good morning i may please the court matthew helland of nichols castor for the plaintiffs in appellants i'd like to reserve any remaining time i might have for rebuttal i'd like to start by talking about the minimum wage california's minimum wage law demands separate distinct and actual payment for each hour worked in this case the undisputed facts show that plaintiffs worked hundreds of hours on the ground in the state of california for which delta paid them nothing the district court care by holding the delta paid flight attends for all their work time on the ground when the undisputed evidence shows delta did not california's unique minimum wage rule recognizes that nonproductive work time is a cost of doing business you know prohibits employers from shifting that cost of doing business on to the backs of its workers but that's exactly what delta's flight pay formula does here it pays only for flight time and pays nothing for time on the ground meaning not only do flight attendants board the planes for free and deplane the planes for free the flight attendants the hours that an employee would actually work it does the duty period is the work day and the one for to do period credit according to delta covers the whole covers the whole workday we disagree but that disagreement is it necessary in order for the court to reverse well ok but so let's assume that it covers all of the hours you know sort of productive and nonproductive time i know that's not the right terminology but right it becomes everything that you would possibly want to get paid an hourly wage for i guess i don't understand why if the employer sets that as the floor and guarantees that you will be paid above the minimum wage for every single one of those hours you actually work but we don't have these alternative formulas that my guarantee you hi compensation why is that a violation of california minimum wage law and that is exactly the gonzales case your honor because all those involved to formalize working in conjunction with n one another there was a minimum wage hourly guarantee the pay for all hours worked and then there was the piece rape a formula that only paid for the productive time and didn't pay for the nonproductive time and the court held that there was no violation of law when the court actually paid under the minimum wage guarantee but there was a violation of law when the employer paid under the piece rate formula because the piece rate formula didn't account for employee downtime and there's a very helpful example in consults that shows why this violates the law and why it allows the employer to shift the burden of  nonproductive time onto the backs of the workers like ok maybe i'm just fighting with gonzalez and you can you can correct me on that but i guess i don't see how has the employer shifting the burden of nonproductive time on to you as the employee when i am guaranteeing you in this instance you know well more than the minimum wage for every single hour you work i'm not i'm not saying i'm going to pay you fifty dollars an hour for productive time and nothing for the other time i'm going to pay you for every single hour you work at least you know double the minimum wage i just that just wrecks me is hard to understand why i'm in violation of the minimum wage when you're getting paid for every single hour and i've just come up with alternative formulas to ensure that you might get more money and not even more money that's calculated necessarily to actual hours worked it's just it's a weird formula that has all sorts of substitute metrics right i have a few answers for that your honor i think first of all you might be grappling with california law as articulated in our mentor and consult us but that is california law and this is well yes and no i mean it's not controlling in the sense that the state's highest court has endorsed that right that's correct your honor but this case and vers jet blue case are the only lower court cases that have had any difficulty in applying california law as articulated in are meant to and consult and then let's talk about why guaranteeing minimum pay is not enough there's an example in the work rules at page i think it's three sixty seven of the excerpts of record that talks about how the duty period formula works the one for two credit ok the one for two credit kicks in when the duty period is more than twice the amount of flight time so when you have equal amounts of paid time and unpaid time ok in the example there's a day that has six hours of flight time and it's supposed to be a ten hour duty period day and the guarantees will pay your six hours of flight time but there is a delay and because of the delay the duty period is extended and if the duty period is extended from ten hours until twelve hours delta makes the flight attendant work those additional two hours for free you can't say on the front end i'm going to pay you a certain amount for the day it's going to be a ten hour day but once you work twelve hours you're not getting any more money california law says you can't do that and that's the piece about shifting the nonproductive time onto the backs of the workers and this is very attractive for delta because it gives it some certainty we're going to try to pay under the fly pay formula as often as we can and then if there are ground delays delta the company does not absorb the cost of those ground delays it makes the workers absorb the cost of the ground delays and that's what been zealous says is against the law i like to address the job status test it specially in the context of wage claims if the judge if the tidewater california supreme court created the jobsite us test then sullivan versus oracle would have gone the other way especially if it created the percentage based jobsite this test that the airlines are evidence for five per second so what your time of the jobsite is test and are you really focusing your whole case at this point on the minimum wage argument are you still also pursuing wage statement claims we are also pursuing wage statement claims but are cases driven by the minimum wage claims but the like for do you need us to decide anything more than the minimum wage claims i was a little unclear because your brief barely says anything about the wage statement so i don't know whether what you want us to be deciding on appeal here the piece that's unique to our case is the minimum wage claims in the courtroom reversed and remand with instructions to enter judgment in plaintiff's favor on the minimum wage claims there's a separate summary judgment order on the wa in claims to twenty six and those are wrapped up in some of the other issues that are present in some of the other cases here today but on the question of whether the two to six claims should be certified to the california supreme court if this court decides to do that the california minimum wage claim should not because the laws clear under are meant to and in solace in our view and there is no dispute that california law applies to work performed on the ground in the state the principles of sullivan control and so going back to the jobsite is test just one example as to why this shifting percentage based test doesn't work imagine a worker who starts employment with one month of work in california and then works in nevada for two months that first month of work was clearly covered by california law but then after the two months of nevada work is the first month of work retroactively stripped of coverage that doesn't make any sense and then if the employee comes back well now i'm confused what you're arguing for so i thought so if they have the money california maybe we agree with you that california law applies for you saying if you have two months where you're not in california all the way the statement still needs to be a california statement not for those two months because there is no work performed in california i thought that was you're going to have our test under to twenty six's if there's california work then two twenty six applies and there should be a california wage to me the point is that a percentage based job site is test creates a moving target that makes compliance impossible i think you think a california wage statement for any month where you have  a work and minimum wage for any work in california correct if that person goes out of california in that month minimum wage isn't going to apply to those hours correct correct we only seek minimum wage for time worked on the ground in the state of california and that only makes sense the gate agents taking the boarding passes are covered by california law the luggage handlers loading the planes are covered by california law flight attendants are on the ground in california doing the same sort of work and there is no basis for letting delta work the flight attendants for free when it has to pay the gate agent in the luggage handlers under california law i'd like to address also this are a lay issue and the sort of general request on behalf of the airlines that there should be a uniform national standard congress has spoken in these areas specifically with respect to in what circumstances there should be a national standard in the airline industry it's a poke in the railway labor act the airline deregulation what situation state law should apply and state law applies here really there is an argument from the airlines are against federalism this is an area of traditional state power and there is no federal preemption i'd like to return to the minimum wage just to see if i can help the court a little bit it's important to understand that eighty five percent of plaintiffs work days were paid under the flight pay formula that is the predominant flight the formula and there's no disagreement here that the flight pay form look the pay by measuring only the block time and not paying anything for the time on the ground all of the arguments about minimum guarantee they go to averaging and how do we know that so i guess i just have a question about whether the argument you're making makes sense in the sense that will necessarily help the employee because we're about to hear a trucking case where when this argument was raised the trucking company they change the pay formula to comply with minimum wage and everyone was worse off they started listing all the hours and paying much less per hour and everyone got paid less so your employees are actually getting paid more under this alternative thing and i know it's disagreeing with gonzales to ask this question but i'm not sure it's helpful to the workers to push this point i'm a little like your response to that the same argument could be made in almost any wage in our case where there's a payment above the minimum standard take the example of a salaried employee who's paid sixty thousand dollars a year but should have been classified as not exempt and employee sues for the unpaid overtime pay it is certainly true that the employer could have paid that employee ten dollars an hour plus overtime and the employee would have earned less but that doesn't change the fact that the employer violated the law when it paid sixty thousand dollars without overtime regardless of what delta does going forward to cure this fix the the reality is that flight attendants work unpaid time on the ground when there were delays they alone bore the burden of those extended delays and they loaded the planes for free and they deplaned the planes for free and the flight pay formula applied eighty five percent of the time but i guess that assumes that you're i why pay formula for they're not really saying that we're going to we're going to guarantee you a certain hourly rate for every hour that you're in flight and then you're not going to be compensated for your the rest of the time that's and it's just it's it's a formula right that involves kind of an alternative way of calculating what your compensation will be but i guess i just don't it doesn't seem to me it's like the case where the employer says i'll promise to pay you fifty dollars an hour for productive time that you're actually doing work and yeah there's an equal amount of time that's you're just going to be dead time and we're just not going to pay you anything there because that's not the nature of the agreement here it's just it's a more kind of that's what i'm struggling with so maybe you can help on that i understand your job as you're out of the agreement to pay fifty dollars an hour for the productive time and nothing for the nonproductive time is are meant the minimum wage guarantee is gonzales now the delta nor the district court have distinguish this very important point in solace there was an explicit guarantee that we will pay you the minimum wage for every hour worked and there was an explicit agreement that will pay you the piece rate formula if that's greater than the amount than the minimum wage pay but that there's a the court can also look to the labor code sections to twenty one to twenty two and two twenty three and those are the code sections that underlie are meant to and also underlie gonzales and two twenty three especially goes to this issue that an employer cannot secretly pay a lower wage while claiming to pay the contract wage and that's exactly what's going on here in the summary judgment argument at the district court i said i said to the court on this specific day delta paid fourteen hours for twelve hours of work and the district court said well isn't it true that they just paid a lower rate if you spread it across the entire fourteen hours that is exactly what california law prohibits that's secretly paying a lower wage for all the hours it's taken from the pay for the productive time and spending it other than i was asked if i get i get the secret thing but that's this and there's nothing secret about this this is an agreement upfront that's fully disclosed to the employees and they understand what that formulation is and so that's that's why i just don't feel like it's not cheating you just we're here's what you and i are going to agree is going to govern the pay structure of this employment relationship and so i don't feel like your clients are being cheated in any way employees cannot contract away their right to minimum wage that's a fundamental aspect of california law the fact that there's an agreement to an illegal pay formula is irrelevant and i'm just getting well more than the minimum wage for every single hour you could possibly try to measure their  work day by they're getting way more than the minimum wage that's why it just seems crazy for you to stand here and say that somehow there's been a violation that they are getting more than the minimum wage only if you average the pay over all the hours which california law says you cannot and my l morning your honour's ma'am please the court r j hendricks with morgan lewis and baucus somebody for the defendant it is not that that this issue is all that confusing or that we've reached different results when other courts have looked at this particular issue and i'm speaking specifically as to the minimum wage argument the first case ever to address this was a was a district court and massachusetts that also found that that the delta work rules are not unlawful averaging the next court that looked at this was the oman court looking at all of the pay formulas looking all of the evidence that was presented and also concluded this was not averaging the bernstein court a court with which we have much disagreement with as to much of their decision also concluded that because of the one for two duty period rig this is not averaging there is an express formula under there under our paper rules that accounts for all hours work the complete duty the duty period is a federally defined sort of concept from the time that a flight attendant reports to work until the time that they are released and for that entire period of time they're paid in excess of twenty two dollars per per per hour yeah that makes sense to me but your opponent of course says but this is just like a so why is why is it different from going down well it's not like them solace or any of those particular cases aren't the cases because first of which all of those cases potentially the exception of one was a piece rate case this is not a piece rate formula but why does it matter i mean it's equivalent isn't it i mean there they had two formulas minimum wage was guaranteed it was going to be at least minimum wage on both formulas and you got two other formulas like why if we call it piece rate or not his rate doesn't matter i think it matters because of this in all of those ph rate cases one of the problems that the employee has is they never know the number of pieces at the time that the engage in the work is always something that is like well maybe i will replace so many winchell's today in the in the safe like have a say don't europe your employees don't know delay because of fog either but but but but what they do know through the bid process is they know the duty periods they know the flights in point of fact the characterization that credits are not extended when there are delays are simply inaccurate the  formulas that we have for formulas which are always applied with respect to every duty period in formulas also plug with respect to the rotation account for all hours worked and if that duty period is extended that duty period form accounts for all of that time but doesn't necessarily pay them more i mean they've got this perfect example in their brief about the guy who had the wind in his favor and then compared to the day where the delay is and the person who worked fewer hours got paid more do you deny that example well i think that there can be the because of the unique nature of weather and delays and things of that sort sort you can have some idiosyncratic circumstances that particular employee could have reported that and requested an extension of the duty period that's within the practice in most instances where this comes up where the employee is not getting additional compensation it is where there is a complete absence to do work outside of the duty and that was the situation which are resulted in the not being compensated for all hours but i did not see eye to their example about the wind and the weather is not that atypical of airline flights i mean it is a very good example for them but if these formulas are such that there are these not that unlikely events with wind and weather that mean that sometimes you get paid less for working more hours that does seem to have at least tension about well what i would say is otherwise that is exactly what this is it's a credit bassist i'm the factors in a number of factors given a very complex order working environment where people aren't right working regular routine schedules where they can switch their schedules change the schedules have delays we do have formulas that account then you have any help interpreting otherwise interpreting otherwise the phrase you're relying on here i've not seen a specific case that that the fully interprets it what i would say is this is under principles of statutory construction otherwise must mean something then hourly rate or the specifically enumerated buckets that are listed within that within the within the statue or that language would be a surprise ok so it has to mean something so that's why it doesn't matter that our system is not piece rate in what you see all of these other cases specifically talk about a piece rate system where they're targeting particular tasks not a complete duty period and they don't have a true hour component that covers report to release so we're completely distinct the cases the courts have analyze this issue to st in massachusetts oman and california who are in even bernstein all reached the conclusion as as if ain't about california it wasn't a california law but it was about the factual question as to whether or not the the the work rules constituted unlawful averaging but unlawful under thumb law and we're trying to figure out if means of a california law so i don't know how helpful that is i understand but i do think it's persuasive authority that another court with similar sort of standards that prohibits averaging has concluded that our structure is not averaging and it's not alone it's other california courts looking at this have may reach the same conclusion so unless you think about whether the california supreme court should think about this question i give given given the case law i don't believe that there's an issue that that requires them to look at it i think that it's pretty clear that our pay structure has a duty regular encompasses all hours worked it covers report to release it provides a minimum wage above that and we're paying more and i think you're honest point is very very important and that is to say if you look at of this sort of examples that are given the one that they don't really strike that they don't clarify is under the system that they were paid they were paid more than that that minimum wage guarantee significantly so so so that there is no benefit to the worker in this context interpret in this in this way does not benefit the worker it's harmful to the worker and workers are not being cheated with a bid system where everything is disclosed where they pick him bid on it they know exactly what it is which is another material distinction between a piece rate where i don't know in a given day how many widgets i will do i don't know in a day how many things i will do and so there's that problem so so i understand what for lawyers so far have told us it is that there is no need to certify because california law is clear the only trouble is they all disagree as to what the statute says i'm not understanding why we again i think in this particular instance the the conclusions of the oman court the conclusions of the brewer court the conclusions in the st i know it's not exactly on point but all of that in just the plain language of the agreements i don't think there's really a real question that we compensate for all hours worked and that we satisfy california law with that is to that particular issue i think with respect to the jobsite us issue i would argue that again it's pretty clear here we believe the tidewater is the controlling standard in this case presents a very important sort of question understand the standard the plaintiffs are advocating in this case their standard is you work any time in california under any circumstances for any length and you are subject to all of the panic plea of california wage an hour long and with no i mean they're asking her to think they're asking for the wage statement rule of an minimum wage that's all that's an issue well and those those though that's that's enough but the principle that they are ticket is simply if a person were to fly from l a to or from new york heading to hawaii they have a layover in california and they are working on a memo working on a presentation for a speech that's going to take place in a why that is work in california it triggers california obligations that's the premise that they articulate it below that's the premise that they're really arguing here and so when they tell you that the job site is test requiring that that there be at least either the worker exclusively or principally work in california but that's not the tast what they're doing is telling you that any amount of time work in calif under any circumstances triggers this obligation so again let's say that we agree with you on that point that at least as to folks who don't live in california they're there theory just doesn't work ok so but let's say that we were persuaded in say like in the war so let's say that we thought as to that person you know that person was entitle to california wait statement over the timing thing or whatever is at issue here but that it's all the nonresident folks it's a no go what what what happened to the judgment that  well i would say two points to that first of which i would agree with comments from an earlier attorney that said clearly under sullivan residence is not the test ok but let's take the hyper so they say we say we believe in you we're not part of your case and not on the other part depending on where the plaintiffs live what happened to this case at that point i think i think in that case she would still apply a do they principally work in california and if you can do that well maybe i maybe i'm not understand ethical i'm sorry let's say that were persuaded that if you live in california and you work some time not principally but fifteen percent twenty percent of your time ten percent i don't know you live in california you work some of the time in california but less than fifty percent that you are entitled to a few twenty six wait statement let's say that we were to hold that ok but this class has is a blended one it has all these nonresident folks who they want to you know pose liability solely on the fact as you say that they work for however little time in california let's say that we say that's not ok there are those people are not entitled to a t twenty six statement on trying to figure out what happens to the judgment that we've got before well what i would say is this i still think the there order issued in our particular case our case had summary judgment that was brought prior to certification so so to the extent there is an alteration of those judgments in some fashion it would be remanded to the district court for further proceedings and we would at that point make a determination as to what if anything is is certifiable and and follow whatever additional guidance the court gave us with respect to that but we do not have a certified case in this kind of sort of high class in this case we just have if i remember  that's i believe that's correct your honor at this stage at least are just pursuing individual claims on behalf of themselves no they're pursuing class claims but procedurally the parties agreed in the court allowed dispositive motions to be reached or and decided before the issue of classification to determine whether or not there are claims to be to be certified right but i guess i confess although hazy on this but i thought the basis for the district court's judgment was to say essentially you've got this blended class and you want to you want me to hold your opponent said that i can impose liability under two twenty six let's just say just on the basis of having worked in california and the court says that's not you know i can't do that so if that's all you're asking me for then you lose and i'm granting judgment against you i guess that's what i was trying to figure out but what if we thought that there were some people in this class that could prevail if the issue that the court decided it was looking at the specific flight histories of the name plaintiffs that they were insufficient time to trigger obligations under under california law that that with mr oman for example he was really based out of of new york he was a new york resident only so one percent of us flights touch could just hypothetically if we may not but if we disagreed with that and thought that for the plaintiff who lives in california a different result should follow then then what would happen is that as to the other plaintiffs they'd be out some or just would still be affirmed as to the one that that is denied we would go back and litigate the remaining place cases they would litigate potentially a paga claim and or attempt to certify a class based upon whatever definition apply extraterritoriality basically california is sort of method of calculation you know the wage order requires it to be reported in a certain way again our system is completely different in even if you were to conclude which i don't think is accurate that our system costs averaging most jurisdictions allow averaging ok so in order to comply with california's wage order we would have to somehow rethink it rejigger and configure for california something that was compliant with california when in fact our system is compliant under the federal rules is compliant under most state rules even if it was concluded to be averaging in this complaint under california law what are the federal rules because it brief that the only federal rule is that you get a w two at the end the year for your taxes and that is definitely not going to tell you how many hours you work at what wage is that what you're talking about as the federal rule that you think is the best one here know what i was referring to was was this notion that the manner in which we lawfully compensate employees does not fit within the framework of what's required to be reported under the california wage statement we will have when you talk about federal law as if we don't have to worry about california law because federal law takes care of this i don't know of any federal law that takes care of this is there a federal law that speaks to making sure that employees know every hour they worked or even the formula that's used or anything like that there's no specific pay statement requirement under federal law there is the w two requirement at the end of the year with respect to taxes but the point that i'm making is that in order to comply with a california wage the requirement that requires compensation to be reported in certain ways that would be a fundamental adjustment of our compensation structure it has that impact in the last point it's really really critical here is this the premise in hurst two cases out of illinois is so on the point it's the same premise that the court in ward adopted and that is the airline industry is a national industry it requires a level of uniformity this is not a situation like in sullivan where if they wanted to hire california trainers they could when you're dealing with interstate transportation inherently you're going to be going from one jurisdiction to the next you cannot have a situation where states are chasing each other going to the extreme to implementing all sorts of regulations or than saying figure it out as your honour's have already pointed out that can be a very difficult process understanding with a statute means understanding what a regulation means going to local ordinances having judges to disagree over those particular standards that's what we're expected to adopt and figure out though it seems like california law and that wage order nine like tried to have an exemption for your type of situation but you happen to not have a collective bargaining agreement but i'm a little confused about like what to do with you if this should apply to you but for some reason i don't know what the history is here we don't that having a collective bargaining agreement is something that the parties agreed to in to the extent our workers were talking about that the the flight attendants here were not making arguments but other airline employees that don't fly interstate so that's an important thing to keep in mind here you could have an hourly agreement with the workforce that's not necessarily flying interstate it could be people that are extremely working in california or ground sort of proving that in that sense ok so so the reality of it is is that our working conditions are  such that the workers have not decided that that's something that they need to if they felt that we were not compensating them fairly that's a right that they have under federal law to negotiate for him bargain for it can be addressed and i want to make the first certain things for the wage statement but only then in a certain category that you don't fit it only it only means potentially that with respect to that work that's performed in california that exemption would apply it is not the inverse that says and therefore we view the california law applies everywhere you go you know with respect to with respect to you know our our flight attendants understand that the work that they do again distinguishing it from sullivan the trainers and sullivan trained that was their job and they trained in california for complete periods of time there's really nothing the essential component of what a flight attendant does that's on the ground the essential component of the job flight attendant is in the air it is a sprite safety support and passenger support in the air that is the nature of the job and just because of the realities of life that people have to start someplace and in some place does it mean that california gets to be the tail that wags the dog by saying you spend an hour in our state therefore we get to dictate your entire compensation system these are interstate workers working unlike the trainers their job inherently on a given day a given shift a given duty period covers multiple jurisdictions that is a different fact pattern and so the reliance on sullivan for the proposition that any and all work that that happens to be performing california is is subject to this is not what was decided in some of them the controlling fact pattern is tidewater and it speaks to this notion that among other call of qualifications the essential component of getting those protections is that you primarily or or or or exclusively work in california that's an important safeguard to avoiding some floodgate that anytime anyone for any reason comes in pay statement minimum wage and couple the two the two of those components plaintiffs are arguing that minimum wage in a california requires every last second to be compensated so it may no difference how short that phone call was it makes no difference how short that e mail check was under their standard they would be adopting a legal standard if they reject the jobsite this test that says for any amount of time that anyone comes in for whatever the purpose  thank you the record has pages and pages of documents outlining flight attend his job duties while they're on the ground in california there's no dispute that there is work performed delta merged with northwest in two thousand and eight and defeated and union challenge therefore there is no collective bargaining agreement and the result is they have to follow state law because there is no are all a preemption this case is very different than the example of an employee working on a report for one hour in the state of california on a layover in that hypothetical situation the employer would have all sorts of defenses the employer maybe didn't suffer a permit to work maybe the employer didn't control the work maybe the employer had no knowledge or control over the work maybe it's truly de minimus work that would be subject to the exception those are not the facts here these three plaintiffs work hundreds of unpaid unpaid hours on the ground in the state of california their work must be done here it's a purposeful and intentional and delta assigns them to work here going back to gonzales we address in footnote three of our reply brief this argument about or otherwise and did address the language or otherwise and said california law applies no matter how you craft the pay structure lastly this case is on appeal on a grant of summary judgment saying there no factual dispute that delta paid for all hours worked i respectfully submit that the court cannot affirm without looking at the examples we had in a fight in our brief specifically june twenty first twenty fourteen michael lair work an unpaid time on the ground in san francisco we say is undisputed that time was on paid and delta has not answered thank you ok thank you very much for the health warning was the case just argued will be submitted and we will hear argument next in our in the last case on our calendar which is shook vs indian river transport company