Lenway et al v. Hormel Foods Corporation

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
DANIEL LENWAY, DALIA CRUZ
AYALA, JUAN CRUZ GASTELUM, and
JASON NOVAK, individually and on
behalf of those similarly situated,
Plaintiffs,
v.
HORMEL FOODS CORPORATION,
Defendant.
Case No. 25‐CV‐3320 (PJS/JFD)
ORDER
Timothy J. Louris, Emily Lacy Marshall, and Jacob C. Harksen, LOURIS
MARSHALL O’BRIEN, P.A., for plaintiffs.
Samantha Rollins Murphy and Avery Bennett, FAEGRE DRINKER
BIDDLE & REATH LLP, for defendant.
This matter is before the Court on defendant’s motion to dismiss [ECF No. 8] and
plaintiffs’ motion to remand [ECF No. 14]. For the reasons explained on the record at
the January 14, 2026 hearing and summarized below, plaintiffs’ motion is granted and
defendant’s motion is denied without prejudice as moot.
I. BACKGROUND
Plaintiffs are current or former unionized employees of Hormel’s pork‐
processing facility in Austin, Minnesota. Compl. ¶ 13–17. On January 1, 2024, a new
Minnesota law took effect requiring employers such as Hormel to provide employees
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with paid time off for “earned sick and safe time” (“ESST”). Id. ¶¶ 1–2; Minn. Stat.
§§ 181.9445–.9448. Hormel purported to comply with the ESST law by informing its
employees that they could use their paid vacation time for ESST purposes. Compl. ¶¶
36, 38–45. In other words, Hormel told its employees that they could take paid time off
for ESST purposes, but they would forfeit an hour of paid vacation time for every hour
of paid ESST time that they took.
Plaintiffs’ union cried foul, alleging that Hormel’s new plan violated both the
CBA’s guarantee of paid vacation time and the ESST law’s guarantee of paid sick leave.
Id. ¶ 46. In February 2025, an arbitrator agreed with plaintiffs that Hormel’s plan
violated the CBA. Id. ¶¶ 47–52. Specifically, the arbitrator ruled that, under the CBA,
Hormel could not require “employees to use their contractual paid vacation benefits
when exercising their statutory right to paid sick and safe time leave.” Id. ¶ 49. The
arbitrator made clear that he was deciding only “whether the Company has violated the
CBA,” and that “[t]he question of . . . compliance [with the ESST law] is not before me.”
Id. ¶ 48.
Plaintiffs then sued Hormel in state court, alleging that Hormel violated the ESST
law and that Hormel’s employees should be awarded ESST‐mandated leave and
monetary damages. Compl. ¶¶ 4, 53–63, 116–20. Hormel removed the action to federal
court, see ECF No. 1, and now moves to dismiss for failure to state a claim under Fed. R.
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Civ. P. 12(b)(6), see ECF No. 8. Plaintiffs move to remand, see ECF No. 14, arguing that
this Court lacks federal subject‐matter jurisdiction. Hormel opposes plaintiffs’ motion
to remand on the grounds that plaintiffs’ state‐law claims are completely preempted by
Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, and
therefore this Court has subject‐matter jurisdiction.
II. ANALYSIS
A case cannot be removed to federal court unless a basis for federal jurisdiction
(such as diversity of citizenship or the existence of a federal question) appears on the
face of the complaint. Baker v. Martin Marietta Materials, 745 F.3d 919, 923 (8th Cir.
2014); Pet Quarters, Inc. v. Depository Tr. & Clearing Corp., 559 F.3d 772, 779 (8th Cir.
2009). “When a federal court lacks subject‐matter jurisdiction over a removed case, it
must remand it to state court.” Dalton v. JJSC Props., LLC, 967 F.3d 909, 914 (8th Cir.
2020) (citation modified).
Hormel argues that federal subject‐matter jurisdiction exists because the state‐
law claims are completely preempted by Section 301 of the LMRA.1 More often than
not, preemption and jurisdiction are separate issues, but that is not true with respect to
“complete” preemption. Under the doctrine of complete preemption, federal law “does
not merely ‘preempt’ but goes further to ‘absorb’ state law on the subject.” Johnson v.
1It is undisputed that the Court lacks diversity jurisdiction under 28 U.S.C.
§ 1332.
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MFA Petroleum Co., 701 F.3d 243, 250 (8th Cir. 2012). The notion behind complete
preemption is that, in a few areas of law, federal law “wholly displaces” any state
regulation so that any claim “within the scope” of that area, “even if pleaded in terms of
state law, is in reality based on federal law.” Beneficial Natʹl Bank v. Anderson, 539 U.S. 1,
9 (2003). “A conclusion that there is complete preemption effectively maintains that the
plaintiff has simply brought a mislabeled federal claim, which may be asserted under
some federal statute.” MFA Petroleum Co., 701 F.3d at 247 (quotation omitted). In those
areas where complete preemption applies, there is essentially “no such thing as a
state‐law claim,” Beneficial Natʹl Bank, 539 U.S. at 11, and any purported state‐law claim
is treated as “necessarily federal” for purposes of jurisdiction. Metro. Life Ins. Co. v.
Taylor, 481 U.S. 58, 63 (1987).
“Although complete preemption is rare, it exists under § 301 of the LMRA.”
Johnson v. Humphreys, 949 F.3d 413, 415–16 (8th Cir. 2020) (citations omitted); see also
Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557 (1968) (establishing doctrine of complete
preemption in context of LMRA § 301). Section 301 governs “[s]uits for violation of
contracts between an employer and a labor organization,” 29 U.S.C. § 185—in other
words, suits for breaches of CBAs. See, e.g., Boldt v. N. States Power Co., 904 F.3d 586, 590
(8th Cir. 2018); Williams v. Natʹl Football League, 582 F.3d 863, 873 (8th Cir. 2009). But the
“pre‐emptive effect” of Section 301 extends “beyond suits alleging [CBA] violations,”
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Allis‐Chalmers Corp. v. Lueck, 471 U.S. 202, 210 (1985), to any state‐law claim that
“depends upon the meaning of a collective‐bargaining agreement.” Lingle v. Norge Div.
of Magic Chef, Inc., 486 U.S. 399, 406 (1988). In that way, the doctrine of complete
preemption ensures that only federal law fashioned by federal courts “governs the
interpretation and application of collective‐bargaining agreements.” United Steelworkers
of Am. v. Rawson, 495 U.S. 362, 368 (1990).
In the Eighth Circuit, “[t]he LMRA completely preempts . . . claims founded
directly on rights created by collective‐bargaining agreements and claims substantially
dependent on analysis of a collective‐bargaining agreement.” Humphreys, 949 F.3d at
416 (quoting Boldt, 904 F.3d at 590). “A claim is substantially dependent on the CBA if it
requires the interpretation of some specific provision of a CBA.” Id. “Of course, not
every dispute concerning employment, or tangentially involving a provision of a
collective‐bargaining agreement, is pre‐empted by § 301 or other provisions of the
federal labor law.” Allis‐Chalmers, 471 U.S. at 212. “An otherwise independent claim
will not be preempted if the CBA need only be consulted during its adjudication.” Trs.
of Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc., 450 F.3d 324,
330 (8th Cir. 2006) (citation omitted).
“The proper starting point for determining whether interpretation of a CBA is
required in order to resolve a particular state law claim is an examination of the claim
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itself.” Id. at 331 (citation omitted). In this case, the employees do not seek to enforce
the CBA or any right created by the CBA (the arbitrator has already done that). And
thus, the Court must remand this case unless the employees’ claim that Hormel violated
the ESST law is “substantially dependent on” the CBA—i.e., unless the claim requires
“the interpretation of,” and not merely reference to or consultation of, “some specific
provision of” the CBA. Humphreys, 949 F.3d at 416.
The central question in this case is straightforward: Does an employer violate
Minnesota’s ESST law when it requires employees to forfeit one hour of paid vacation
time for every hour of paid ESST time? The parties do not dispute that employees were
entitled to vacation time under the CBA, nor do they dispute that, under Hormel’s ESST
policy, employees who wanted to take ESST time were required to use vacation time.
The Court has not found—and Hormel has not identified—a “specific provision” of the
CBA that would have to interpreted by the Court in order to determine the legality of
Hormel’s policy. Indeed, if the Court found that the employees’ ESST claim was
completely preempted and sent that claim to arbitration, see Allis‐Chalmers, 471 U.S. at
219, the arbitrator would have nothing to do, as his authority would be limited to
interpreting the CBA, and the employees’ ESST claim does not turn on the meaning of
the CBA; it turns on the meaning of the ESST law, which the arbitrator would not have
authority to interpret. See Alexander v. Gardner‐Denver Co., 415 U.S. 36, 54 (1974)
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(“Arbitral procedures, while well suited to the resolution of contractual disputes, make
arbitration a comparatively inappropriate forum for the final resolution of rights
created by [statute].”).
Should the employees prevail in this lawsuit, a court may need to consult the
CBA in fashioning a remedy—specifically, to determine how much paid vacation time
each employee was entitled to receive. But that is no different than consulting a CBA to
determine how much in wages a successful plaintiff would have received but for, say,
an unlawful firing or demotion. It does not result in complete preemption under the
LMRA. See, e.g., Superior Waterproofing, Inc., 450 F.3d at 330 (“An otherwise
independent claim will not be preempted if the CBA need only be consulted during its
adjudication.” (citation omitted)); Livadas v. Bradshaw, 512 U.S. 107, 124 (“[W]hen the
meaning of contract terms is not the subject of dispute, the bare fact that a collective‐
bargaining agreement will be consulted in the course of state‐law litigation plainly does
not require the claim to be extinguished.” (citation omitted)).
For these reasons, the Court finds that this case is not completely preempted
under the LMRA and thus the Court lacks subject‐matter jurisdiction. Accordingly, the
Court remands the case to state court.
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ORDER
Based on the foregoing, and on all of the files, records, and proceedings herein,
IT IS HEREBY ORDERED THAT:
1. 	Plaintiffs’ motion to remand [ECF No. 14] is GRANTED.
2. 	Defendant’s motion to dismiss [ECF No. 8] is DENIED WITHOUT
PREJUDICE as moot.
3. 	Pursuant to 28 U.S.C. § 1447(c), this case is REMANDED to the Minnesota
District Court, Third Judicial District.
Dated: February 4, 2026 	/s/ Patrick J. Schiltz
Patrick J. Schiltz, Chief Judge
United States District Court
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