9th Circuit: State Wage Statement Rules Apply to Interstate Transportation Workers Based in California

In Ward v. United Airlines, Inc., the Ninth Circuit Court of Appeal stated that wage statement requirements under Labor Code § 226 are not preempted by federal law. There, airline pilot and flight attendant employees claimed they did not receive wage statements that complied with California law.

In 2020, the Ninth Circuit in this case asked the California Supreme Court whether Section 226 applies to pilots and flight attendants who spend most of their time working outside California. The state Supreme Court stated that whether employees are entitled to California-compliant wage statements depends on whether their principal place of work is in California. For interstate transportation workers who do not perform a majority of their work in any one state, this test is satisfied when California serves as their base of work operations (i.e., workers perform some work in California and are based in California, meaning that California serves as the physical location where workers present themselves to begin work), regardless of their place of residence or whether a collective bargaining agreement governs their pay.

Following the California Supreme Court’s ruling, the employer then claimed to the Ninth Circuit that federal law precludes California from applying Section 226 to its employees who spend most of their time working outside California. The Ninth Circuit declined this view stating that neither the dormant Commerce Clause, the Airline Deregulation Act, nor the Railway Labor Act prohibit Section 226 from applying.  Specifically, the state has a sufficiently strong interest in protecting employees who perform some work in California, there is no national uniformity requirement for wage statements, United Airlines submitted no evidence to support a significant impact on airline prices, routes, or services, and the rights at issue are not grounded in or need to be interpreted by the employees’ collective bargaining agreement.

Interestingly, the court remanded the case back to the federal district court, in part, to adjust the class of employees from being based on their California residence to being based on their base of work operations. This will likely broaden the potential class of plaintiffs when the district court reviews whether the employee wage statements complied with Section 226.

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