Abdulhussain v. Mv Public ( 2023 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
HAMEED ABDULHUSSAIN, Plaintiff/Appellant,
v.
MV PUBLIC TRANSPORTATION, Defendant/Appellee.
No. 1 CA-CV 22-0522
FILED 6-6-2023
Appeal from the Superior Court in Maricopa County
CV2022-090183
The Honorable Rodrick J. Coffey, Judge
AFFIRMED
COUNSEL
Law Offices of Kimberly A. Eckert, Tempe
By Kimberly A. Eckert
Counsel for Plaintiff/Appellant
Littler Mendelson, P.C., Phoenix
By Jacqueline Langland, R. Shawn Oller
Counsel for Defendant/Appellee
ABDULHUSSAIN v. MV PUBLIC
Decision of the Court
MEMORANDUM DECISION
Judge Daniel J. Kiley delivered the decision of the Court, in which Presiding
Judge Maria Elena Cruz and Judge James B. Morse Jr. joined.
K I L E Y, Judge:
¶1 Hameed Abdulhussain appeals the superior court’s dismissal
of his complaint against his former employer, MV Public Transportation
(“MV Public”) for compensation for unused vacation time. Because
Abdulhussain’s claim for unused vacation time arises out of the provisions
of a collective bargaining agreement (“CBA”), his claim is preempted under
§ 301 (“Section 301”) of 29 U.S.C. § 185, the Labor Management Relations
Act (“LMRA”). Accordingly, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 The allegations in the complaint, accepted as true and
construed in the light most favorable to Abdulhussain as the non-moving
party, see Albers v. Edelson Tech. Partners L.P., 201 Ariz. 47, 50, ¶ 7 (App.
2001), establish that Abdulhussain was employed as a driver for MV Public
for almost 12 years as of July 2021. As a member of the Amalgamated
Transit Union Local 1433, Abdulhussain was covered by a CBA that
contains detailed provisions regarding wages, hours, overtime, and other
employment terms. Article 25 of the CBA entitles employees with 10 or
more years of service to 160 hours of paid vacation time each year, which
could be “cash[ed] in” each year if unused. Article 25 further provides that
vacation time does not accrue on a monthly basis but is awarded annually
on the employee’s service anniversary date.
¶3 Article 9 of the CBA requires arbitration of any grievance or
dispute “as to any matter involving the interpretation or application of the
terms” of the CBA. Under the CBA, grievances are to be submitted in
writing to the company’s General Manager within 10 days of the alleged
infraction, to be followed by a meeting if one is requested. If not resolved
internally, grievances are then referred to an arbitrator to “hear and decide
the issue.” The arbitration process commences with a written demand for
arbitration followed by a request to the Federal Mediation and Conciliation
Service for a list, from which the parties choose, of seven individuals
available to serve as arbitrator.
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ABDULHUSSAIN v. MV PUBLIC
Decision of the Court
¶4 In August 2020, Abdulhussain attempted to cash in 160 hours
of unused vacation time that he claimed to have accrued. MV Public denied
his request, asserting that he had accrued only 80 hours of unused vacation
time. Abdulhussain spoke to MV Public’s General Manager and Human
Resources Director about the discrepancy but did not reach a satisfactory
resolution. In June 2021, Abdulhussain “filed a claim for [his] vacation
hours” with the Industrial Commission of Arizona. MV Public then “placed
[him] on administrative paid leave” before terminating his employment in
July 2021.
¶5 Abdulhussain later withdrew his complaint with the
Industrial Commission and sued MV Public in superior court, alleging that
it wrongfully failed to pay him for 160 hours of accrued but unused
vacation time. Abdulhussain asked that the court “triple [his] vacation
hours number of 160 to be 480 hours,” presumably under A.R.S. § 23-355,
which allows an employee to “recover in a civil action against [a] . . . former
employer an amount that is treble the amount of the unpaid wages.”
¶6 MV Public moved to dismiss the complaint under Arizona
Rule of Civil Procedure (“Rule”) 12(b)(5) due to purportedly insufficient
service of process and, alternatively, under Rule 12(b)(6) because
Section 301 preempted Abdulhussain’s state law claim.
¶7 Citing both Rule 12(b)(5) and Rule 12(b)(6), the superior court
granted MV Public’s motion and dismissed Abdulhussain’s complaint with
prejudice. Abdulhussain now appeals. We have jurisdiction under A.R.S.
§ 12-2101(A)(1).
DISCUSSION
¶8 Dismissal under Rule 12(b)(6) is only appropriate if, as a
matter of law, the plaintiff “would not be entitled to relief under any
interpretation of the facts susceptible of proof.” Coleman v. City of Mesa, 230
Ariz. 352, 356, ¶ 8 (2012) (citation omitted). We review the dismissal of a
complaint under Rule 12(b)(6) de novo, assuming the truth of all well-
pleaded factual allegations and indulging all reasonable inferences
therefrom. Id. at 355-56, ¶¶ 7-9. We likewise review “issues of law relating
to alleged federal preemption of state law claims” de novo. Conklin v.
Medtronic, Inc., 245 Ariz. 501, 504, ¶ 7 (2018).
¶9 Section 301 of the LMRA states that “[s]uits for violation of
contracts between an employer and a labor organization . . . may be brought
in any district court of the United States having jurisdiction of the parties.”
29 U.S.C. § 185(a). Although Section 301 “contains no express language of
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ABDULHUSSAIN v. MV PUBLIC
Decision of the Court
preemption,” Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1151 (9th Cir. 2019),
the United States Supreme Court has long recognized its preemptive effect,
see Teamsters v. Lucas Flour Co., 369 U.S. 95, 103-04 (1962) (holding that
Section 301 preempts state law claims because “Congress intended
doctrines of federal labor law uniformly to prevail over inconsistent local
rules.”). Specifically, the Court has long held that “any suit alleging a
violation of a provision of a labor contract must be brought under [Section
301] and be resolved by reference to federal law.” Curtis, 913 F.3d at 1151-
52 (cleaned up) (citing Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210 (1985)).
¶10 The Ninth Circuit has “articulated a two-step inquiry to
analyze [Section 301] preemption of state law claims.” Kobold v. Good
Samaritan Reg’l Med. Ctr., 832 F.3d 1024, 1032 (9th Cir. 2019). First, if an
“asserted cause of action involves a right . . . [that] exists solely as a result
of the CBA, then the claim is preempted, and the analysis ends there.” Id.(cleaned up). If the right “exists independently of the CBA,” the court
“moves to the second step,” under which the state law claim is preempted
if the right underlying the cause of action is “substantially dependent on
analysis of a collective-bargaining agreement.” Id. at 1032-33 (citation
omitted).
¶11 Abdulhussain argues his claim is not preempted because it is
simply a “claim[] for unpaid wages” that “[does] not require interpretation
of the CBA.” Noting that Arizona statutorily defines “wages” as
“nondiscretionary compensation due an employee in return for labor or
services rendered . . . for which the employee has a reasonable expectation
to be paid,” see A.R.S. § 23-350(7), Abdulhussain asserts that the monies he
sought fall squarely within this definition. Because pay for unused vacation
time “was part of his compensation package,” Abdulhussain asserts, he had
“a reasonable expectation to be paid” for that time irrespective of whether
“the vacation pay was offered as part of the collective bargaining
agreement.”
¶12 We disagree. Arizona statute creates no right to paid vacation
time nor to exchange accrued vacation time for pay. See A.R.S. §§ 23-350 et
seq. The right to paid vacation time, and to exchange accrued vacation time
for pay, exists, if at all, solely by agreement of the parties. Without Article
25 of the CBA, therefore, Abdulhussain would have had no reasonable
expectation of entitlement to compensation for unused vacation time. See
Mitchell v. Globe Newspaper Co., Inc., 602 F. Supp. 2d 258, 261 (D. Mass. 2009)
(holding that Section 301 preempted a former employees’ claim for unpaid
vacation benefits because former employees “would not be entitled to any
vacation pay absent the CBA,” rendering the claim “in no sense
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Decision of the Court
independent of the CBA”); cf. Bell v. Se. Pa. Transp. Auth., 733 F.3d 490, 491,
494 (9th Cir. 2013) (holding that employees’ wage claims under the Fair
Labor Standards Act were not preempted because “[a]n employee’s right to
relief under [that act] . . . is distinct from an employee’s contractual rights
as provided in a collective bargaining agreement”).
¶13 Because state law confers no right to compensation for
unused vacation time absent agreement of the parties, Abdulhussain’s
claim for such compensation “exists solely as a result of the CBA.” See
Kobold, 832 F.3d at 1032 (citation omitted). His claim is therefore preempted
under the first step of the Ninth Circuit’s test, “and the analysis ends there.”
Id. (cleaned up); see also Barton v. Creasey Co. of Clarksburg, 718 F. Supp. 1284,
1287 (N.D. W. Va. 1989) (holding that Section 301 preempted former
employees’ claim for unpaid vacation benefits because right to such
benefits was created by CBA, not state law); cf. Burnside v. Kiewit Pac. Corp.,
491 F.3d 1053, 1061 (9th Cir. 2007) (holding that employees’ claim for
compensation for employer-mandated travel time was not preempted by
Section 301 where “the right to be compensated for employer-mandated
travel exists as a matter of [California] state law”).
¶14 Abdulhussain’s claim is likewise preempted under the
second step of the Kobold test. See Kobold, 832 F.3d at 1032-33 (state law claim
“substantially dependent on analysis of a collective-bargaining agreement”
is preempted (citation omitted)). Abdulhussain asserts that he accrued 160
hours of unused vacation time under the CBA, while MV Public insists that
he accrued only 80 hours of unused vacation time. Determining the “proper
rate of vacation pay under [a] CBA . . . necessarily requires interpretation
of that agreement.” Mitchell, 602 F. Supp. 2d at 261. Because resolving the
parties’ dispute over the amount of vacation time to which Abdulhussain
is entitled will require interpretation of the CBA, Abdulhussain’s claim is
“substantially dependent on analysis of a collective-bargaining agreement”
and thus preempted. See Kobold, 832 F.3d at 1032-33 (citation omitted); see
also Firestone v. S. Cal. Gas Co., 219 F.3d 1063, 1064, 1066 (9th Cir. 2000)
(holding that Section 301 preempted employees’ claim for overtime pay
equal to “time-and-a-half” of their “regular hourly rate” because
employees’ regular rate of pay could not be determined without reference
to the CBA); Salamea v. Macy’s E., Inc., 426 F. Supp. 2d 149, 155 (S.D.N.Y.
2006) (holding unpaid wage claim preempted where “the CBA contain[ed]
detailed requirements for an employee to be eligible for vacation benefits”
and a dispute about employee’s entitlement to vacation days would
“require interpretation of the CBA”).
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ABDULHUSSAIN v. MV PUBLIC
Decision of the Court
¶15 A state court is not necessarily required to dismiss a claim
found to be preempted by Section 301. See Lueck, 471 U.S. at 220. On the
contrary, because state courts have concurrent jurisdiction to hear claims
arising under Section 301, Orfaly v. Tucson Symphony Soc., 209 Ariz. 260, 264,
¶ 13 n.2 (App. 2004) (citing Livadas v. Bradshaw, 512 U.S. 107, 122 (1994)), a
state court may adjudicate a preempted employment claim by treating it as
arising under Section 301 and resolving it by reference to “principles of
federal labor law.” Lucas Flour Co., 369 U.S. at 102. To do so, however, the
employee must first exhaust the grievance process prescribed in the CBA
unless an exception to the exhaustion requirement applies. See Kaylor v.
Crown Zellerbach, Inc., 643 F.2d 1362, 1366 (9th Cir. 1981) (noting that, with
certain exceptions, “an employee must first attempt to exhaust the
grievance procedures contained in the collective bargaining agreement”
before suing employer under Section 301).
¶16 Adbulhussain appears to invoke this principle on appeal,
asserting that “even if this matter was preempted, . . . he must be permitted
to file in court[,] otherwise[,] he has no alternate remedy available.”
Abdulhussain never argued to the superior court, however, that the court
should continue to exercise jurisdiction over his claim despite a finding of
preemption, nor did Abdulhussain argue that the circumstances under
which a state court may entertain a claim arising under Section 301 are
present here. Accordingly, we find that Abdulhussain has waived any
argument that his claim, though preempted by Section 301, should
nonetheless have been allowed to proceed. See Trantor v. Fredrikson, 179
Ariz. 299, 300 (1994) (“Because a trial court and opposing counsel should be
afforded the opportunity to correct any asserted defects before error may
be raised on appeal, absent extraordinary circumstances, errors not raised
in the trial court cannot be raised on appeal.”); State v. Brita, 158 Ariz. 121,
124 (1988) (“It is highly undesirable to attempt to resolve issues for the first
time on appeal, particularly when the record below was made with no
thought in mind of the legal issue to be decided.”).
¶17 In any event, no basis exists to find either that Abdulhussain
exhausted the CBA’s grievance and arbitration process or that he was, for
some reason, excused from doing so. Article 9 of the CBA requires
grievances to be submitted internally in writing within 10 days of the
alleged infraction. If not resolved, the dispute proceeds to arbitration upon
written demand. Although Abdulhussain alleges that he spoke to the
authorized management personnel about his grievance with no satisfactory
resolution, he has never alleged that he complied with Article 9 by
submitting his grievance in writing within the prescribed period or by later
submitting a written demand for arbitration.
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ABDULHUSSAIN v. MV PUBLIC
Decision of the Court
¶18 Abdulhussain argues that he is not bound by the procedures
set forth in Article 9 of the CBA because he is “no longer an employee” of
MV Public. It “would not make sense,” he insists, to require “a former
employee” to adhere to the same contractual grievance and arbitration
provisions that apply to current employees.
¶19 Applicability of the grievance and arbitration provisions of
the CBA is not restricted to disputes involving current employees. On the
contrary, by its terms, the CBA mandates a grievance and arbitration
process for “any controversy . . . involving the interpretation or application
of the [CBA’s] terms,” without exempting controversies involving former
employees. (Emphasis added.) This Court must apply the CBA’s express
terms as written and cannot carve out exceptions not agreed upon by the
parties. See Standard Constr. Co. Inc. v. State, 249 Ariz. 559, 562, ¶ 5 (App.
2020) (“[W]e construe contracts to give effect to the parties’ intent, applying
the plain contractual language when it is unambiguous.”); see also Litton Fin.
Printing Div. v. N.L.R.B., 501 U.S. 190, 205 (1991) (“[I]f a dispute arises
under” a CBA with an “unlimited arbitration clause, by which the parties
agreed to arbitrate all differences that may arise between the parties
regarding the Agreement” as well as “the construction to be placed on any
clause” of the CBA, the dispute “is subject to arbitration even in the
postcontract period.” (emphasis added) (cleaned up)); Republic Steel Corp.
v. Maddox, 379 U.S. 650, 659 (1965) (rejecting “casuistic” argument that
former employee was no longer bound by grievance procedure mandated
by CBA).
¶20 Moreover, references in the CBA to grievance and arbitration
of disputes over an employee’s “dismissal” make clear that an employee’s
obligations under the CBA’s grievance and arbitration provisions do not
automatically terminate when his or her employment does. We therefore
reject Abdulhussain’s argument that the termination of his employment
excused him from adhering to the grievance and arbitration provisions of
the CBA. See Tenn. Valley Trades and Lab. Council v. Day & Zimmerman NPS,
Inc., 418 F. Supp. 2d 993, 1003 (M.D. Tenn. 2006) (holding that, in the
absence of “an express provision” in the CBA to the contrary, “the
grievance regarding [discharged employee’s] termination is subject to
arbitration”). Because Abdulhussain did not ask the superior court to treat
his claim, though preempted, as one arising under Section 301, and because
the record does not show that the circumstances necessary for the court to
do so are present here in any event, the court did not err or abuse its
discretion in dismissing his claim on preemption grounds.
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ABDULHUSSAIN v. MV PUBLIC
Decision of the Court
¶21 Abdulhussain also argues that, to the extent the superior
court’s dismissal order was based on insufficiency of service of process
under Rule 12(b)(5), the dismissal was in error because, in his view, sending
the complaint to MV Public’s counsel by certified mail constitutes valid
service on MV Public under applicable court rules. Because we affirm the
dismissal on preemption grounds, we need not address Abdulhussain’s
alternative challenge to the dismissal.
CONCLUSION
¶22 We affirm.
AMY M. WOOD • Clerk of the Court
FILED: AA
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