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California Law Governs Offshore Employment Relationships

California Court of Appeal held that California’s wage and hour laws apply to seamen working on a ship outside of California’s jurisdictional limits.

On December 7, 2020, the California Court of Appeal (Second Appellate District, Division 6) decided Gulf Offshore Logistics, LLC v. Superior Court, Case Number B298318 (2020), reversed itself and, following the California Supreme Court’s guidance in Ward v. United Airlines, Inc. 9 Cal.5th 731 (2020) and Oman v. Delta Air Lines, Inc., 9 Cal.5th 762 (2020), held that California’s wage and hour laws apply to seamen working on a ship that sailed between California ports and oil drilling platforms outside California’s jurisdictional limits.

The Facts

Louisiana-based employers hired crew members, who were not residents of California, to work on a vessel docked in California that provided maintenance services to offshore oil platforms located outside of California’s boundaries. On its route to the platforms, the vessel traveled both inside and outside California state boundaries.

The crew members brought a class action alleging that their employers had violated numerous California wage and hour laws, including minimum wage and overtime, meal and rest break, accurate work records, and complete wage statements.

The crew members resided in Texas, Ohio, and Mississippi and would fly to Los Angeles and be shuttled to the vessel. Once on the vessel, they were not permitted to leave without permission.

The employers moved for summary judgment on the theories that Louisiana rather than California law governed and that the federal Fair Labor Standards Act (“FLSA”) preempted California law. The superior court denied the motion on the grounds that the employers had not shown that Louisiana law should apply or that California law should be preempted.

Petitioners sought a writ of mandate directing the superior court to vacate its order and enter a new order granting summary judgment. In its prior opinion, the court of appeals concluded that Louisiana law applied because that state had more significant contacts with the parties and a greater interest in regulating the employment relationships of the crew members.

Following the California Supreme Court’s grant of review and remand, the court of appeals vacated its prior opinion and held that California law applies and the superior court correctly denied the employers’ motion for summary judgment.

The Court’s Opinion

The court of appeals focused on the holdings in Ward and Oman that, where employees do not perform a majority of their work in any one place, California wage and hour laws will apply when California serves as the employee’s base of work operations, regardless of where their residence is located, whether a collective bargaining agreement is in place, or whether the employer is a non-resident corporation.

The court of appeals concluded that "California law governs the employment relationships at issue here because California served as the base for the crew members' work operations, all or most which were performed in California." The fact that the vessel sailed beyond California’s state boundaries was not persuasive to the court.

The court of appeals further held that there was no preemption. Although the FLSA exempts seamen from its provisions, the FLSA and general maritime law did not preempt California wage and hour laws. There was no evidence that Congress intended the FLSA’s seamen exemption to preempt state law. Furthermore, the California Supreme Court previously found in Tidewater Marine Western, Inc. v. Bradshaw, 14 Cal.4th 557 (1996) that the FLSA does not preempt California law for state residents employed as seamen in the Santa Barbara Channel, and Ward and Oman clearly instruct that the residence of the employee is not determinative.

What This Means for Employers

  • The Gulf Offshore decision extends the holdings in Ward and Oman from airline employees to offshore vessel crew members whose base of operations is in California.
  • California wage and hour laws apply to employees based in California even when they live out of state and their employers are headquartered elsewhere.
  • California courts favor providing employees with the protections of California wage and hour laws whenever possible.

Actions to Take

  • Offshore vessel operators who hire employees to work on vessels operating both in and outside California waters must comply with California wage and hour laws.
  • Employers headquartered outside of California who hire employees whose work is based in California should review their wage and hour policies for compliance with California law.

Contacts

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