SAN FRANCISCO – A federal court of appeals vacated a summary judgment in a case involving an alleged violation of the San Jose minimum wage ordinance.
The lawsuit, filed by a server at Marriott Hotel Services who was paid less than the city-ordered minimum wage of $10 per hour, has been ordered back to the state court for further review.
U.S. Circuit Judge Albert Diaz, on the panel of the U.S. Court of Appeals for the Ninth Circuit, issued a 19-page ruling on Aug. 31, vacating the U.S. District Court for the Northern District of California decision in the lawsuit filed by Ian McCray against Marriott Hotel Services Inc.
McCray sued Marriott on the grounds that it allegedly violated a city ordinance that established the minimum wage at $10 per hour.
He claimed that, as of the ruling, "the San Jose Marriott Hotel continued to pay Ian McCray and other employees less," whereas his 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 in state court, stating 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 moved the case to federal court based on the Labor Management Relations Act (LMRA), and the court granted the summary judgment.
As stated in the ruling, 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," where employees "would be paid a minimum wage of $10 an hour, subject to cost-of-living adjustments over time." The same ordinance also aimed to "give employers and employees the ability to waive the minimum wage requirements through collective bargaining."
McCray, at that time, was working at the San Jose Marriott, where he was performing several hospitality duties, mostly in the hotel's restaurant.
As described in the court document, when McCray was working as a busser, he "received an hourly wage of $10.80." Nevertheless, when he "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."
During that time, McCray was represented by the union Unite Here, Local 19, who entered a collective-bargaining agreement (CBA) with Marriott, which was amended before the ordinance passed, establishing, per the ruling, that both parties were "opting out of the minimum wage requirement."
When McCray asked about the wages, representatives for both Marriott and the union told him about the opt-out agreement, as well as he was told that it "could secure other benefits, such as healthcare, for its members," according to the lawsuit.
In his ruling, Diaz stated that the LMRA did not limit McCray's claims and his right to have the case judged by the state court.
"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," Diaz said.
One of the judges, however, issued a dissenting opinion.
U.S. Circuit Judge Mary Schroeder, stated in her opinion that federal courts are competent to resolve disputes involving bargaining agreements.
"Section 301 of the LMRA provides that disputes regarding CBAs belong in federal court," Schroeder said, adding that the agreement in question "contains a grievance procedure which McCray did not follow, and his complaint was properly dismissed."
U.S. Court of Appeals for the Ninth Circuit Case number 17-15767