Fitz-Gerald v. Skywest Airlines, Inc.

• Decision Date: 19 September 2007
• Docket Number: No. B187795.,B187795.
• Citation: 155 Cal.App.4th 411,65 Cal.Rptr.3d 913
• Court: California Court of Appeals Court of Appeals
• Parties: Michaelena FITZ-GERALD et al., Plaintiffs and Appellants, v. SKYWEST AIRLINES, INC., Defendant and Respondent.

65 Cal.Rptr.3d 913

155 Cal.App.4th 411

Michaelena FITZ-GERALD et al., Plaintiffs and Appellants, v. SKYWEST AIRLINES, INC., Defendant and Respondent.

No. B187795.

Court of Appeal, Second District, Division 6.

September 19, 2007.

Pine & Pine, Norman Pine and Beverly Tillett Pine, Los Angeles; Anticouni & Associates, Bruce N. Anticouni; Slovak, Baron & Empey, Thomas Slovak, Palm Springs and Lucien Van Hulle, for Appellants.

Paul D. Fogel, Margaret A. Grignon, Raymond A.Cardozo, Dennis Peter Maio and Reed Smith, San Francisco; Ford & Harrison and Norman A. Quandt, Atlanta, GA, Patricia T. Stambelos, Assistant General Counsel, for Respondent.

YEGAN, J.

Michaelena Fitz-Gerald and Romead Neilson appeal from a summary judgment granted in favor of SkyWest Airlines, Inc. (SkyWest) on their class action for alleged violations of California labor law regarding minimum wages, overtime, and meal/rest breaks. Appellants are suing individually and on behalf of former and current Sky-West flight attendants (FAs) working for SkyWest in California. The trial court granted summary judgment in favor of SkyWest, ruling inter alia that the action was preempted by the Railway Labor Act (45 U.S.C. § 151 et seq.). We affirm.

SkyWest and Its Flight Attendants

SkyWest is a regional air carrier with headquarters in Utah. It operates as United Express in 91 cities and provides 1,500 daily flights to 120 cities in 32 states and Canada. SkyWest also provides air carrier services for Delta Air Lines and Continental Airlines.

SkyWest flight attendants receive flight pay (also referred to as "block to block time") from the time the aircraft blocks are removed at takeoff until the aircraft reaches it designation. In 2001, flight pay ranged from $17.50 per hour to $31.20 an hour depending on seniority and the work schedule. Top-end flight pay for FAs is currently $37.07 an hour. FAs also receive a per diem wage of $1.60 an hour for block time while the aircraft is readied for flight, while passengers board and disembark, and for flight standbys and stayovers. On any given work day, the ratio of block time to flight time is about two to one.

The Complaint

California Industrial Welfare Commission Order No. 9-2001 (IWC Order No. 9-2001) requires that certain persons employed in the transportation industry be paid not less than the minimum wage and receive meal/rest breaks and overtime. The complaint alleges that SkyWest FAs are not provided uninterrupted rest periods or meal breaks. Nor do FAs receive overtime or state minimum wage for block time. The complaint seek damages for unpaid minimum wages (first cause of action; Lab.Code, § 1194), unpaid meal and rest breaks (second cause of action), over-time (third cause of action), waiting time penalties (fourth cause of action; Lab. Code, § 203), and relief under the Unfair Business Practices Act (fifth cause of action; Bus. & Prof.Code, § 17200 et seq.).

The Summary Judgment Motion

The moving papers establish that FA compensation is based on the SkyWest Airlines Crewmember Policy Manual, which has all the attributes of a collective bargaining agreement (CBA) and was negotiated by the SkyWest In-Flight Association (SIA) and SkyWest. SIA is an employee association and the exclusive bargaining representative for SkyWest FAs. It has 1,100 members and has negotiated compensation and workplace rules for the past 10 years. About every two years, a new SIA/SkyWest compensation agreement is negotiated, voted on by FAs, and if approved, incorporated into the SkyWest Crewmember Policy Manual (herein referred to as CBA).

Pursuant to the CBA, FAs bid each month for their work schedules and receive flight pay, per diem block pay, vacation and holiday pay, and compensation for flight cancellations and overnight stayovers.¹ The compensation methodology is standard in the airline industry. SkyWest FAs are guaranteed 3.75 hours flight pay each work day. The CBA provides that FAs may not eat meals during critical phases of flight and that FAA regulations prohibit FAs from working more than 14 hours at a stretch.

As indicated, the trial court ruled that the action was preempted by the federal Railway Labor Act (RLA; 45 U.S.C. § 151 et seq) and that application of IWC Order No. 9-2001 would violate the Airline De regulation Act of 1978 (ADA; 49 U.S.C. § 41713(b)(1)). We review the order granting summary judgment de novo. (Department of Industrial Relations v. Nielsen Construction Co. (1996) 51 Cal. App.4th 1016, 1024, 59 Cal.Rptr.2d 785.)

IWC Order No. 9-2001 and Armenta

The California Industrial Welfare Commission "is the state agency empowered to formulate regulations (known as wage orders) governing employment in the State of California. [Citations.]" (Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 561, 59 Cal.Rptr.2d 186, 927 P.2d 296.) IWC Order No. 9-2001 applies to the transportation industry (Cal.Code Regs, tit. 8, § 11090) and provides: "Every employer shall pay to each employee, on the established payday for the period involved, not less than the applicable minimum wage for all hours ordered in the payroll period, whether the remuneration is measured by time, piece, commission or otherwise." (IWC Order No. 9-2001(4)(B).)

The complaint alleges that block time pay ($1.60 per hour) violates California minimum wage law. SkyWest asserts that FA compensation averages $23.13 an hour (flight time plus block time, averaged over a month), a pay rate that is substantially greater than the state minimum wage.

Citing Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, 37 Cal.Rptr.3d 460 (Armenta), appellants argue that wage averaging does not trump state minimum wage law. In Armenta, a company that serviced utility poles did not pay its employees for travel time and time spent loading equipment and supplies. We held that California's labor statutes reflect a strong public policy in favor of full payment of wages for all hours worked. "[T]he FLSA [Fair Labor Standards Act] 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." (Id., at p. 324, 37 Cal.Rptr.3d 460.)

Armenta is distinguishable on several grounds: it did not involve an interstate air carrier, it not involve the RLA or a CBA sanctioned under the RLA, and it did not involve a state wage order that contained a RLA exemption. In Armenta, the employer violated its own CBA and written employment policies which required that employees be paid for time spent driving company vehicles to and from job sites. (Id., at p. 319, 37 Cal. Rptr.3d 460.) The California Department of Labor Standards Enforcement issued an opinion letter stating that the employees were entitled to compensation for all hours worked. (Id., at pp. 319-320, 37 Cal. Rptr.3d 460.)

We concluded that the Department of Labor Standards Enforcement opinion letter did not have the force of law but the reasoning expressed in the letter was persuasive. (Id., at p. 324, 37 Cal.Rptr.3d 460.) The opinion letter noted that Labor Code sections 221, 222, and 223 prohibit an employer from "withholding from the employee, or secretly paying to the employee, some amount less than the employee's actual agreed wages for work performed by the employee." (Id., at p. 320, 37 Cal. Rptr.3d 460, emphasis added.) We held that the state "minimum wage standard applies to each hour worked by [employees] for which they were not paid." (Id., at p. 324, 37 Cal.Rptr.3d 460.) An employer may not invoke a federal wage averaging formula to defend against a minimum wage claim where the employer, in violation, of its own wage agreement, pays no wage for an hour worked. "California's labor statutes reflect a strong public policy in favor of full payment of wages for all hours worked." (Ibid.)²

Unlike Armenta, here there is no evidence that SkyWest pays FAs less than what was collectively bargained for. As discussed in Armenta, Labor Code "[sections 221, 222, ands 223 articulate the principal that all hours must be paid at the statutory or agreed rate. ..." (Id., at p. 323, 37 Cal.Rptr.3d 460.) Here the agreed rate is set forth in the SkyWest CBA which was voted on and approved by Sky-West FAs. Under appellants' construction of the law, IWC Order No. 9-2001 sets a minimum wage standard for every interstate airline carrier regardless of how much it burdens interstate commerce, an argument that was properly rejected by the trial court.

The RLA provides that state-law rights and obligations that do not exist independently of a collective bargaining agreement may be waived or altered by the collective bargaining agreement. (See e.g., Allis-Chalmers Corp. v. Lueck (1985) 471 U.S. 202, 213, 105 S.Ct. 1904, 1912, 85 L.Ed.2d 206, 216; Adames v. Executive Airlines, Inc. (5th Cir.2001) 258 F.3d 7, 12.) The purpose of the RLA is to bring about stable relations between labor and management in the national transportation industry. (Thibodeaux v. Executive Jet Intern., Inc. (5th Cir.2003) 328 F.3d 742, 754.) "Congress has long concerned itself with minimizing interruptions in the Nation's transportation services by strikes and labor disputes and has made successive attempts to establish effective machinery to resolve disputes not only as to wages, hours, and working conditions, the so-called major disputes connected with a negotiation of contracts or alterations in them, but also as to the interpretation and application of existing contracts...." (Machinists Asso. v. Central Airlines (1963) 372 U.S. 682, 687, 83 S.Ct. 956, 959, 10 L.Ed.2d 67, 72.)

Railway Labor Act

The RLA regulates labor relations between common interstate air carriers and their employees. (45 U.S.C. § 181; DeTomaso v. Pan American World Airways, Inc. (1987) 43 Cal.3d 517, 525, 235 Cal. Rptr. 292, 733 P.2d 614.) It requires that carriers "exert every reasonable...