At issue was whether the flight attendants had standing to assert violations of the California Labor Code when only 25% of Defendant’s flights were between California airports and class members spent only approximately 31.5% of their time working in California and in any event never more than 50% of their time in California. The district court certified a class of all California-based flight attendants who worked in California at any time during the relevant period, with two subclasses, one for California-based flight attendants who resided in California during the relevant period and one for formerly employed California-based flight attendants.

The Ninth Circuit began its analysis by noting that very few Supreme Court cases had invalidated state laws under the dormant Commerce Clause, and only then where “a compelling need for national uniformity in regulation” was shown. The Court of Appeals distinguished the cases upon which Defendant relied, finding that the dormant Commerce Clause did not apply to the main class here because “a claim that a proliferation of similar state laws would substantially burden Virgin is dubious.”

With regard to the two subclasses, the appellate court looked to the California Supreme Court’s decisions in Ward v. United Airlines, Inc. (2020) 9 Cal.5th 732, Oman v. Delta Air Lines, Inc. (2020) 9 Cal.5th 762, and Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191 for guidance as to what type of connections to California would trigger invoking the California Labor Code for each cause of action while rejecting Defendant’s “job situs” test as a misinterpretation of California law. As to the minimum wage claim, the Court of Appeals found the Oman rule controlled, that Defendant’s scheme, when taken as a whole, offered a guaranteed level of compensation rather than one based on hours worked. With respect to Plaintiffs’ overtime claim, the Ninth Circuit found the holding in Sullivan, where the California high court found California’s overtime provision applied to non-residents performing work in California, required the federal court to apply California overtime law to the proposed class, not only for work performed in California by non-residents but also for out-of-state work performed by California residents. Regarding the meal and rest period claims, as an initial matter the Court of Appeals found such claims were not preempted by either the Federal Aviation Act or the Airline Deregulation Act because neither law was intended to occupy the field of meal and rest breaks, just as it had held seven years earlier that the Federal Aviation Administration Authorization Act of 1994 does not preempt meal and rest breaks in the trucking industry. Having found California’s meal and rest break laws were not preempted, the Ninth Circuit held they also applied to the flight attendants, for the same reasons that Sullivan compelled application of California’s overtime laws to the proposed classes. Relying on Ward, the Court of Appeals also found California’s Labor Code section 226 (wage statements) applied to the proposed classes, since that Code section applies to workers who “perform the majority of their work in California; but if they do not perform the majority of their work in any one state, they will be covered if they are based for work purposes in California;” the record did not show that the flight attendants worked a clear majority in any one state. The Ninth Circuit also held, in the absence of controlling California authority, that Labor Code section 203 was analogous to Section 226 and therefore should apply to the proposed classes, too. Given the above, the Court reversed summary judgment as to the minimum wage claim but affirmed as to the overtime, meal and rest break, wage statement, and waiting time penalty claims.

The Court of Appeals also upheld the district court’s ruling on class certification, finding Plaintiffs had satisfied Rule 23 requirements. However, the Ninth Circuit limited the PAGA penalties to the lower penalty ($100 per aggrieved employee per pay period for an initial violation), finding Defendant had presented a defense thereby creating a good faith dispute and therefore Defendant did not receive notice it was violating the law until the district court ruled on summary judgment. Regrettably, this also meant the Court vacated the award of fees and costs.

CELA member Monique Olivier co-argued this appeal on behalf of the prevailing side. Kudos to Monique and her team!

Ninth Circuit. Filed 2/23/21. 990 F.3d 1157. Opinion by Judge Smith.