Date: 09-25-2020

Case Style:

Case Number: A157097

Judge: Tucher, J.

Court: California Court of Appeals First Appellate District, Division Four on appeal from the Superior Court, City and County of San Francisco

Plaintiff's Attorney: Christopher D. Baker and Deborah R. Schwartz

Defendant's Attorney: Zachary P. Hutton, Cameron W. Fox, Ankush Dhupar, Mia Farber, Scott P. Jang, Dylan B. Carp and Philip Alexander Johnson

Description: San Francisco, CA - Employment Law Lawyer

Google, Inc. and Alphabet, Inc. (collectively, Google), and Adecco USA,
Inc. (Adecco) require their employees to comply with various confidentiality
policies. John Doe, David Gudeman, and Paola Correa, who are current and
former Google and Adecco employees, sued Google and Adecco under the
Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698
et seq.), alleging the employers’ confidentiality policies restricted their
employees’ speech in violation of California law. The trial court sustained
defendants’ demurrers without leave to amend, concluding plaintiffs’ claims
were preempted by the National Labor Relations Act (NLRA or Act) (29
U.S.C. § 151 et seq.) under San Diego Bldg. Trades Council v. Garmon (1959)
359 U.S. 236, 244–245 (Garmon). Plaintiffs contend the trial court erred in
finding the NLRA preempted their PAGA claims. They further challenge the
trial court’s denial of a petition to coordinate this case with another case
pending in a different trial court.
2
We conclude that, although many of plaintiffs’ claims relate to conduct
that is arguably within the scope of the NLRA, the claims fall within the local
interest exception to Garmon preemption and may therefore go forward. We
also conclude that plaintiffs’ challenge to the trial court’s coordination
petition is not properly before us. We will therefore reverse the trial court’s
orders sustaining defendants’ demurrers without leave to amend and remand
for further proceedings.
BACKGROUND
Because this appeal comes to us on demurrer, the following facts are
based on the allegations in plaintiffs’ pleadings and the requests for judicial
notice.1
Litigation Regarding Confidentiality Policies
Doe works as a product manager in a supervisory capacity at Google.
He began work at Google in July 2014, had his employment terminated in
April 2016, and was reinstated in June 2016. After being terminated and
before being reinstated, Doe sent notice under PAGA to the California Labor
and Workforce Development Agency that he intended to file this suit on
behalf of himself and other current and former Google employees. Doe
alleged that Google required employees to sign a confidentiality agreement
1 Google and plaintiffs have requested judicial notice of various
submissions to and rulings by the NLRB’s regional director and general
counsel. The requests are unopposed. With one exception, we grant the
requests for notice of these documents as official acts or records of the
executive department or a court of record of the United States. (Evid. Code,
§§ 452, subds. (c)-(d), 459; PG&E Corp. v. Public Utilities Com. (2004) 118
Cal.App.4th 1174, 1220, fn. 38 [taking judicial notice of briefs filed before
administrative agency]; Heston v. Farmers Ins. Group (1984) 160 Cal.App.3d
402, 413 [approving of judicial notice of brief filed with the NLRB as court
record].) We deny Google’s request for notice of Doe’s unfair labor practice
charge as unnecessary, because that document is already in the record.
3
and imposed certain related confidentiality policies on its employees, and
that these policies violated the Labor Code. Six months later, Doe filed this
case in San Francisco Superior Court. (John Doe et al. v. Google Inc. et al
(Super. Ct. S.F. City & County, 2016, No. CGC-16-556034) (Doe).)
Gudeman is a former Google employee, and Correa is a former Google
employee who also worked for Adecco as a temporary employee placed at
Google. Doe’s second amended complaint included them as named plaintiffs,
and added claims against Adecco based on Correa’s experience there.
Shortly after plaintiffs filed their second amended complaint, Rachel
Moniz filed a complaint against Adecco in San Mateo Superior Court alleging
claims based on Adecco’s confidentiality policies. (Moniz v. Adecco (Super. Ct.
San Mateo County, 2017, No. 17-CIV-01736) (Moniz).) Ten days later,
plaintiffs filed their third amended complaint against Google and Adecco.
The Harms Alleged
Plaintiffs’ third amended complaint alleges 17 causes of action under
PAGA based on defendants’ confidentiality policies. Plaintiffs’ confidentiality
claims fall into three subcategories; restraints of competition, whistleblowing,
and freedom of speech.
In their competition causes of action plaintiffs allege that Google’s
confidentiality rules violate state statutes by preventing employees from
using or disclosing the skills, knowledge, and experience they obtained at
Google for purposes of competing with Google. For example, the policies
prevent Googlers from disclosing their wages in negotiating a new job with a
prospective employer, and from disclosing who else works at Google and
under what circumstances such that they might be receptive to an offer from
a rival employer. The complaint grounds these PAGA claims on alleged
4
violations of Business & Professions Code sections 17200, 16600, and 167002
and various provisions of the Labor Code (see Lab. Code, §§ 232, 232.5,
1197.5, subd. (k)).
Plaintiffs’ whistleblowing causes of action allege that Google’s
confidentiality rules prevent employees from disclosing violations of state and
federal law, either within Google to their managers or outside Google to
private attorneys or government officials. (See Bus. & Prof. Code, §§ 17200 et
seq.; Lab. Code, § 1102.5.) They also allege the policies unlawfully prevent
employees from disclosing information about unsafe or discriminatory
working conditions, or about wage and hour violations. (See Lab. Code,
§§ 232, 232.5.)
In their freedom of speech claims, plaintiffs allege that defendants’
confidentiality rules prevent employees from engaging in lawful conduct
during non-work hours and violate state statutes entitling employees to
disclose wages, working conditions, and illegal conduct. (See Lab. Code,
§§ 96, subd. (k), 98.6, 232, 232.5, 1197.5, subd. (k).) This lawful conduct
includes the exercise of an employee’s constitutional rights of freedom of
speech and economic liberty. As a practical matter, plaintiffs argue, they are
forbidden even to write a novel about working in Silicon Valley or to reassure
their parents they are making enough money to pay their bills, matters
untethered to any legitimate need for confidentiality.
Google’s confidentiality rules contain a savings clause stating that the
company’s rules were not intended to limit employees’ right to discuss wages,
terms, or conditions of employment with other employees, or their right to
2 The fifth amended complaint expressly grounds the Business &
Professions Code section 17200 allegation on violation of Business &
Professions Code sections 16600 and 16700.
5
communicate with government agencies regarding violations of law.
However, plaintiffs allege these clauses are meaningless and contrary to
Google’s policies and practices of enforcement, which threaten employees for
disclosing any information at all.
Plaintiffs allege Adecco was liable for both its own confidentiality
policies and Google’s because Adecco was Correa’s joint employer when she
was placed at Google. Adecco admits that in ruling on the demurrers “there
is no meaningful difference between [the] claims against Google and those
against Adecco.”
Demurrers
Google demurred to the entire complaint. As relevant here, Google
argued the NLRA preempted plaintiffs’ confidentiality claims. The trial court
sustained Google’s demurrer to the confidentiality claims without leave to
amend. It overruled the demurrer only as to a single remaining cause of
action—alleging defendants required employees to sign illegal releases of
potential claims as a condition of being hired—and the parties eventually
settled that claim.
Adecco demurred to the third amended complaint as well, shortly after
it filed a similar demurrer in Moniz. The Moniz court overruled the
demurrer, but the Doe court sustained Adecco’s demurrer to the
confidentiality claims, with leave to amend, for the same reasons that it
sustained Google’s demurrer.
Proceedings Specific to Adecco
Plaintiffs tried to cure the defects identified by the Doe court as to their
claims against Adecco by filing a fourth amended complaint. This complaint
retains the allegation that Adecco is jointly liable under PAGA for Google’s
confidentiality rules, but adds separate claims on behalf of Adecco employees
6
statewide based on Adecco’s own confidentiality rules. The new causes of
action against Adecco fall into the same competition, whistleblowing, and free
speech categories as the claims against Google in the third amended
complaint. Plaintiffs also allege Adecco had an unlawful policy prohibiting
temporary employees placed at Google from working directly for Google
without Adecco’s consent.
Adecco again demurred, and the trial court sustained the demurrer,
this time without leave to amend. Plaintiffs then amended their Doe
complaint a final time to add an illegal release claim against Adecco, a claim
the parties subsequently settled.
Before Adecco filed its demurrer to the third amended complaint, it
filed with the Judicial Council a petition to coordinate the action with Moniz.
After plaintiffs filed their fourth amended complaint and shortly before
Adecco demurred to it, the coordination judge continued proceedings on
Adecco’s petition until after the ruling on Adecco’s forthcoming demurrer.
Then, after the Doe court sustained Adecco’s demurrer to the fourth amended
complaint without leave to amend, the coordination judge denied the petition
to coordinate, explaining that the sole then-remaining cause of action in Doe
(the illegal release claim) was not at issue in Moniz, the claims in Moniz
covered more employees than the claim in Doe, and the Moniz litigation had
advanced further.
Adecco filed a petition for writ of mandate in this court seeking review
of the coordination judge’s denial of its coordination petition. Plaintiffs
likewise filed a petition for writ of mandate, seeking review of the Doe court’s
orders sustaining Google’s and Adecco’s demurrers. This court summarily
denied Adecco’s writ and denied plaintiffs’ writ as untimely. (Adecco USA,
Inc. v. Superior Court for the City & County of San Francisco (Feb. 6, 2018,
7
A153470) [nonpub. opn.]; Doe et al. v. Superior Court for the City & County of
San Francisco (Mar. 29, 2018, A153726) [nonpub. opn.].)
The trial court in Doe entered final judgment, and plaintiffs timely
appealed.
NLRB Files Then Settles Complaint Against Google
At the same time as Doe sent the PAGA notices anticipating this case,
he also filed an unfair labor practice charge against Google with the National
Labor Relations Board (NLRB or Board). Doe alleged Google’s confidentiality
rules violated section 8 of the NLRA by prohibiting employees from exercising
their rights under section 7 of the Act, which entitles employees to engage in
“concerted activities for the purpose of collective bargaining or other mutual
aid or protection.” (29 U.S.C. § 157) Doe alleged that Google violated section
8 by terminating him because he exercised his section 7 rights.
On the same day that plaintiffs filed their third amended complaint in
Doe, the regional director of the NLRB issued a complaint against Google
based on Doe’s unfair labor practice charge. However, the regional director’s
complaint did not include certain allegations from Doe’s charge, including the
allegation relating to Doe’s termination, because the regional director
determined Doe had been a supervisor and therefore was not protected by the
NLRA. Doe appealed that decision, but the NLRB’s general counsel denied
the appeal.
After plaintiffs filed their opening brief in this court, the NLRB’s
regional director and Google reached an informal settlement on the NLRB’s
complaint.3 As part of that settlement, Google agreed to post a notice for 60
3 We discuss the proceedings on the regional director’s complaint that
transpired after the trial court entered judgment because they are not in
dispute and come to us by way of judicial notice. (Reserve Insurance Co. v.
Pisciotta (1982) 30 Cal.3d 800, 813.)
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days informing employees that they had the right “to discuss wages, hours,
and working conditions with other employees, the press/media, and other
third parties, and [Google] WILL NOT do anything to interfere with
[employees’] exercise of those rights.” The notice further stated that Google
would “NOT prohibit [employees] from discussing or sharing information
relating to [their] performance, salaries, benefits, discipline, training, or any
other terms and conditions of [their] employment and” had rescinded any
such limitations in its confidentiality rules. In exchange, the NLRB regional
director would withdraw her complaint, but this would not prevent the courts
or the Board from proceeding with other cases.
DISCUSSION
I. The NLRA and Garmon Preemption
Plaintiffs contend the trial court erred in finding the NLRA preempts
their confidentiality claims. We review this question de novo. (Wal-Mart
Stores, Inc. v. United Food & Commercial Workers Internat. Union (2016)
4 Cal.App.5th 194, 201 (Wal-Mart).) Likewise, de novo review applies to a
trial court’s decision sustaining a demurrer. (Traders Sports, Inc. v. City of
San Leandro (2001) 93 Cal.App.4th 37, 43). As we shall explain, we conclude
that these causes of action fall within the local interest exception to
preemption.
A. Legal Principles
Congress intended the NLRA to serve as a comprehensive law
governing labor relations; accordingly, “the NLRB has exclusive jurisdiction
over disputes involving unfair labor practices, and ‘state jurisdiction must
yield’ when state action would regulate conduct governed by the NLRA.
(Garmon, [supra, 359 U.S.] at pp. 244–245.)” (Wal-Mart, supra,
4 Cal.App.5th at pp. 200–201.) Because it is for the NLRB to determine, in
9
the first instance, whether conduct is in fact governed by the NLRA, the Act’s
preemptive effect may extend beyond conduct that the NLRA directly governs
to “activities which ‘arguably’ constitute unfair labor practices under the
Act.” (Balog v. LRJV, Inc. (1988) 204 Cal.App.3d 1295, 1303 (Balog); see
Garmon, at pp. 244–245.) Such conduct is “presumptively pre-empted.”
(Belknap, Inc. v. Hale (1983) 463 U.S. 491, 498 (Belknap).)
But Garmon preemption must not be applied in a “ ‘literal, mechanical
fashion’ ” (Local 926, Internat. Union of Operating Engineers, AFL-CIO v.
Jones (1983) 460 U.S. 669, 676 (Jones)), and it is subject to exceptions where
the activity in question is a “merely peripheral concern” of the NLRA, or
where “the regulated conduct touche[s] interests so deeply rooted in local
feeling and responsibility that, in the absence of compelling congressional
direction, we could not infer that Congress had deprived the States of the
power to act.” (Garmon, supra, 359 U.S. at pp. 243–244.) Although framed
as separate exceptions, these two factors are often analyzed together, as we
will do here. (See, e.g., Linn v. United Plant Guard Workers (1966) 383 U.S.
53, 61 (Linn); Balog, supra, 204 Cal.App.3d at p. 1304.)
B. Federal and State Interests at Stake
Garmon preemption “has its greatest force when applied to state laws
regulating the relations between employees, their union, and their employer.”
(Sears, Roebuck & Co. v. San Diego County Dist. Council of Carpenters (1978)
436 U.S. 180, 193 (Sears).) However, “the general applicability of a state
cause of action is not sufficient to exempt it from pre-emption.” (Farmer v.
United Brotherhood of Carpenters and Joiners of America, Local 25 (1977)
430 U.S. 290, 300 (Farmer).) Rather, we conduct a “balanced inquiry” into
the federal and state interests at stake and the potential to interfere with the
10
NLRB’s jurisdiction. (Ibid.) With this in mind, we consider the interests at
stake in this action.
The NLRA “was designed to ‘eliminate the causes of certain substantial
obstructions to the free flow of commerce . . . by encouraging the practice and
procedure of collective bargaining, and by protecting the exercise by workers
of full freedom of association, self-organization, and designation of
representatives of their own choosing, for the purpose of negotiating the
terms and conditions of their employment or other mutual aid or protection.’ ”
(Balog, supra, 204 Cal.App.3d at p. 1301, quoting 29 U.S.C. § 151.) To this
end, section 7 of the NLRA gives non-exempt employees the right to selforganize, bargain collectively, and “engage in other concerted activities for
the purpose of collective bargaining or other mutual aid or protection.” (29
U.S.C. § 157.) The NLRA also defines certain actions as unfair labor
practices. (Balog, at p. 1302, citing 29 U.S.C. §§ 158, 160.) As pertinent here,
section 8 of the NLRA declares it an “unfair labor practice for an employer . . .
[¶] to interfere with, restrain, or coerce employees in the exercise of the rights
guaranteed in” section 7. (29 U.S.C. § 158.) The focus of these provisions is
on workers joining together for mutual benefit.
By contrast here, plaintiffs seek to enforce Labor Code provisions that
protect their activities as individuals. For example, one provision prohibits
employers from preventing an employee “from disclosing the amount of his or
her wages” (Lab. Code, § 232), a statute that was enacted at the urging of
women’s groups to protect employees sharing information necessary to the
enforcement of laws against sex discrimination. (See, e.g., Sen. Com. on
Industrial Relations Staff Analysis of Assem. Bill No. 3193 (1983-1984 Reg.
Sess.) as amended March 21, 1984.) Another provision provides analogous
protection for an employee disclosing “information about the employer’s
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working conditions” (Lab. Code, § 232.5), manifesting California’s public
policy to “prohibit[] employer restrictions on, or punishment for, speech
regarding conditions of employment” (Glassdoor, Inc. v. Superior Court (2017)
9 Cal.App.5th 623, 633). A third protects the rights of any employee to
disclose information about a violation of state or federal law to someone with
the power to address the problem—“to a government or law enforcement
agency, to a person with authority over the employee, or to another employee
who has authority to investigate, discover, or correct” the violation. (Lab.
Code, § 1102.5.) A fourth provision protects employees who complain about
underpayment of wages to the Labor Commissioner. (Lab. Code, § 98.6; see
also Lab. Code, § 1102.5 [protecting right to disclose information to state
agencies].) And a fifth protects an employee from retaliation for his or her
“lawful conduct occurring during nonworking hours away from the employer’s
premises” (Lab. Code, § 96, subd. (k)), so employers do not seek to control
non-work aspects of their employees’ lives. Plaintiffs allege that defendants’
confidentiality policies violate these provisions of California law.
Plaintiffs also allege violations of section 16600 of the Business and
Professions Code, which prohibits any contract that would improperly
restrain an employee from securing new employment with a competitor. This
statute “evinces a settled legislative policy in favor of open competition and
employee mobility” (Edwards v. Arthur Anderson LLP (2008) 44 Cal.4th 937,
946), a policy that has been seen as instrumental in the success of
California’s technology industry (see Gilson, The Legal Infrastructure of High
Technology Industrial Districts: Silicon Valley, Route 128, and Covenants
Not to Compete (1999) 74 N.Y.U.L. Rev. 575, 609 [“Silicon Valley’s legal
infrastructure, in the form of Business and Profession[s] Code section 16600’s
prohibition of covenants not to compete, provided a pole around which Silicon
12
Valley’s characteristic business culture and structure precipitated”]; see also
Saxenian, Regional Advantage: Culture and Competition in Silicon Valley
and Route 128 (1994) pp. 34–37.)
Keeping these very different federal and state interests in mind, we
now analyze Garmon preemption in this case.
C. Arguably Protected or Prohibited Activity
The first step of a Garmon analysis asks whether the conduct at issue
is arguably protected or prohibited by the NLRA. (Jones, supra, 460 U.S. at
p. 676.) The trial court concluded all of plaintiffs’ confidentiality claims are
presumptively preempted in their entirety because they involve policies
against disclosure of wages and working conditions (in the case of the
competition claims and some freedom of speech claims) or against disclosures
intended to affect the terms or conditions of employment (in the case of the
whistleblowing and some freedom of speech claims). We do not doubt that
some of the conduct at issue at least arguably falls within the NLRA. (See
Luke v. Collotype Labels USA, Inc. (2008) 159 Cal.App.4th 1463, 1470
[discussions among workers about working conditions are protected activity
under NLRA].) Indeed, the fact that the regional director brought a
complaint challenging Google’s confidentiality policies indicates that she so
concluded.
However, plaintiffs also allege conduct that clearly falls outside the
scope of the NLRA. For instance, plaintiffs’ competition claims allege
defendants’ confidentiality rules inhibit an employee seeking new
employment elsewhere and competing with defendants. They also allege
Adecco prevents its employees from working with companies where Adecco
has placed them, unless Adecco consents. These matters are, on their face,
unrelated to “mutual aid or protection” (29 U.S.C. § 157) of fellow employees
13
at Google or Adecco. Similarly, some of plaintiffs’ whistleblowing causes of
action allege defendants’ confidentiality policies prevent them from
discussing with the government legal violations unconnected to working
conditions, such as an employer’s violations of securities laws, false claims
laws, the federal Foreign Corrupt Practices Act, and other laws unrelated to
employees’ terms and conditions of employment. The NLRB has
authoritatively rejected the argument that whistleblowing about employer
conduct unrelated to working conditions is protected activity, so the NLRA
does not protect an employee reporting concerns about patient care in a
nursing home. (Orchard Park Health Care Center, Inc. (2004) 341 NLRB 642,
645.) But we need not belabor this point because, as we shall next discuss,
regardless of whether the challenged policies reach employee conduct that
the NLRA arguably protects or prohibits, plaintiffs’ state-law causes of action
fall within the local interest exception to Garmon preemption.
D. The Local Interest Exception
The local interest exception vindicates interests “ ‘deeply rooted in local
feeling and responsibility.’ ” (Sears, supra, 436 U.S. at p. 195.) Two factors
relevant to the application of this exception, in a case where an employer’s
policies are arguably prohibited by the NLRA, are: (1) whether there is “a
significant state interest in protecting the citizen from the challenged
conduct” and (2) whether “the exercise of state jurisdiction over the tort
claim [for trespass] entailed little risk of interference with the regulatory
jurisdiction of the Labor Board.” (Id. at pp. 196–197.)
The local interest exception has been applied in a range of
circumstances. As explained in Inter-Modal Rail Employees Assn. v.
Burlington Northern & Santa Fe Ry. Co. (1999) 73 Cal.App.4th 918 (InterModal), “the Supreme Court has declined to preempt a variety of state law
14
claims even though they arose in a labor law context [involving, for example,]
trespass by peaceful picking . . . intentional infliction of emotional distress
. . . [and] defamation . . .’ ” (Id. at p. 925; see Sears, supra, 436 U.S. at p. 198
[trespass by picketing]; Farmer, supra, 430 U.S. at pp. 299–300 [intentional
infliction of emotional distress]; Linn, supra, 383 U.S. at pp. 61–62
[defamation].) The local interest exception has also been applied to a cause of
action challenging an employer’s retaliation against employees for raising
concerns about workplace safety (Inter-Modal, at pp. 922–923, 925, citing
Balog, supra, 204 Cal.App.3d at p. 1304), and to controversies where the
NLRB could not have provided relief to the plaintiffs because their injury was
not relevant to its functions (Service by Medallion, Inc. v. Clorox Co. (1996)
44 Cal.App.4th 1807, 1815–1816 (Clorox) [service provider’s contract
negotiations with company took place against “backdrop” of union
campaign]).
Defendants do not deny that plaintiffs’ claims grow from deeply-rooted
local interests. This is no surprise, as plaintiffs bring this case under PAGA,
which means plaintiffs are serving “ ‘as the proxy or agent of the state’s labor
law enforcement agencies.’ ” (Kim v. Reins Internat. California, Inc. (2020)
9 Cal.5th 73, 81, italics omitted.) Courts have long recognized the importance
of state labor regulation that “provides protections to individual union and
nonunion workers alike, and thus ‘neither encourage[s] nor discourage[s] the
collective-bargaining processes that are the subject of the NLRA.’ ” (Fort
Halifax Packing Co. v. Coyne (1987) 482 U.S. 1, 20–21.) “[P]re-emption
should not be lightly inferred in this area, since the establishment of labor
standards falls within the traditional police power of the State.” (Id. at p. 21;
accord Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th
348, 388 [“enactment and enforcement of laws concerning wages, hours, and
15
other terms of employment is within the state’s historic police power”—
powers that “ ‘ “courts should assume . . . are not superseded ‘unless that was
the clear and manifest purpose of Congress’ ” ’ ”].) The state statutes
plaintiffs seek to enforce are all labor standards of this sort, statutes that
preserve the freedom of all employees to practice their profession or trade
(Bus. & Prof. Code, § 16600), to report wage-and-hour violations or unsafe
working conditions to government agencies (Lab. Code, § 1102.5), and to
speak as they choose about their work lives (Lab. Code, §§ 232, 232.5, 96,
subd. (k)). In sum, these statutes establish as a minimum employment
standard an employee anti-gag rule.
Not only are the interests protected by these statutes matters of
traditional local concern, but they may reasonably be seen as peripheral to
the NLRA. Nothing about the NLRA manifests a purpose to displace state
labor laws regulating wages, hours, and other terms of employment, as the
NLRA is “aimed at ‘safeguard[ing], first and foremost, workers’ rights to join
unions and to engage in collective bargaining.’ ” (Epic Sys. Corp. v. Lewis
(2018) __ U.S. __ [138 S.Ct. 1612, 1630] (Epic); see also Inter-Modal, supra,
73 Cal.App.4th at p. 926 [focus of NLRA is “ ‘an equitable bargaining
process[;] . . . Congress did not intend to preempt all local regulations that
touch or concern the employment relationship’ ”].) It is thus well established
that a state may set minimum employment standards without running afoul
of the NLRA. (Castillo v. Toll Bros., Inc. (2011) 197 Cal.App.4th 1172, 1207
[“state wage-and-hour statutes . . . raise no Garmon preemption concerns”].)
The state laws plaintiffs assert here govern matters similarly far afield from
the concerns underlying the NLRA.
Unable to refute the local interests at stake, defendants instead argue
that because the NLRB issued a complaint at Doe’s behest, to allow this case
16
to proceed in state court would risk interfering with the jurisdiction of the
NLRB. Were this a serious concern, it would render the local interest
exception unavailable. (See Sears, supra, 436 U.S. at pp. 196–197; Hillhaven
Oakland Nursing etc. Center v. Health Care Workers Union (1996) 41
Cal.App.4th 846, 855 (Hillhaven); Rodriguez v. Yellow Cab Cooperative, Inc.
(1988) 206 Cal.App.3d 668, 678–679.) But the NLRB has settled its claim
with no admission of wrongdoing by Google and no findings of fact by the
Board. Nothing the state court does at this juncture could interfere with the
NLRB’s exercise of its primary jurisdiction.
Asked about this point at oral argument, counsel for Google responded
with two concerns: (1) that the state court could reach “a different finding on
the merits,” in that “the NLRB . . . issued a complaint and [Google] entered
into a settlement on it, so there could be a different result in state court on
liability,” and (2) that state courts cannot impose “a different remedial
scheme for NLRA violations,” especially a scheme of punitive remedies as
was found preempted in Wisconsin Dept. of Industry v. Gould, Inc. (1986) 475
U.S. 282 (Wisconsin Dept. of Industry). Responding to these concerns in turn,
neither is substantial.
First, it would be impossible for the state court to reach “a different
result . . . on liability,” since the NLRB settled its case without resolving
liability issues. The settlement agreement between the Board and Google is
informal and of limited scope. It requires Google to post for 60 days a notice
informing its employees of their rights under “FEDERAL LAW,” and if
Google upholds its end of the bargain then the NLRB promises to take no
further action in the case. The reference to federal law is a signal that the
question on liability that underlay the NLRB case (i.e., whether defendants
violated the NLRA) is completely different from the liability questions in this
17
case (i.e., whether defendants violated California labor laws). Moreover, the
agreement expressly “does not prevent . . . the Board and the courts from
finding violations with respect to matters” occurring before the agreement
was approved, or from “mak[ing] findings of fact and/or conclusions of law
with respect to” evidence obtained in the case. With this provision, the Board
itself has given courts license to proceed with claims addressing the same or
similar facts. The terms of the agreement itself suggest that, whatever
California courts would ultimately decide on plaintiffs’ claims, the Board sees
in plaintiffs’ case no threat to its own jurisdiction.
As for Google’s second concern—duplicative and punitive remedies for
an NLRA violation—this argument founders at the outset because none of
plaintiffs’ claims requires proof of an NLRA violation. The difference
between this case and Wisconsin Dept. of Industry illustrates the point.
There, the state of Wisconsin had adopted a law debarring from state
contracting any company “found by judicially enforced orders of the National
Labor Relations Board to have violated the NLRA” three times in five years.
(Wisconsin Dept. of Industry, supra, 475 U.S. at pp. 283–284.) The NLRA
preempts this statute “[b]ecause Wisconsin’s debarment law functions
unambiguously as a supplemental sanction for violations of the NLRA.” (Id.
at p. 288.) By contrast, the California laws that plaintiffs seek to enforce
make no reference to the NLRA, the NLRB, or the rights of workers to
organize. They do not supplement sanctions for a violation of the NLRA, but
instead extend unrelated protections to conduct that may, or may not, also be
addressed by the NLRA. In such circumstances, the availability of a remedy
in state court that is unavailable under the NLRA may be a reason not to find
a case preempted. (Linn, supra, 383 U.S. at pp. 63–64; Clorox, supra, 44
Cal.App.4th at p. 1816.)
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In sum, analyzing the two factors the United States Supreme Court has
identified as dispositive—the significance of the local interest and the risk of
interference with the jurisdiction of the Board—we see no basis for
preemption here. (See Sears, supra, 436 U.S. at pp. 196–197; Farmer, supra,
430 U.S. at p. 300.) But the parties have argued, citing competing precedents
and legal tests ostensibly derived from them, for alternative ways of
analyzing the local interest exception, so we now turn to consider these
alternatives.
1. Sears, Linn, and the “Critical Inquiry”
In Sears, after the Supreme Court set forth the two relevant factors we
have just examined, it synthesized them into a single “critical inquiry” for
preemption of claims based on arguably prohibited conduct. That inquiry is
“whether the controversy presented to the state court is identical to . . . or
different from” a controversy that could have been presented to the NLRB.
(Sears, supra, 436 U.S. at p. 197.) Answering that question in Sears meant
an employer’s state-court trespass case against a union was not preempted—
even though the picketing in question might have been protected or
prohibited by the NLRA—because the issues involved in the trespass case
were “different from” the issues the NLRB would have considered in
assessing the legality of the same picketing under federal law. (Id. at
pp. 197–198; see also Wal-Mart, supra, 4 Cal.App.5th 194 [same].) By
contrast, a controversy “ ‘identical to’ ” one that could have been presented to
the NLRB was an attempt to enforce the Pennsylvania Labor Relations Act,
whose relevant language was “ ‘almost identical to’ ” language in the NLRA.
(Sears, at pp. 192, 197, discussing Garner v. Teamsters, Chauffeurs & Helpers
Local Union (1953) 346 U.S. 485, 487–489, fns. 3 & 5 [employer’s attempt to
19
enforce Pennsylvania Labor Relations Act against peaceful union picketing is
preempted].)
Sears’s focus on whether the legal issue in the two controversies is the
same or different also animates the Supreme Court’s decision in Linn. There,
the Court held a state-court libel action was not preempted, explaining:
“When the Board and state law frown upon the publication of malicious libel,
albeit for different reasons, it may be expected that the injured party will
request both administrative and judicial relief.” (Linn, supra, 383 U.S. at
p. 66.)
Under the formulations of either of these cases, plaintiffs’ claims are
not preempted. The Board may “frown upon” an employer’s confidentiality
policy because it interferes with workers’ rights to undertake concerted
action, but California law disapproves such policies for a different reason:
because they interfere with every employee’s right to bring workplace issues
to the attention of supervisors, state agencies, courts, and the public. (See
Linn, supra, 383 U.S. at p. 66.) And, although there may be overlap in the
operative facts, whether an employer’s confidentiality policy constitutes an
unfair labor practice under the NLRA is a “different” controversy from the
question of whether it violates provisions of the state Labor Code. (See Sears,
supra, 436 U.S. at p. 197.)
Highlighting that the controversy here is different from the controversy
that was, or could have been, placed before the NLRB is the Board’s decision
in Boeing Co. (2017) 2017 NLRB Lexis 634 (Boeing), which elucidates how
the NLRB would evaluate whether Google’s confidentiality policies comply
with the NLRA. In Boeing, the NLRB announces a new standard for
determining whether an employer’s adoption of a facially neutral workplace
rule that potentially interferes with Section 7 rights is an unfair labor
20
practice. The Board concludes it must evaluate and weigh “(i) the nature and
extent of the potential impact on NLRA rights,” and (ii) an employer’s
“legitimate justifications associated with” business requirements. (Id. at
pp. *60–*63.) This process could lead the NLRB to uphold confidentiality
rules that risk inhibiting NLRA-protected activity, especially if that activity
is peripheral, rather than central, to the NLRA’s concerns, or the risk of
intruding on NLRA-protected rights is “ ‘comparatively slight.’ ” (Id. at
p. *66.) Not surprisingly, there is no suggestion that a state’s interests
underlying its own statutes will figure in this weighing process at all. The
issues and concerns before the NLRB in deciding a challenge to defendants’
confidentiality policies would be wholly different from the state-law issues in
this case, and by the same token the issues the state court must adjudicate in
this case will require no consideration of the Section 7 rights that animate
the NLRB. Thus, under the “critical inquiry” enunciated in Sears (Sears,
supra, 436 U.S. at p. 197), plaintiffs’ claims are not preempted.
2. Jones and the “Crucial Element”
Although Google acknowledges Sears and Linn remain good law, it
urges us to focus instead on a subsequent Supreme Court case in which
preemption was found, Jones, supra, 460 U.S. 669. In that case, Jones filed
an NLRB charge against a union representing employees at his former
company, where he had been hired as a supervisor but then quickly let go.
Jones alleged that because he was not a member of the union, the union
“ ‘procured’ his discharge, ‘and thereby coerced [the Company] in the selection
of its supervisors and bargaining representative,’ ” an unfair labor practice
under the NLRA. (Id. at p. 672.) The regional director refused to issue a
complaint, concluding “there was insufficient evidence to establish that the
Union had caused Jones’ discharge;” the union had “merely participated in
21
discussions” about “changes in the Company’s supervisory structure.” (Id. at
pp. 672–673.) Rather than appealing this decision to the General Counsel of
the NLRB, Jones filed a state-court action alleging the union had interfered
with his employment contract. (Id. at p. 673.)
The high court held this action was preempted for several reasons,
including that Jones was seeking to prove the union coerced his discharge, a
claim that was “concededly preempted” as an unfair labor practice (Jones,
supra, 460 U.S. at pp. 681–682); that asking the state court to police the line
between a coerced or uncoerced discharge would have required the court to
adjudicate issues of federal labor law (id. at pp. 682); and that if Jones
attempted to prove non-coercive interference with his employment there
would be two further problems. He would still need to prove the union had
caused his ouster—a “crucial element” of the NLRA claim that the Regional
Director had already decided against Jones—and he would be seeking to
impose liability for union conduct that the NLRA arguably protects. (Id. at
pp. 682–684.)
Relying on Jones, defendants argue the local interest exception does not
apply in this case because the dispute in this case and a dispute properly
before the Board share a “crucial element,” namely, whether defendants’
policies actually restrict employees from discussing wages and working
conditions. But we do not read Jones to create a rule that if the state-law
controversy shares a factual element—“crucial” or otherwise—with a matter
properly before the NLRB, then the case is necessarily preempted. Such a
rule would eviscerate the local interest and peripheral concern exceptions,
since a court only considers these exceptions if some common set of facts
gives rise to both the state-law claims and a dispute arguably within the
purview of the NLRB, as with the picketing activity in Sears.
22
The Jones court does not announce any such revision of settled law.
Instead, Jones recognizes the continuing force of Sears and seeks to
distinguish it on the ground that the focus of the unfair labor practice charge
in Sears was unrelated to that of the trespass action challenging the same
picketing activity. (Jones, supra, 460 U.S. at pp. 682–683.) Although Jones
does use the phrase “crucial element” in explaining one of several reasons
that together explain the court’s preemption finding, the Court does not hold
the phrase out as any sort of dispositive test, nor attempt to explain how a
court would decipher when an “element” is “crucial.” (Id. at p. 682.) Instead,
Jones follows Sears and Farmer in directing courts to undertake “a sensitive
balancing” of potential harms to the Congressional scheme for regulating
labor-management relations and to a state’s power to protect its citizens.
(Jones, at p. 676.)
Even if we were to attempt application of a “crucial element” test here,
we disagree that the “crucial element” in this case is whether defendants’
policies restrict employees from discussing their wages and working
conditions. This factual question about the scope of the employers’ policies
may be an area of overlap between this case and a dispute properly before the
Board, but the question is antecedent to those questions that bring to bear
legal considerations that differ for the two disputes. The crucial elements for
the state-law confidentiality claims are whether defendants’ policies infringe
on an employee’s right to practice a profession or trade, disclose wrongdoing,
and exercise free speech as protected by California law. The crucial elements
in the Board’s determination of whether the confidentiality policies are an
unfair labor practice are the extent to which the policies interfere with
NLRA-protected activity, how central any such protected activity is to the
organizing and bargaining activities that are the NLRA’s core concerns, and
23
whether the employer’s business justifications offset any interference with
NLRA rights. (Boeing, supra, 2017 NLRB Lexis 634, at pp. *60–*63, *66; 29
U.S.C. § 151.) These elements are not common to the two disputes.
Our case is different from Jones in other respects as well. First and
foremost, there is in our case no issue of federal labor law that the state court
would be required to adjudicate. (Cf. Jones, supra, 460 U.S. at p. 682.)
California courts can and should decide whether Google and Adecco violated
California law without considering whether, in so doing, they also committed
unfair labor practices under the Act. Second, the regional director has made
no factual determination that is fatal to plaintiffs’ claims, as occurred in
Jones. (Id. at p. 682.) Thus, plaintiffs can proceed in state court without ever
taking a position inconsistent with one already adopted by the Board or its
regional director. Third, neither Google nor Adecco argues that its policies
are protected by federal labor law, as the union’s conduct in Jones arguably
was. (Id. at pp. 672–673.) This factor is important because federal
supremacy is “implicated to a greater extent when labor-related activity is
protected than when it is prohibited.” (Sears, supra, 436 U.S. at p. 200; see
also Belknap, supra, 463 U.S. at pp. 498–499 [courts must balance state’s
interest against interference with NLRB’s jurisdiction and risk that the state
will sanction conduct the NLRA protects].) Finally, in this case there is no
union. The absence of a union is significant, for the argument in favor of
preemption “has its greatest force when applied to state laws regulating the
relations between employees, their union, and their employer.” (Sears, supra,
436 U.S. at p. 193; see also Epic, supra, 138 S.Ct. at p. 1630 [NLRA “
‘safeguard[s] first and foremost, workers’ rights to join unions and to engage
in collective bargaining’ ”].)
24
Because our case differs from Jones in all of these substantial ways and
because even Jones did not offer “crucial element” as a dispositive test,4 we
decline defendants’ invitation to defeat the local interest exemption on this
basis.
3. Hillhaven and Bright-Line Rules
Google also argues that Hillhaven, supra, 41 Cal.App.4th 846, is “the
dispositive precedent” defeating the local interest exemption in this case. In
Hillhaven, another division of our court held that the NLRA preempted statecourt action against a union alleged to have overrun a nursing home,
disrupting patient care and intimidating workers. (Id. at pp. 850, 862.) The
union was “the certified bargaining representative of employees at
Hillhaven,” and was in the midst of negotiating a new collective bargaining
agreement at the time. (Id. at pp. 849–850.) In finding preemption, the
Hillhaven court relied on common factual issues between the state-court suit
4 The concurring and dissenting opinion accuses us of “ignor[ing]
Jones’s reasoning” and “the analytical path the Supreme Court has set forth
for the local interest exception.” (At pp. 4, 13, post.) But there is nothing
“novel” about our analyzing “competing interests.” (At p. 7, post.) The
Supreme Court requires that we conduct a “balanced inquiry into such factors
as the nature of the federal and state interests in regulation and the
potential for interference with federal regulation” (Farmer, supra, 430 U.S. at
p. 300), give “careful consideration [to] the relative impact . . . on the various
interests affected” (Sears, supra, 436 U.S. at p. 188), and, in the language of
Jones, engage in “a sensitive balancing” of harm to the NLRA’s regulatory
scheme and to the state’s interest in protecting its citizens. (Jones, supra,
460 U.S. at p. 676). While in Sears the Supreme Court distilled this
balancing of competing interests into a single “critical inquiry” (Sears, at
p. 197), the concurring and dissenting opinion dismisses that analytical
approach as “of only academic interest” based on a comment made in dissent
in Jones. (At p. 10, post.) But no dissenting opinion has the power to
overrule precedent, and we have shown that plaintiffs’ claims clear the
“identical controversy” hurdle Sears sets forth. (Sears, supra, 436 U.S. at
p. 197.)
25
and a complaint already settled before the NLRB and also, more importantly,
two factors with no parallel in the case before us that go to the heart of the
NLRB’s authority. First was the likelihood “that resolution of some of the
state court claims would require . . . interpretation of the collective
bargaining agreement between the parties.” (Id. at pp. 860–861 [e.g.,
“number of union representatives allowed to enter the facility, and where
those representatives were permitted access” likely turned on interpretation
of collective bargaining agreement].) Second was the “real possibility of
conflict” between the injunctive relief Hillhaven sought in state court and
“NLRB rulings on issues such as union access to employees at their place of
work.” (Id. at p. 861.) Obviously, our case involves no collective bargaining
agreement, no union, and no risk that the state court will punish or prohibit
conduct that NLRB rulings protect.
Defendants extract from the facts of Hillhaven a bright-line rule they
would have us apply, that where the regional director has filed a complaint
addressing conduct that is also the subject of a state-court action, the statecourt action is preempted. We think defendants make too much of an
observation in Hillhaven that the court was unaware of any decision failing
to find preemption once the regional director had issued a complaint.
(Hillhaven, supra, 41 Cal.App.4th at p. 859.) Hillhaven itself acknowledges
that “simultaneous jurisdiction of the NLRB and state court is possible for
conduct arguably prohibited under the” NLRA (ibid., italics omitted), and
other courts have indeed adjudicated controversies after the NLRB issued
and settled a related complaint (see, e.g., Belknap, supra, 463 U.S. at 496,
508–509; United Food & Commercial Workers Internat. Union v. Wal-Mart
Stores, Inc. (2017) 453 Md. 482, 490–491, 508–511).
26
Where the local interest is strong, even the possibility of findings that
conflict with an NLRB complaint need not be fatal. In Linn, the regional
director of the NLRB declined to file a complaint against a union because
factual investigation led him to conclude “the union was not responsible for”
the offending conduct—there, the distribution of the allegedly libelous
leaflets. (Linn, supra, 383 U.S. at p. 57.) Yet, the Supreme Court allowed
Linn’s libel case against the union to proceed based on the peripheral concern
and local interest exceptions, untroubled that the factual issue of the union’s
responsibility for the leaflets might be decided differently in the state-court
case. (Id. at pp. 61–62, 67.) Although Linn does not, as plaintiffs suggest,
create an opposite bright-line rule—that state-court actions may always
proceed in parallel to NLRB proceedings when an employer’s conduct violates
both the NLRA and state law—its reasoning does establish that with a strong
local interest and a peripheral NLRA concern, the possibility of conflicting
findings does not foreclose a state-court action.
4. Conclusion
The first step of a Garmon preemption analysis sweeps broadly,
presumptively preempting conduct that may, in the end, be of only peripheral
concern to (or even lie outside the scope of) the NLRA. The local interest
exception is vital to protecting workers in such cases. And even where
certain aspects of a dispute do, or could, attract the enforcement efforts of the
NLRB, “defendants should not be able to escape the jurisdiction of California
courts simply because, in addition to allegedly undertaking violations of
health and safety regulations which are of compelling local importance and
interest, they had the good fortune to also undertake the commission of
NLRB-defined unfair labor practices.” (Balog, supra, 204 Cal.App.3d at
27
p. 1308 [plaintiff may proceed with wrongful termination claim to extent it is
based on theories not preempted by NLRA].)
The complaint in this case makes no mention of union organizing or
other concerted activity, and it alleges violations of state law that can be
proven without considering whether defendants’ actions also amounted to
unfair labor practices under the NLRA.5 Because the asserted statutes
protecting competition, whistleblowing, and free speech fit comfortably
within our state’s historic police powers and address conduct affecting
individual employees, as distinct from the NLRA’s focus on concerted activity,
and because this state-court action poses no threat to the NLRA’s exercise of
its own jurisdiction, our courts retain the power to decide these claims.
II. Denial of the Petition to Coordinate
In addition to challenging the trial court’s demurrer rulings, plaintiffs
argue the coordination judge should not have continued the hearing on
Adecco’s coordination petition and then denied Adecco’s petition to coordinate
petitioners’ case with Moniz. Defendants argue that we may not review the
substance of the order on the coordination petition because such orders are
reviewable only via writ petition. We agree with defendants that the
coordination order is not properly before us.
We begin by examining the procedures for coordination. When an
individual wants to coordinate two or more actions pending in different
courts, he or she must submit a petition to the Chairperson of the Judicial
5 We disagree with the concurring and dissenting opinion that our
decision will require California courts to decide issues of federal labor law—
specifically, whether plaintiffs’ evidence involves concerted activity. (At
p. 15, post.) That question is immaterial to the state-law causes of action
plaintiffs allege, and we see no reason to litigate it here.
28
Council. (Code Civ. Proc., § 404; remaining statutory references are to the
Code of Civil Procedure.) The Chairperson assigns the petition “a special
title and coordination proceeding number.” (Cal. Rules of Ct., rule 3.550(c).)
The Chairperson then assigns (or authorizes a presiding judge to assign) a
coordination judge to decide whether coordination is appropriate. (§ 404.) If
the coordination judge decides coordination is appropriate, he or she selects
an appellate court to review decisions from the coordinated proceeding.
(§ 404.2.) The Chairperson of the Judicial Council then assigns (or authorizes
a presiding judge to assign) a judge to hear the coordinated actions. (§ 404.3.)
After service of notice of entry of an order relating to coordination, “any party
may petition the appropriate reviewing court for a writ of mandate to require
the court to make such order as the reviewing court finds appropriate.”
(§ 404.6.)
This framework demonstrates that coordination petitions are not
necessarily decided under the jurisdiction of any one of the courts in which
the actions potentially subject to coordination are pending. Rather, the
coordination proceeding is its own type of special proceeding, with a separate
caption and number. (Cal. Rules of Ct., rule 3.550(c).) When the coordination
judge grants or denies a petition for coordination, that order is not filed in the
trial court on its own; the party that requested coordination must file it in all
included actions. (Cal. Rules of Ct., rule 3.529(a).) As a result, a coordination
order is not part of the bundle of orders reviewable via appeal from final
judgment in any one of the actions for which coordination was sought.
The fact that the judge presiding over the Doe action was also assigned
to decide the coordination motion here changes nothing. Were the
coordination order reviewable after final judgment, as plaintiffs contend, it
would be subject to multiple appeals after final judgment in each of the
29
included actions, with the unacceptable potential for inconsistent rulings.
Alternatively, if the coordination order were reviewable after final judgment
in the included action only if that action is pending in the coordination
judge’s own court (even though no statute or rule requires the coordination
judge to be one of the judges hearing an included action), then the parties in
that action alone would be able to appeal the order after final judgment. The
parties in the other actions for which coordination was sought would be
relegated to the writ review procedure in section 404.6, an unequal and
unjust result. Consequently, although plaintiffs are correct that section
404.6 does not explicitly say so, we hold that section 404.6 is the exclusive
method for appellate review of coordination orders. (Cf. Lautrup, Inc. v.
Trans-West Discount Corp. (1976) 64 Cal.App.3d 316, 317–318 [coordination
orders are not separately appealable orders under section 904.1; appellate
review of such orders is via writ of mandate under section 404.6].)
Plaintiffs having failed timely to file a petition seeking writ relief from
the trial court’s decision not to coordinate this matter with Moniz, they may
not take a second bite at the coordination apple on their appeal from the trial
court’s orders on demurrer.

Outcome: The judgment is reversed, as are the orders sustaining defendants’
demurrers without leave to amend. We dismiss as untimely the appeal from
the order denying coordination with Moniz, and remand the case for further
proceedings consistent with this opinion. Plaintiffs are entitled to their costs on appeal. (See Cal. Rules of Court, rule 8.278(a)(3).)

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