ORDER REGARDING MOTION FOR SUMMARY JUDGMENT
Re: ECF No. 97
Before the Court is Defendant Virgin America’s motion for summary judgment. ECF No. 97. The Court will deny the motion in part and grant the motion in part.
I. BACKGROUND
The Plaintiffs are flight attendants who currently work or have previously worked for Defendant Virgin America, Inc. (“Virgin”). In this class action against Virgin, the Plaintiffs allege that Virgin did not pay them for hours worked before, after, and between flights; time spent in training; time on reserve; time spent taking mandatory drug tests; and time spent completing incident reports. See First Amended Class Action Complaint, ECF No. 32 ¶¶ 28-41. The Plaintiffs further allege that Virgin did not allow flight attendants to take meal or rest breaks, failed to pay overtime and minimum wages, and failed to provide accurate wage statements. H.
A. Factual Summary
1. The Parties
Virgin is an airline company that is headquartered in Burlingame, California. Depo. of Valerie Jenkins, ECF No. 44-1 at 71:4.
Plaintiffs Julia Bernstein, Esther Garcia, and Lisa Marie all previously worked for or currently work for Virgin as flight attendants. ECF No. 50-17, Exs. 23-25. Each of the Plaintiffs provided Virgin with a California address and each of the Plaintiffs were based out of either San Francisco International Airport or Los Angeles International Airport during the course of
2. Flight Attendant Scheduling Terminology and Responsibilities
Virgin schedules its flight attendants to fly “pairings,” a series of flights over a series of continuous days that depart and return to the airport out of which flight attendants are based. ECF No. 44-1, Ex. 1 at 4:10-16; ECF No. 44-1, Ex. 2 at 59:6-13. Each pairing consists of one or more “duty periods.” ECF No. 44-1, Ex. 1 at 5:18-25. Virgin’s Work Rules require that each flight attendant report for duty one hour before the departure of her first scheduled flight of the day. ECF No. 45-2, Ex. 8 at 31. After they check in for duty, flight attendants must travel to the departure gate of their first flight and be on-board the flight no less than forty-five minutes before the scheduled departure. ECF No. 46-2 at 18. They must also attend two pre-flight briefings, greet and assist passengers in boarding, and generally prepare the cabin for departure. ECF No. 47-2 at 131-134; ECF No. 47-2 at 143-146. “Block time” is the amount of time within a duty period from when an aircraft pushes back from the gate (“block out”) at its departure city to when the aircraft arrives at the gate (“block in”) at its destination. ECF No. 50-2 at 6:11-21, 8:13-21. Once the flight arrives at its destination, flight attendants help passengers deplane and check the cabin for items left onboard. ECF No. 47-2 at 177. Flight attendants are not released from duty until fifteen minutes after their last scheduled flight of the day. ECF No. 45-3 at 2. Sometimes a flight attendant will need to travel as a passenger on a flight to arrive at an airport for an assigned flight. This time spent traveling is referred to as “deadheading.”
When a flight attendant works a subsequent flight in a duty period, the time between the block in of the first flight and block out of the second flight is referred to as “turn time.” As with the first flight of the day, flight attendants must report for duty at the second flight’s departure gate and be onboard that flight forty-five minutes before the scheduled departure. ECF 47-2 at 129. Flight attendants remain on duty during turn time. ECF No. 44-1 at 93:13-20.
3. Virgin’s Policies Regarding Compensation and Breaks
Virgin’s InFlight Work Rules outline its detailed compensation policies for flight attendants. ECF Nos. 45-46, Exs. 8, 9,10. And Virgin’s Crew Pay Manual is used by Virgin’s payroll department to process flight attendant compensation. ECF No. 47-3, Ex. 12.
Pursuant to those policies, Virgin uses a credit-based system to compensate its flight attendants. ECF No. 45-4 at 12-13. That system does not directly compensate flight attendants for all hours on duty. ECF No. 47-3 at 8 (“Even for flying activity, crewmembers are not paid for time ‘on the clock’ (duty time); instead, they are typically paid only when the aircraft is moving (block time).”). Flight attendants receive an hour of credit for each hour of block time, fifty percent of block time for time spent deadheading, and a minimum of 3.5 hours of “minimum duty period credit” for duty periods in which the flight attendant does not earn at least 3.5 hours of credit from block time and/or deadheading. ECF No. 45-4 at 12-13. Virgin’s system does not directly compensate duty hours that do not fall into one of these thi-ee categories (e.g. pre- and post-block duty time and turn time between flights). See id.
Virgin does, however, pay flat rates for some non-flight activities. For example, it
Per Virgin’s policies, crew leaders provide rest and meal periods for flight attendants. ECF No. 50-13 at 22. However, Virgin admits that, although its flight attendants have the opportunity to take breaks, they are still on duty throughout the entirety of a flight. ECF No. 71 at 15; ECF No. 44-1 at 96:1-6. Many flight attendants claim that they are unable to take breaks on flights. See, e.g., ECF No. 50-17, Ex. 23, ¶ 18. Approximately one-hird of Virgin’s daily flights since 2011 have been longer than five hours in duration. ECF No. 101-26 at 6-8.
Virgin’s wage statements do not indicate the duty period hours worked or the block hours worked. ECF No. 50-2, Ex. 1 at 34:19-21, 36:17-24; ECF No. 101-23, 101-24,101-25.
B. Procedural History
The Plaintiffs commenced this action in state court, and Virgin removed it to federal court pursuant to the diversity jurisdiction provision of the Class Action Fairness Act (“CAFA”). ECF No. 1.
Plaintiffs bring claims under the California Labor Code and California Industrial Welfare Commission Wage Order 9-2001 (“Wage Order”) for failure to pay minimum wage, failure to pay overtime wages, failure to pay wages for all hours worked, failure to provide required meal periods, failure to provide required rest periods, failure to provide accurate wage statements, failure to pay waiting time penalties to discharged employees, failure to indemnify all necessary business expenditures, and derivative claims under California’s Unfair Competition Law (“UCL”) and the Private Attorney General Act (“PAGA”). ECF No. 32.
On November 7, 2016, this Court certified the following Class and Subclasses under Rule 23(b)(3):
Class: All individuals who have worked as California-based flight attendants of Virgin America, Inc. at any time during the period from March 18, 2011 (four years from the filing of the original Complaint) through the date established by the Court for notice of certification of the Class (the “Class Period”).
California Resident Subclass: All individuals who have worked as California-based flight attendants of Virgin America, Inc. while residing in California at any time during the Class Period.
Waiting Time Penalties Subclass: All individuals who have worked as California-based flight attendants of Virgin America, Inc. and have separated from their employment at any time since March 18, 2012.
Virgin now moves for summary judgment. ECF No. 97.
II. JURISDICTION
Pursuant to the Class Action Fairness Act (“CAFA”), the Court has jurisdiction over this case, as a class action in which a member of the class of plaintiffs is a citizen of a state different from any defendant, there are more than 100 class members nationwide, and the matter in controversy exceeds the sum of $5 million, exclusive of interests and costs. 28 U.S.C. § 1332(d).
III. LEGAL STANDARD
Summary judgment is proper when a “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ, P. 56(a), “A party asserting that a fact cannot be or is genuinely disputed must support the assertion by” citing to depositions, documents, affidavits, or other materials. Fed. R. Civ. P. 56(c)(1)(a). A party also may show-that such materials “do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact,” Fed. R. Civ. P. 56(c)(1)(B). An issue is “genuine” only if there is sufficient evidence for a reasonable fact-finder to find for the non-moving party. Anderson v. Liberty Lobby, Inc.,
Where the party moving for summary judgment would bear the burden of proof at trial, that party bears the initial burden of producing evidence that would entitle it to a directed verdict if uncontroverted at trial. See C.A.R. Transp. Brokerage Co. v. Darden Rests, Inc.,
Virgin argues that applying California labor law to the Plaintiffs’ employment would violate both the presumption against extraterritorial application and the Dormant Commerce Clause. Virgin further argues that the Plaintiffs’ meal and rest break claims are preempted by the Federal Aviation Act and the Airline Deregulation Act. Finally, Virgin argues that, even if California law applies, Virgin’s policies and practices comply with California law and the Plaintiffs have failed to present sufficient evidence to prevail on their claims.
A. Application of California’s Labor Laws
1. Job Situs is Not Dispositive
As it did when opposing class certification, Virgin again argues that California labor law does not protect the Plaintiffs because they do not work “exclusively or principally” in California, but rather across “multiple jurisdictions” and “in the federally regulated airspace.” ECF No. 97 at 19-22. Virgin claims that this “job situs” test is “determinative.” Id.
The Court again rejects Virgin’s singular emphasis on job situs as the dispositive factor to determine whether California’s wage and hour laws apply to Plaintiffs. See ECF No. 104 at 14-17. As explained at length in the class certification order, Virgin’s position lacks relevant support in the case law. See id.
Virgin relies primarily on Tidewater Marine W., Inc. v. Bradshaw,
Lacking sufficient support from the California Supreme Court, Virgin again turns to three federal district court cases to find support for its dispositive “job situs” test. Because the Court has already explained at length why those cases are factually distinguishable and legally erroneous, it does not address them again here. See ECF No. 104 at 14-17.
Instead of considering principal “job situs” in a vacuum, the California Supreme Court has endorsed a multi-facet-ed approach. The California Supreme
This multi-faceted approach is consistent with California’s strong public policy of protecting its workers. The Sullivan court stressed that the wage and hour laws “serve important public policy goals” and therefore they should be applied in a way that would not encourage employers to evade the law. Sullivan,
As applied to this case, the Court finds that Plaintiffs’ and Virgin’s significant connections to California are also relevant considerations when determining whether to apply California’s wage and hour laws. The Plaintiffs were California residents
Given Virgin’s thin precedential support for its position that “job situs” is determinative, the other compelling considerations present in this case, and California’s strong public policy of protecting its workers, the Court concludes that the Plaintiffs are not barred from asserting claims under California’s wage and hour laws simply because they did not work exclusively or principally in California.
2. The California Labor Code Applies to Work Performed in California and Wrongful Conduct that Occurred in California
Virgin also argues that the Plaintiffs cannot seek protection of the California Labor Code for work that they performed outside of the state due to the presumption against the extraterritorial application of California law. See ECF No. 97 at 19.
At the outset, it is important to stress that many of the Plaintiffs’ claims relate to work performed within California’s borders to which California law clearly applies. For example, one of the Plaintiffs’ primary allegations is that they were not paid for time spent working before takeoff and after landing in California airports.
Both the plain terms of the California Labor Code and California Supreme Court precedent confirm that the California Labor Code applies to work performed in California. The preamble to California’s Labor Code provides that its protections “are available to all individuals ... who have applied for employment, or who are or who have been employed, in this state.” Cal. Lab. Code § 1171.5(a).
Based on this clear statutory text, the California Supreme Court has concluded that California’s overtime laws “speak broadly” to “regulate all nonexempt overtime work ivithin its borders.” Sullivan v. Oracle Corp.,
Still, the Plaintiffs must overcome the presumption against extraterritorial application to the extent they seek to recover based on work performed outside of California. California law presumptively does not apply to conduct that occurs outside of California. See N. Alaska Salmon Co. v. Pillsbury,
Instead of trying to overcome the presumption by pointing to the relevant statutory language or legislative history, Plaintiffs seek to avoid the presumption against extraterritorial application áltogether by arguing that the alleged wrongful conduct giving rise to liability occurred within California. See ECF No. 102 at 18. The Plaintiffs argue that, “even if a presumption against extraterritorial application applies generally to the Labor Code,” the Court must still “consider whether plaintiffs’ proposed application of the [law] would cause it to operate, impermissibly, with respect to occurrences outside the state.” Id. (quoting Sullivan,
Even if the presumption against extraterritorial application applies to a particular statute, the court must still consider “whether plaintiffs’ proposed application of the [law] would cause it to operate, impermissibly, with respect to occurrences outside the state,” Sullivan,
To determine whether a state law is being applied extraterritorially, courts consider “whether ‘the conduct which gives rise to liability ... occurs in California.’ ” Leibman v. Prupes, No. 2:14-CV-09003-CAS,
The Court concludes that the wrongful conduct giving rise to liability occurred in California such that the Plaintiffs’ claims do not constitute an attempt to apply the law to occurrences outside of the state. Plaintiffs challenge Virgin’s centrally devised compensation policies, such as its policies of not compensating flight attendants for non-block duty time and paying flat rates for drug testing and training activities. See generally ECF No. 32; ECF Nos. 45, 46, 47-3 (outlining Virgin’s detailed compensation policies for flight attendants). As in the above cases, Virgin made these critical decisions regarding how it would pay its flight attendants, and proceeded to pay its flight attendants in accordance with those decisions, from its headquarters in Burlingame, California. Therefore, the very actions giving rise to potential liability—that is, the failure to pay for all hours worked, the failure to pay overtime, the failure to provide accurate wage statements, and the failure to pay waiting time penalties to discharged employees—occurred in California. Because the Plaintiffs’ proposed application of the law would not impermissibly operate to reach conduct occurring outside of the state, the presumption against extraterritorial application does not apply and the Plaintiffs do not have to overcome it.
The only wrongful conduct that could have potentially occurred outside of California, at least in some instances, is Vir
However, the Court nonetheless declines to grant summary judgment to Virgin on the meal and rest break claims because there is sufficient evidence that the Plaintiffs were deprived of at least some of those breaks while working in California. See ECF No. 101-17 at 2 (showing days on which Plaintiffs Esther Garcia and Lisa Smith flew back and forth between Los Angeles, San Francisco, and San Diego); ECF No. 98-2 at 6-7 (concluding that the Plaintiffs were sometimes eligible for meal periods or rest breaks based on the length of their pairings); ECF No. 50-17, ¶¶ 18-19 (Plaintiff Bernstein declaring that she “cannot remember ever being encouraged or directed to take a break or meal period” and that she does not remember taking a meal period during turn time between flights). Therefore, the Court cannot conclude as a matter of law that the break claims solely involve extraterritorial conduct such that California law may not apply to those claims. Aguilar,
B. Dormant Commerce Clause
Second, Virgin argues that requiring it to comply with California’s labor laws would violate the Dormant Commerce Clause. ECF No. 97 at 22-25.
The United States Constitution’s Commerce Clause grants Congress the authority “[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes[.]” U.S. CONST, art. I, § 8, cl. 3. Because the framers gave the federal government the exclusive power to regulate interstate commerce, and because federal law preempts state law, the United States Supreme Court has inferred the existence of a “dormant” Commerce Clause that limits states’ abilities to restrict interstate commerce. See New Energy Co. v. Limbach,
At the same time, the Dormant Commerce Clause “respects federalism by protecting local autonomy.” Nat’l Ass’n of Optometrists & Opticians v. Harris,
There are two ways in which a state regulation may violate the Dormant Commerce Clause. First, a state regulation is virtually per se invalid under the Dormant Commerce Clause if it discriminates against out-of-state entities. Dep’t of Revenue v. Davis,
Second, a state regulation that “regulates even-handedly to effectuate a legitimate local public interest” and whose “effects on interstate commerce are only incidental” may nonetheless violate the Dormant Commerce Clause if “the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Sullivan v. Oracle Corp.,
Virgin argues that, if it is forced to comply with the California Labor Code, it will necessarily have to comply with other states’ wage and hour laws, too. ECF No. 97 at 22. As a result, it argues, “Application of the state regulations at issue would subject Virgin to an ever changing national patchwork of wage and hour law, and therefore places an undue burden on interstate commerce” that outweighs California’s interest in protecting its employees. ECF No. 107 at 14. Virgin further argues that the need for uniform regulation is especially important in the airline industry, which is inherently national. ECF No. 97 at 23. Finally, Virgin argues that it will incur substantial costs if required to comply with the California Labor Code. ECF No. 120 at 4.
As a preliminary matter, the Court rejects Virgin’s premise that it will necessarily be required to comply with each state’s wage and hour laws. As explained above, Virgin is subject to California law because
Absent this flawed premise, Virgin’s argument regarding its administrative burden falls apart. Virgin relies heavily on Ward, but that court’s conclusion that the application of California’s Labor Code would impose an undue administrative burden on the airline was entirely dependent on its erroneous conclusion that California law only applies to individuals who work principally or exclusively in California. Based on that incorrect interpretation of California law, the Ward court concluded that the airline would have to “monitor the pilot’s precise hours spent working in each state and determine which state’s laws applied in that bid period.” Ward v. United Airlines, Inc.,
Perhaps most importantly, the Ninth Circuit has already rejected a similar Dormant Commerce Clause to California’s Labor Code. See Sullivan v. Oracle Corp.,
The only potential difference between this case and Sullivan is that this case involves the airline industry. It is true that a state regulation “that imposes significant burdens on interstate transportation” represents the kind of “inconsistent regulation of activities that are inherently national or require a uniform system of regulation.” Harris,
Virgin suggests that the Fair Labor Standards Act (FLSA) already provides a uniform, albeit “baseline,” system of regulation for employment in the airline industry.. See ECF No. 107 at 15-16. But Virgin completely fails to explain how the application of California’s Labor Code would conflict with FLSA and thereby disrupt the uniform system of regulation.
The lack of a conflict between the FLSA and the California Labor Code distinguish this case from the small number of cases in which the Supreme Court has held that a state regulation is unconstitutional because it imposes an undue burden on interstate transportation. Virgin argues that California’s prohibition against averaging to satisfy minimum wage requirements is akin to the state regulation at issue in Bibb v. Navajo Freight Lines, Inc.,
Virgin also relies on United Air Lines, Inc. v. Indus. Welfare Com., a 1963 California Court of Appeals decision that was later overruled on other grounds. United Air Lines, Inc. v. Indus. Welfare Comm’n,
Finally, Virgin argues that it will incur additional staffing costs if required to comply with California’s meal break requirements. ECF No. 120 at 4-5. But the “administrative costs of compliance, alone, are generally insufficient to be deemed an unconstitutional burden.” Barclays Bank Internat. Ltd. v. Franchise Tax Bd.,
In sum, Virgin has failed to show that the burden on interstate commerce imposed by the California Labor Code is “clearly excessive in relation to the putative local benefits.” Pike,
C. Federal Preemption of Plaintiffs’ Meal and Rest Break Claims
Third, Virgin argues that Plaintiffs’ meal and rest break claims are preempted by the Federal Aviation Act (“FAA”) and/or the Airline Deregulation Act (“ADA”). ECF No. 97 at 26-29.
“Preemption analysis begins with the ‘presumption that Congress does not intend to supplant state law.’ ” Tillison v. Gregoire,
However, this presumption is ovei'come where Congress expresses a “clear and manifest” intent to preempt state law. Californians For Safe & Competitive Dump Truck Transp. v. Mendonca,
3. FAA Preemption
With respect to the FAA, Virgin argues that both types of implied preemption are present. ECF No. 97 at 26-28. First, Virgin argues that “[t]he FAA occupies the field with respect to setting rest and duty periods for [flight attendants], and California’s meal period and rest break laws are therefore preempted.” Id. Second, Virgin argues that California law conflicts with the FAA’s requirements regarding meal and rest breaks. ECF No. 97 at 28.
a. Field Preemption
“The first step” in the field preemption inquiry “is to delineate the pertinent regulatory field.” Nat’l Fed’n of the Blind v. United Airlines Inc.,
With this definition in mind, the Court now turns to the second step of the field preemption analysis: “to survey the scope of the federal regulation within that field” and determine “whether the density and detail of federal regulation merits the inference that any state regulation within the same field will necessarily interfere with the federal regulatory scheme.” Nat’l Fed’n of the Blind,
b. Conflict Preemption
“Conflict preemption applies ‘where compliance with both federal and state regulations is a physical impossibility,’ and in ‘those instances where the challenged state law stands as an obstacle to
Virgin argues that there are two potential conflicts between FAA regulations and California’s meal and rest break requirements. First, it argues that California law, which requires that employees are relieved of all duty during a thirty-minute meal break every five hours, conflicts with FAA regulations that “do not permit Plaintiffs to forego their responsibilities while in flight.” ECF No. 97 at 27-28. Second, Virgin argues that “the FAA permits [flight attendants] to remain on duty for up to 14 hours straight before receiving a rest period,” whereas California law requires a ten-minute rest-period every four hours and an additional thkty-minute meal period every five hours. ECF No. 107 at 7.
It is not “a physical impossibility” for Virgin to simultaneously comply with California law and FAA regulations. For example, Virgin could staff longer flights with additional flight attendants in order to allow for duty-free breaks. In addition, the FAA regulation that Virgin relies on is wholly consistent with California’s break requirements because it merely establishes the maximum duty period time and minimum rest requirements. See 14 C.F.R. § 121,467. Therefore, there is no conflict preemption.
4. ADA Preemption
Next, Virgin argues that the application of California’s Labor Code is preempted by the Airline Deregulation Act (“ADA”). ECF No. 97 at 28-29.
To support its argument, Virgin relies on the following express preemption provision in the ADA: “[A] State ... may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart.” 49 U.S.C. § 41713(b)(1). Based on this provision, Virgin argues that providing its flight attendants with breaks as required under California law could “prevent the aircraft from being prepared for takeoff or passengers being boarded on time,” thereby having the effect of “regulating Virgin’s services and routes.” ECF No. 97 at 28-29. Virgin cites to several district court cases that support its argument that meal and rest break claims impact an airline’s services and routes and are therefore preempted by the ADA. See id.
However, all of the cases that Virgin relies on predate the Ninth Circuit’s decision in Dilts v. Penske Logistics, LLC, in which it squarely rejected the preemption argument that Virgin makes here.
Virgin tries to distinguish Dilts by arguing that it “dealt with neither ADA preemption nor the airline industry,” but neither of those considerations changes this Court’s analysis. ECF No. 97 at 29, n. 30; ECF No. 107 at 8, n. 7. Although Dilts involved preemption under the Federal Aviation Administration Authorization Act (“FAAAA”), and not the ADA, “the FAAAA was modeled on the Airline Deregulation Act of 1978” and “us[es] text nearly identical to the Airline Deregulation Act’s,” including the exact preemption language at issue in this case. Dilts,
Plaintiffs’ meal and rest break claims are not preempted by the ADA.
D. Compliance With California Law
Next, Virgin argues that its compensation policy and wage statements comply with California law. ECF No. 97 at 31-34.
1. Compensation Policy
The relevant Wage Order requires that employers in the transportation industry pay minimum wages “for all hours worked.” Cal. Code Regs. tit. 8, § 11090, Wage Order 9-2001 ¶4(A). “Hours worked” means “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” Id., § 2(G). California courts have held that “[t]his language expresses the intent to ensure that employees be compensated at the minimum wage for each hour worked” and, therefore, employers may not average the total amount earned by an employee over all hours worked in order to comply with minimum wage laws. Armenta v. Osmose, Inc.,
The wage order does not require, however, that employers necessarily compensate their employees through an hourly wage. Instead, it gives employers some flexibility in this regard, allowing them to calculate compensation “by time, piece, commission, or otherwise.” Cal. Code Regs. tit. 8, § 11090, Wage Order 9-2001 ¶ 4(B); see also id, § 2(0) (“ “Wages’ includes all amounts for labor performed by
However, Virgin must still compensate its employees for all time worked in some way, irrespective of how it calculates that compensation (e.g. based on hours worked, the particular task performed, or some other factor). See, e.g., Cardenas v. McLane FoodServices, Inc.,
a. Compensation for Non-Block Duty Time
The Plaintiffs claim that Virgin has no identifiable means of paying for duty hours outside of block time—i.e., time spent before takeoff and after arrival. ECF No. 102 at 21-22. Plaintiffs argue that they are subject to Virgin’s control and perform work during this non-block duty time, including participating in pre-flight briefings and boarding .passengers, so they must be paid for that time.
Virgin responds that it compensates flight attendants for non-block duty time, relying largely on the following provision in its Work Rules: “[t]he credit value for each duty period within a pairing will consist of block hours, deadhead or ground transportation credit, and minimum duty credit ...” ECF No. 97 at 31 (emphasis in original); see also ECF No. 45-4 at 12. Virgin appears to be arguing that, because its Work Rules say that flight attendants will be compensated “for each duty period,” Virgin actually did compensate flight attendants for the entire duty period, including non-block time. But, as the court explained in Cardenas, “it is irrelevant whether the pay formula was intended to compensate pre- and post-trip duties, or even if employees believed it covered those duties, if its formula did not actually directly compensate those pre- and post-trip duties.” Cardenas,
It does not. The formula, as articulated in Virgin’s work rules, always compensates flight attendants for block time and time spent deadheading. See ECF No. 45-4 at 12-13. However, it does not separately compensate non-block, non-deadheading duty time, which includes time when flight attendants are performing work (e.g. boarding and deplaning passengers) and subject to Virgin’s control. One could argue that the “minimum duty period credit” presumably compensates for all time spent on duty, including non-block duty hours, but even that compensation is not guaranteed. See id. Rather, a flight attendant is only entitled to the “minimum duty period credit” for a given day if he or she has not already earned 3.5 hours of block time or deadheading credit for the day. Id, In addition, the Crew Pay Manual explicitly states that “crewmembers are not paid for time ‘on the clock’ (duty time); instead, they are typically paid only when the air
The cases from this district that Virgin relies on are distinguishable. ECF No. 97 at 31-32. For example, the compensation formula at issue in Oman included a guaranteed “duty period credit” of one hour of pay for every two hours of duty, in addition to a “minimum duty credit” of approximately five hours. See Oman v. Delta Air Lines, Inc.,
Unlike the compensation formulas at issue in the cases above, which ensured that flight attendants were, “at a minimum,” compensated for all hours on duty, Virgin’s formula does not provide such a guarantee. As explained above, Virgin’s flight attendants only receive credit for duty hours if they have not already earned 3.5 credits of block time or deadheading time for the day. Virgin therefore fails to compensate its flight attendants for all hours worked,
b. Compensation for Non-Flight Activities
The Plaintiffs also claim that Virgin fails-to pay for all hours worked doing certain non-flight activities, such as time spent undergoing mandatory drug testing, attending mandatory training, deadheading, completing incident reports, and being on reserve duty. ECF No. 32 ¶ 46.
With the single exception of time spent completing incident reports, Virgin’s compensation formula accounts for all of the above non-flight work duties when calculating compensation. ECF No. 45-4 at 12-13. Specifically, it assigns thirty minutes of credit for drug testing, a flat monthly rate for initial flight attendant training, 3.5 hours of credit for annual training, and four hours of credit for airport reserve shifts in which flight attendants are not assigned to a flight. ECF No. 47-5 at 7, 9; ECF No. 45-4 at 16, 24. Because Virgin’s formula directly compensates Plaintiffs for these non-flight work duties, albeit via a credit-based system instead of an hourly rate, Plaintiffs cannot succeed on .their claims related to non-payment for these tasks. Oman,
However, Virgin’s compensation formula completely fails to account for time spent completing incident reports, and the Plaintiffs have presented evidence that they were unable to complete these mandatory incident reports during block time. ECF No. 101-29 at 10. The Court therefore denies Virgin’s motion for summary judgment as to claims based on the completion of incident reports.
2. Wage Statements
Under § 226 of the California Labor Code, an employer is required to provide “an accurate itemized wage statement” showing gross wages, total hours worked, net wages earned, and all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate, among other things'. Cal. Lab. Code § 226(a). “The employer’s violation of section 226 must be ‘knowing and intentional.’” Garnett v. ADT LLC,
Virgin concedes that its wage statements do not show the effective hourly rate of pay for each hour on duty, but it claims that its compensation system prevents full compliance and that it nonetheless is “complying with Section 226 in good faith.” ECF No. 97 at 34. Virgin also admits that, pursuant to its payment policies, its month end wage statement does not show the actual number of hours worked during that pay period, but rather just shows 37.5 hours at the flight attendant’s base rate by default. ECF No. 101-30 at 10.
Good faith is not a defense to a wage statement violation under § 226. Garnett,
The Court therefore denies Virgin’s motion for summary judgment on the Plaintiffs’ wage statement claims.
E. Plaintiffs’ Overtime and Break Eligibility
Next, Virgin argues that, because the California Labor Code does not apply ex-traterritorially, the Plaintiffs must show that they worked the requisite number of hours within California to trigger overtime and break requirements. ECF No. 97 at 29. Virgin argues that the Plaintiffs cannot do so because time spent flying in the airspace above California is not time spent within California. Id.
The Court rejects Virgin’s argument that California wage and hour law cannot apply to flight attendants while they are in the air. To support its argument, Virgin cites to a provision of the FAA (§ 40103), but the Court has already rejected Virgin’s argument for FAA preemption. Although the federal government has exclusive sovereignty over the United States airspace and aviation safety, “Congress has not occupied the field of employment law in the aviation context and ... the FAA does not confer upon the agency the exclusive power to regulate all employment matters involving airmen.” Ventress v. Japan Airlines,
There is evidence that the Plaintiffs worked more than eight hours some days such that they qualify for overtime pay. As explained above, the Plaintiffs’ overtime claims do not seek to apply California law extraterritorially. Because the alleged wrongful conduct—i.e. Virgin’s decisions about how to compensate its flight attendants and its payment of flight attendants in accordance with those decisions—occurred in California, Virgin may be held accountable for that wrongful conduct under California law regardless of where the Plaintiffs worked their shifts. In any event, there is also evidence that Plaintiffs worked shifts longer than eight hours mthin California such that they qualify for overtime pay. For example, Virgin’s own expert testified that each of the Plaintiffs had at least one day where they worked in excess of eight hours within California. ECF No. 101-31 at 3:9-24. This evidence is sufficient to create a triable issue of fact regarding whether the Plaintiffs were eligible for overtime pay.
Although Plaintiffs’ break claims are geographically limited, there is sufficient evidence that the Plaintiffs worked duty periods solely within California—for example, on flights between California airports—that were long enough to trigger meal period and rest break eligibility. ECF No. 101-17 (showing Plaintiffs’ scheduled flights between California airports). Virgin’s expert found that, when time spent on California tarmacs was considered, “the data reflects few instances when Plaintiffs potentially worked enough hours in California to be eligible for meal periods (days longer than 5 hours) or rest breaks (days longer than or equal to 3.5 hours).” ECF No. 98-2 at 6. Specifically, Virgin’s expert found fifty instances in which Plaintiff Smith was potentially eligible for a rest break, four instances in which Plaintiff Bernstein was potentially eligible for a rest break, and fifty-three instances in which Plaintiff Garcia was potentially eligible for a rest break. Id. He also found thirty-one instances in which Plaintiff Smith was potentially eligible for a meal period, four instances in which Plaintiff Bernstein was potentially eligible for a meal period, and twenty-six instances in which Plaintiff Garcia was eligible for a meal period. Id. This evidence is sufficient to create a triable issue of fact regarding whether Plaintiffs were eligible for breaks when working in California.
The Court accordingly denies Virgin’s motion for summary judgment on the overtime and break claims.
F. Covered Employees Under the San Francisco Minimum Wage Ordinance
Next, Virgin argues that the Plaintiffs are not covered employees under the San Francisco Minimum Wage Ordinance (“SFMWO”). ECF No. 97 at 33. The SFMWO states that “Employers shall pay Employees no less than the Minimum Wage for each hour worked within the geographic boundaries of the City.” S.F. Admin. Code § 12R.4. “City” is defined to include “the City and County of San Francisco,” and an “Employee” is any person who “[i]n a particular week performs at least two (2) hours of work for an Employer within the geographic boundaries of the City.” Id., § 12R.3. Although San Francisco International Airport (SFO) is owned by the City and County of San Francisco, it is located outside the city limits of San Francisco and in San Mateo County. Vir
G. Business Expenses
The Plaintiffs claim that Virgin required Plaintiffs Garcia and Smith to maintain a valid passport, but that Virgin did not indemnify Plaintiffs for the costs incurred in purchasing and/or renewing passports. ECF No. 32 ¶ 101. However, Virgin argues that the Plaintiffs have not produced any evidence that they incurred business expenses related to their passports and, as a result, they cannot prevail on them claim for failure to indemnify for necessary expenditures. ECF No. 97 at 84-35.
Plaintiff Garcia testified that she obtained her passport before she began working for Virgin and did not renew her passport while she was working for Virgin. ECF No. 61-2 at 7:10-15. Plaintiff Smith similarly testified that she had a passport before she started working for Virgin and her passport does not expire until 2020. ECF No. 61-3 at 23. Plaintiffs fail to point to any countervailing evidence in their opposition.
The Court therefore grants Virgin’s motion for summary judgment as to the Plaintiffs’ claim for business expenses under California Labor Code § 2802.
H. Remaining Claims
Because the Court has not dismissed all of the Plaintiffs’ underlying claims for unpaid wages, it denies Virgin’s motion for summary judgment on the derivative waiting time penalty, unfair competition, and Private Attorney General Act (“PAGA”) claims.
CONCLUSION
For the reasons above, the Court denies in part and grants in part Virgin’s motion for summary judgment.
IT IS SO ORDERED.
Notes
. Throughout this Order, the Court refers to the pagination created by the Court’s electronic filing system, not the document’s internal pagination.
. Although Virgin disputes whether Bernstein was actually living in California, see ECF No. 97 at 21, n. 23, the fact that she provided a California address for payroll and tax purposes in 2011 is sufficient to create a triable factual issue regarding her residency.
. The Plaintiffs' expert report shows that at least 88 percent of Virgin’s flights each day either arrived at or departed from California airports. ECF No. 101-38, ¶¶ 3-4. In some years, this percentage reached 99 percent. |d.
. Although Virgin appears to concede this point as a matter of legal "theory," it nonetheless argues that the Plaintiffs have not provided sufficient evidence to prevail on such a theory in this particular case (i.e. because they have not shown that they worked enough hours in California to trigger overtime protections). See id. The Court addresses these alleged factual shortcomings later in its order.
.Although the original impetus for § 1171.5 was to extend protections to non-resident, undocumented workers in California, the provision has a broader reach because it was "codified as a general preamble to the wage law” and it "broadly refers to 'all individuals' employed in the state.” Sullivan,
. The Ward court also failed to analyze whether state laws regarding wage statements actually conflicted such that the airline would need to provide different wage statements for different states. In doing so, the court neglected to hold the airline to its burden of showing that compliance would impose a substantial burden. See Int'l Franchise Ass'n, Inc.,
. Again, the primary disruption to national uniformity that Virgin identifies is the supposed conflict between California law and the laws of other states, such as New York and Florida. See ECF No. 97 at 24. For the reasons provided above, the Court rejects Virgin’s assumption that it will be subject to every state’s wage and hour laws simply because it is subject to California law..
. Contrary to Plaintiffs’ assertion, FLSA's savings clause does not constitute a delegation of Congressional authority to the states to regulate an area of interstate commerce. See ECF No. 102 at 26. As the Ninth Circuit explained in Pacific Merchant, "Congress did not 'delegate' authority to the states through section 218, but simply made clear its intent not to disturb the traditional exercise of the states’ police powers with respect to wages and hours more generous than the federal standards.” Pacific Merchant,
. Virgin also relies on an unpublished, uncita-ble decision. See ECF No. 97 at 23 (relying on Guy v. IASCO,
. This estimate reflects the cost of paying an additional flight attendant the lowest base rate ($20/hour) for every flight that lasts five hours. ECF No. 120 at 4-5.
. Virgin also relies heavily on the FAA's statements about its flight attendant break regulation to argue that break requirements affect airline "safety,” at least to some degree, and are therefore preempted. ECF No. 97 at 27 (citing 59 FR 42974-01). In doing so, Virgin adopts the overly broad reading of Montalvo that the Ninth Circuit has repeatedly counseled against. Nat'l Fed'n of the Blind,
. The other FAA regulations outline the requisite number of flight attendants and the requirements regarding where flight attendants should be located during takeoff, landing, taxi, and stops where passengers remain on board. See 14 CFR §§ 121.391, 121.393, 121.394.
. Despite this clear prohibition against averaging to meet minimum wage requirements, Virgin argues that "there is no evidence that when applying the number of credits received for each Duty Period against their hours worked for the Duty Period that Plaintiffs received below the .minimum wage.” ECF No. 97 at 33. As explained above, that is not the relevant question under California law; the relevant question is whether the Plaintiffs were paid the minimum wage for each hour worked.
