Opinion
Case No. 17–cv–03233–VC
01-08-2018
Dan GOLDTHORPE, et al., Plaintiffs, v. CATHAY PACIFIC AIRWAYS LIMITED, et al., Defendants.
David Emilio Mastagni, Isaac Sean Stevens, Mastagni Holstedt Amick Miller Johnsen & Uhrhammer, Sacramento, CA, Bryson R. Brown, Nathan D. Alder, Sarah E. Spencer, Christensen and Jensen, Salt Lake City, UT, Ace Thomas Tate, Rohnert Park, CA, for Plaintiffs. John Peter Zaimes, Roxanne McClure Wilson, Mayer Brown LLP, Los Angeles, CA, for Defendants.
David Emilio Mastagni, Isaac Sean Stevens, Mastagni Holstedt Amick Miller Johnsen & Uhrhammer, Sacramento, CA, Bryson R. Brown, Nathan D. Alder, Sarah E. Spencer, Christensen and Jensen, Salt Lake City, UT, Ace Thomas Tate, Rohnert Park, CA, for Plaintiffs.
John Peter Zaimes, Roxanne McClure Wilson, Mayer Brown LLP, Los Angeles, CA, for Defendants.
ORDER RE MOTION TO DISMISS
VINCE CHHABRIA, United States District Judge
The plaintiffs in this case are pilots for Cathay Pacific Airways. They are based either in San Francisco or Los Angeles. According to the allegations in the complaint, roughly three times per month the airline schedules pilots for a round trip flight between their home base and Hong Kong. In addition, the airline schedules pilots for "reserve" duty, which requires them to remain near their home base and be available to leave on flights to Hong Kong on short notice. Given the nature of air travel, the plaintiffs do not spend the majority of their work time in any one location. But because they are based in California, do a substantial amount of pre-flight preparation work in California, and perform reserve duty in California, they spend far more work time in California than in any other jurisdiction.
The plaintiffs believe they are covered by California's wage and hour laws, and they allege Cathay has denied them the protections of those laws. For example, they allege Cathay has failed to give them overtime pay and denied them meal and rest breaks. Cathay has filed a motion to dismiss, arguing (among other things) that California's wage and hour protections do not apply in circumstances like these. Although its briefs are not particularly clear, Cathay seems to make two related but distinct arguments: (i) because the pilots perform most of their work outside the state, they cannot be considered "California employees" who are protected by California's wage and hour laws; and (ii) putting aside the work the pilots perform within California, the work performed outside California cannot be covered by California's wage and hour laws because of the presumption against extraterritorial application of those laws. Both of these arguments are wrong.
First, it is wrong to assume, as a categorical matter, that California's wage and hour laws may only protect employees who do the large majority of their work in California. Although some district courts have assumed what Cathay argues here, Judge Tigar has explained why that assumption is incorrect and contrary to California Supreme Court case law. Bernstein v. Virgin America, Inc. , No. 15-CV-2277-JST, 2016 WL 6576621, at *8–10 (N.D. Cal. Nov. 7, 2016). Indeed, in Sullivan v. Oracle Corp. , the California Supreme Court held that California's overtime protections can apply to people based in other states who travel temporarily to California to perform work. 51 Cal. 4th 1191, 1197–98, 127 Cal.Rptr.3d 185, 254 P.3d 237 (2011). This alone defeats any argument that the wage and hour laws categorically cannot apply unless an employee's primary work location is California. As Sullivan shows, and as Judge Tigar has explained, no one factor dictates whether California law applies—it depends on all the facts and circumstances. Bernstein v. Virgin America, Inc. , 227 F.Supp.3d 1049, 1059–60 (N.D. Cal. 2017). And in circumstances analogous to these, involving airline employees, Judge Tigar has noted that "although the Plaintiffs spent just around a quarter of their total work time in California, that consideration is relatively less important where, as here, temporary out-of-state travel is an inherent part of their job." Id. at 1060.
Second, Cathay is wrong, in this context, to invoke the presumption against extraterritorial application of California's laws. To be sure, the presumption governs if a law is silent on the issue of extraterritorial application. But this presumption is rebutted if an intent to cover work performed outside California's boundaries can reasonably be inferred " ‘from the language of the act or from its purpose, subject-matter, or history.’ " N. Alaska Salmon Co. v. Pillsbury , 174 Cal. 1, 4, 162 P. 93 (1916). Transportation workers are covered by Industrial Welfare Commission Order 9–2000, which is codified at Cal. Code Regs. tit. 8, § 11090 ("Order Regulating Wages, Hours, and Working Conditions in the Transportation Industry"). The language of the Wage Order strongly suggests that the Industrial Welfare Commission intended for California wage and hour law to cover California-based transportation workers while they are traveling elsewhere as part of their jobs. Specifically, Section 1(E) of Wage Order 9 provides:
Except as provided in Sections 4, 10, 11, 12, and 20 through 22, this order shall not be deemed to cover those employees who have entered into a collective bargaining agreement under and in accordance with the provisions of the Railway Labor Act, 45 U.S.C. Sections 151 et seq.
Some airlines have collective bargaining agreements with their pilots, flight attendants, and other employees. These collective bargaining agreements are regulated by the Railway Labor Act. But some airline employees (including, until recently, Cathay's pilots) are not covered by a collective bargaining agreement. Therefore, Section 1(E) of Wage Order 9 stands for the proposition that certain airline workers (i.e., those who don't have collective bargaining agreements) will be fully covered by the Wage Order. Moreover, the above-quoted language merely exempts CBA-covered airline workers from some aspects of the Wage Order. Other aspects of the Wage Order (including for example, provisions pertaining to minimum hourly wages) still apply to these CBA-covered workers. It is obvious that many CBA-covered airline workers will travel across state lines in the course of their employment, and it is implausible that the Industrial Welfare Commission would not have been aware of that fact.
The history of the above-quoted language shows that the Commission was indeed aware that California-based transportation workers often perform portions of their work out of state, and that sometimes this work needs to be covered by California law. In the "Statement of Findings" accompanying the adoption of this partial exemption for CBA-covered transportation workers, the Commission seemed to recognize that, while it is difficult to regulate interstate work and therefore largely not worth doing so if an employee is protected by a collective bargaining agreement regulated by the RLA, it is a necessary undertaking in situations where an employee lacks such protection:
Certain employees were exempted in the Applicability section from provisions of Order 9–76, Transportation. The Commission found that it would be difficult to enforce standards for employees crossing state lines and that the exempted employees were better protected by their collective bargaining agreements pursuant to the Railway Labor Act.
Dkt. No. 41 at 13, Industrial Welfare Comm'n, Statement of Findings by the Industrial Welfare Commission of the State of California in Connection with the Revision in 1976 of Its Orders Regulating Wages, Hours, and Working Conditions 6 (1976), https://perma.cc/V849-3UG3.
Finally, because the Labor Code and IWC wage orders are complementary and must be harmonized, the language and history of Wage Order 9 also supports the application of the Labor Code to California-based transportation workers who travel outside of the state as part of their work. See Brinker Restaurant Corp. v. Superior Court , 53 Cal. 4th 1004, 1026–27, 139 Cal.Rptr.3d 315, 273 P.3d 513 (2012).
In sum, 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 (including Wage Order 9) were designed to protect workers, and to prevent employers from exploiting their bargaining advantage by denying workers fair wages and tolerable working conditions. Cotter v. Lyft, Inc. , 60 F.Supp.3d 1067, 1074 (N.D. Cal. 2015) ; see also Brinker , 53 Cal. 4th at 1026–27, 139 Cal.Rptr.3d 315, 273 P.3d 513. Courts must construe these laws "with an eye towards the purposes [they] were meant to serve, and the type of person they were meant to protect." Cotter , 60 F.Supp.3d at 1075. According to the complaint, the plaintiffs are based in California, the nature of their work prevents them from being in one location for the majority of their working hours, and they perform more work in California than anywhere else. California has a strong interest in protecting workers who fit this description. See Bostain v. Food Express, Inc. , 159 Wash. 2d 700, 710–11, 153 P.3d 846 (2007) (holding that truckers based in Washington who drive interstate are protected by Washington's wage and hour laws) (cited with apparent approval by the California Supreme Court in Sullivan , 51 Cal. 4th at 1200, 127 Cal.Rptr.3d 185, 254 P.3d 237 ).
What's more, California is the only state in this country where the plaintiffs perform work—the rest of their work time is spent in international air space or in Hong Kong. Although California law could certainly apply even if the plaintiffs did perform work in other states, the fact that they don't makes Cathay's arguments even weaker. After all, the presumption against extraterritorial application of the wage and hour laws is based in significant part on comity. Sullivan , 51 Cal. 4th at 1199, 127 Cal.Rptr.3d 185, 254 P.3d 237. Applying State A's laws to work performed in State B has the potential to infringe upon State B's police power—that is, the power of a state to regulate relationships and protect the health and welfare of its people. See Cotter v. Lyft, Inc., 60 F.Supp.3d 1059, 1061 (N.D. Cal. 2014) ("[E]ach state has the right (subject to federal law, of course) to regulate the work performed within its own borders without regard to another state's approach to regulating the employer-employee relationship."). No such comity interest is implicated here.
For all these reasons, Cathay's motion to dismiss on the ground that California's wage and hour protections cannot apply in circumstances like those alleged in the complaint is denied.
The remainder of Cathay's motion to dismiss will be address in a separate order.