Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 HP COMMUNICATIONS, INC., Case No.: 23-cv-00844-JO-BLM 13 Plaintiff, 14 v. ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY 15 COUNTY OF SAN DIEGO, BOARD OF JUDGMENT [DKT. 38] AND SUPERVISORS OF COUNTY OF SAN 16 DENYING PLAINTIFF’S MOTION DIEGO, and DOES 1-20, FOR SUMMARY JUDGMENT [DKT. 17 Defendants. 37] 18 19 20 21 Plaintiff HP Communications, Inc. challenged a San Diego County ordinance 22 requiring private employers to pay traffic control workers a prevailing wage. The parties 23 filed cross motions for summary judgment addressing whether this ordinance is preempted 24 by the National Labor Relations Act (“NLRA”), 29 U.S.C. § 151 et seq., because it 25 interferes with the collective bargaining process between private employers and the traffic 26 27 28 1 control workers they hire. Dkt. 37 (“HP’s MSJ”); Dkt. 38 (Defs.’ MSJ”). For the reasons 2 below, the Court grants summary judgment in favor of Defendants. 3 I. BACKGROUND 4 HP is a non-union company that installs telephone lines on roads maintained by San 5 Diego County. HP’s MSJ, Ex. 1 & Dkt. 39, Ex. F (“Olomi Dep.”) 25:22–25, 98:8–10; 6 HP’s MSJ, Ex. 36 (“Olomi Decl.”) ¶¶ 2–3. It primarily does contract work for 7 telecommunications corporations like AT&T, Verizon, and San Diego Gas & Electric 8 (“SDG&E”). See Olomi Dep. 25:22–25; Olomi Decl. ¶¶ 2–5. When working on its 9 projects, HP sometimes utilizes traffic control workers or “flagmen” to redirect the flow of 10 traffic, either drawing from its own employees or outsourcing to traffic control companies. 11 See Olomi Dep. 46:1–47:17, 51:18–22. As a non-union contractor, HP does not have any 12 ongoing collective bargaining agreements with local unions, nor has it ever negotiated a 13 collective bargaining agreement. Id. 98:10–12, 99:6–8. On two occasions, it has entered 14 Project Labor Agreements (“PLAs”) to allow it to work on projects for companies that 15 require unionized labor. Id. 129:7–18, 132:7–9. When performing work on projects 16 governed by a PLA, HP’s employees temporarily become members of the local union that 17 negotiated the PLA, and HP pays them the wages specified by the PLA. Id. 130:8–17, 18 139:16–140:14; Dkt. 41-2 (“Olomi Opp. Decl.”) ¶ 3. HP was not involved in negotiating 19 either PLA it entered; the terms of those PLAs were negotiated by the company requiring 20 work and a local union, and HP stepped in to provide labor under the already-negotiated 21 conditions. Olomi Dep. 131:17–132:6, 137:22–138:6. 22 In February 2023, the San Diego County Board of Supervisors adopted Ordinance 23 No. 10828 (“the Ordinance”), which set a minimum wage for traffic control workers 24 performing work on private construction projects on County-maintained roads. San Diego 25 26 27 1 After the parties filed their respective motions for summary judgment, the Court also granted the State Building and Construction Trades Council of California leave to file an amicus brief in support of 28 1 County Code of Regulatory Ordinances § 74.301 (added by Ordinance No. 10828 (N.S.), 2 Feb. 8, 2023). By requiring that traffic control workers be paid “a wage equivalent to the 3 Prevailing Wage otherwise owed to persons engaged on a public works or maintenance 4 project for the same or substantially similar work,” id. § 2(b), the Ordinance effectively 5 increased wages for this sector of workers. See HP’s MSJ, Ex. 4 (“Abney Dep.”) 16:23– 6 17:10, 19:15–23, 20:2–6, 25:1–26:7; HP’s MSJ, Ex. 5 (“Sanchez Dep.”) 17:19–18:5, 7 35:10–36:4; HP’s MSJ, Ex. 6 & Dkt. 39, Ex. N (“Friedman Dep.”) 23:17–25; HP’s MSJ, 8 Ex. 7 & Dkt. 39, Ex. H (“Andrews Dep.”) 27:6–22, 40:15–41:17; and HP’s MSJ, Ex. 8 9 (“Requilman Dep.”) 16:14–21, 22:7–23:6 (testifying that the Ordinance has increased 10 wages). The Ordinance’s declared purpose is to “address the unique safety risks confronted 11 by users of County maintained roads subject to traffic control by ensuring that . . . traffic 12 control workers are paid a minimum wage equivalent to the prevailing wage . . . [because] 13 [l]ow wages and difficult working conditions can present a significant risk of harm to users 14 of public streets that can be avoided by ensuring the most qualified workers are retained to 15 provide traffic control work.” Ordinance § 1. 16 Under the Ordinance, employers must pay traffic control workers total hourly 17 compensation, comprised of both wages and benefits, equal to the hourly prevailing wage 18 rate set by California’s Department of Industrial Relations (“DIR”). Dkt. 38-4, Declaration 19 of Branden Butler (“Butler Decl.”) ¶ 8; see CAL. LAB. CODE §§ 1773, 1773.9; Associated 20 Builders & Contractors of S. California, Inc. v. Nunn, 356 F.3d 979, 989–90 (9th Cir. 21 2004), amended, No. 02-56735, 2004 WL 292128 (9th Cir. Feb. 17, 2004) (describing 22 DIR’s process of calculating prevailing wages).2 Employers may satisfy this prevailing 23 wage requirement through any combination of base wages and benefits, provided that the 24 total compensation package equals the prevailing wage rate. Interpipe Contracting, Inc. v. 25 26 2 The Ordinance requires workers be paid “a wage equivalent to the Prevailing Wage,” and defines 27 “Prevailing Wages” as the wages required to be paid under California’s Prevailing Wage Statute, CAL. 28 LAB. CODE § 1720 et seq. See Ordinance §§ 2(a)(ii), (b). Those wages, in turn, are set by DIR through 1 Becerra, 898 F.3d 879, 884 (9th Cir. 2018) (citing CAL. LAB. CODE § 1773.1); CAL. LAB. 2 CODE § 1773.8 (parties may opt out of the base cash wage component by collective 3 bargaining agreement); Butler Decl. ¶ 9 (County interprets the Ordinance to allow parties 4 to pay more or less than base cash wage component set by DIR, so long as total 5 compensation provided is at least equal to the total prevailing wage rate). 6 The Ordinance mandates compliance with this prevailing wage rate for any work 7 performed on a County-operated road, and gives the Director of the Office of Labor 8 Standards and Enforcement or any other County official authority to enforce it. Ordinance 9 §§ 2(c)–(d). The County intends to enforce the Ordinance by responding to complaints 10 that it receives; it does not affirmatively conduct audits of employer payrolls to ensure 11 compliance and has no plans to do so in the future. Dkt. 39-1, Ex. G (“Butler Dep.”) 26:24– 12 27:23.3 According to the County’s website describing the Ordinance’s requirements, 13 remedies for an employer’s failure to pay the required prevailing wage include “citation[s], 14 civil penalt[ies], [and] injunctive relief (not limited to a stop work order).” HP’s MSJ, Ex. 15 32. 16 Since the Ordinance has gone into effect, HP’s costs for traffic control services have 17 significantly increased. The Ordinance requires HP to pay employees two-and-a-half to 18 three times the rate it previously paid them for traffic control services. Olomi Dep. 46:1– 19 7. For HP, paying its low-level traffic control employees this increased rate means paying 20 them more than the foremen supervising them. Id. 46:8–25. To avoid the undesirable 21 employee dynamic that this creates, HP now subcontracts out most of the traffic control 22 work it used to perform in-house. Id. 46:8–47:10. Subcontracting has increased HP’s costs 23 for traffic control work by 60–130%, making it substantially more expensive for HP to pay 24 for these services on its work sites. Id. 47:3–10. HP is also concerned that the Ordinance 25 26 27 3 To date, the County has not received any complaints of noncompliance with the Ordinance. Id. 28 1 will override wage and benefit terms it could negotiate with unions for any future PLAs it 2 might enter. See Olomi Opp. Decl. ¶ 5. 3 Other union and non-union employers have also had to increase their total 4 compensation to comply with the Ordinance, although they arrive at the total prevailing 5 wage rate in different ways. Some employers have increased both wages and benefits, 6 while others have increased their hourly cash wage but kept their benefits at the same level. 7 Abney Dep. 20:2–6 (non-union employer West Coast Traffic Control, LLC increased 8 wages and benefits to comply with the Ordinance); Friedman Dep. 23:17–25, 29:19–30:5 9 (union employer ACME Safety and Supply Corp. pays employees more in hourly wages 10 and fringe benefits when the Ordinance applies); Requilman Dep. 16:15–22, 22:7–23:6 11 (non-union employer North County Traffic Control, Inc. pays employees higher hourly 12 wages when the Ordinance applies, which increases wage-based fringe benefits, but has 13 not changed the amount or type of fringe benefits offered); Andrews Dep. 32:23–33:20 14 (when the prevailing wage rate includes categories of fringe benefits not required by the 15 union’s collective bargaining agreement nor offered by Pro Traffic Services, Inc., Pro 16 Traffic pays the worker additional money wages to cover the difference); Sanchez Dep. 17 17:14–18:5, 35:11–1 (union employer Co’s Traffic Control, Inc. pays normal fringe 18 benefits and additional money wages). 19 Finally, while the Ordinance has caused the wages in collective bargaining 20 agreements to go up, there is no evidence in the record that it has interfered with the 21 bargaining process itself.4 Instead, HP argues that these requirements impede the collective 22 bargaining process by imposing such detailed wage and benefit requirements that parties 23 have no room to negotiate labor terms. See HP’s MSJ at 25. 24 25 4 HP points to SDG&E’s Letters of Understanding with IBEW Local Union 465 as an example of 26 the Ordinance interfering with the collective bargaining process, but these letters show only that SDG&E agreed to pay IBEW Local Union 465-affiliated workers more to comply with the Ordinance, and IBEW 27 Local Union 465 agreed to accept these negotiated rates. See HP’s MSJ at 24. HP’s briefing points the Court to no other record evidence regarding any impact on the collective bargaining process, as opposed 28 1 On May 5, 2023, HP filed a complaint against the County of San Diego and the San 2 Diego County Board of Supervisors, alleging that the Ordinance was preempted by the 3 NLRA. Dkt. 1. The complaint asserted a single federal preemption claim and sought 4 declaratory and injunctive relief deeming the Ordinance void and enjoining County from 5 enforcing it. Id. After the close of discovery, the parties filed cross-motions for summary 6 judgment on HP’s NLRA preemption claim. HP’s MSJ; Defs.’ MSJ. In its motion, HP 7 also raised a state preemption theory for the first time. See HP’s MSJ at 11–16. At the 8 September 11, 2025 hearing on the parties’ cross-motions for summary judgment, the 9 Court ordered supplemental briefing on this newly-raised state preemption theory. See 10 Dkts. 55 (HP’s Supp. State Preemption Brief), 57 (Defs.’ Supp. State Preemption Brief). 11 II. LEGAL STANDARD 12 Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil 13 Procedure if the moving party demonstrates that there is no genuine issue of material fact 14 and that they are entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 15 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it 16 could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 17 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute as to a material 18 fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the 19 nonmoving party. Anderson, 477 U.S. at 248–50. 20 A party seeking summary judgment always bears the initial burden of establishing 21 the absence of a genuine issue of material fact. Celotex, 477 U.S. at 322. The moving 22 party can satisfy this burden in two ways: (1) by presenting evidence that negates an 23 essential element of the nonmoving party’s case; or (2) by demonstrating that the 24 nonmoving party failed to establish an essential element of the nonmoving party’s case on 25 which the nonmoving party bears the burden of proof at trial. Id. at 322–23. The court 26 must view all inferences drawn from the underlying facts in the light most favorable to the 27 nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 28 (1986). “Credibility determinations, the weighing of the evidence, and the drawing of 1 legitimate inferences from the facts are jury functions, not those of a judge, [when she] is 2 ruling on a motion for summary judgment.” Anderson, 477 U.S. at 255. 3 III. REQUEST FOR JUDICIAL NOTICE 4 HP requests that the Court take judicial notice of various prevailing wage 5 determinations made by DIR, excerpts of the County of San Diego’s Salary Schedule, and 6 San Diego County’s Office of Labor Standards & Enforcement FAQ Page. Dkt. 37-3. 7 Defendants do not oppose HP’s request for judicial notice. Courts may take judicial notice 8 of matters that are not subject to reasonable dispute, including government documents 9 available from reliable sources on the internet, such as websites run by governmental 10 agencies. Fed. R. Evid. 201; Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998–99 (9th 11 Cir. 2010) (appropriate to take judicial notice of information on local government website 12 because it was “made publicly available by government entities” and “neither party 13 dispute[d] the authenticity of the web sites or the accuracy of the information displayed 14 therein”); Gerritsen v. Warner Bros. Ent. Inc., 112 F. Supp. 3d 1011, 1033 (C.D. Cal. 2015) 15 (“the court can take judicial notice of ‘[p]ublic records and government documents 16 available from reliable sources on the Internet,’ such as websites run by governmental 17 agencies”) (quoting Fed. R. Evid. 201). Here, all the documents that HP requests the Court 18 take judicial notice of are official government publications on state and local government 19 websites, and neither party disputes their accuracy. Accordingly, the Court grants HP’s 20 request and takes judicial notice of the documents identified in HP’s request for judicial 21 notice. Dkt. 37-3.5 22 IV. EVIDENTIARY OBJECTIONS 23 Defendants object to (1) testimony from two traffic control companies about the 24 safety of their workers on Ordinance and non-Ordinance jobs; (2) County witness Murali 25 Pasumarthi’s testimony about the DIR prevailing wage rate the County uses; (3) DIR 26 27 5 These documents are attached as HP’s Exhibits 16, 17, 19–21, 24–32, and 37 to Dkt. 37-4 28 1 Research Data Supervisor Michael Morris’s declaration about two DIR prevailing wage 2 determinations for San Diego County; and (4) County witness Branden Butler’s testimony 3 concerning the contents of DIR’s website and its relevance for interpreting the Ordinance. 4 See Dkt. 43-3. The Court overrules Defendants’ objections to the above testimony as moot 5 because it did not rely on the objected-to evidence in its ruling.6 See Norse v. City of Santa 6 Cruz, 629 F.3d 966, 973 (9th Cir. 2010) (“Before ordering summary judgment in a case, a 7 district court must . . . rule on evidentiary objections that are material to its ruling.”). 8 V. DISCUSSION 9 The Court begins by addressing whether HP may raise its new state preemption 10 argument at this stage in the proceedings. While concluding that it may not, the Court 11 considers, in the alternative, whether HP has raised a triable issue on elements necessary 12 for this argument—i.e., that HP qualifies as a public utility or that this County wage 13 ordinance regulates matters of statewide concern. Finally, the Court turns to the crux of 14 the parties’ dispute: whether the Ordinance’s prevailing wage requirement is preempted by 15 the NLRA because it interferes with the collective bargaining process. 16 A. State Law Preemption 17 In its motion for summary judgment, HP argues for the first time that the Ordinance 18 is preempted because it regulates safety and wages for public utilities—areas where the 19 State has exclusive regulatory authority. HP’s MSJ at 5, 11–16. It may not raise this 20 argument at this late stage because it did not provide Defendants adequate notice of this 21 theory. Courts may only consider a new theory of liability at summary judgment if the 22 facts pled in the complaint are sufficient to give the defendant fair notice of the claim. Pac. 23 Coast Fed’n of Fishermen’s Ass’ns v. Glaser, 945 F.3d 1076, 1086–87 (9th Cir. 2019). In 24 its motion for summary judgment, HP asserts that it is a public utility, and as such, 25 regulation of its wages and safety constitutes impermissible regulation of a public utility. 26 27 6 Based on parties’ stipulation at oral argument, the Court takes judicial notice of DIR’s website as 28 1 HP’s MSJ at 11–16. Alternatively, HP argues that because it is a contractor for public 2 utilities and bound by the same state regulations when performing work for them, any 3 regulation of HP is “indistinguishable” from regulation of the public utility itself. See id.; 4 Dkt. 55 at 9–10. But none of the facts that would give Defendants notice of these 5 arguments are pled in the complaint. HP did not plead that it was a public utility, nor did 6 it allege what aspects of its work would qualify it as one. For example, HP did not allege 7 that it provides services or goods to the public directly or indirectly. See generally Compl.; 8 CAL. CONST., Art. XII § III (public utilities include “[p]rivate corporations and persons that 9 own, operate, control, or manage a line, plant, or system for . . . the transmission of 10 telephone and telegraph messages”); CAL. PUB. UTIL. CODE § 216(a) (a “telephone 11 corporation” is a public utility where its “service is performed for, or the commodity is 12 delivered to, the public or any portion thereof”), § 216(c) (a company that performs a 13 service for a telephone corporation also qualifies as a public utility if the telephone 14 corporation in turn provides that service to the public). HP also failed to plead facts to 15 support its alternate argument based on its work as a contractor for public utilities—for 16 instance, HP did not even allege that the companies it works for are public utilities. 17 Because these facts are wholly absent from the complaint, they cannot have possibly given 18 “fair notice” to Defendants of the state law preemption argument that HP now raises.7 19 Even if the Court were to permit this belated argument, HP also fails to raise a triable 20 issue on several elements of its claim. To prevail on a state preemption theory, the party 21 claiming preemption must show that the local legislation (1) conflicts with state law by 22 duplicating, contradicting, or entering an area fully occupied by state law; and (2) regulates 23 a matter of statewide concern. Sherwin-Williams Co. v. City of Los Angeles, 4 Cal. 4th 24 25 26 7 HP’s belated disclosure of this argument in a confidential settlement discussion that took place after the close of discovery cannot retroactively cure the deficiency of its pleadings. See HP’s MSJ at 11 27 n.1; Pac. Coast Fed’n of Fishermen’s Ass’ns, 945 F.3d at 1086–87 (factual allegations must be pled in the complaint to give fair notice). Because Defendants had no notice of this argument prior to the close of 28 1 893, 897 (1993); T-Mobile W. LLC v. City & Cnty. of San Francisco, 6 Cal. 5th 1107, 1116 2 (2019) (“The party claiming preemption has the burden of proof.”). 3 HP’s first argument, that the Ordinance conflicts with state law by regulating public 4 utilities, rests on its assertion that it qualifies as a public utility. But HP offers no evidence 5 to support this assertion. While HP performs work for “telephone corporations” that may 6 qualify as public utilities, HP offers no evidence to support the proposition that it is itself 7 a “telephone corporation.” See Olomi Decl. ¶¶ 2–5 (“HP’s customers are telephone 8 corporations”) (emphasis added); CAL. PUB. UTIL. CODE § 216(a) (public utilities include 9 “telephone corporation[s]” whose “service is performed for, or [whose] commodity is 10 delivered to, the public or any portion thereof”); Utility Contact System Search, CAL. 11 PUBLIC UTIL. COMM’N, https://apps.cpuc.ca.gov/apex/f?p=102:1::::RP (directory of all 12 telephone corporations in California maintained by the Public Utilities Commission does 13 not list HP)8; see generally Dkts. 37, 41, 47, 55 (not pointing to any record evidence that 14 HP provides services directly to the public). 15 HP also argues that it qualifies as a telephone corporation under CAL. PUB. UTIL. 16 CODE § 216(c) because it provides construction services to telephone corporations like 17 Verizon, T-Mobile, and AT&T. See Dkt. 55 at 6–7. This argument is flawed. Section 18 216(c) states that a company that performs a service for a telephone corporation also 19 qualifies as a public utility if the telephone corporation “in turn . . . performs that service 20 for . . . the public.” (emphasis added). HP provides construction services for its telephone 21 corporation customers, but those telephone corporations do not in turn provide construction 22 services to the public, so CAL. PUB. UTIL. CODE § 216(c) does not render it a public utility.9 23 Nor does HP point to evidence to support its contention that the Ordinance, which 24 sets wages on roads maintained by San Diego County, regulates a matter of statewide 25 26 27 9 By HP’s logic, any vendor or contractor that provided goods or services to a telephone corporation 28 1 concern. See Dkt. 55 at 12–13 (arguing that prevailing wages of public utilities are a matter 2 of statewide concern but not identifying facts to support claim); contra State Bldg. & 3 Constr. Trades Council of California v. City of Vista, 54 Cal. 4th 547, 556 (2012) (holding 4 that “the wage levels of contract workers constructing locally funded public works are a 5 municipal affair . . . and that these wage levels are not a statewide concern”).10 HP’s failure 6 to create a triable issue on this required statewide concern element is fatal under both of 7 its theories—that the Ordinance regulates public utilities directly or that it regulates them 8 by regulating their agents and contractors. See San Diego Gas & Elec. Co. v. City of 9 Carlsbad, 64 Cal. App. 4th 785, 793 (1998) (“Where local legislation clearly serves local 10 purposes, and state legislation that appears to be in conflict actually serves different, 11 statewide purposes, preemption will not be found.”). 12 Because HP fails to provide evidence of necessary elements of its state preemption 13 claim, the Court, alternatively, grants summary judgment in favor of Defendants. See Cool 14 Fuel, Inc. v. Connett, 685 F.2d 309, 311 (9th Cir. 1982) (“if one party moves for summary 15 judgment and, at the hearing, it is made to appear from all the records, files, affidavits and 16 documents presented that there is no genuine dispute respecting a material fact essential to 17 the proof of movant’s case and that the case cannot be proved if a trial should be held, the 18 court may sua sponte grant summary judgment to the non-moving party”). 19 20 21 22 23 10 HP also argues that the safety of public utilities is a matter of statewide concern. See Dkt. 55 at 24 10–12. However, insofar as the Ordinance is a safety measure, HP provides no evidence that it conflicts 25 with state safety laws. Moreover, state law expressly preserves local governments’ power to regulate safety measures for public utilities. CAL. PUB. UTIL. CODE § 2902 (“This chapter shall not be construed 26 to authorize any municipal corporation to surrender to the commission its powers of control to supervise and regulate the relationship between a public utility and the general public in matters affecting the health, 27 convenience, and safety of the general public, including matters such as the use and repair of public streets by any public utility.”) (emphasis added). Because there is no evidence of conflict, this 28 1 B. NLRA Preemption 2 The Court next turns to HP’s argument that the Ordinance is preempted by the 3 NLRA because it interferes with the collective bargaining process.11 4 The NLRA is a federal law that “codifies employees’ right to bargain collectively, 5 seeks to equalize bargaining power between employers and employees, and preempts state 6 laws that frustrate the accomplishment of these goals.” Interpipe Contracting, 898 F.3d at 7 887. “While the NLRA contains no express preemption provision, two categories of state 8 action are implicitly preempted: (1) laws that regulate conduct that is either protected or 9 prohibited by the NLRA (Garmon preemption), and (2) laws that regulate in an area 10 Congress intended to leave unregulated or controlled by the free play of economic forces 11 (Machinists preemption).” Id. (internal quotations omitted). 12 Machinists preemption “bars states from interfering with the collective bargaining 13 process.” Id. It focuses on interference with how parties negotiate (process), rather than 14 what they negotiate (outcomes). Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 20–21 15 (1987) (“the NLRA is concerned with ensuring an equitable bargaining process, not with 16 the substantive terms that may emerge from such bargaining”). Thus, for a Machinists 17 preemption analysis, the key question is whether the measure alters the mechanics of 18 collective bargaining, such as by restricting economic “weapon[s] of self-help” (like strikes 19 or lockouts) that parties can use to pressure negotiations. Am. Hotel & Lodging Ass’n v. 20 City of Los Angeles, 834 F.3d 958, 963 (9th Cir. 2016); Interpipe Contracting, 898 F.3d at 21 22 11 The County argues that it was acting as a property owner and not as a regulator when it passed this 23 prevailing wage requirement to ensure the safety of the roads it maintains. See Defs.’ MSJ at 25 (arguing its “actions were taken in its capacity as the owner of property interests in the land where its roads are 24 located.”) As such, it invokes the “market participant” exception to argue that NLRA preemption does 25 not apply. See id.; Airline Serv. Providers Ass’n v. Los Angeles World Airports, 873 F.3d 1074, 1079 (9th Cir. 2017) (NLRA preemption does not apply to local government actions taken as a market participant). 26 Because the undisputed evidence shows that the Ordinance contains a civil penalty provision, see HP’s MSJ, Ex. 32, the Court cannot grant summary judgment for Defendants on the market participant 27 exception. Airlines for Am. v. City & Cnty. of San Francisco, 78 F.4th 1146, 1152 (9th Cir. 2023) (“civil penalty provisions alone may amount to the force and effect of law rendering a government entity a 28 1 888 (“Virtually any labor standard—e.g., wage and hour requirements—will affect the 2 terms of [collective bargaining], but the pertinent question under Machinists is whether 3 such a standard interferes with the collective bargaining process.”) (emphasis in original). 4 Minimum wage and benefit laws generally do not interfere with the collective 5 bargaining process because they do not alter bargaining mechanics. Metro. Life Ins. Co. v. 6 Massachusetts, 471 U.S. 724, 755 (1985). Even though these laws may change the 7 substantive outcomes of negotiations by setting a higher floor, “they do not regulate the 8 mechanics of labor dispute resolution.” Am. Hotel & Lodging Ass’n, 834 F.3d at 963; 9 Interpipe Contracting, 898 F.3d at 888 (“Minimum labor standards will necessarily affect 10 employer-employee relations by . . . setting the statutory baseline [] for collective 11 bargaining negotiations . . . But such effects differ in kind from a State’s regulation of the 12 bargaining process itself.”) (emphasis in original). This is true even though these laws 13 “technically interfere with labor-management relations,” “give[] employees something for 14 which they might otherwise have had to bargain,” and impact labor and management 15 unequally. Am. Hotel & Lodging Ass’n, 834 F.3d at 963–64 (citing Metro. Life, 471 U.S. 16 at 757; Fort Halifax, 482 U.S. at 2–3). 17 Over thirty years ago, the Ninth Circuit recognized one potential exception to this 18 rule: a minimum wage and benefit requirement could interfere with the collective 19 bargaining process by setting substantive labor terms so exhaustive that they leave nothing 20 to bargain over. See Chamber of Com. of U.S. v. Bragdon, 64 F.3d 497, 501 (9th Cir. 21 1995). In Bragdon, the Ninth Circuit struck down a Contra Costa County ordinance 22 requiring the payment of “prevailing wages,” as defined by California’s Prevailing Wage 23 Statute, because, among other things, it “affect[ed] not only the total of the wages and 24 benefits to be paid, but also the division of the total package that is paid in hourly wages 25 directly to the worker and the amount paid by the employer in health, pension, and welfare 26 benefits for the worker.” Id. at 502. 27 However, since then, the Ninth Circuit has upheld numerous prevailing wage 28 measures, confirming that its holding in Bragdon is a narrow exception to the general rule 1 that minimum labor standards do not interfere with the collective bargaining process. 2 Dillingham Const. N.A., Inc. v. Cnty. of Sonoma, 190 F.3d 1034, 1039-41 (9th Cir. 1999) 3 (prevailing wage statute “d[id] not affect the collective bargaining process” because it 4 neither “encourage[d] nor discourage[d] the collective bargaining process”); Nunn, 356 5 F.3d at 991 (statute requiring the payment of prevailing wages to apprentices on public and 6 private projects was “not so restrictive as to interfere with the collective-bargaining 7 process”); Interpipe Contracting, 898 F.3d at 891 (confirming that minimum labor 8 standards that are “unrelated in any way to the processes of bargaining or self- 9 organization” are not preempted) (alterations and italics in original) (quoting Metro. Life, 10 471 U.S. at 756). 11 In sum, the Ninth Circuit recognizes two ways that a law can be preempted for 12 interfering with the collective bargaining process: (1) if it directly interferes with the 13 mechanics of bargaining, such as by restricting “weapons of self-help” that parties use to 14 pressure negotiations, see Am. Hotel & Lodging Ass’n, 834 F.3d at 963; or (2) if it sets 15 terms that are so restrictive that they prevent collective bargaining from happening, see 16 Bragdon, 64 F.3d at 504. 17 Here, HP rests its argument exclusively on the latter ground, but it offers no evidence 18 that the Ordinance is so restrictive that it prevents collective bargaining. 19 First, the prevailing wage required by the Ordinance lacks the key feature that the 20 Bragdon Court found overly restrictive: it does not require a particular allocation between 21 wages and benefits. At the time Bragdon was decided, California’s Prevailing Wage 22 Statute required not only a total prevailing wage rate (cash plus benefits) but also required 23 employers to pay a certain base cash component, regardless of how much they paid in 24 benefits. See Bragdon, 64 F.3d at 500, 502–03. This led the Bragdon court to be concerned 25 that contractors and employees would “reduce the benefit package and increase the hourly 26 wages” to meet both the required base cash component and the total wage requirement, 27 essentially leaving them nothing to bargain over. See id. However, in 2012, California 28 amended its Prevailing Wage Statute so that parties may now opt out of the base wage 1 ||}component by collective bargaining agreement. See CAL. LAB. CODE § 1773.8. By 2 requiring employers to pay a wage “equivalent to the Prevailing Wage” under the current 3 || Prevailing Wage Statute, the Ordinance only requires employers to pay the total prevailing 4 || wage rate set by DIR, but allows employers, unions, and employees the flexibility to 5 negotiate how to apportion wages and benefits to reach that total. See Ordinance §§ 2(a)(11) 6 || (requiring employers to pay a wage “equivalent to the Prevailing Wage” set by DIR) 7 ||(emphasis added); Butler Decl. 9] 8—9 (County interprets Ordinance to require the total 8 || prevailing wage rate set by DIR and does not interpret Ordinance to require base cash wage 9 || component). 10 HP argues that the “Right-of-Way Done Right FAQ” page on the County’s website 11 ||shows that the Ordinance dictates a specific allocation between of wages and benefits. Dkt. 12 ||41 at 23-24; HP’s MSJ, Ex. 32. This webpage, however, merely explains what the 13 || Ordinance 1s and specifies the current prevailing wage rates for traffic control workers: 14 WHAT DOES THE RIGHT OF WAY ORDINANCE DO?

] 7 The Prevailing Wage Rate* for Building Construction Traffic Control Work - $66.21 3 The Prevailing Wage Rate* for Engineering Construction Traffic Control Work - $67.45 18 19 || In the footnotes, the FAQ further breaks down how the prevailing wage rates are calculated 20 || by DIR:

23 24 || Although DIR shows the components it uses to calculate the prevailing wage rate, it does 25 ||not require employers to pay each component to satisfy the prevailing wage rate. DIR 26 abandoned that “line-by-line” approach in 1989, after the Ninth Circuit found that it was 27 ||preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”). WSB 28 || Elec., Inc. v. Curry, 88 F.3d 788, 791 (9th Cir. 1996) (DIR “no longer consider[s] each te 1 benefit separately”). Under the current approach, DIR sets a total prevailing wage rate, 2 and an employer may satisfy that rate by “add[ing] the hourly cash wage paid plus the total 3 amount of employer contributions to benefits plans . . . If this sum falls short of the 4 prevailing wage, then the employer must make up the difference in cash.” Id.; see also 5 Interpipe, 898 F.3d at 884 (“In satisfying the prevailing wage, employers can either pay all 6 cash wages or pay a combination of cash wages and benefits . . . employer payments 7 [toward benefits] are a credit against the obligation to pay the general prevailing wages.”) 8 (cleaned up). Contrary to HP’s arguments, the FAQ page simply shows how DIR arrived 9 at the total prevailing wage rate and how it priced the separate components; it does not 10 require employers to reach the total in the same way. 11 Second, the undisputed facts also show that the Ordinance has not dictated a specific 12 allocation between wages and benefits in practice. Employers have adopted a variety of 13 wage and benefit packages to ensure that they are paying total compensation equal to the 14 prevailing wage rate. Some have increased both wages and benefits. Abney Dep. 20:2–6; 15 Friedman Dep. 23:17–25, 29:19–30:5. Others have increased their base hourly pay rate, 16 but not their benefits, except insofar as benefits are based on hourly pay rate. See 17 Requilman Dep. 16:15–22, 22:7–23:6. And others have not adjusted benefits at all, 18 electing to meet the prevailing wage rate through higher cash wages. Andrews Dep. 32:23– 19 33:20; Sanchez Dep. 17:14–18:5, 35:11–1. No contractors testified that they believed the 20 Ordinance required specific pay and benefit allocations, or that they believed they had to 21 offer certain benefits to comply with the Ordinance. 22 At bottom, HP has offered no evidence that the Ordinance has prevented collective 23 bargaining through the exhaustiveness of its requirements. Accordingly, HP has failed to 24 carry its burden of raising a triable issue of fact over whether the Ordinance interferes with 25 the collective bargaining process, and Defendants are entitled to summary judgment.12 26 27 12 Because HP has not raised a triable issue of fact over whether the Ordinance interferes with the 28 I VI. CONCLUSION AND ORDER 2 For the reasons stated above, the Court GRANTS Defendants’ motion for summary 3 judgment [Dkt. 38] in full; and DENIES HP’s motion for summary judgment [Dkt. 37]. 4 5 |} IT IS SO ORDERED. 6 7 Dated: February 23, 2026 9 Honorable Jinsook Ohta 10 United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 bringing this claim because its injuries do not fall within the zone of interests that the NLRA is designed to protect. 17