Wage and hour law updates for interstate workers

Last year, the California Supreme Court released the long-awaited decisions in Ward v. United Airlines, Inc., 9 Cal. 5th 731 (2020), and Oman v. Delta Air Lines, Inc., 9 Cal. 5th 762 (2020), determining that California labor laws apply to airline employees based in California who perform most of their work in airspace outside of California borders. Since that time, California appellate courts and the 9th U.S. Circuit Court of Appeals have expanded on and clarified the reach of California wage and hour laws to interstate workers.

California Labor Laws Apply to Interstate Workers Based in California

In Ward, the Supreme Court established the "home base" rule used to determine whether employers are subject to California's wage and hour laws. This test requires courts to first consider whether the employee works the majority of the time in California or in another state. When transportation employees do not perform a majority of their work in any state, the test is satisfied if the employees' base of work operations is California, meaning California serves as the physical location where the worker presents themself to begin work. In applying this test, the court emphasized that the jurisdictional reach of each Labor Code section must be considered separately. Ward specifically extended Section 226 -- requirements for wage statements -- and Oman applied the rule to Section 204 -- requirement to provide wages on a semimonthly basis.

Following the Ward and Oman decisions, the 2nd District Court of Appeal applied the home base rule to various labor codes. In Gulf Offshore Logistics, LLC v. Superior Court of Ventura County, 58 Cal. App. 5th 264 (2020), review denied and ordered not to be officially published (Mar. 24, 2021), the court applied the home base test in determining that California law applied to crew members on a boat that docked at a California port and provided services to offshore oil platforms located outside the state's boundaries. Notably, the crew members in Gulf Offshore were suing under a variety of wage statutes, some of which were not addressed in Ward and Oman. The appellate court did not address these statutes individually, but their ruling seems to indicate that same analysis would apply to all the relevant labor code sections, even those the Supreme Court did not analyze.

California Law Not Preempted By Federal

Courts also addressed the issue of whether various federal laws including the Fair Labor Standards Act, Airline Deregulation Act and the Railway Labor Act preempted California Labor Law on issues related to interstate transportation.

On return from the Supreme Court, the 9th Circuit in Ward v. United Airlines, Inc., 986 F.3d 1234 (9th Cir. 2021), determined that federal law does not preclude California from applying its wage statement law (Section 226) to interstate transportation workers based in the state. The court rejected United's argument that the application of Section 226 was preempted by the ADA, which provides that a state "may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier." The court noted that wage and safety laws are generally applicable regulations that are not preempted "even if employers must factor those provisions into their decisions about the prices they set" or "if they raise the overall cost of doing business." The court also reiterated that United had provided no evidence that the application of Section 226 would result in costs that would have a significant impact on prices, routes or services.

The 9th Circuit also held that the RLA did not preempt the application of California law. The court noted that plaintiffs' claims were not based on a right or duty created by their collective bargaining agreements. Rather, their claims were grounded in California law. Further, adjudicating these claims would not require the court to interpret the collective bargaining agreement. Therefore, the RLA did not bar the application of section 226 to plaintiffs' claims.

In Bernstein v. Virgin America, Inc., 990 F.3d 1157 (9th Cir. 2021), the 9th Circuit found that Federal Aviation Administration regulation limiting flight attendant duty periods and imposing rest periods after release from duty did not preclude application of California Labor Code's rest and meal break requirements under doctrine of conflict preemption. The court reasoned that it was physically possible to comply with federal regulation prohibiting a duty period of longer than 14 hours, with a nine-hour rest requirement following, while also complying with California's requirement for 10-minute rest breaks and 30-minute meal periods at specific intervals. The court also held that the ADA did not preempt California Labor Code's rest and meal break requirements because Congress did not intend to preempt generally applicable state transportation, safety, welfare or business rules.

Finally, in Gulf Offshore, the Court of Appeal held that the FLSA exemption for seamen did not preempt the application of California wage and hour laws. The court reasoned that there was no evidence that Congress intended the FLSA's seamen exemption to preempt state law. Moreover, the California Supreme Court previously found in Tidewater Marine Western, Inc. v. Bradshaw, 14 Cal. 4th 557 (1996), that the FLSA does not preempt California law for individuals employed as seamen in the Santa Barbara Channel.

In sum, the past year has resulted in numerous wins for interstate transportation workers as the courts have furthered the reach of California's labor laws. 