California Court of Appeals Concludes That California Wage and Hour Laws Extend to Offshore Workers
Which state’s wage and hour laws apply to Louisiana employers whose employees applied and interviewed for their jobs in Louisiana, acknowledged receipt of employment documents in Louisiana, and resided in Texas, Mississippi, and Ohio while they worked offshore? The answer, according to the California Court of Appeals, is California if the employees are based in California.
In Gulf Offshore Logistics, LLC et al. v. Superior Court of Ventura County, employees worked on a vessel that provided maintenance services to offshore oil platforms located outside California’s boundaries. The vessel docked in a California port, and employees reached it by flying into and out of Los Angeles. The vessel sailed through the Santa Barbara channel (which is within California’s state law boundaries), but also sailed outside of California waters — including to the oil platforms where employees performed their work.
Three employees filed a proposed class action lawsuit, claiming their employers violated California law regarding minimum wage, overtime, meal and rest periods, maintaining accurate work records, and providing accurate wage statements. The employers moved for summary judgment, arguing that California law did not apply. The trial court denied that motion.
On a petition for writ of mandate, the Court of Appeals applied a conflicts of law analysis. It found the following facts particularly noteworthy. The employers were LLCs formed under Louisiana law, and their members were all Louisiana residents. The employees applied for and interviewed for their jobs in Louisiana, acknowledged receipt of employment documents in Louisiana, and did not reside in California. On these facts, the Court of Appeals concluded that Louisiana had more significant contacts with the parties and a greater interest in regulating the employment relationships than California. It therefore found that California law did not apply.
Thereafter, the California Supreme Court decided two cases concerning the application of California wage and hour laws to employees who performed work for their employers both in and out of California. In the first case, Ward v. United Airlines (2020) 9 Cal.5th 732, the Court addressed the application of the wage statement requirement in California Labor Code section 226(a). The Court held that “workers are covered [under section 226(a)] if they 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.” Id. at 756. In the second case, Oman v. Delta Air Lines (2020) 9 Cal.5th 762, the California Supreme Court extended this holding to California Labor Code section 204, which governs the timing of wage payments. The Court considered that obligations to pay wages and provide wage statements occurred on at least a semi-monthly basis and that Sections 204 and 226 applied only during pay periods in which the employees were based in California or worked primarily in California.
In both Ward and Oman, the Supreme Court stated it would be inappropriate to adopt a single test for determining application of California wage and hour laws to multistate workers because application would vary on a statute-by-statute basis. (Oman at 772; Ward at 318-19 [citing Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191, 1201]).
In light of Ward and Oman, the Court of Appeals determined that it was “mistaken” to conclude in Gulf Offshore Logistics, LLC that Louisiana law should apply because it had a greater interest than California in regulating these employment relationships. Instead, it found, the “relevant inquiry is the location in which the work is performed.” The Court provided no further guidance or analysis regarding how this rule would apply to the Labor Code sections at issue in Gulf Offshore Logistics, LLC that were not addressed in Sullivan, Ward, or Oman, such as minimum wage, meal periods, rest periods, and recordkeeping.
Only time will tell whether the employers will seek review from the California Supreme Court and, if so, how that Court would rule.