Pilots’ late wages suit revived after change in Labor Code

Following changes the Legislature made to the Labor Code, pilots for Cathay Pacific Airways can revive their dismissed claims for late wage payments, a federal judge ruled Thursday.

U.S. District Judge Vince Chhabria in San Francisco dismissed the pilots' claims in 2018. He reasoned that Section 204 of the Labor Code, which governs how frequently employees must be paid, did not provide for a private right of action.

But in 2019, the Legislature amended the code to allow employees to directly sue employers for statutory penalties when they are not paid on time while they are employed. The change went into effect on Jan. 1, 2020.

In a joint stipulation, the pilots and Cathay Pacific Airways asked Chhabria on Tuesday to let the pilots pursue their late wage payment claims, prospectively from the effective date of the change. Goldthorpe et al v. Cathay Pacific Airways Limited et al., 3:17-cv-03233-VC (N.D. Cal., filed June 5, 2017).

Thursday's ruling was the second time Chhabria walked back a decision based on later changes to state employment rules. In October, the judge gave the plaintiffs permission to pursue claims related to itemized wage statements for the period after September 2016. Chhabria originally ruled in 2018 that the claims were only actionable before September 2016, the month when the plaintiffs' employment started being governed by a collective bargaining agreement.

Chhabria's October decision was guided by a 2020 state Supreme Court opinion, Ward v. United Airlines, Inc., 9 Cal. 5th 732 (2020), which clarified that employees governed by a collective bargaining agreement could still pursue the itemized wage statement claims.

The plaintiffs sued Cathay Pacific Airways in 2017, alleging the company did not pay them in a timely manner, provide accurate itemized wage statements, give overtime or double-time compensation, or provide meal and rest breaks in accordance with state law.

The company argued that the plaintiffs were not covered by California's wage and hour laws because they did not perform most of their work within the state. Chhabria dismissed this argument in 2018, writing, "There is no categorical rule that California's wage and hour protections can only apply if most of an employee's work is performed within the state, and the presumption against extraterritorial application does not prevent the application of California wage and hour law to transportation workers based in California who travel interstate. Absent such a categorical rule, and absent the presumption against extraterritorial application, it is difficult to think of a reason why California law should not apply in this situation."

"After all, California's wage and hour laws ... were designed to protect workers, and to prevent employers from exploiting their bargaining advantage by denying workers fair wages and tolerable working conditions," he added.