United pilots, attendants get lawsuit revived over home base

A federal appellate panel on Tuesday revived two class actions by pilots and flight attendants against United Airlines, concluding California labor laws apply to workers whose home base is in the state.

United Airlines persuaded two district judges to dismiss the employees' lawsuits, but a 9th U.S. Circuit Court of Appeals panel sent them back after ruling the California Labor Code section does not violate the dormant commerce clause of the U.S. Constitution.

9th Circuit Judge Paul J. Watford, an appointee of President Barack Obama, also rejected arguments by United attorneys that the state law violated the Airline Deregulation Act and the Railway Labor Act.

The dispute revolves around a quirk of the industry: Airline pilots and flight attendants do not spend a majority of their work hours in California even if that's their principal place of work.

In response to the complaints, the airline argued -- and two district judges agreed -- that California's Labor Code requirement for wage statements is preempted by federal law.

"What every airline is going to have to do is track where all of these employees are," O'Melveny & Myers LLP partner Adam P. KohSweeney told the panel during oral arguments.

He argued United might run afoul of the labor laws of other states.

Watford, however, dismissed such concerns as overblown.

"The mere fact that a firm engaged in interstate commerce will face increased costs as a result of complying with state regulations does not, on its own, suffice to establish a substantial burden on interstate commerce," he wrote.

Watford added that United could easily comply with state law by issuing wage statements "to all pilots and flight attendants whose home base airport is located in California." Ward v. United Airlines Inc., 2021 DJDAR 1141 (9th Cir., filed Aug. 11, 2016).

Kirk D. Hanson, a partner with Jackson Hanson LLP in San Diego who represents the employee classes, hailed the ruling. It sends the cases back to district court to determine if United Airlines complied with state labor law.

"It's been a long road," Hanson wrote in an email after the ruling. "We are very happy about the win."

David E. Mastagni, a partner with Mastagni Holstedt APC who is not involved in the case, said in an emailed statement the ruling is a big victory for airline workers.

"This ruling is a significant victory for California based workers both in that the Ninth Circuit upheld applicability of Labor Code Section 226 over federal law preemption claims, and because the federal appeals court has further entrenched the Ward test," he wrote.

9th Circuit Judge Michelle T. Friedland and Senior U.S. District Judge Jed S. Rakoff of the Southern District of New York, sitting by designation, affirmed the reversal. Friedland was appointed by Obama while Rakoff was appointed by President Bill Clinton.

The panel asked the state Supreme Court to weigh in on the case, and the justices concluded the state labor code applies "if the employee's principal place of work is in California."

KohSweeney, who could not be reached for comment Tuesday, argued the 9th Circuit should affirm the district court judges' rulings in United's favor anyway.