The Federal Court of Appeals, which oversees California cases, recently issued an opinion that helps guide employers who try to comply with collective agreements, while being asked to apply potentially inconsistent definitions in California`s overtime law. The 9th Circuit decision of January 29 in Curtis et al. Irwin Industries, Inc. gave a victory to the employer concerned, but you do not necessarily have to think that, in every situation, this case offers you an automatic pardon of state law. Continue reading to understand the nuances that are at stake and whether the federal preemption option might work to clarify your California operations. Under Section 301 of the MRA (“Section 301”), federal courts have jurisdiction to adjudicate disputes arising from collective agreements. When an issue is both an agreement and a state right, determining the anticipation of state law requires the application of a two-part test. First, a court asks whether the remedy is a right that consists only of the collective agreement. If the law attempts to enforce a right created by the collective agreement itself, the right is anticipated. If this is not the case, the second step will be to determine whether the state`s law “essentially depends on the analysis of the agreement.” In other words, the claim of state law is not anticipated if it does not deal with the scope, meaning or application of the agreement. Under Section 510 of the California Labor Code, employers must pay overtime for all hours worked for a day of more than eight hours and the seventh consecutive working day.
However, section 514 of the labour code also provides for a derogation from these requirements for workers covered by a collective agreement when certain conditions are met. Section 514 states that california`s statutory overtime requirements do not apply “where the agreement explicitly provides for workers` wages, working hours and working conditions and the agreement provides for bonus rates for all overtime worked and a regular hourly wage for those workers who do not exceed the state minimum wage by less than 30%.” The CBAs in question met these minimum requirements. The Supreme Court applied Sciborski v. Pacific Bell Director and, in its decision, presented a two-part test to determine whether a claim is anticipated under Section 301: first, a court must decide whether a claim originates from the CBA or an independent state law. Second, where an application is made in accordance with state law, a court must decide whether (a) the claim requires an “interpretation or construction of an employment contract” (i.e., competing interpretations of KBA must be assessed?) or (b) the KBA is mentioned only in the decision of the claim. If there is a right under national law and the CBA is referred to only – and not interpreted – there is no possibility of pre-emption under section 301. In Section 301 (a) of the Labor Management Relations Act, Congress provided a means of taking legal action in the event of a breach of a collective agreement. This law has long been interpreted as a denial of the state`s infringement rights in the case of a collective agreement.
California has a reputation for strictly enforcing its wage and hourly laws, regardless of federal laws or an agreement between the parties. But the U.S. Court of Agreement for the 9th Circuit recently ruled that these laws could be anticipated by federal labor law as part of collective bargaining.