902 F.3d 1005

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, 105 S.Ct. 1904, 85 L.Ed.2d 206 (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, 105 S.Ct. 1904 (citing Avco Corp. v. Aero Lodge 735 , 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (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 .... 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 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, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985) ; see also Fort Halifax Packing Co. v. Coyne , 482 U.S. 1, 20, 107 S.Ct. 2211, 96 L.Ed.2d 1 (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, 114 S.Ct. 2068, 129 L.Ed.2d 93 (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, 105 S.Ct. 1904 ; see also Int'l Bhd. of Elec. Workers, AFL-CIO v. Hechler , 481 U.S. 851, 859 n.3, 107 S.Ct. 2161, 95 L.Ed.2d 791 (1987) ("[W]hen a state-law claim is substantially dependent on analysis of a collective-bargaining agreement, a plaintiff may not evade the preemptive 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).
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, 898 F.3d 904, 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, 77 S.Ct. 912, 1 L.Ed.2d 972 (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.

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