986 F.3d 1234
9th Cir.2021Background
- Consolidated class actions by California-resident United Airlines pilots and flight attendants alleging wage statements violate Cal. Labor Code § 226 (missing employer street address; failure to itemize hours and applicable hourly rates on the wage statement itself).
- United issues separate online “pay registers” with detailed pay information; plaintiffs contend § 226 requires the wage statement alone to contain required items.
- District courts granted summary judgment for United, holding § 226 applied only to employees who work "principally" in California; plaintiffs appealed and the Ninth Circuit certified a question to the California Supreme Court.
- California Supreme Court (Ward) held § 226 applies if the employee’s principal place of work is California, and for interstate transportation workers who do not work a majority in any state, if the worker is based in California (i.e., designated home-base airport and does some work in California).
- Most class members meet the Ward test (designated California home-base airports though majority of work occurs outside California); United argues federal preemption under the dormant Commerce Clause, the Airline Deregulation Act (ADA), and the Railway Labor Act (RLA).
- Ninth Circuit rejects United’s preemption and constitutional arguments, reverses summary judgment, and remands for district courts to adjudicate § 226 liability and modify class definitions and class period to conform to Ward.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 226 apply to pilots/flight attendants based in CA who work mostly outside CA? | Ward: §226 applies to employees based in CA (home-base airport) who perform some work in CA. | United: §226 should not reach employees who do not work principally in CA. | Held: Apply California Supreme Court’s Ward test; §226 covers class members who are based in CA and do some work there. |
| Dormant Commerce Clause | Plaintiffs: Application is non-discriminatory and CA has sufficient nexus; burden is not excessive. | United: Application is extraterritorial and imposes substantial burdens and a risk of regulatory patchwork. | Held: No violation; statute is non-discriminatory, nexus to employment is adequate, and burdens are not clearly excessive. |
| ADA preemption (49 U.S.C. § 41713) | Plaintiffs: §226 is a generally applicable background wage-disclosure law not related to prices/routes/services. | United: Compliance will affect costs and thus prices/routes/services, so ADA preempts. | Held: Not preempted; any effect on prices/routes/services is too tenuous/remote and §226 is a background regulation. |
| RLA preemption | Plaintiffs: §226 rights are statutory, not created by CBAs, and resolution does not require interpreting CBAs. | United: Dispute is a minor dispute under the RLA, preempting state-law claims. | Held: Not preempted; Schurke two-step test shows claims are not grounded in CBAs nor require CBA interpretation. |
Key Cases Cited
- Ward v. United Airlines, Inc., 466 P.3d 309 (Cal. 2020) (defines when §226 applies to California-based interstate transportation workers)
- Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) (dormant Commerce Clause balancing test)
- Healy v. Beer Institute, 491 U.S. 324 (1989) (extraterritoriality principle)
- Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644 (2003) (limits extraterritoriality rule; distinguishes price-control cases)
- S.D. Myers, Inc. v. City & County of San Francisco, 253 F.3d 461 (9th Cir. 2001) (sufficient nexus to regulate employment-related benefits)
- Dilts v. Penske Logistics, LLC, 769 F.3d 637 (9th Cir. 2014) (FAAAA/ADA preemption: generally applicable workplace rules are not preempted)
- Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) (broad ADA preemption principles)
- Rowe v. New Hampshire Motor Transport Ass'n, 552 U.S. 364 (2008) (background regulations vs. preemption analysis)
- Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246 (1994) (RLA major/minor dispute framework)
- Alaska Airlines Inc. v. Schurke, 898 F.3d 904 (9th Cir. 2018) (two-step test for RLA preemption of state-law claims)
- Air Transp. Ass'n of Am. v. City & County of San Francisco, 266 F.3d 1064 (9th Cir. 2001) (example of no ADA preemption for municipal employee-benefit regulation)