Court Opinion

ID: 4309222
Source: CourtListenerOpinion
Date Created: 2018-08-31 17:00:27.756368+00
Date Added: 2024-06-11T14:42:54.376746
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

 IAN MCCRAY, an individual, and on                No. 17-15767
 behalf of himself, and on behalf of
 all other persons similarly situated,              D.C. No.
                    Plaintiff-Appellant,         5:16-cv-02092-
                                                       NC
                     v.

 MARRIOTT HOTEL SERVICES, INC., a                   OPINION
 Delaware corporation; SJMEC, INC.,
 a California corporation,
                Defendants-Appellees.

       Appeal from the United States District Court
          for the Northern District of California
    Nathanael M. Cousins, Magistrate Judge, Presiding

             Argued and Submitted June 11, 2018
                  San Francisco, California

                     Filed August 31, 2018

      Before: Mary M. Schroeder, Ronald M. Gould,
             and Albert Diaz, * Circuit Judges.

    *
      The Honorable Albert Diaz, United States Circuit Judge for the
U.S. Court of Appeals for the Fourth Circuit, sitting by designation.
2           MCCRAY V. MARRIOT HOTEL SERVICES

                    Opinion by Judge Diaz;
                   Dissent by Judge Schroeder

                          SUMMARY **

                            Labor Law

    The panel vacated the district court’s grant of summary
judgment in favor of the defendant and its denial of the
plaintiff’s motion to remand to state court an action alleging
violation of a City of San Jose minimum wage ordinance.

    The defendant had removed the case from state court on
the basis that the plaintiff’s claims were preempted by § 301
of the Labor Management Relations Act. The panel held that
the district court lacked subject matter jurisdiction to hear
the case, which amounted to an interpretive challenge to the
San Jose ordinance, rather than a lawsuit that required
substantial analysis of the plaintiff’s union’s collective-
bargaining agreement.           The panel remanded with
instructions for the district court to return the case to state
court for further proceedings.

    Dissenting, Judge Schroeder wrote that she would affirm
the district court because the case substantially depended
upon analysis of the terms of the collective-bargaining
agreement, which should be interpreted in accordance with
federal law.

    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
          MCCRAY V. MARRIOT HOTEL SERVICES                  3

                        COUNSEL

James L. Pagano (argued) and Ian A. Kass, Pagano & Kass
APC, San Jose, California, for Plaintiff-Appellant.

William J. Dritsas (argued), Seyfarth Shaw LLP, San
Francisco, California; Michael W. Kopp, Seyfarth Shaw
LLP, Sacramento, California; for Defendants-Appellees.

Paul L. More, McCracken Stemerman & Holsberry LLP,
San Francisco, California, for Amicus Curiae Unite Here
Local 19.

                         OPINION

DIAZ, Circuit Judge:

    When the City of San Jose enacted an ordinance that
established a minimum wage of $10/hour, the San Jose
Marriott Hotel continued to pay Ian McCray and other
employees less. It turned out that McCray’s union had
negotiated with Marriott and agreed to waive the ordinance’s
minimum-wage requirement so that it could bargain for
other benefits for its members.

    McCray sued Marriott in state court. He says that the
ordinance doesn’t allow for waiver, and so Marriott owes
him the difference between what he was paid and the new
minimum wage. Marriott removed the case to federal court
on the basis that McCray’s claims are preempted by § 301 of
the Labor Management Relations Act (the “LMRA”),
29 U.S.C. § 185. The district court concluded that McCray
failed to first exhaust his claim through a required grievance
process and granted summary judgment to Marriott.
4         MCCRAY V. MARRIOT HOTEL SERVICES

    Whether McCray’s claims were exhausted or not, the
district court was without jurisdiction to hear this case.
While we recognize the strong preemptive force of § 301,
McCray’s lawsuit amounts to an interpretive challenge to the
San Jose ordinance, not one that requires substantial analysis
of his union’s collective-bargaining agreement.           We
therefore vacate the district court’s denial of remand and
grant of summary judgment. We remand this case so that it
may be returned to state court for further proceedings.

                              I.

    In 2012, voters in San Jose, California, considered a
ballot initiative that would establish a new minimum wage
for most of the city’s workers. Under the proposed
ordinance, employees would be paid a minimum wage of
$10 an hour, subject to cost-of-living adjustments over time.
See San Jose, Cal., Mun. Code § 4.100.040. The ordinance
also purported to give employers and employees the ability
to waive the minimum wage requirements through collective
bargaining. “To the extent required by federal law,” the
proposed law provided, “all or any portion of the applicable
requirements of this Chapter may be waived in a bona fide
collective bargaining agreement, provided that such waiver
is explicitly set forth in such agreement in clear and
unambiguous terms.” Id. § 4.100.050.

    Meanwhile, Ian McCray was employed at the Marriott
Hotel in San Jose. There, he performed several hospitality-
related jobs, including working as a busser, then later a
server, in the hotel’s restaurant. As a busser, McCray
received an hourly wage of $10.80. When McCray became
a server, his hourly wage decreased to $9, but he generally
wound up taking home more pay than he had as a busser
because of tips he received from customers.
           MCCRAY V. MARRIOT HOTEL SERVICES                         5

     Throughout his employment with Marriott, McCray was
represented by the union Unite Here, Local 19. The terms
of McCray’s employment were governed by a collective-
bargaining agreement (a “CBA”) entered into between Unite
Here and Marriott. Anticipating the passage of San Jose’s
minimum wage ordinance, Marriott and the union executed
an addendum to the CBA, prospectively opting out of the
minimum wage requirement. The waiver explained that
should the ordinance become law, the “Employer and the
Union, through collective bargaining, have agreed to
explicitly waive as part of the parties[’] collective bargaining
agreement, all provisions and requirements of the City of
San Jose Minimum Wage Ordinance.” EOR 119. The ballot
initiative passed, and the ordinance and waiver took effect in
2012.

    Shortly thereafter, McCray, then earning $9 an hour as a
server, spoke with a Marriott human resources employee and
a representative from his union and asked why he was being
paid less than the new minimum wage. 1 McCray was told
that the union had opted out of the minimum wage ordinance
so that it could secure other benefits, such as healthcare, for
its members.

    Apparently not satisfied with that answer, McCray filed
this lawsuit in state court in Santa Clara County. McCray
seeks to represent himself as well as similarly situated
Marriott employees in a class action. His complaint asserts
a bevy of wage and hour claims that flow from a single,
simple theory: the San Jose ordinance requires Marriott to

    1
      Tips that employees like McCray might receive don’t count toward
the minimum wage for purposes of the ordinance.
6         MCCRAY V. MARRIOT HOTEL SERVICES

pay its employees a minimum wage of $10 an hour; McCray
and others received less.

    Marriott removed this case to federal court. In support
of removal, Marriott argued that § 301 of the LMRA
preempts McCray’s claims and thus jurisdiction to hear this
case lies in federal court. The district court agreed and
denied McCray’s motion to remand. Next, the court granted
summary judgment in favor of Marriott. It held that McCray
couldn’t pursue his claims in court because he had failed to
exhaust the mandatory administrative grievance procedure
set forth in the CBA. This appeal followed.

                             II.

    We begin with the issue of preemption. The question
here is whether the LMRA preempts McCray’s state law
claims, thus allowing this case to be heard in federal court.
Preemption is a matter of subject matter jurisdiction, which
we review de novo. See Ritchey v. Upjohn Drug Co.,
139 F.3d 1313, 1315 (9th Cir. 1998).

    Section 301 of the LMRA vests federal courts with
jurisdiction to hear suits “for violation of contracts between
an employer and a labor organization representing
employees in an industry affecting commerce . . . without
respect to the amount in controversy or without regard to the
citizenship of the parties.” 29 U.S.C. § 185(a). By enacting
the LMRA, Congress completely preempted state law for
certain labor-related claims. See Caterpillar Inc. v.
Williams, 482 U.S. 386, 393–94 (1987).
          MCCRAY V. MARRIOT HOTEL SERVICES                 7

    A claim that falls within § 301’s ambit “is considered,
from its inception, a federal claim,” and so is subject to
removal based on federal question jurisdiction. Id. at 393;
see also 28 U.S.C. §§ 1331, 1441. In these areas, “the
preemptive force of § 301 is so powerful as to displace
entirely any state cause of action for violation of contracts
between an employer and a labor organization. Any such
suit is purely a creature of federal law, notwithstanding the
fact that state law would provide a cause of action in the
absence of § 301.” Franchise Tax Bd. v. Constr. Laborers
Vacation Tr. for S. Cal., 463 U.S. 1, 23 (1983) (internal
quotation marks and footnote omitted). However, “not every
dispute concerning employment, or tangentially involving a
provision of a collective-bargaining agreement, is pre-
empted by § 301 or other provisions of the federal labor
law.” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211
(1985). “Claims bearing no relationship to a collective-
bargaining agreement beyond the fact that they are asserted
by an individual covered by such an agreement are simply
not pre-empted by § 301.” Caterpillar, 482 U.S. at 396 n.10.

    The distinction between claims that are preempted and
claims that are not doesn’t “lend[] itself to analytical
precision.” Cramer v. Consol. Freightways, Inc., 255 F.3d
683, 691 (9th Cir. 2001) (en banc); see also Livadas v.
Bradshaw, 512 U.S. 107, 124 n.18 (1994). In an effort to
clear the waters, our prior decisions have set out a two-part
test to determine when § 301 preemption applies. Section
301 preempts claims that are “founded directly on rights
created by collective-bargaining agreements,” Caterpillar,
482 U.S. at 394, as well as claims that are “substantially
dependent on analysis of a collective-bargaining
agreement,” Int’l Bhd. of Elec. Workers v. Hechler, 481 U.S.
851, 859 n.3 (1987). So when faced with a claim that may
implicate a CBA, a court must first ascertain “whether the
8          MCCRAY V. MARRIOT HOTEL SERVICES

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 analysis ends there.” Kobold v. Good
Samaritan Reg’l Med. Ctr., 832 F.3d 1024, 1032 (9th Cir.
2016) (alteration omitted) (quoting Burnside v. Kiewit Pac.
Corp., 491 F.3d 1053, 1059 (9th Cir. 2007)).

    On the other hand, if the court determines that the right
at issue exists independently of the CBA, it must then ask
“whether the right is nevertheless substantially dependent on
analysis of a collective-bargaining agreement.” Id. (internal
quotation marks omitted). A claim that substantially
depends on a collective-bargaining analysis is preempted. In
other words, § 301 generally preempts state law claims that
implicate a collective-bargaining agreement, except for
claims that (1) arise independently of a CBA, and (2) don’t
substantially depend on analysis of a CBA.

                               A.

     We first decide whether McCray’s complaint asserts
claims that exist solely as a result of the CBA, or if the rights
at issue are conferred independently by state law. In doing
so, we consider whether “the legal character of a claim” is
rooted in the CBA. Burnside, 491 F.3d at 1060 (internal
quotation marks and emphasis omitted). A defendant can’t
rely on a CBA as an aspect of her defense simply to “inject
a federal question into an action that asserts what is plainly
a state-law claim.” Id. (alteration and internal quotation
marks omitted).

    McCray has plainly asserted claims arising under
California state law and the San Jose ordinance. His case
rests on the premise that Marriott didn’t pay McCray and
other workers the minimum wage that the ordinance
          MCCRAY V. MARRIOT HOTEL SERVICES                    9

requires. The rights at issue—that is, the right to be paid the
$10 hourly minimum wage and the right to receive back pay
and other compensation for Marriott’s alleged failure to do
so—arise under state and local law and would exist with or
without the CBA.

    Burnside’s fact pattern is instructive. There, the plaintiff
employees sought pay for time spent traveling between
designated meeting points and their actual job sites.
491 F.3d at 1055. The complaint made no reference to
CBAs the workers’ unions had entered into with their
employer. Instead, it asserted claims under California state
law, including some of the same provisions here, as well as
a common law claim for conversion. See id. at 1058. The
employer argued that certain provisions contained in the
CBAs effectively waived the obligation to pay workers for
their travel time. See id. at 1064.

     We held that the claims in that case were independent
rights asserted under state law and did not depend on the
CBAs. In doing so, we specifically rejected the employer’s
argument that the fact that a right could theoretically be
waived meant that the right necessarily depended on a CBA.
See id. at 1064–65. The right to be paid according to state
law, we explained, is “one that came into existence entirely
independently of the CBA, and that remains in existence,
independently of the CBA” unless and until the CBA waives
it. Id. at 1064. The employees’ claimed right to be paid for
their travel time was “based on a right conferred as a matter
of state law . . . not by the CBAs,” and the fact that the state
law “contain[ed] an opt-out provision [did] not change our
analysis.” Id. at 1070.

   So too here. The San Jose ordinance and relevant state
law afford workers in San Jose the right to be paid the
minimum wage established by the ordinance, subject to the
10         MCCRAY V. MARRIOT HOTEL SERVICES

requirements of California law. That the ordinance contains
an opt-out mechanism doesn’t change the fact that these
rights originate outside of the CBA. We therefore hold that
McCray’s claims arise independently under state law and are
not subject to § 301 preemption on that basis.

                                 B.

    Because McCray’s claims arise independently under
state law, we next ask whether his claims substantially
depend on an analysis of the CBA. To answer this, we must
decide if McCray’s case will require a court to merely “look
to” the CBA or instead “interpret” its terms. Compare
Livadas, 512 U.S. at 125, with Balcorta v. Twentieth
Century-Fox Film Corp., 208 F.3d 1102, 1108–09 (9th Cir.
2000). “[T]he mere need to ‘look to’ the collective-
bargaining agreement . . . is no reason to hold [a] state-law
claim defeated by § 301.” Livadas, 512 U.S. at 125. It is
only “state-law actions that require interpretation of labor
agreements” that are preempted. Balcorta, 208 F.3d at 1108
(internal quotation marks omitted).

    “[T]he line between reference to and interpretation of an
agreement may be somewhat hazy . . . .” Ramirez v. Fox
Television Station, Inc., 998 F.2d 743, 749 (9th Cir. 1993).
But “the totality of the policies underlying § 301—
promoting the arbitration of labor contract disputes, securing
the uniform interpretation of labor contracts, and protecting
the states’ authority to enact minimum labor standards—
guides our understanding of what constitutes
‘interpretation.’” Balcorta, 208 F.3d at 1108–09. 2

     2
     An en banc panel of this court recently explained that “[s]etting
minimum wages, regulating work hours and pay periods, requiring paid
             MCCRAY V. MARRIOT HOTEL SERVICES                             11

    “[I]n the context of § 301 complete preemption, the term
‘interpret’ is defined narrowly—it means something more
than ‘consider,’ ‘refer to,’ or ‘apply.’” Id. at 1108. That’s
why in Livadas, there was no “interpretation” afoot when
resolving the case because the court only needed to look to
the CBA to determine the plaintiff’s undisputed pay rate in
order to calculate damages. See 512 U.S. at 124–25. The
same goes for Burnside, where the court simply had to flip
through the CBA and ask whether a valid waiver was
anywhere to be found. See 491 F.3d at 1066–68.

    Our recent decision in Kobold helps further sharpen the
look-to/interpret distinction. That case involved preemption
analysis in three consolidated cases, two of which are
particularly relevant here. First, Kobold considered a claim
brought by an operating nurse who sought to receive time-
and-a-half pay for certain “extra” shifts she’d worked.
832 F.3d at 1034–35. The nurse asserted claims under
Oregon state law, which we assumed arose independently
from the CBA (thus satisfying step one of Burnside). We
nevertheless found that § 301 preempted her claims because
resolving her case would require interpretation of the CBA.
Id. at 1035–36. This was so because before the court “could
calculate the total amount Kobold is owed, it must determine
which of the shifts she worked qualified for premium pay.”
Id. at 1035. And the definition of which shifts qualified for

and unpaid leave, protecting worker safety, prohibiting discrimination in
employment, and establishing other worker rights remains well within
the traditional police power of the states, and will naturally result in labor
standards that affect workers differently from one jurisdiction to the next
. . . .” Alaska Airlines Inc. v. Shurke, No. 13-35574, 2018 WL 3636431,
at *6 (9th Cir. Aug. 1, 2018) (en banc). That case involved a question of
preemption under the Railway Labor Act, 45 U.S.C. §§ 151–65, 181–88,
whose preemptive force is “virtually identical” to that of the LMRA. Id.
at *1 n.1.
12        MCCRAY V. MARRIOT HOTEL SERVICES

premium pay was contained not within the state law under
which the action arose, but rather was based on the terms of
the CBA. Id. at 1035–36. Because there was a live dispute
over the meaning of a particular provision of the relevant
CBA, resolving the case would mean that the court “must
interpret, not just refer to or look at” the agreement. Id. at
1036. Specifically, the CBA did not “directly and clearly
explain what constitutes a ‘change of schedule,’ nor how an
agreement between [the hospital] and a nurse is to be made.”
Id. Since interpretation of the CBA’s terms would be
necessary, preemption was appropriate.

    By contrast, Kobold also considered claims brought by a
group of truck drivers who claimed that their employer had
failed to make timely premium payments to a benefit plan
negotiated under a CBA. Id. at 1037. The plaintiffs asserted
claims under state employment and labor laws, which
provided that those sorts of deductions must be paid
consistent with the time and manner set out in the CBA. Id.
at 1037–38. The employer claimed that resolving the dispute
would require the district court to “interpret several key
provisions of the contract,” including the employer’s
“obligations to make any deductions from employee’s
paychecks; the amount and frequency of deductions taken;
increases in monthly premium changes; coverage
requirements of employees,” and other issues. Id. at 1040.

    We rejected that argument, explaining that “[n]one of
these matters require CBA interpretation” because the CBAs
“unambiguously specif[ied]” the employer’s obligation to
deduct funds from employee paychecks; “the amount and
frequency of the deductions; to whom the deduction must be
remitted and for what purpose; and the terms of employee
eligibility for the health benefits.” Id. In other words,
reading and applying relevant, unambiguous provisions of
          MCCRAY V. MARRIOT HOTEL SERVICES                  13

the CBA required the court to only “look to,” rather than
“interpret,” the agreement. See also Alaska Airlines, 2018
WL 3636431, at *12 (no preemption in dispute over
employee’s banked vacation days, which existed “only by
virtue of her having earned them in accordance with a
workplace policy incorporated in the CBA”).

    This same reasoning applies here. McCray’s theory of
liability goes like this: The San Jose ordinance establishes a
$10 minimum hourly wage. Marriott paid McCray and other
workers less than that. The CBA (which governs McCray’s
employment) purports to waive the minimum wage
requirement. But the ordinance only allows waiver “[t]o the
extent required by federal law”—and no federal law requires
the minimum wage requirement to be waivable. So, McCray
argues, the waiver is ineffective (no matter what it says), and
McCray is owed the difference between what he was
actually paid and what the ordinance requires.

    At bottom, this case is a matter of statutory
interpretation. The primary task of the court deciding this
case will be to determine whether the minimum wage
established by the ordinance is waivable. If the court
determines it can’t be waived, then it’s irrelevant whether
the CBA contains a waiver. On the other hand, if the
minimum wage is subject to waiver, the court will need only
“look to” the CBA to determine whether it contains a valid
waiver.

    “[R]eliance on and reference to CBA-established or
CBA-defined terms of employment do not make for a CBA
dispute if there is no disagreement about the meaning or
application of any relevant CBA-covered terms of
employment.” Alaska Airlines, 2018 WL 3636431, at *12.
So far, there’s been no dispute about the waiver’s validity.
Aside from claiming that the waiver conflicts with the
14         MCCRAY V. MARRIOT HOTEL SERVICES

ordinance, McCray has pointed to no defect in the document
itself. This would be a different case if, for example,
McCray had argued that the text of the waiver was not
sufficiently “clear and unambiguous” to satisfy the
ordinance or suffered some other flaw that rendered it
invalid. But McCray has made no such argument. Since the
case he’s brought will only require a court to check and see
whether the CBA contains a waiver, this isn’t a case where
a court must do “more than ‘consider,’ ‘refer to,’ or ‘apply’”
the agreement. Balcorta, 208 F.3d at 1108.

    The degree of analysis of the CBA this case requires isn’t
altogether different from checking an agreement to identify,
for example, an employee’s pay rate. See Livadas, 512 U.S.
at 124–25. And in many respects, it presents the inverse of
the issue in Burnside: there, we said that looking at a CBA
to see whether it contained a valid waiver didn’t require
“interpreting” the agreement. 491 F.3d at 1066–68, 1074.
We fail to see why the result should be any different here
simply because a waiver does exist.

    Finally, we recognize that although McCray hasn’t yet
challenged the substance of the waiver, he may attempt to do
so later in the litigation. But that speculative possibility isn’t
enough to warrant preemption at this early stage. We have
stressed in this context the principle that “the plaintiff is the
master of the complaint, and that if the defendant could
engineer the forum in which the claim shall be litigated
based on the substance of his defense, the plaintiff would be
master of nothing.” Id. at 1060 (internal quotation marks
omitted).

    Additionally, we recognized in Burnside (where we
found that the claim wasn’t preempted) that it was “of course
possible . . . that some dispute we cannot now foresee will
arise in the course of computing damages that will require
            MCCRAY V. MARRIOT HOTEL SERVICES                         15

the interpretation of the CBAs.” Id. at 1074 n.19. But that
possibility did not create a basis for preemption. In fact, we
specifically rejected the Burnside employer’s invitation to
“preempt[] the entire cause of action now, even though the
likelihood is that no dispute requiring interpretation of the
CBAs will ever arise,” because doing so “would turn section
301 preemption doctrine[ ]into the ‘mighty oak’ we know it
is not.” Id. (quoting Livadas, 512 U.S. at 122). As McCray
has framed his claims (and argued them thus far), his case
will rise or fall based on interpretation of the local ordinance,
not interpretation of the CBA. The possibility that things
could change down the road is simply not enough to warrant
preemption now. 3

                                  III.

    In sum, the district court didn’t have jurisdiction to hear
this case, because the LMRA doesn’t preempt McCray’s
claims. The district court therefore erred in denying
McCray’s motion to remand this case to state court and
shouldn’t have reached the merits of Marriott’s motion for
summary judgment. See MacKay v. Pfeil, 827 F.2d 540, 543
(9th Cir. 1987). Accordingly, we vacate the district court’s
denial of McCray’s motion to remand and also vacate its
grant of summary judgment in favor of Marriott. Upon

    3
        Of course, should McCray change tack later in the course of
litigation and make an argument directly challenging the CBA, Marriott
would then have the opportunity to again pursue removal. See 28 U.S.C.
§ 1446(b)(3) (“[I]f the case stated by the initial pleading is not
removable, a notice of removal may be filed within 30 days after receipt
by the defendant . . . of a copy of an amended pleading, motion, order or
other paper from which it may first be ascertained that the case is one
which is or has become removable.”).
16        MCCRAY V. MARRIOT HOTEL SERVICES

remand, the district court should return this case to state
court for further proceedings.

   VACATED    AND                 REMANDED             WITH
INSTRUCTIONS.

SCHROEDER, Circuit Judge, dissenting:

    This case is about whether the employer is entitled to rely
on provisions of the collective bargaining agreement
(“CBA”) that establish a contractual hourly wage rate, as
well as a waiver, or “opt out,” of the City of San Jose’s
minimum wage ordinance. The CBA’s hourly rate, a dollar
lower than the City’s minimum wage, was negotiated in
connection with the employer’s providing health care
benefits. The District Court correctly held that the case
substantially depends upon analysis of the terms of the CBA
that should be interpreted in accordance with federal law.

    The District Court followed the Supreme Court’s
decision in Allis-Chalmers Corp. v. Lueck, 471 U.S. 202,
220 (1985), which says as much. In Allis-Chalmers, the
Supreme Court held that “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 [of the
Labor Management Relations Act (“LMRA”), 29 U.S.C.
§ 185(a)], . . . or dismissed as pre-empted by federal labor-
contract law.” 471 U.S. at 220 (citing Avco Corp. v. Aero
Lodge 735, 390 U.S. 557 (1968)); see also Firestone v. S.
Cal. Gas Co., 219 F.3d 1063, 1065 (9th Cir. 2000) (“When
the meaning of particular contract terms is not disputed, the
fact that a collective bargaining agreement must be consulted
for information will not result in § 301 preemption . . . .
          MCCRAY V. MARRIOT HOTEL SERVICES                   17

However, § 301 does preempt state law claims that are
substantially dependent on an analysis of a collective
bargaining agreement.”) (citations and internal quotation
marks omitted).

    The majority nevertheless holds that the case must be
remanded to state court for the application of state law. The
majority does so on the basis of Plaintiff McCray’s theory
that we must first interpret the City’s ordinance to determine
whether it means, as McCray argues, that it can only be
waived by some overarching federal law, rather than by a
CBA. The majority concludes that because that initial
question involves interpretation of the ordinance under state
law, the entire case must be resolved in state court.

    Even assuming that would be a plausible result in some
cases, in this case that initial issue concerning interpretation
of the ordinance raises no serious question. The ordinance
on its face refers to waivers in CBAs; it states, “all or any
portion of the applicable requirements of this Chapter may
be waived in a bona fide collective bargaining agreement,
provided that such waiver is explicitly set forth in such
agreement in clear and unambiguous terms.” And the
explanatory material accompanying the ordinance even
provides sample language that can be used in CBAs to
accomplish a waiver.

    Federal labor law does not require unions and employers
to agree to specific substantive provisions in CBAs, such as
a minimum wage opt-out. Federal labor law merely requires
unions and employers to engage in the collective bargaining
process to reach agreement on terms. They did so here. As
the Supreme Court stated in Metropolitan Life Insurance Co.
v. Massachusetts, “The [National Labor Relations Act
(“NLRA”)] is concerned primarily with establishing an
equitable process for determining terms and conditions of
18        MCCRAY V. MARRIOT HOTEL SERVICES

employment, and not with particular substantive terms of the
bargain that is struck when the parties are negotiating from
relatively equal positions.” 471 U.S. 724, 753 (1985); see
also Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 20
(1987). Furthermore, similar opt-out provisions have been
uniformly upheld under federal law. See, e.g., Livadas v.
Bradshaw, 512 U.S. 107, 131–32 (1994) (recognizing
validity of state and federal laws allowing opt-outs in CBAs
of minimum labor standards). As the Union, UNITE HERE
Local 19, points out in its amicus brief, McCray’s reading
would nullify the opt-out provision altogether.

    The essence of McCray’s claim is that the employer is
required to pay the City’s minimum wage. Thus, he contends
the opt-out contained in the CBA is not to be given effect.
Of course McCray’s complaint does not discuss the CBA
because he wishes the claim to be litigated in state court, but
the District Court correctly recognized that the dispute is
actually about the CBA. We should similarly reject the
pretense that this case is about state law.

    When state law claims require analysis of the provisions
in a CBA, the claims are preempted by the LMRA’s
exclusive federal jurisdiction. The District Court saw that the
issue is not whether the complaint frames the case in terms
of the CBA, but whether resolution of the claims will depend
on analyzing the agreement. Allis-Chalmers, 471 U.S. at
220; see also Int’l Bhd. of Elec. Workers, AFL-CIO v.
Hechler, 481 U.S. 851, 859 n.3 (1987) (“[W]hen a state-law
claim is substantially dependent on analysis of a collective-
bargaining agreement, a plaintiff may not evade the pre-
emptive force of § 301 of the LMRA by casting the suit as a
state-law claim.”). We faithfully followed this principle in
Kobold v. Good Samaritan Regional Medical Center,
832 F.3d 1024, 1032 (9th Cir. 2016).
          MCCRAY V. MARRIOT HOTEL SERVICES                 19

    The majority cites to our Court’s decisions in Burnside
v. Kiewit Pacific Corp., 491 F.3d 1053, 1058 (9th Cir. 2007),
and Alaska Airlines Inc. v. Shurke, No. 13-35574, 2018 WL
3636431, at *12 (9th Cir. Aug. 1, 2018) (en banc), in which
we held that claims predicated on state law were not
preempted, because they related to subjects that were
independent of the CBA: travel time in Burnside and leave
interchangeability in Shurke. Shurke, 2018 WL 3636431, at
*2; Burnside, 491 F.3d at 1055. Such claims did not
challenge the basic wage rate, a core subject of virtually all
collective bargaining negotiations. Nor did those claims seek
to replace any collectively bargained-for provision with
inconsistent state law. McCray’s claim here does both.

    Section 301 of the LMRA provides that disputes
regarding CBAs belong in federal court. CBAs are to be
interpreted and applied in accordance with federal common
law, a principle going back more than sixty years to Textile
Workers v. Lincoln Mills, 353 U.S. 448 (1957). In this case
the CBA contains a grievance procedure which McCray did
not follow, and his complaint was properly dismissed.

    I would affirm the District Court and I therefore
respectfully dissent.