In a decision that is good news for airline employers, a California Appeals Court has held that a group of SkyWest flight attendants cannot pursue their claims under certain of California’s labor laws because these claims are preempted by the Railway Labor Act (RLA). See Fitz-Gerald v. SkyWest Airlines, Inc. (Sept. 19, 2007), opinion modified October 16, 2007. Additionally, the court held that an earlier California Appeals Court decision did not preclude averaging the flight attendants’ wages to demonstrate compliance with the state minimum wage laws.
California labor law requires that certain employees in the transportation industry be paid not less than the minimum wage and receive meal/rest breaks and overtime. See IWC Order No. 9-2001. The SkyWest flight attendants claimed they were not given uninterrupted rest periods or meal breaks and that they did not receive overtime or state minimum wage under the airline’s method of compensating them. The flight attendants sought damages for these violations under the California Labor Code and relief under the California Unfair Business Practices Act.
The trial court granted summary judgment in favor of SkyWest and the Court of Appeals affirmed this decision.
Flight Attendant Compensation
Using a method that is standard in the airline industry, SkyWest pays its flight attendants a combination of flight pay and per diem. Flight attendants receive block time pay from the time the aircraft blocks are removed until the aircraft reaches its destination. Flight attendants also receive a per diem allowance from the time they report to duty until they are released from duty.*
SkyWest flight attendant compensation is based on the SkyWest Airlines Crewmember Policy, which has all the attributes of a collective bargaining agreement (CBA) and was negotiated by SkyWest and the SkyWest InFlight Association (SIA), an employee association representing the flight attendants.
State Law did not Preclude Averaging in this Case
Under IWC Order No. 9-2001, employers must pay employees at least the minimum wage "for all hours ordered in the payroll period" regardless of how remuneration is measured. The flight attendants claimed their per diem rate of $1.60 per hour violated this requirement. SkyWest claimed flight attendant compensation averaged $23.13 per hour (per diem time plus block time averaged over a month), a pay rate substantially greater than the state minimum wage.
The flight attendants argued that under a recent California Appeals Court decision, SkyWest could not average their wages to satisfy the state minimum wage law. In Armenta v. Osmose, Inc., 135 Cal.App.4th 314 (2005), a case involving a company that did not pay its employees for travel time and time spent loading equipment and supplies in violation of its own CBA and written employment policies, the court rejected the FLSA wage averaging model. "[T]he FLSA model of averaging all hours worked ‘in any work week’ to compute an employee’s minimum wage obligation under California law is inappropriate. The minimum wage standard affixes to each hour worked by respondents for which they were not paid."
The court in SkyWest distinguished Armenta, noting that Armenta did not involve an interstate air carrier, it did not involve the RLA or a CBA sanctioned under the RLA, and it did not involve a state wage order that contained an RLA exemption. In SkyWest the court held that there was no evidence that the airline paid the flight attendants less than what was collectively bargained for. The court also held that applying the state minimum wage law to an interstate airline carrier would burden interstate commerce.
RLA Exemption Applied to Overtime Claims
The court held that the flight attendants’ overtime claims were precluded by an RLA exemption in the state overtime law. IWC Order No. 9-2001(1)(E) provides that overtime wages do not have to be paid to employees who have entered into a collective bargaining agreement under the RLA. The court rejected the flight attendants’ argument that there is no CBA because SkyWest is a nonunion employer.
The court held that under the RLA, employees have the right to organize and bargain collectively through a representative of their own choosing. This representative is "simply, a person or union [or an association] designated to act on [the employees’] behalf." Accordingly, the court held that the RLA exemption applied to the wage and benefit plans included in the SkyWest Crewmember Policy Manual, which were negotiated by SIA.
RLA Preemption of Minimum Wage and Meal/Rest Break Provisions
Although the minimum wage and meal/rest break provisions of the California wage order do not contain a specific RLA exemption, the court held that these claims are preempted by the RLA. Under the RLA, interpretation of a CBA lies in the exclusive jurisdiction of arbitrational bodies created by the RLA. If resolution of a state law claim requires the interpretation or application of a CBA, that claim is preempted under the RLA. The California Supreme Court has held that RLA preemption extends to "any claim premised on facts inextricably intertwined with matters subject to the grievance procedures of the collective bargaining agreement."
The Court of Appeals held that if a violation of the meal/rest break requirements was found, the court would have to determine whether the flight attendant was receiving per diem pay or block time pay when the violation occurred, because damages for a violation of this law are one hour of pay at the employee’s regular rate of compensation. However, a court could not determine the regular rate of compensation without interpreting the CBA. Thus, the Court of Appeals held that the flight attendants’ claims for state minimum wages and meal/rest breaks were preempted by the RLA.
The Court of Appeals also held that because these claims were preempted by the RLA, the plaintiffs’ claims for waiting time penalties (Lab. Code, § 203) and violation of the Unfair Business Practices Act were barred.
If you have any questions regarding this decision, please contact the Ford & Harrison attorney with whom you usually work or Norman Quandt, a partner in our Atlanta office. Mr. Quandt represented SkyWest at the trial of this case and was co-counsel for the airline on the appeal. He can be reached at email@example.com or 404-888-3845.