Introduction: Why Renteria-Hinojosa Matters in Labor-Intensive Industries
Labor-intensive industries such as agriculture, construction, manufacturing, food processing, and warehousing depend on large, unionized workforces. In these environments, employers frequently rely on collective bargaining agreements (CBAs) to structure work rules, compensation, and grievance procedures. When wage and hour or related statutory claims arise, employers often assert defenses based on those CBAs—especially preemption under Section 301 of the Labor Management Relations Act (LMRA).
The Ninth Circuit’s recent decision in RENTERIA-HINOJOSA V. SUNSWEET GROWERS, INC., No. 23-3379 (9th Cir. 2025) has refined how courts evaluate those defenses. The case underscores that while CBAs remain central to labor relations, not every dispute touching on a CBA is subject to federal preemption or removal. For both plaintiff and defense counsel, this decision invites a closer, more disciplined evaluation of how CBA-based defenses operate in statutory employment litigation.
The Legal Framework After Renteria-Hinojosa
Section 301 Preemption and the Two-Step Burnside v. Kiewit Pacific Corp Test
The Ninth Circuit continues to apply and refine the Burnside v. Kiewit Pacific Corp., 491 F.3d 1053 (9th Circuit) two-step analysis for determining whether a claim is preempted by Section 301:
- Step One: Does the claim or right arise from or exist only because the CBA created it? If yes, the preemption applies. If the right does not arise entirely (only) from a CBA, then proceed to Step Two.
- Step Two: Even if the right is independent and not created by the CBA, must a court interpret a disputed clause of the CBA? If yes, then the preemption still applies.
If the answer to both questions is no, meaning that the right exists independently under state law and can be resolved without interpreting the CBA, preemption does not apply.
In Renteria-Hinojosa, agricultural workers filed a putative class action alleging violations of California Business and Labor Codes for untimely-wage claims and related claims. A few months later Plaintiff filed a corresponding PAGA action for violations of the California Labor Code. Defendant Sunsweet removed both actions to Federal court asserting all claims were preempted by §301 of the Labor Management Relations Act.
The employer argued that under step one of Burnside v. Kiewit Pacific Corp, although plaintiff’s claims might exist under state law, they were nevertheless preempted under Federal law because they necessarily alleged a breach of the CBA because the CBA addressed wages and hours.
The Ninth Circuit disagreed, holding that at step one, a state law claim is preempted only if a CBA is the “only source” of the right underlying the claim, as opposed to an additional source. Because state law is a source for each of Renteria-Hinojosa’s claims, it does not matter whether Renteria-Hinojosa’s factual allegations could also support claims for breach of the CBAs at step one.
The Ninth Circuit also rejected the employer’s allegation that the wages and hours claims for overtime pay, sick leave pay, and meal and rest breaks were preempted at step two because they require interpretation of “substantive provisions” of the CBAs. The Ninth Circuit reasoned that to determine the amount of liability for unpaid overtime wages under state law, a court may need to refer to the pay rates listed in the CBAs to identify the applicable regular rate of pay (See Cal. Lab. Code §§ 510, 119) but “[T]he mere need to ‘look to’ the collective-bargaining agreement for damages computation is no reason to hold the state-law claim defeated by § 301.”) (quoting Alaska Airlines Inc. v. Schurke, 898 F.3d at 921(9th Cir. 2018).
The court further held that the need to refer to CBA terms is not the equivalent of identifying an interpretive dispute about a CBA term that must be resolved to determine the regulate rate of pay or any other element of Plaintiff’s overtime pay claims. As such there was no §301 preemption.
Defensive Invocation of a CBA Not Grounds for Automatic Removal
In Renteria-Hinojosa, the employer argued that the CBA required arbitration of all grievances and therefore precluded the entire action. The Renteria-Hinojosa court, relying on Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987), affirmed a key limit on §301 jurisdiction: A defendant cannot create federal preemption simply by raising the CBA as a defense. The Renteria-Hinojosa court found that the employer’s claim that the arbitration protocol prevented litigation was an affirmative defense to the plaintiff’s complaint filed in state court.
This principle prevents employers from converting state-law claims into federal ones merely because a CBA touches the same subject matter. The right at issue must be “substantially dependent” on interpretation of the CBA itself.
Exhaustion of Grievance Procedures
When a claim genuinely arises under the CBA, making it a §301 claim, exhaustion of the CBA’s grievance or arbitration procedure is typically required before litigation. The Ninth Circuit in Renteria-Hinojosa affirmed dismissal of certain claims for failure to exhaust. However, the court also upheld remand of independent state law claims to California courts, emphasizing that non-preempted statutory claims can proceed separately.
Step | Plaintiff-Side Questions | Defense-Side Questions | Strategic Considerations |
1. Identify the source of the right | Is the alleged right created by statute rather than contract? | Can the defense show that the right exists solely within the CBA’s terms? | The distinction between statutory and contractual rights often determines preemption. |
2. Determine if CBA interpretation is necessary | Can the claim be resolved by applying statutory standards without construing ambiguous CBA provisions? | Does resolution require interpreting specific CBA clauses (e.g. overtime, premium pay)? | The focus is on interpretation, not mere reference to CBA’s terms. |
3. Address defensive reliance on the CBA | Does the employer merely cite the CBA as context rather than as a source of law? | Can the defense establish that the claim’s outcome turns on construing the contract? | Courts are alert to overbroad assertions of preemption based solely on CBA overlap. |
4. Examine exhaustion requirements | Is the grievance process relevant to the claim asserted? | Does the CBA clearly require exhaustion before litigation? | Clarify which claims are truly contractual versus statutory to determine exhaustion. |
5. Consider compliance and offset arguments | Does compliance with the CBA satisfy statutory standards? | Can adherence to the CBA be presented as evidence of full compliance? | Statutory minimums cannot be waived or diluted by CBA terms. |
6. Apply industry-specific context | Are piece-rate, shift premium, or break provisions governed by statute or contract? | Are these provisions so intertwined with the CBA that interpretation is inevitable? | Evaluate whether factual overlap requires actual construction of the CBA. |
7. Address remand and supplemental jurisdiction | Should remaining state claims be remanded after partial preemption? | Can the defense argue that judicial economy favors retention? | Courts often remand surviving state claims, as Renteria-Hinojosa illustrates. |
Key Issues Emerging in Labor-Intensive Sectors
- Piece-Rate and Incentive Systems. These systems often depend on definitions within CBAs. Evaluating preemption requires distinguishing between interpreting those definitions and merely referencing them for context.
- Meal and Rest Period Provisions. Some CBAs allow alternate scheduling or pay in lieu of breaks. Counsel should assess whether such terms clearly displace statutory protections.
- Shift Differentials and Overtime Thresholds. Disputes over pay rates beyond eight or twelve hours may turn on whether the CBA’s formula conflicts with or complement state law.
- Expense Reimbursement and Tool Policies. CBAs may omit or only indirectly address these issues. Silence generally favors independent statutory claims.
- Negotiated Trade-Offs. CBAs often reflect bargaining compromises. Courts remain cautious not to infer waivers of statutory rights absent explicit language.
Practical Observations for Both Sides
- For Plaintiff-Side Practitioners: Frame statutory claims clearly and avoid unnecessary reliance on CBA provisions. Emphasize the independence of state rights and the minimal need to interpret contractual terms.
- For Defense-Side Practitioners: Identify specific CBA provisions central to the dispute and show why interpretation is unavoidable. Prepare to demonstrate that exhaustion or arbitration requirements apply to the claims asserted.
- For Both: Consider early briefing on preemption to narrow issues and preserve forum strategy. Maintain awareness of how district courts apply Renteria-Hinojosa to different industries, as interpretations may evolve.
Conclusion
Renteria-Hinojosa underscores a recalibration in how courts view CBA-based defenses. It preserves the importance of collective bargaining while reaffirming the autonomy of statutory labor protections. For counsel in labor-intensive industries, the decision invites a measured and precise evaluation of when a CBA legitimately governs the dispute and when statutory rights proceed independently.
Balanced and thoughtful evaluation of these issues—grounded in clear identification of rights, careful reading of the CBA, and respect for both contractual and statutory frameworks—will serve practitioners well on either side of the employment bar.