Naranjo v. Spectrum Security Services, Inc.
Filed March 24, 2009
Second District
Division Four
Cite as 2009 SOS 1819

Denial of Employee’s Unpaid Wage Claim Reversed, Upheld and Remanded

This case stemmed from a class suit filed by Gustavo Naranjo, a detention officer who worked for Spectrum Security Services, Inc, a company that provides security services for facilities and detention centers in Los Angeles County, under contract with federal agency Immigration and Customs Enforcement (ICE).

According to the terms of Spectrum’s contract with ICE, the employee’s wage and fringe benefits will be determined by the Secretary of the Department of Labor pursuant to the McNamara-O’Hara Service Contract Act of 1965 (SCA) (41 U.S.C. section 351 et seq.).

Naranjo filed the class suit on June 2007, on behalf of himself and other employees who had resigned or who had been discharged from employment.

Among other things, the suit asserted the following claims:

• Claims under California Labor Code (section 203, 226, subdivision (e), 226.7)


• Claims for unfair business practices (Business and Professional Code section 17200)


• Conversion


• Injunctive relief

In response, Spectrum countered that the SCA provided Naranjo with exclusive remedies for the claims. In addition, the company alleged that the claims were “preempted by the federal law” and any claim for unpaid wages must be pursued through the administrative process of the SCA, hence it sought summary judgment or as alternative, a summary adjudication of the case.

The trial court granted summary judgment, concluding that it lacked jurisdiction over Naranjo’s claims. The court held the following facts:

• That Naranjo had no right to file a private action to recover unpaid wages


• That his sole remedy lies in the administrative process of the SCA

The legal issue brought up to the appeals court was therefore narrowed down to whether Naranjo’s claims would conflict with the SCA or “hinder achievement of its goals”.

After reviewing the facts, the Second District court of appeal found that Naranjo’s action to recover additional wages under Labor Code section 226.7 does not conflict with the SCA nor impedes its goal.

The court held that although the SCA provides sole remedies for claims under the act and does not provide a private right of action, it does not preempt the employee’s claim to recover compensation under the California Labor Code.

The Second District appellate court therefore reversed the judgment concerning claims under Labor Code sections 203, 226, and 226.7. Although the judgment is affirmed in other respects, the case was remanded for further proceedings. The court ruled that Naranjo should be awarded his cost on appeal.