Court Rules on Applicability of California Wage Laws to Flight Attendants

The California Supreme Court recently issued rulings in two companion cases, including Oman v. Delta Airlines, Inc., Cal. Sup. Ct. Case No. S248726 and Ward v. United Airlines, Inc., Cal. Sup. Ct. Case No. S248702. Both of these cases looked at whether certain California labor provisions applied to flight attendants and pilots who occasionally work in California but who perform most of their work elsewhere. Factual and procedural backgrounds

In Ward, three cases were filed against United Airlines by pilots and flight attendants. The plaintiffs argued that California’s laws for wage statements should apply to them even though they performed work in other states. The plaintiffs were based in California and argued that United’s wage statements did not comply with the rules outlined under Cal. Lab. Code § 226 because they did not provide the hours worked and all of the hourly rates that the employees had earned but instead only included the totals. United moved the cases to federal court. The District Court judge granted United’s motions for summary judgment in each case. The District Court judge held that Lab. Code § 226 only applied to people whose principal job sites are located in California.

The plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit. The Ninth Circuit consolidated the three cases and asked the parties for supplemental briefs about Wage Order 9, which exempts transportation workers who work under collective bargaining agreements from the wage statement requirements. The Ninth Circuit then issued an order for the California Supreme Court to decide whether the exemptions under Wage Order 9 for workers under the Railway Labor Act for transportation workers apply to employees who have entered into collective bargaining agreements and whether Cal. Labor Code § 226 applies to workers who live in California and pay taxes in California but primarily work in locations outside of the state.

In Oman, four flight attendants filed a lawsuit against Delta Airlines, which offers services in about 12 California airports. Dev Anand Oman, one of the three plaintiffs, lived in New York and was based out of a New York airport. A second plaintiff, Michael Lehr, lived in Nevada but was based out of a California airport. The remaining two flight attendants both lived in California and were based out of California. The plaintiffs filed a putative class action claim in federal court against Delta, alleging that the airline failed to pay at least the minimum wage for all hours worked and instead used a formula to pay the flight attendants an hourly rate for some hours and nothing for other hours in contravention of California’s labor laws. They also argued that Delta failed to provide comprehensive wage statements under Cal. Labor Code § 226 and to pay on a semi-monthly timeframe under Cal. Labor Code § 204.

Delta filed a motion for summary judgment. The district court found that Delta’s payment methods did not violate California’s minimum wage laws and that the flight attendants were adequately compensated without borrowing for all of the hours worked. The court also found that Cal. Labor Codes §§ 204 and 226 did not reach Oman because the plaintiffs only worked a small portion of time in California. The plaintiffs appealed, and the U.S. Court of Appeals asked the California Supreme Court to answer whether the California labor laws apply to employees who work in California only on an episodic basis for an out-of-state employer, whether the state’s minimum wage laws apply to all of the hours of work that an employee performs in the state, and whether a bar on wage averaging applies to Delta’s pay formula. Issues: 1) Whether California’s labor codes apply to workers who only perform occasional work in California regardless of where they are based? 2) Whether working under a collective bargaining agreement bars wage claims under § 226?

In both cases, the plaintiffs argued that California’s labor laws apply to them because they perform work in California. Since they perform work in California, they argued that the airlines must provide them with comprehensive wage statements as required by California law. They also argued that the pay formulas used by the airlines did not compensate them for all of the hours that they worked as required by California law. Rules: 1) Under § 226, employers must provide comprehensive wage statements to their employees. 2) Wage Order 9 exempts employees under the Railway Labor Act from wage statement requirements.

Cal. Labor Code § 226 states that workers in California must be provided with comprehensive wage statements on a semimonthly basis. The statements must include detailed information about the number of hours worked and the hourly rate for all hours worked. Wage Order 9 from the Industrial Welfare Commission exempts transportation workers under the Railway Labor Act from the wage statement requirements.

Analysis

In Ward, the court first looked at Wage Order 9 and considered whether its provisions barred transportation employees who are working under a collective bargaining agreement from bringing wage statement claims. It noted that the provisions of Wage Order 9 exempt workers who work under collective bargaining requirements from the requirement of providing itemized wage statements. However, it also found that § 226 did not contain a similar exemption and that Wage Order 9 does not apply to other provisions of the law.

The court then looked at § 226 and noted that it did not refer to Wage Order 9’s Railroad Worker Act exemption but did refer to other wage order exemptions. The court noted that § 226 was enacted before Wage Order 9 and requires extensive information on the wage statements provided to employees in California. It also found that the legislature had never extended the exemption in Wage Order 9 to people working under a collective bargaining agreement. The court then looked at the reach of § 226 and whether it can be applied to workers who work only de minimus times in California. United argued that it would be extraterritorial to make it comply with the wage statement requirements for workers who worked primarily outside of California. The plaintiffs argued that they should receive the itemized wage statements because they work and live in California and pay California taxes. The court found that for interstate transportation workers who work in multiple states but whose work is based in California, the wage statement provisions of § 226 apply and are not barred by Wage Order 9.

In Oman, the court used the geographic application of § 226 it established in Ward in which the reach of the law for interstate transportation workers depends on where they are based. The court noted that Oman did not perform most of his work in California and was based out of New York. It found that short periods of work in California by an out-of-state worker do not entitle the worker to the wage statement provisions of § 226. It also found that the airline’s pay scheme did not violate the minimum wage provisions of the law. Conclusion

The California Supreme Court submitted its findings in both cases back to the Ninth Circuit. Get help from a Los Angeles employment lawyer

People who believe that they have not been fairly compensated for all of the hours that they have worked and who have not received compliant wage statements may want to talk to an experienced employment law attorney in Los Angeles. Contact Steven M. Sweat, APC to schedule a free consultation about wage and hour claims at 866.966.5240.

Sources

[1] https://law.justia.com/cases/california/supreme-court/2020/s248726.html
[2] https://law.justia.com/cases/california/supreme-court/2020/s248702.html
[3] https://www.elaborlaw.com/wage-and-hour-claims.html
[4] https://law.justia.com/codes/california/2011/lab/division-2/200-243/226/
[5] https://www.dir.ca.gov/IWC/WageOrders2005/IWCArticle9.html