. Purolator Air Filtration Prods. Co., 23 Cal. 4th 163 (2000), the California Supreme Court held

that (1) an analysis of the wage in question is required to determine whether “the wages owed may not

be recovered as restitution in a UCL action,” and (2) “[a]n order that earned wages be paid is. . . a

restitutionary remedy authorized by the UCL.” Id. at 174-78 (emphasis added). Cortez specifically

limited its holding to earned wages; “[o]nce earned, those unpaid wages became property to which the

employees were entitled.” Id. at 168 (emphasis added).

Plaintiffs seek unearned pay under Sections 226.7(c) -- money that is due not because they

performed labor but because Defendants allegedly violated a statute. Although the California Supreme

Court has not yet directly addressed whether unearned wages are recoverable as restitution, such an

award would be inconsistent with Cortez. As Cortez explained, “earned wages that are due and payable .

. . are as much the property of the employee who has given his or her labor to the employer in exchange

for that property as is property a person surrenders through an unfair business practice.” Id. at 178.

Premiums for missed rest breaks under Labor Code section 226.7, however, represent a form of

liquidated damages, or unearned wages. Kirby, 53 Cal. 4th at 1256 (“a section 226.7 action is brought

for the nonprovision of meal and rest periods, not for the ‘nonpayment of wages.’”; nonpayment of

wages is “not the gravamen of a Section 226.7 violation.”) A Section 226.7 claim, therefore, is not for

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nonpayment of wages, but for failure to provide breaks. Id. at 1257. Jones, 2012 WL 3264081, at *6

(Kirby clarifies that meal and rest claims are not wage actions).

The Supreme Court’s opinion in Pineda v. Bank of Am., 50 Cal.4th 1389 (2010), holding that

203 waiting-time penalties cannot be recovered as restitution under the UCL, is instructive. Id. at 1401.

Pineda’s requirement that a plaintiff have an ownership interest in wages is consistent with Cortez. See

id. In the context of Cortez, the Section 203 penalties considered in Pineda were not recoverable as

restitution, because the wages were unearned, i.e., the employee had not expended any labor to earn the

money. Pineda further recognized that Section 203 wages are “not designed to compensate employees

for work performed,” but rather are “intended to encourage employers to pay final wages on time.” Id. at

1401-02. Unlike earned wages in which the employees have a vested right, there is, prior to any

adjudication “no comparable vested interest in section 203 penalties. We thus hold section 203 penalties

cannot be recovered as restitution under the UCL.” Id. at 1402. The same is true here: Plaintiffs have no

vested interest in missed rest premium pay until the Court awards it.

Accordingly, the Court should dismiss Plaintiffs’ attempt to recover via a UCL claim for failure

to provide rest breaks and the associated penalties under Labor Code section 226.7(c).

3. UCL Claims Cannot Be Predicated on Labor Code Section 226 Violations.

For the reasons discussed above, Plaintiffs also are precluded from recovering penalties under

the UCL for alleged Labor Code Sections 226 wage-statement violations. See, e.g., In re Wal-Mart

Stores, Inc. Wage and Hour Litigation, 505 F. Supp. 2d 609, 619 (N.D. Cal. May 29, 2007) (“claims

pursuant to Labor Code §§ 203 and 226 cannot support a § 17200 claim”). Accordingly, the Court

should dismiss Plaintiffs’ UCL claim predicated on alleged Section 226 wage statement violations.

4. Plaintiffs May Not Seek Disgorgement of Profits Under the UCL.

Plaintiffs’ UCL claim seeks “an order disgorgement of all profits gained by operation of the

unfair business practices.” (Compl. ¶ 65; 66; Prayer for Relief ¶ 10.) Such a request is improper, and

not provided by the UCL. Woo v. Home Loan Group, L.P., 2007 WL 6624925 at *7 (S.D. Cal. Jul. 27,

2007) (“Plaintiff's prayer for damages includes a request for disgorgement of revenues, earnings, profits,

compensation and benefits obtained by Defendants pursuant to its UCL claim. . . . A plaintiff bringing a

UCL claim may not recover disgorgement beyond what it recoverable in restitution . . . . the Court

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grants [Defendant’s] motion to strike Plaintiff’s prayer for disgorgement.”); Cortez, 23 Cal. 4th at 172

(2000) (no disgorgement under the UCL).

5. Plaintiffs’ PAGA Claim Fails to State a Claim for Relief.

a. Plaintiffs Have Not Pleaded Facts Satisfying Administrative

Prerequisites for Recovery of PAGA Penalties.

Individuals who bring claims under PAGA must comply with the administrative procedures set

forth in California Labor Code § 2699.3, and must plead compliance with exhaustion requirements. See

Caliber Bodyworks, Inc. v. Superior Court, 134 Cal. App. 4th 365, 385 (2005). Plaintiffs have pleaded

themselves out of their claim for PAGA penalties, by alleging a procedurally and substantively improper

rush to the court, prior to providing the LWDA the required period to review the PAGA notice:

“Named Plaintiffs are in the process of exhausting their administrative remedies as required by

Labor Code section 2699.3(a) . . . . When Plaintiffs’ administrative remedies are exhausted,

Plaintiffs will amend the Complaint.”

Compl. ¶ 55 (emphasis added). This undermines the core legislative purpose of PAGA exhaustion

requirements (including amended statutory provisions that provide the LWDA a more extended period

of time in which to review the notice). The purpose of the PAGA notice requirement is to give notice to

the state agency-the LWDA-so that it has “the initial opportunity to investigate and cite employers for

Labor Code violations.” Caliber, 134 Cal.App.4th at 375.

Plaintiffs’ claim for PAGA penalties pursuant to California Labor Code § 2699 fails to state a

claim for relief, because it affirmatively states the exhaustion requirement was not satisfied. See Tan v.

GrubHub, Inc., 171 F. Supp. 3d 998, 1011 (N.D. Cal. 2016) (PAGA’s plain language bars an employee

from bringing a PAGA action when the employee has failed to satisfy exhaustion requirement).8

b. Plaintiffs’ PAGA Claim Is Based on Inapplicable Labor Code

Violations

The Court should dismiss Plaintiffs’ PAGA claim for the further reason it seeks unavailable

8 Defendants anticipate that Plaintiffs will argue the issue is mooted once the notice period is exhausted.

That is not correct. See, e.g., Stagner v. Luxottica Retail N. Am., Inc., 2011 WL 3667502 (N.D. Cal.

Aug. 22, 2011) (“Here, Plaintiff allegedly gave notice of her claims to the LWDA on May 12, 2011. She

filed her lawsuit the same day. Plaintiff does not dispute that she did not satisfy the prerequisites for her

PAGA claim, but instead argues that ‘the passage of time has already mooted’ this issue. This is

incorrect. Because she brought her PAGA claim without satisfying the statute's requirements, she is not

entitled to litigate this claim as of May 12, 2011, the date her complaint was filed.”)

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PAGA penalties for alleged wage statement violations and missed rest breaks. See Compl. ¶ 53.

PAGA authorizes employees to pursue claims through a private action that could previously only

be recovered by the Labor Commissioner (under Section 2699(a)), and it creates new penalties (under

Section 2699(f)) for certain Labor Code violations—those for which penalties already are not

“specifically provided.” In other words, Section 2699(f) “establish[es] new civil penalties for Labor

Code violations that did not previously carry a penalty.” Amaral v. Cintas Corp. No. 2, 163 Cal. App.

4th 1157, 1195 (2008). PAGA creates penalties only in limited circumstances: “For all provisions of this

code except those for which a civil penalty is specifically provided ... .” Cal. Lab. Code § 2699(f).

The California Court of Appeal has confirmed that only where “no civil penalty for such conduct

is ‘specifically provided’ in [the allegedly violated Labor Code] section [itself] or elsewhere [would]

violations of this type [be] subject to the default remedy stated in section 2699, subdivision (f).” Home

Depot U.S.A., Inc. v. Superior Ct., 191 Cal. App. 4th 210, 218 (2010); see also Hernandez v. Towne

Park, Ltd., 2012 WL 2373372, at *17 (C.D. Cal. June 22, 2012); Bright v. 99 Cents Only Stores, 189

Cal. App. 4th 1472, 1481 (2010) (accord).

PAGA establishes two distinct enforcement mechanisms: (1) a private right of action for certain

Labor Code provisions where none previously existed, under Section 2699(a); and (2) penalties imposed

by PAGA itself under Section 2699(f) for violations of Labor Code provisions that do not carry their

own penalties, which the wage statement and rest break statutes already do.

i. Plaintiffs Are Not Entitled To PAGA Penalties For Alleged

Wage Statement Violations Because Labor Code Sections

226(e)(1), 226.3, and 226.6 Already Provide For Such Penalties.

Plaintiffs are not entitled to any penalties under Section 2699(f) based on alleged wage statement

violations. Rosenstein v. Pratt, 2016 WL 308593, at *3 (S.D. Cal. Jan. 25, 2016) (striking PAGA

penalties predicated on Labor Code § 226 violations). The Labor Code section dealing with wage

statements, Section 226(e)(1), already provides penalties for deficient statements:

. . .the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a

violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent

pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000) ....”

Similarly, Labor Code section 226.3 also provides additional penalties for 226(a) violations:

. . . a civil penalty in the amount of two hundred fifty dollars ($250) per employee per violation

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in an initial citation and one thousand dollars ($1,000) per employee for each violation in a

subsequent citation, for which the employer fails to provide the employee a wage deduction

statement or fails to keep the records required in subdivision (a) of Section 226....

Finally, Labor Code section 226.6 fines employers who “knowingly and intentionally” violate

Section 226 in an amount “not more than one thousand dollars ($1,000).”

As PAGA does not create additional penalties for violations of any provision “for which a civil

penalty is specifically provided” (Cal. Lab. Code § 2699(f)), PAGA penalties are not available for

violations of Section 226. Rosenstein, at *3 (PAGA penalties unavailable for § 226 violations).

In addition to the statute’s plain language, PAGA’s rationale for creating new penalties under

Section 2699(f) simply does not apply to Section 226(a) violations, which already have multiple

meaningful deterrents provided by Sections 226(e), 226.3, and 226.6. The Legislature acknowledged

that it created new penalties through Section 2699(f) only when necessary, meaning only when the

Labor Code had previously failed to provide for penalties as deterrents to unlawful conduct:

[P]rivate actions to enforce the Labor Code are needed because LWDA simply does not have the

resources to pursue all of the labor violations.... The bill would authorize civil penalties for any

Labor Code violation currently lacking a specific penalty provision and authorizes aggrieved

employees to bring private civil actions against employers.

Home Depot, 191 Cal. App. 4th at 223-24 (explaining PAGA’s purpose) (quoting Assem. Com. on

Approp., Bill Analysis, Sen. Bill No. 796 (2003-04 Regular Session), as amended July 16, 2003, at 2).

In sum, because Sections 226(e), 226.3, and 226.6 already penalize Section 226(a) violations,

Section 2699(f) does not create a new penalty for those violations. Accordingly, the Court should

dismiss Plaintiffs’ attempt to recover 2699(f) penalties for alleged 226(a) violations.

ii. Plaintiffs Are Not Entitled To PAGA Penalties For Alleged

Rest Break Violations Under Labor Code Section 226.7(c).

Plaintiffs also seek Section 2699(f) penalties under PAGA for violations of Labor Code 226.7 for

the alleged failure to authorize and permit rest breaks. Compl. ¶¶ 53-54. Based on the reasoning

discussed above, such penalties are not recoverable for rest break violations because the Labor Code

already provides for such penalties elsewhere. Ruelas v. Costco Wholesale Corp., 67 F. Supp. 3d 1137,

1142-44 (2014) (“[B]ecause Section 226.7(c) provides a civil penalty, Ruelas cannot recover under

Section 2699(f) and this claim must be dismissed.”).

In their first claim, Plaintiffs identify Labor Code sections 226.7(c) as a basis for penalties for

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rest break violations. See Comp. ¶ 41. Specifically, Labor Code section 226.7(c) provides for “one

additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or

rest . . . period is not provided.” The additional hour of penalty pay is a “civil penalty” for purposes of

Section 2699(f). Singletary v. Teavana Corp., 2014 WL 1760884, at *4 (N.D. Cal. Apr. 2, 2014) (when

“the wrong at issue in Section 226.7 is the non-provision of [meal or] rest breaks,” then the case falls

under the California Supreme Court’s “characterization of Section 226.7’s payment as penalties”) (citing

Kirby, 53 Cal. 4th 1244); see also Brewer, 168 Cal .App. 4th at 1254 (remedies for missed meal periods

are “an award in the nature of liquidated damages under section 226.7”); accord Nguyen, 2011 WL

6018284, at *8 (additional hour of penalty pay for “missed meal breaks must be compensated under

Section 226.7 and is liquidated damages, not wages earned for the purposes of Section 226(a)”).

As discussed above, Section 2699(f) does not create additional PAGA penalties for Labor Code

sections “for which a civil penalty is specifically provided.” Cal. Lab. Code § 2699(f); see also

Hernandez, 2012 WL 2373372, at *17; Home Depot, 191 Cal. App. 4th at 218; Bright, 189 Cal. App.

4th at 1481. Accordingly, because penalties are already provided elsewhere in the Labor Code for rest

break violations, the Court should dismiss Plaintiffs’ PAGA claim seeking additional 2699(f) penalties

based on Section 226.7(c) rest break violations.

IV. CONCLUSION

Defendants respectfully request the Court grant their motion to dismiss Plaintiffs’ Complaint, in

its entirety, with prejudice. Plaintiffs’ claims are preempted by Section 301 of the LMRA, and Plaintiffs

do not have a cognizable Section 301 claim, because they failed to exhaust the mandatory grievance and

arbitration procedures under the CBA. In addition, Plaintiffs’ Complaint attempts to state claims and

request remedies for which Plaintiffs cannot state a claim for relief, requiring dismissal of Plaintiff’s

derivative claims for Section 226 penalties, relief under the UCL, and PAGA penalties.

DATED: March 21, 2017 SEYFARTH SHAW LLP

By: /s/ Michael W. Kopp

Michael W. Kopp

Attorneys for Defendants

38207032v.1

Case 3:17-cv-00123-JST Document 16 Filed 03/21/17 Page 33 of 33