Filed
9/8/10

>CERTIFIED FOR PUBLICATION



IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



SECOND
APPELLATE DISTRICT



DIVISION
THREE


>

MARCO GARCIA et al., Plaintiffs and Appellants, v. FOUR POINTS SHERATON LAX et al., Defendants and Respondents. [And related consolidated appeals.]

B210720 (c/w B210716, B210719, B210726 & B210730) (Los Angeles County Super. Ct. Nos. BC377059, BC377060, BC377062, BC377063 & BC377065)

APPEALS
from judgments of the Superior Court of Los Angeles County, William F.
Highberger, Judge. Reversed.



Hadsell
Stormer Keeny Richardson & Renick, Randy Renick and Cornelia Dai; Davis,
Cowell & Bowe, Elizabeth Ann Lawrence, Sarah Varela and Winifred Kao, for
Plaintiffs and Appellants.



O'Melveny
& Myers, Scott H. Dunham, Apalla U. Chopra and Benjamin J. Kim for
Renaissance Montura Hotel Los Angeles, Marriott International, Inc., Marriott
LAX, Marriott Hotels and Resorts, Diamond Rock Hospitality and Sunstone Hotel
Investors, Inc., Defendants and Respondents.



Littler
Mendelson and Robert S. Blumberg for Pacifica Host Hotels, Inc., Defendant and
Respondent.



Carmen
A. Trutanich, City Attorney, Claudia McGee Henry, Senior Assistant City
Attorney, and Gerald M. Sato, Deputy City Attorney, as Amicus Curiae for City
of Los Angeles.





INTRODUCTION

In this
appeal, we address the validity of the Hotel Service Charge Reform Ordinance
(Ordinance) enacted by the City of Los Angeles (the City), requiring
non-unionized hotels in the Century Corridor near Los Angeles International
Airport (LAX) to pass along mandatory service charges to workers who render the
services for which the charges have been collected. The Ordinance is based upon the City's
determination that LAX-area hotels reap economic benefits from their location
and have the responsibility and ability to pay these workers a decent
compensation. Service workers have seen
their income decline as a result of the hotels' practice of imposing mandatory
service charges because patrons assume these charges are paid to the workers
and therefore do not leave them a gratuity.

Appellants are service workers who
challenge the trial court's dismissal of their lawsuits to enforce the
Ordinance on the grounds that it is preempted by Labor Code sections 350 through
356, which govern the disposition of gratuities. Appellants contend the Ordinance does not
conflict with the Labor Code because it neither contradicts the Labor Code nor
enters the field of regulating gratuities.
Although not addressed by the trial court, appellants also contend the
Ordinance does not violate the equal protection clauses of the federal and
state Constitutions, is not void for vagueness under the due process clause,
and is not an unconstitutional taking.

We conclude the Labor Code does not
preempt the Ordinance because the Labor Code provisions regulating gratuities
are not irreconcilable with the Ordinance, and the Legislature has not
demonstrated its intent to regulate in the field of service charges. We further conclude there is no equal
protection violation under the deferential, rational basis standard, and the
Ordinance is not otherwise constitutionally infirm. Therefore, we reverse the judgments of
dismissal entered following the trial court's order sustaining the demurrers to
the complaints without leave to amend.

BACKGROUND

In 2006, the City enacted the
Ordinance to increase the compensation of workers performing services at
airport hotels. The Ordinance requires
hotels with 50 or more rooms within the Gateway to Los Angeles Property
Business Improvement District (Century Corridor PBID) adjacent to LAX
(hereafter Corridor), to pass along service charges to those hotel workers who
render the services for which the charges are collected. (L.A. Ord. No. 178084, adding Art. 4, Ch.
XVIII, § 184.00 et seq. to Los Angeles Municipal Code (LAMC).)

Plaintiffs
and appellants are banquet captains and servers at Corridor hotels.[1] They filed separate class action complaints
against certain hotels[2]
for violations of the Ordinance and the unfair competition law (Bus. &
Prof. Code, § 17200 et seq.) (UCL).
The complaints are similar and allege hotels own, control, or operate a
hotel located within the Corridor.[3] Hotels allegedly failed to compensate
plaintiffs and members of the putative class in the amount of the entire
service charge as defined in the Ordinance.


Several
hotels joined in a demurrer to the complaint, >[4]
contending the Ordinance: (1) is
preempted by Labor Code sections 350 to 356, >[5]
which regulate gratuities; and (2) is unconstitutional in that it violates
the equal protection clauses of the state and federal Constitutions, is void
for vagueness, and amounts to a taking without just compensation.

The trial
court agreed that the gratuity provisions preempted the Ordinance and did not
reach the constitutional issues. The
trial court concluded the Ordinance contradicted the Labor Code. It reasoned the gratuity statutes in the
Labor Code set a â€