889 F.3d 1075
9th Cir.2018Background
- Four Delta Air Lines flight attendants sued, alleging violations of California wage-and-hour laws (minimum wage, wage timing §204, and wage statements §226) based on work they performed in California episodically and for less than a day at a time.
- Plaintiffs worked only a small portion of their flight-related hours in California (3%, 9%, 14%, 11% in sample periods).
- Delta pays flight attendants under a credit-based pay formula (multiple credit calculations; employer selects the calculation producing the most credits per rotation). Some calculations do not credit every hour on duty, though the formula never produced average hourly pay below California minimum wage for these plaintiffs.
- Plaintiffs contend the Flight Pay calculation impermissibly averages paid productive time with unpaid unproductive time (invoking Armenta/Gonzalez) and that California wage-timing and wage-statement laws apply to brief in-state work.
- The district court granted summary judgment to Delta on minimum-wage and extraterritoriality grounds; the Ninth Circuit certified three questions to the California Supreme Court because California precedent does not clearly resolve (1) territorial reach of §§204 and 226, (2) application of California minimum-wage law to episodic in-state work by out-of-state employers, and (3) whether Armenta/Gonzalez’s bar on averaging wages applies to Delta’s credit system.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cal. Labor Code §§ 204 and 226 apply when an out-of-state employer pays an employee who worked in California only episodically and for less than a day | Oman: §204 and §226 apply to any pay period in which work occurred in California (location-of-work controls) | Delta: California labor statutes should not reach de minimis episodic in-state work by out-of-state employers (extraterritoriality/comity limits) | Ninth Circuit could not decide; certified the question to the California Supreme Court |
| Whether California minimum-wage law applies to all work performed in California by an out-of-state employer when the employee works in California only episodically and for less than a day | Oman: California minimum wage applies to any work performed in California regardless of duration | Delta: California law should not apply to brief episodic in-state work by non-California employers/employees (limits from Sullivan/Tidewater) | Ninth Circuit could not decide; certified the question to the California Supreme Court |
| Whether Armenta/Gonzalez bar on averaging wages applies to Delta’s credit-based pay formula that generally credits all duty hours but sometimes omits credit for some hours when a higher-pay calculation applies | Oman: Flight Pay averages hours and thus violates Armenta/Gonzalez because not every hour receives minimum-wage credit | Delta: The system never produces hourly pay below minimum; credit system and Work Rules sever the direct link between specific hours and pay so Armenta/Gonzalez may not apply | Ninth Circuit could not decide whether Armenta/Gonzalez applies to this fact pattern; certified the question to the California Supreme Court |
| Whether California extraterritoriality principles (Tidewater/Sullivan) resolve these claims | Oman: California interest in protecting work performed and receipt of pay in California supports application | Delta: Comity and territorial limits counsel against applying California law to out-of-state operations with minimal in-state contacts | Ninth Circuit found existing California precedent (Tidewater, Sullivan) inconclusive and certified questions for clarification |
Key Cases Cited
- Sullivan v. Oracle Corp., 254 P.3d 237 (Cal. 2011) (articulates test for extraterritorial application of California law focusing on where liability-creating conduct occurs)
- Tidewater Marine W., Inc. v. Bradshaw, 927 P.2d 296 (Cal. 1996) (wage orders apply where employee resides in California, receives pay in California, and works principally in California)
- Armenta v. Osmose, Inc., 37 Cal. Rptr. 3d 460 (Ct. App. 2005) (rejects FLSA-style averaging; minimum wage must apply to each hour worked)
- Gonzalez v. Downtown LA Motors, LP, 155 Cal. Rptr. 3d 18 (Ct. App. 2013) (applies Armenta to bar agreements that average wages across different types of work)
- RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090 (2016) (Supreme Court guidance on presumption against extraterritorial application of statutes)
- Diamond Multimedia Sys., Inc. v. Superior Court, 968 P.2d 539 (Cal. 1998) (analysis of where conduct relevant to statute’s focus occurs)