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Does a Union Contract Override a California City’s Minimum Wage Rules?


A common source of wage and hour disputes in California is the proper calculation of an employee’s minimum wage. There are often a host of overlapping federal, state, and local rules to consider. The federal government sets the minimum wage at just $7.25 per hour, while California law requires higher pay (increasing each year), depending on the size of the business. On top of that, individual California cities like Los Angeles and San Jose impose even higher wage requirements.

Federal Court Returns Hotel Worker’s Class Action to State Court

In some situations, an employee’s minimum wage rights may also depend on whether or not they belong to a union.

Federal law can preempt–override–state and local laws that require payment of a certain wage if the union has a collective bargaining agreement (CBA) with an employer that governs compensation terms. However, the mere fact a CBA exists does not necessarily bar an employee from pursuing a minimum wage claim under state or municipal law.

The U.S. Ninth Court of Appeals recently addressed this issue in McCray v. Marriott Hotel Services, Inc. The plaintiff in this case worked as a server for a Marriott hotel in San Jose in 2012. That year, San Jose voters approved a local ordinance raising the citywide minimum wage to $10 per hour. However, the plaintiff only earned $9.00 per hour at his job before tips.

Prior to the adoption of the San Jose ordinance, Marriott and the union representing the employees at the hotel agreed to amend their CBA to “explicitly waive” the higher local minimum wage should it come to pass. The union told the plaintiff it agreed to the waiver in exchange for Marriott’s consideration on other issues, such as improved healthcare benefits. The employee, believing the waiver was inappropriate, filed a class action complaint against Marriott in California state court.

Marriott had the case removed (transferred) to federal court, where it argued the plaintiff’s claims were barred by the Labor Management Relations Act (LMRA), a federal statute that preempts state lawsuits alleging violations of a collective bargaining agreement. The plaintiff replied that his claims were not based on an interpretation of the CBA, but rather of San Jose’s minimum wage ordinance. As he saw the case, the ordinance only permits waivers “to the extent required by federal law.” And since federal law does not require such waivers, the one in this case is “ineffective,” meaning the plaintiff and his fellow workers are entitled to compensation at the level mandated by the San Jose ordinance.

The trial court disagreed with the plaintiff’s reasoning and granted summary judgment to Marriott. But a divided three-judge panel of the Ninth Circuit reversed, holding the federal courts do not have jurisdiction over this case as the LMRA does not prevent the plaintiff from raising a claim in state court based on an “interpretation of the local ordinance,” rather than an “interpretation of the CBA.”

Need Help Understanding California’s Minimum Wage Laws?

Wage and hour claims often raise complex questions of law, even when there is no union or collective bargaining agreement involved. As an employee who depends on the minimum wage to survive, however, you may not be in the best position to understand which laws apply to you. That is why you should consult a qualified California employment law attorney if you have any questions.



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* Cathleen Scott is licensed to practice in Florida only.

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