JON S. TIGAR, District Judge.
Before the Court is Plaintiffs' motion for summary judgment, ECF No. 225. The Court will grant the motion in part and deny the motion in part.
Plaintiffs are flight attendants who work or who have worked for Defendant Virgin America, Inc. and Defendant Alaska Airlines, Inc. ("Virgin") in California.
This Court granted in part and denied in part Virgin's motion for summary judgment on January 5, 2017. Plaintiffs filed this summary judgment motion on January 12, 2018.
Pursuant to the Class Action Fairness Act ("CAFA"), the Court has jurisdiction over this case, as a class action in which a member of the class of plaintiffs is a citizen of a state different from any defendant, there are more than 100 class members nationwide, and the matter in controversy exceeds the sum of $5 million, exclusive of interests and costs. 28 U.S.C. § 1332(d).
Summary judgment is proper when a "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by" citing to depositions, documents, affidavits, or other materials. Fed. R. Civ. P. 56(c)(1)(a). A party also may show that such materials "do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(B). An issue is "genuine" only if there is sufficient evidence for a reasonable fact-finder to find for the non-moving party.
Where the party moving for summary judgment would bear the burden of proof at trial, that party bears the initial burden of producing evidence that would entitle it to a directed verdict if uncontroverted at trial.
This Court previously issued an order certifying the class, ECF No. 104; an order granting in part and denying in part Virgin's motion for summary judgment, ECF No. 121; and an order denying Virgin's motion for leave to file a motion for reconsideration, ECF No. 151.
This Court has previously found that the California Labor Code applies to work performed in California. ECF No. 121 at 10. In its opposition, Virgin argues that the California Resident Subclass is not entitled to the extraterritorial application of the California Labor Code. ECF No. 267 at 27. However, this Court has already found that the presumption against extraterritorial application does not apply for the failure to pay for all hours worked, to pay overtime, to pay waiting time penalties, and to provide accurate wage statements claims because the actions giving rise to potential liability occurred in California. ECF No. 121 at 13. The Court need not repeat its analysis here.
In its opposition to Plaintiffs' motion for summary judgment, Virgin again also argues that the Dormant Commerce Clause bars these claims. ECF No. 267 19-24. The Court previously found there was no Dormant Commerce Clause violation.
The Court previously found that the only potential wrongful conduct that could have occurred outside of California, at least in some instances, is Virgin's alleged failure to provide meal and rest breaks. ECF No. 121 at 13. The Court noted that to the extent that the Plaintiffs might have been deprived of breaks outside of California, they must overcome the presumption against extraterritorial application.
In its motion for summary judgment, Virgin argued that Plaintiffs' meal and rest breaks are preempted by the Federal Aviation Act ("FAA") and/or the Airline Deregulation Act ("ADA"). ECF No. 97 at 26-29. The Court found that Plaintiffs' meal and rest break claims are not preempted by the FAA or the ADA. ECF No. 121 at 24, 25, 27.
Here, Virgin argues that meal period and rest break claims are preempted under field preemption "because the FAA pervasively regulated the area of flight attendant duties, including duty periods and rest requirements, as part of its mandate to regulate aviation safety." ECF No. 267 at 9. The Court previously rejected this argument also. The Court noted the Ninth Circuit's emphasis on defining the relevant field with specificity, and defined the relevant field as the regulation of meal and rest breaks for flight attendants. ECF No. 121 at 24. The Court rejected Virgin's argument that 14 C.F.R. §121.467 justified field preemption, finding that section "hardly. . . comprehensive, detailed, or pervasive enough to justify federal preemption of the field."
Next, Virgin argues that California's meal and rest break requirements represent an impermissible conflict with FAA regulations. This Court also already found that 14 C.F.R. § 121.467 is wholly consistent with California's break requirements because it merely establishes the maximum duty period time and minimum rest requirements. ECF No. 121 at 25. Just because the FAA chose not to require "inflight" or "on board" rest does not mean that Virgin cannot provide its flight attendants with on board rest breaks and the FAA required rest breaks between flights. Therefore, there is no conflict preemption.
Finally, Virgin argues that Plaintiffs' meal and rest break claims are expressly preempted by the ADA. This Court has already found that Plaintiffs' meal and rest break claims are not preempted by the ADA. ECF No. 121 at 27. The Court will not reconsider this ruling.
The Court recognizes the policy arguments behind many of Virgin's preemption arguments. However, this Court is not in a position to evaluate policy. The case law is clear that "[p]reemption analysis begins with the `presumption that Congress does not intend to supplant state law.'"
Virgin argues that "Plaintiffs' motion for summary judgment must be denied because there are triable issues of material fact that impact that analysis of each claim under this Court's test for whether and how California law applies." ECF No. 267 at 29. The disputes it identifies are (1) whether plaintiff Bernstein and other class members are residents of California; (2) whether class members were eligible for overtime pay; and (3) whether class members are entitled to compensation for the time spent completing incident reports.
Virgin contends that there is a triable issue of material fact as to plaintiff Bernstein's residence and, by extension, as to each class member's residence. ECF No. 267 at 29-30. Virgin argues that the Court must apply a multi-factor test that the Court allegedly created to determine whether the relevant California Labor Code provisions apply to any particular class member. ECF No. 226 at 3. The Court did not create such a test. Rather, the Court engaged in a multi-factor analysis of Plaintiffs' claims as a whole in response to Virgin's argument that California labor law does not protect Plaintiffs because they do not work "exclusively or principally in California." ECF No. 97 at 19-22. The Court considered a variety of factors, including residency, to conclude that that Plaintiffs were not barred from asserting claims under California law.
With regard to residence, the Court determined that residence could be determined by looking to Virgin's business records and the state where each flight attendant paid taxes.
Virgin argues that there is a triable issue of fact because a flight attendant is not eligible for overtime when the overtime hours worked were "`due to a temporary modification in the employee's work schedule . . . arranged at the request of the employee.'" ECF No. 267 at 30 (quoting Wage Order No. 9 §3(N)). Virgin provides no evidence, however, that any flight attendant made such a request. Hence, there is no dispute of material fact.
Virgin contends that there is a dispute of material fact with regard to Plaintiffs' claims for time spent completing incident reports. ECF No. 267 at 30-31. It notes that Plaintiffs have "failed to present any class data or expert testimony that would reliably establish whether the reports were completed during or after a duty period, or how much time was spent preparing them" and that "[t]he time it takes to complete the reports admittedly varies."
Turning to the merits of Plaintiffs' motion, they ask for: "(1) for adjudication of Virgin's liability under California law for failing to pay the Class and California Resident Subclass for all of their hours worked; (2) for adjudication of Virgin's liability under California law for failing to pay the Class and California Resident Subclass overtime; (3) for adjudication of Virgin's liability under California law for failing to provide the Class with legally compliant meal periods; (4) for adjudication of Virgin's liability under California law for failing to provide the Class with legally compliant rest breaks; (5) for adjudication of Virgin's liability under California law for failing to provide the Class with legally compliant wage statements; (6) for adjudication of Virgin's liability under California law for failing to provide the Waiting Time Penalty Subclass with all wages due and owing at the time of separation from employment; (7) for adjudication of Virgin's liability under the California Unfair Competition Law, Business & Professions Code §§ 17200 et seq.; (8) for adjudication of Virgin's liability under the California Private Attorney General Act, Labor Code§§ 2698 et seq.; and (9) for declaratory relief, injunctive relief, and for damages, restitution, and penalties in the amounts set forth below, and for attorneys' fees and costs." ECF No. 225 at 2.
The relevant Wage Order requires that employers in the transportation industry pay minimum wages "for all hours worked." Cal. Code Regs. tit. 8, § 11090, Wage Order 9-2001 ¶ 4(A). "Hours worked" means "the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so."
This Court has previously found that Virgin fails to compensate its flight attendants for all hours worked because Virgin's formula does not separately compensate flight attendants for duty time that is not block time or deadheading time. ECF No. 121 at 29. Instead, Virgin's flight attendants only receive credit for duty hours if they have already earned 3.5 credits of block time or deadheading for the day.
California Labor Code Section 510 requires employers to pay over time for "any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek . . . ."
This Court previously found evidence that Plaintiffs worked more than eight hours some days such that they qualify for overtime pay.
California Labor Code Section 510 requires an employer to provide a 30 minute-meal if an employee works more than five hours per day.
This Court previously found that Plaintiffs' meal period and break claims are geographically limited to California. ECF No. 121 at 33. However, the Court also noted that there was evidence that Plaintiffs worked duty periods solely within California that were long enough to trigger meal period and rest break eligibility.
Under Section 226 of the California Labor Code, an employer is required to provide "an accurate itemized wage statement" showing gross wages, total hours worked, net wages earned, and all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate, among other things. Cal. Lab. Code § 226(a). "The employer's violation of section 226 must be `knowing and intentional.'"
Virgin concedes that its wage statements do not show the effective hourly rate of pay for each hour of duty or the actual number of hours worked. ECF No. 121 at 31. Plaintiffs have also provided evidence that Virgin knew that its wage statements did not show the actual number of hours worked. ECF No. 225-3 at 18-20. Virgin does not dispute this evidence or offer competing evidence. Therefore, Plaintiffs are entitled to summary judgment on this claim.
Under California law, if an employer willfully fails to pay . . . any wages of an employee who is discharged or who quits, "the wages of the employee shall continue as a penalty from the due date thereof . . . but the wages shall not continue for more than 30 days." Cal. Lab. Code § 203.
"California courts have held that an `employer's refusal to pay need not be based on a deliberate evil purpose to defraud workmen of wages which the employer knows to be due.' Rather, `[w]illful merely means that the employer intentionally failed or refused to perform an act which was required to be done.'"
Plaintiffs ask for summary judgment on the UCL claims "that are derivative of Virgin's violations of the California Labor Code for (1) failing to pay for all hours worked; (2) failing to pay overtime; (3)failing to provide meal breaks; and (4) failing to provide rest breaks. ECF No. 225 at 26. "[O]rders for payment of wages unlawfully withheld from an employee" are a restitutionary remedy authorized by the UCL.
Plaintiffs bring derivative claims under the PAGA.
Plaintiffs also seek PAGA penalties for Virgin's failure to provide timely payments. ECF No. 225. Plaintiffs provide evidence that Virgin does not provide timely payments pursuant to California Labor Code Section 204.
Plaintiffs argue that they are entitled to declaratory and injunctive relief under the Labor Code and the UCL. ECF No. 225 at 28. Virgin argues that prospective injunctive relief cannot be awarded against Virgin because Virgin no longer has control over the applicable policies or the flight attendants' working conditions. ECF No. 267 at 29. Virgin argues that it no longer has control because the class members are now employees of Alaska Airlines and subject to Alaska Airlines policies and practices.
The Court denies Plaintiffs' motion for summary judgment as to Plaintiffs' claims for declaratory and injunctive relief. Plaintiffs simply have not provided the Court with enough information regarding Virgin's corporate successor's policies and practices to determine whether such relief is appropriate.
Plaintiffs are entitled to seek compensatory damages, restitution, statutory penalties, civil penalties, attorneys' fees and/or costs.
First, Virgin argues that damages calculations for the Subclass cannot be calculated until residency is determined. ECF No. 267 at 31. The Court again rejects this argument. The Court has already held that the California Resident Subclass can be ascertained through Virgin's business records and the state where each flight attendant paid income taxes. ECF No. 151 at 9. Individual issues can be raised in claims administration.
Second, there is a dispute about the appropriate rate to be used in calculating damages for any unpaid non-overtime hours. Plaintiffs argue for the use of the "regular rate of pay," which is the same rate they use for their overtime damages calculation. ECF No. 225 at 29. "The regular rate of pay is calculated by dividing the total remuneration that the employee receives by the total number of hours that the employee has worked."
No party has cited a case directly on point, and the Court has not found one. The question of whether pay differentials must be included in the calculation of unpaid regular time appears to be an open question. Accordingly, the Court looks to other, analogous provisions of California labor law. To calculate unpaid overtime, California law uses the "regular rate of pay" proposed by Plaintiffs.
The Court sees no principled distinction between an appropriate wage for overtime hours, meal breaks, and rest breaks, on the one hand, and regular wages on the other. Furthermore, adopting the regular rate of pay as the appropriate benchmark would give effect to the "strong public policy in favor of full payment of wages for all hours worked" reflected in California's labor statutes.
Third, Virgin argues that Plaintiff should not use the "subsequent violation rate" for calculating PAGA penalties. ECF No. 267 at 32. Under California Labor Code Section 2699(f), the civil penalty for an initial violation is lower than the civil penalty for a subsequent violation. "Until the employer has been notified that it is violating a Labor Code provision (whether or not the Commissioner or court chooses to impose penalties), the employer cannot be presumed to be aware that its continuing underpayment of employees is a "violation" subject to penalties. However, after the employer has learned its conduct violates the Labor Code, the employer is on notice that any future violations will be punished just the same as violations that are willful or intentional — i.e., they will be punished at twice the rate of penalties that could have been imposed or that were imposed for the initial violation."
Here, Plaintiffs allege that prior to filing its First Amended Complaint, they gave written notice by certified mail to Virgin of the factual and legal bases for the Labor Code violations on September 25, 2015 and September 26, 2015. ECF No. 32 at 22. Virgin does not dispute this allegation, but argues that the initial rate should apply until a court or the Labor Commission has made a finding of a violation. ECF No. 267 at 32. However, there is nothing in the statutory language or California court authority that requires any finding of liability.
Fourth, Virgin argues that Plaintiffs should not have included the 88 class members who participated in Virgin's Career Choice program. ECF No. 32 at 32. As the Court discusses in its order regarding Virgin's motion to decertify the class, this is a question of class membership.
The Court grants Plaintiffs' motion for summary judgment for its failure to pay for all hours worked, failure to pay overtime, failure to provide meal and rest breaks, and failure to provide accurate wage statements claims. The motion is denied regarding the time spent completing incident reports. The Court also grants Plaintiffs' motion for summary judgment as to the Waiting Time Penalty Subclass. Finally, the Court grants Plaintiffs' motion for summary judgment for its UCL and PAGA claims.
The Court sets a case management conference on August 1, 2018 at 9:30 a.m. An updated joint case management statement is due July 25, 2018. The statement should address any remaining issues that require resolution before judgment can be entered in this case.