Facts

Plaintiffs Charles Scott, Brenda McCoy, and Dominique Ferdinand were all employed by Gate Gourmet, Inc., a provider of airline catering and provisioning services for airlines. Scott worked as a chef in 2017, McCoy worked in food assembly in early 2019, and Ferdinand worked as an equipment handler in 2019. Scott and McCoy were laid off on March 28, 2020. Ferdinand was laid off on March 20, 2020. Plaintiffs filed a class action suit against Gate Gourmet alleging Gate Gourmet wrongfully terminated plaintiffs' and the putative class members' employment in violation of public policy because their termination occurred after the 2020 CARES Act was signed into law. Plaintiffs further alleged Gate Gourmet breached a fiduciary duty owed to its employees and engaged in unfair business practice in violation of California's Unfair Competition Law. Gate Gourmet filed a motion to dismiss plaintiffs' complaint pursuant to Fed. R. Civ. Proc. Section 12(b)(6). The court granted Gate Gourmet's motion, with leave to amend. Plaintiffs filed a First Amended Complaint, omitting their breach of fiduciary duty claim but continuing to assert their claims for wrongful termination and unfair competition. Defendant filed a motion to dismiss plaintiffs' First Amended Complaint pursuant to Fed. R. Civ. Proc. Section 12(b)(6).

PLAINTIFF CONTENTIONS: Plaintiffs contended that defendant received federal funds for payroll support pursuant to the 2020 Cares Act, but laid off at least 1,500 of its employees, then offered temporary reemployment only when convenient for the company. This action allegedly transferred the costs of its workforce to the government by significantly reducing its workforce while also receiving money to support that workforce. Plaintiffs claimed this constituted an unlawful and fraudulent business practice.

DEFENDANT CONTENTIONS: Gate Gourmet contended that plaintiffs failed to state a claim for wrongful termination in violation of public policy or for breach of fiduciary duty because they failed to allege facts that, if proven, would establish that their layoffs violated public policy or that Gate Gourmet owed them a fiduciary duty. Gate Gourmet further contended that the CARES Act was not "well-established" at the time of Plaintiffs' layoffs and therefore could not serve as the basis for a claim for violation of public policy. Gate Gourmet also contended that Plaintiffs could not pursue recovery for wage losses resulting from their terminations under California's Unfair Competition law and that the plaintiffs further lacked standing to seek disgorgement of funds obtained from the U.S. Treasury or other injunctive relief.

Result

The court dismissed plaintiffs' First Amended Complaint with prejudice and entered judgment in favor of defendant Gate Gourmet.