SANTA ANA, Calif. (Legal Newsline) - Alaska Airlines must provide detailed wage statements to flight attendants who are based in California even if they spend most of their time in the air over other states, a California appeals court ruled, citing a 2020 decision by the California Supreme Court. The court reversed $25 million in penalties against the airline, however, saying the trial court misapplied state law.
Flight attendant Julie Gunther sued Alaska Air under the Private Attorneys General Act, a California law that allows workers to sue on behalf of their fellow employees and the state for labor-law violations. Gunther claimed Alaska Air was failing to provide pay statements that complied with Section 226 of the California Labor Code, which requires employers to report total hours worked or an equivalent piece rate if wages are calculated that way.
Alaska Air admitted it didn’t comply with California’s information requirements and initially argued the law didn’t apply to flight attendants who spent most of their time in federal airspace. But in 2020, the California Supreme Court decided that a worker’s base of operations determined whether California’s payroll law applied.
After that decision came down, the airline modified its argument slightly but maintained that under a collective bargaining agreement union the flight attendants were paid according to a complex formula called “trips per pay” that didn’t easily mesh with state reporting requirements. As a result, the airline argued, the court must examine every pay period for every attendant to determine whether they spent the majority of their time in California or some other state with different requirements.
The airline also argued the California law would violate the “dormant commerce clause” of the U.S. Constitution by forcing it to spend millions of dollars trying to track the hours its employees spent in California airspace, costs it would impose on consumers in other states.
California’s Fourth Appellate District rejected all those arguments in a Dec. 1 decision. While it may be expensive to retool its payroll accounting for California employees, the court said, “the practical aspect of how Alaska will comply with this portion of the judgment is not before us.”
Alaska Air also argued the PAGA claims would be “unmanageable” because of the complexity of more than 1,000 individual assessments for penalties. One attendant spent 38% of her flying over the ocean and 24 percent in California, for example, while others spent some months flying in California and others elsewhere.
Under California Supreme Court precedent, the appeals court said, “the relevant inquiry is a flight attendant’s connection to a particular state so as to trigger application of that state’s laws.” The court described the airline’s proposal for pay period-by-pay period analysis as “an unrealistic burden.”
The court also rejected the airline’s argument that California’s Industrial Welfare Commission wage order No. 9 conflicted with the duties the plaintiffs asserted in this case, saying the airline couldn’t raise it for the first time on appeal. It likewise rejected arguments based on federal preemption, saying it didn’t matter whether employees spent most of their time in federal airspace because the California payroll law applied to workers who started and ended in that state. And the fact the flight attendants were paid under a collective bargaining agreement governed by federal law didn’t matter, the appeals court said.
The Ninth Circuit Court of Appeals similarly rejected a challenge by United Airlines to applying Section 226 to pilots and flight attendants. Both courts rejected comparisons to a 1963 decision striking down a California law prohibiting airlines from requiring workers to buy their own uniforms on constitutional grounds it interfered with interstate commerce, calling that ruling out of date.
Before filing a PAGA claim employees must exhaust their administrative remedies. If they win, 75% of the money goes to the California labor department and 25% to the plaintiffs.
Gunther argued the heightened penalties applied if the employer failed to provide a wage statement or failed to maintain accurate time records, but the appeals court said the law specifies penalties only in the latter case. Since it was undisputed Alaska Air provided wage statements to attendants and Gunther dropped her claim the airline failed to maintain records, the default civil penalties of up to $200 for each pay period per employee apply, the court ruled.
On remand, the trial court must determine whether the airline had been notified by the Labor Commission or a court that it was violating the law for the $200 penalty on “subsequent violations” to apply.
Despite the prospect of a lower total award, the appeals court said Gunther’s lawyers deserved their full $944,860 in fees.
“As a result of this litigation, the aggrieved employees will obtain the information necessary to independently ensure they receive all compensation earned and owed,” the appeals court concluded. “That the trial court here awarded civil penalties under the wrong statute does not materially impact the degree of Gunther’s success in this litigation.”