Title: Oman v. Delta Air Lines, Inc.

State: california

Issuer: California Supreme Court

Document:

IN THE SUPREME COURT OF 
CALIFORNIA 
 
DEV ANAND OMAN et al., 
Plaintiffs and Appellants, 
v. 
DELTA AIR LINES, INC., 
Defendant and Respondent. 
 
S248726 
 
Ninth Circuit 
17-15124 
 
Northern District of California 
3:15-cv-00131-WHO 
 
 
June 29, 2020 
 
This opinion follows companion case S248702,  
also filed on June 29, 2020. 
 
Justice Kruger authored the opinion of the Court, in which 
Chief Justice Cantil-Sakauye and Justices Chin, Corrigan, Liu, 
Cuéllar, and Groban concurred. 
 
Justice Liu filed a concurring opinion, in which Justice Cuéllar 
concurred. 
 
 
OMAN v. DELTA AIR LINES, INC. 
S248726 
 
Opinion of the Court by Kruger, J. 
 
In this case, as in the companion cases Ward v. United 
Airlines, Inc., and Vidrio v. United Airlines, Inc. (June 29, 2020, 
S248702) ___ Cal.5th ___ (Ward), we confront a question about 
the application of various California wage and hour laws to 
flight attendants who work primarily outside California’s 
territorial jurisdiction.  Consistent with our holding in those 
cases, we conclude that California’s wage statement laws apply 
only to flight attendants who have their base of work operations 
in California, and that the same is true of California laws 
governing the timing of wage payments.  Finally, we hold that, 
whether or not California’s minimum wage laws apply to work 
performed on the ground during the flight attendants’ brief and 
episodic stops in California, the pay scheme challenged here 
complies with the state requirement that employers pay their 
employees at least the minimum wage for all hours worked. 
I. 
Defendant Delta Air Lines, Inc., is a national and 
international air carrier incorporated in Delaware and based in 
Georgia.  Delta offers service in and out of roughly one dozen 
California airports, connecting cities as small as Palm Springs 
and as large as Los Angeles to the rest of the country and the 
world. 
Plaintiffs Dev Anand Oman, Todd Eichmann, Michael 
Lehr, and Albert Flores are or were flight attendants for Delta.  
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
2 
Oman lived in New York and had a New York airport as a home 
base.  Lehr lives in Nevada but has a California airport as his 
home base.  Eichmann and Flores both live in California and 
have California airports as their home bases.  All four employees 
have served on flights in and out of California airports, as well 
as airports outside the state. 
In 2015, the named plaintiffs (collectively Oman) filed a 
putative class action in federal court, alleging that Delta 
violates California labor law by failing to pay its flight 
attendants at least the minimum wage for all hours worked.  
According to the operative complaint, Delta’s published work 
rules (hereafter Work Rules) pay flight attendants pursuant to 
formulas that compensate them on an hourly basis for certain 
hours worked but fail to provide any compensation at all for 
other working hours, in contravention of an obligation under 
California statutory and regulatory law to pay no less than the 
minimum wage for every hour worked.  (See Lab. Code, 
§§ 1182.12, 1194, 1194.2; Industrial Welfare Commission (IWC) 
wage order No. 9–2001, § 4 (Wage Order No. 9).)  Oman also 
alleged Delta fails to pay all wages in accordance with the 
semimonthly timeframe prescribed by Labor Code section 204 
(section 204) and to provide comprehensive wage statements 
reporting hours worked and applicable hourly pay rates, as 
required by California’s wage statement statute, Labor Code 
section 226 (section 226).  Oman sought relief under these 
statutes, as well as civil penalties under the Labor Code Private 
Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.) and 
restitution and injunctive relief under the unfair competition 
law (Bus. & Prof. Code, § 17200 et seq.). 
On cross-motions for summary judgment, the district 
court concluded Delta’s pay scheme does not violate California’s 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
3 
minimum wage requirements.  (Oman v. Delta Air Lines, Inc. 
(N.D.Cal. 2015) 153 F.Supp.3d 1094, 1095.)  Oman argued that 
Delta fails to pay any compensation at all for certain hours 
worked in California and, under Gonzalez v. Downtown LA 
Motors, LP (2013) 215 Cal.App.4th 36 (Gonzalez) and Armenta 
v. Osmose, Inc. (2005) 135 Cal.App.4th 314 (Armenta), Delta is 
prohibited from borrowing compensation due for other hours 
worked to make up for any shortfall.  The district court 
examined the pay formulas set out by Delta’s Work Rules and 
concluded they adequately compensate flight attendants for all 
hours worked, without any impermissible borrowing or 
reduction in agreed-to contractual rates.  (Oman, supra, 153 
F.Supp.3d at pp. 1102–1107.) 
The parties then filed cross-motions for summary 
judgment on Oman’s remaining wage statement and timing 
claims.  The district court granted judgment in favor of Delta, 
concluding that the relevant California statutes, sections 204 
and 226, do not apply to Oman.  The court held that the 
jurisdictional reach of the statutes should be determined 
according to a multifactor analysis that examines “the 
particular Labor Code provision invoked, the nature of the work 
being performed, the amount of work being performed in 
California, and the residence of the plaintiff and the employer.”  
(Oman v. Delta Air Lines, Inc. (N.D.Cal. 2017) 230 F.Supp.3d 
986, 992–993.)  Here, “[f]ocusing on the purpose of Section 226 
(to give employees clarity as to how their wages are calculated, 
so they can verify that their wages are calculated appropriately 
under California law), because the undisputed facts show that 
the named plaintiffs only worked a de minimis amount of time 
in California (ranging from 2.6% to a high of 14%), and in light 
of the nature of their work (necessarily working in federal 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
4 
airspace as well as in multiple other jurisdictions but during 
each pay period and day at issue),” the court concluded that 
section 226 does not apply to Oman’s claims.  (Oman, supra, 230 
F.Supp.3d at p. 993, fn. omitted.)  Seeing no argument for a 
different result under section 204, and because plaintiffs’ 
counsel had conceded the statute should have a similar scope, 
the district court likewise rejected Oman’s section 204 claims.  
(Oman, at p. 994.) 
On appeal, the Ninth Circuit asked that we resolve three 
unsettled questions of California law underlying Oman’s claims.  
(Oman v. Delta Air Lines, Inc. (9th Cir. 2018) 889 F.3d 1075, 
1076–1077.)  We accepted the request and agreed to resolve the 
following issues:1 
(1) 
Do sections 204 and 226 apply to wage payments and 
wage statements provided by an out-of-state employer to an 
employee who, in the relevant pay period, works in California 
only episodically and for less than a day at a time? 
(2) 
Does California minimum wage law apply to all 
work performed in California for an out-of-state employer by an 
employee who works in California only episodically and for less 
than a day at a time?  (See Lab. Code, §§ 1182.12, 1194; Cal. 
Code Regs., tit. 8, § 11090, subd. (4).) 
(3)  
Does the Armenta/Gonzalez bar on averaging wages 
(see Armenta, supra, 135 Cal.App.4th 314; Gonzalez, supra, 215 
Cal.App.4th 36) apply to a pay formula that generally awards 
credit for all hours on duty, but which, in certain situations 
                                        
1  
We have reframed these inquiries slightly.  (Cal. Rules of 
Court, rule 8.548(f)(5).) 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
5 
resulting in higher pay, does not award credit for all hours on 
duty? 
II. 
A. 
Our precedent makes clear that the application of 
California wage and hour protections to multistate workers like 
Oman may vary on a statute-by-statute basis.  (See Sullivan v. 
Oracle Corp. (2011) 51 Cal.4th 1191, 1201 (Sullivan).)  We thus 
consider separately each of the wage and hour statutes on which 
Oman relies, beginning with section 226.  That provision 
requires an employer to supply each employee “semimonthly or 
at the time of each payment” a written wage statement 
disclosing the pay period and itemizing the hours worked, 
applicable hourly rates, gross and net wages earned, any 
deductions taken, and other relevant information.  (§ 226, subd. 
(a).) 
As we explained in Ward, supra, ___ Cal.5th ___, section 
226 does not, in so many words, define its geographic reach.  
(Ward, at p. ___ [p. 21].)  But we ordinarily presume the 
Legislature drafts laws with domestic conditions in mind (id. at 
p. ___ [p. 16]), and thus requires some degree of connection 
between the subject matter of the statutory claim and the State 
of California.  In Ward, we addressed the nature of the 
connection required to trigger the wage statement requirements 
set forth in section 226 and held that section 226 applies when 
an employee’s principal place of work is in California.  
Ordinarily, this test is met if an employee works primarily (i.e., 
the majority of the time) in California.  In the case of interstate 
transportation workers and others who do not spend a majority 
of their working time in any one state, this test is satisfied when 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
6 
California serves as their base of work operations.  (Ward, at 
pp. ___–___ [pp. 26–28].)  Under this rule, because plaintiffs 
here never worked more than half the time in California (or in 
any other state), whether they are entitled to California-
compliant wage statements hinges on whether they were based 
for work purposes in California. 
The Ninth Circuit’s question in this case appears to ask 
whether it is also relevant that Delta is a nonresident 
corporation.  Delta now concedes that its foreign domicile does 
not foreclose the application of state law.  We accept the 
concession.  Section 226 contains no exemption based on the 
employer’s location.  This is in contrast to, for example, the 
worker’s compensation scheme, which expressly exempts some 
out-of-state employers.  (See Lab. Code, § 3600.5, subd. (b); 
Sullivan, supra, 51 Cal.4th at pp. 1197–1198.)  The state’s 
power to protect employees within its borders is not limited by 
whether the worker might be a nonresident or might be 
employed by a nonresident entity.  (North Alaska Salmon Co. v. 
Pillsbury (1916) 174 Cal. 1, 5; see Kearney v. Salomon Smith 
Barney, Inc. (2006) 39 Cal.4th 95, 105 [“individual states may 
adopt distinct policies to protect their own residents and 
generally may apply those policies to businesses that choose to 
conduct business within that state”].)  Instead, the onus 
ordinarily is on “a company that conducts business in numerous 
states . . . to make itself aware of and comply with the law of a 
state in which it chooses to do business.”  (Kearney, at p. 105.)  
To hold otherwise would, as Delta suggests, create an incentive 
for businesses employing individuals who work in California to 
avoid application of California law by locating their business 
operations outside the state.  If employees are based for work 
purposes in California, that is sufficient to trigger the 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
7 
requirements of section 226, regardless of where their employer 
resides. 
The proposed class in this case includes individuals who, 
like New York-based Dev Oman, neither perform their work 
predominantly in California nor are based for work purposes in 
the state.  Oman urges us to apply a different rule than the one 
we have articulated in Ward.  Although the operative complaint 
does not so specify, Oman clarifies in his briefing that unlike the 
Ward plaintiffs he does not seek comprehensive wage 
statements documenting all wages earned during a pay period.  
He argues instead that section 226 ought to be interpreted to 
require California-compliant documentation for those hours, 
however few they might be during any given pay period, when 
he worked on the ground in California.  He contends this 
requirement should apply to any airline employee who ever 
works in California, even those who are based out of state. 
This argument fails under the terms of section 226.  
Section 226 provides for the documentation of wages and other 
information over an entire pay period, not fractions thereof.  A 
wage statement must specify not only “total hours worked” and 
“all applicable hourly rates,” but also “gross wages,” “net wages,” 
and “all deductions” for the full period.  (§ 226, subd. (a).)  The 
statute contains no indication that the employer of an out-of-
state worker must report fractions of wages earned during brief 
trips to the state, as well as attempt to calculate the fraction of 
wage deductions attributable to these sojourns.  The statute 
requires “an accurate itemized statement” reflecting “the 
inclusive dates of the period for which the employee is paid” and 
all relevant information concerning the employee’s pay during 
that period—that is, a single comprehensive statement of pay.  
(Ibid.) 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
8 
Oman argues that our recent decision in Troester v. 
Starbucks Corp. (2018) 5 Cal.5th 829 supports his proposed 
fractional approach, but Troester has nothing to do with the 
question before us.  There, stressing that the IWC’s wage orders 
ensure compensation for “ ‘all hours worked’ ” (Troester, at 
p. 840, quoting IWC wage order No. 5–2001, §§ 3(A), 4(A)), we 
rejected the contention that state wage law would not concern 
itself with unpaid work on the order of a few minutes a day.  
Instead, we held that an “employer that requires its employees 
to work minutes off the clock on a regular basis or as a regular 
feature of the job may not evade the obligation to compensate 
the employee for that time by invoking the de minimis doctrine.”  
(Troester, at p. 847.)  That holding has no relevance here.  The 
issue before us is not whether brief periods of work must be 
compensated—no one disputes the point—but whether a few 
minutes or hours of work in California necessarily trigger the 
detailed pay-period documentation requirements of California 
law.  The answer to that question is no:  Employees are entitled 
to California-compliant wage statements only if California is the 
principal place of their work. 
Oman also argues that an approach based on the principal 
place of work will prove unworkable because coverage can only 
be determined in retrospect.  But there is nothing unworkable 
about it.  Wage statements are, of necessity, prepared in 
retrospect; their function is to record hours already worked and 
wages already earned.  And if the location of an employee’s job 
duties shifts radically during the course of employment—if, for 
example, a flight attendant takes on a new job as a gate agent 
at Los Angeles International Airport—the employer will have 
ample opportunity to adjust.  Likewise, if the employee’s base of 
operations changes because the employee is assigned to a 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
9 
different home airport, it will be a small matter to determine 
whether section 226 now applies. 
It is, in the end, Oman’s approach that poses greater 
practical concerns.  By insisting on California-compliant wage 
statements, but only for the fraction of hours worked on the 
ground in California, Oman would effectively require that 
employers either (1) accompany each California-specific wage 
statement with multiple similar separate statements under the 
laws of each and every additional state in which an employee 
worked during a pay period, or (2) issue a single wage statement, 
but allow California law effectively to dictate the form and 
contents for documenting work predominantly performed in 
foreign jurisdictions.  The first option would undermine the very 
purpose of section 226, which is “to ensure an employer 
‘document[s] the basis of the employee compensation payments’ 
to assist the employee in determining whether he or she has 
been compensated properly.”  (Soto v. Motel 6 Operating, L.P. 
(2016) 4 Cal.App.5th 385, 390, quoting Gattuso v. Harte-Hanks 
Shoppers, Inc. (2007) 42 Cal.4th 554, 574.)  This informational 
purpose would be ill-served by a rule that led to employees 
receiving a blizzard of wage statements every pay period, each 
documenting only a state-specific sliver of their work, and from 
this paper snowdrift trying to discern what they had actually 
been paid.  As to the second option, allowing any work in 
California, no matter how fleeting, to effectively impose 
California law on documentation of all work in a pay period 
would raise the very sorts of conflict-of-laws problems we 
generally presume the Legislature seeks to avoid.  (Ward, supra, 
___ Cal.5th at pp. ___–___ [pp. 16–17].)  It is presumably for this 
reason that Oman has avoided arguing that California law 
requires this result.  We decline to construe section 226 as 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
10 
putting employers to the choice of either issuing a single 
California-compliant wage statement for every interstate 
worker who works for any amount of time, however brief, within 
the state, or issuing a multiplicity of statements, when the 
statute envisions that employees will receive just one. 
The principal place of work rule we have articulated in 
Ward means that some short periods of work in California will 
not be covered by section 226’s documentation requirements.  
Conversely, some periods of work outside California will be 
covered, if they occur as part of an overall period in which most 
work occurs inside this state or are performed by an employee 
who primarily works in no state but is based here.  Such 
consequences are inevitable and unavoidable in a nation of 50 
states where some forms of employment stretch across the land.  
But an understanding of section 226 that focuses on the 
principal place of an employee’s work both serves the 
informational purposes the Legislature sought to achieve and 
minimizes the inevitable complications that would result from a 
rule that any work in one state, no matter how fleeting, is 
sufficient to trigger application of that state’s wage reporting 
laws.   
We thus conclude section 226 does not apply to work 
performed in California during pay periods in which the 
employee, based outside California, works primarily outside 
California.  A non-California-based employee who works in 
California “only episodically and for less than a day at a time” 
(Oman v. Delta Air Lines, Inc., supra, 889 F.3d at p. 1077) is not 
entitled to a wage statement prepared according to the 
requirements of California law. 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
11 
B. 
We turn now to Oman’s section 204 claim.  That statute 
guarantees employees full payment on a semimonthly basis, 
providing:  “All wages,” with certain exceptions not relevant 
here, “earned by any person in any employment are due and 
payable twice during each calendar month, on days designated 
in advance by the employer as the regular paydays.”  (§ 204, 
subd. (a).)  Section 204 goes on to establish specific deadlines by 
which wage payments must be made.  (Id., subd. (a).)2  As is true 
of section 226, nothing in the statute explicitly specifies its 
intended geographic scope. 
As Oman conceded in the federal district court (see Oman 
v. Delta Air Lines, Inc., supra, 230 F.Supp.3d at p. 994), there is 
no reason to interpret section 204’s geographic coverage 
differently from that of section 226.  That is because section 204 
works hand in hand with section 226.  Section 226 regulates the 
information an employer must provide in connection with wage 
payments, while section 204 regulates when an employer must 
pay an employee for hours worked.  The Legislature has 
recognized that when an employee must be paid (the subject of 
§ 204), and what information must accompany each such 
required payment (the subject of § 226) are necessarily linked.  
(See § 204, subd. (b)(2) [coordinating the application of these 
provisions].) 
                                        
2  
With certain exceptions not relevant here, “[l]abor 
performed between the 1st and 15th days, inclusive, of any 
calendar month shall be paid for between the 16th and the 26th 
day of the month during which the labor was performed, and 
labor performed between the 16th and the last day, inclusive, of 
any calendar month, shall be paid for between the 1st and 10th 
day of the following month.”  (§ 204, subd. (a).) 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
12 
As with section 226, Oman seeks to apply section 204 only 
to those hours he worked within California.  And as with section 
226, reading the statute as Oman argues would pose difficulties 
that prove fatal to the argument.  Again, there are two options:  
Either the employer must calculate and split out some portion 
of the wages due as attributable to work performed in California 
and pay only those on section 204’s schedule, while paying other 
wages due in accord with whatever timing statutes might apply 
under other states’ laws, or the employer must pay all wages due 
according to the schedule required under California law by 
section 204.  These interpretations present the same issues as 
the corresponding options for complying with section 226. 
The first interpretation, aside from the administrative 
headaches it would generate, runs headlong into the text of 
section 204, which applies to “[a]ll wages . . . earned,” with 
exceptions not significant here.  (§ 204, subd. (a), italics added.)  
As with section 226, nothing in the text suggests the Legislature 
contemplated fragmenting wages earned according to the state 
in which labor was performed and requiring whatever sliver of 
wages might be attributable to California to be paid on section 
204’s timeline, with other slivers for work elsewhere paid 
according to whatever other state law might apply.  Nor is it 
clear how such a reading would advance the policy underlying 
section 204.  Section 204 serves the “public policy in favor of full 
and prompt payment of an employee’s earned wages,” which “is 
fundamental and well established:  ‘ “Delay of payment or loss 
of wages results in deprivation of the necessities of life, suffering 
inability to meet just obligations to others, and, in many cases 
may make the wage-earner a charge upon the public.” ’ ”  (Smith 
v. Superior Court (2006) 39 Cal.4th 77, 82, quoting Kerr’s 
Catering Service v. Department of Industrial Relations (1962) 57 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
13 
Cal.2d 319, 326; see Voris v. Lampert (2019) 7 Cal.5th 1141, 
1148 [“prompt and complete wage payments are of critical 
importance to the well-being of workers, their families, and the 
public at large”].)  Section 204, insofar as it applies to the 
entirety of an employee’s wages, directly serves this policy.  It is 
less apparent how the policy is meaningfully advanced by 
requiring payment of California-earned wages on a California-
specified timeline when those wages represent just a small 
fraction of the earnings an employee relies on for support. 
The second interpretation accords section 204 a broad 
reach, allowing California law to dictate the timing of payment 
for wages earned predominantly outside California for work 
performed outside California.  Granting section 204 such an 
expansive scope would generate significant complications.  
Given the nature of the flight attendants’ work, treating any 
work performed on the ground in any given state as sufficient to 
trigger application of payment timing requirements could 
subject the payment for work in a given pay period to the often-
conflicting laws of a dozen or more states.  Reading section 204 
in concert with section 226 as applying to pay periods in which 
an employee works predominantly in California avoids these 
problems. 
In sum, we conclude section 204 is subject to the same 
limits as section 226 and applies only to pay periods during 
which an employee predominantly works inside California. 
III. 
We turn, finally, to the minimum wage claims.  The Ninth 
Circuit asks two questions related to these claims:  First, 
whether California minimum wage law applies to the hours (or 
fractions thereof) that Oman worked on the ground in 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
14 
California, and second, whether Delta’s method of computing 
Oman’s wages complies with the state law.  As discussed, the 
application of labor protections must be analyzed on a provision 
by provision basis in light of the nature of the protection 
afforded, and so the rules we articulate for sections 204 and 226 
do not resolve whether the state’s minimum wage laws might 
apply.  (See Ward, supra, ___ Cal.5th at pp. ___, ___ & fn. 10 
[pp. 21, 28 & fn. 10]; Sullivan, supra, 51 Cal.4th at p. 1201; ante, 
at p. ___ [p. 5].)  But we need not settle the reach of the state’s 
minimum wage laws if we can determine that, even were those 
laws to apply, Delta’s pay scheme would not violate them.  
Because the record establishes Delta complies with state 
minimum wage law, we address only that question. 
Like other industry wage orders, Wage Order No. 9 
requires that “[e]very employer shall pay to each employee, on 
the established payday for the period involved, not less than the 
applicable minimum wage for all hours worked in the payroll 
period, whether the remuneration is measured by time, piece, 
commission, or otherwise.”  (Id., § 4(B).)  Here, pursuant to the 
Work Rules, the remuneration provided to Delta flight 
attendants is measured by the “rotation,” a given sequence of 
flights over a day or a period of days that the attendant will 
serve on.  Compensation for each rotation is calculated 
according to four different formulas; flight attendants are paid 
according to whichever formula yields the largest amount for the 
complete rotation.  (See post, at pp. 22–23.)  It is undisputed that 
under this compensation scheme, flight attendants are always 
paid, on an hourly average, above the minimum wage.  Oman 
contends that the scheme nonetheless violates California’s 
minimum wage law, principally because one of Delta’s four 
formulas—the formula that most often determines how much 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
15 
flight attendants will be paid, because it generally yields the 
greatest compensation—is based solely on flight time and does 
not factor in the hours flight attendants spend working on the 
ground before and after flights. 
The dispute between the parties does not concern the 
substance of California’s minimum wage guarantee.  It is 
common ground that the law guarantees at least minimum wage 
for “all hours worked in the payroll period.”  (Wage Order No. 9, 
§ 4(B).)  The parties’ disagreement instead concerns how 
compliance is to be measured when the employer does not 
compensate its employees according to a fixed hourly rate 
applicable to all hours.   
A. 
To understand the nature of the dispute, some background 
is required.  Beginning several decades ago, federal courts 
confronting questions about minimum wage compliance 
commonly interpreted federal law to require only that 
employers pay in each week an average wage at or above the 
federal minimum.  (See 29 U.S.C. § 206(a); U.S. v. Klinghoffer 
Bros. Realty Corp. (2d Cir. 1960) 285 F.2d 487, 490; see also, e.g., 
Dove v. Coupe (D.C. Cir. 1985) 759 F.2d 167, 171–172 (opn. of 
Ginsburg, J.).)  At least without further refinement, the 
workweek-average approach means that if an employer agrees 
to pay a particular amount for say, 20 hours of work in a week, 
but then demands the employee work an additional 10 hours for 
free, the minimum wage law is satisfied so long as the total 
wages, divided by 30, equal or exceed the applicable minimum 
wage.  Under this approach, Delta’s compensation scheme could 
create no possible problems, since, as noted, it is undisputed 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
16 
that the scheme yields an average hourly wage that well exceeds 
the minimum set by California law. 
The Division of Labor Standards Enforcement (DLSE) and 
the unanimous Courts of Appeal, however, have embraced a 
more stringent understanding of state law that forbids taking 
compensation contractually due for one set of hours and 
spreading it over other, otherwise un- or undercompensated, 
hours to satisfy the minimum wage—a practice that has often, 
perhaps misleadingly, been referred to as “wage averaging.”  As 
we will explain, the practice these authorities prohibit might be 
more accurately characterized as “wage borrowing,” and we 
employ that phraseology here. 
The DLSE was first to consider the issue.  (See Dept. of 
Industrial Relations, DLSE Opn. Letter No. 2002.01.29 (Jan. 29, 
2002) (hereafter DLSE Opinion Letter No. 2002.01.29).)  In 
response to a question by parties to a collective bargaining 
agreement, the DLSE determined that particular employee 
travel time for which no compensation was being paid, because 
the 
employer 
apparently 
viewed 
it 
as 
off-duty 
and 
noncompensable, was in fact on-duty hours worked and 
compensable.  (Id. at pp. 1–7.)  The DLSE then considered 
whether payments for other compensable hours, contractually 
promised under the collective bargaining agreement, could be 
borrowed to satisfy the employer’s minimum wage obligations, 
as would have been true under the rule generally articulated in 
the federal courts. 
The DLSE viewed the language of the wage order as 
ambiguous, so it turned to the statutory backdrop for answers.  
California law, the DLSE observed, differs from federal law in 
that it not only guarantees a minimum wage but also expressly 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
17 
protects employees’ right to receive the wages promised in a 
contract or collective bargaining agreement.  Specifically, Labor 
Code section 221 prohibits an employer from paying wages and 
then recouping some portion of the wages as a kickback or secret 
deduction;3 Labor Code section 222 prohibits underpayment of 
wages established by a collective bargaining agreement;4 and 
Labor Code section 223 prohibits underpayment of wages 
otherwise established by contract.5  Wage borrowing would 
violate these statutes by reducing compensation, for the hours 
from which wages were borrowed, below the contractually 
agreed-upon level.  (DLSE Opn. Letter No. 2002.01.29, supra, at 
p. 11 [“These statutes prevent [an] employer that might be 
covered by a [collective bargaining agreement (CBA)] or other 
contract that expressly pays employees less than the minimum 
wage for certain activities that constitute ‘hours worked’ within 
the meaning of state law, from using any part of the wage 
payments that are required under that CBA or other contract 
for activities that are compensated in an amount that equals or 
exceeds the minimum wage, as a credit for satisfying minimum 
                                        
3  
“It shall be unlawful for any employer to collect or receive 
from an employee any part of wages theretofore paid by said 
employer to said employee.”  (Lab. Code, § 221; see Kerr’s 
Catering Service v. Department of Industrial Relations, supra, 
57 Cal.2d at p. 328.) 
4  
“It shall be unlawful, in case of any wage agreement 
arrived at through collective bargaining, either wilfully or 
unlawfully or with intent to defraud an employee, a competitor, 
or any other person, to withhold from said employee any part of 
the wage agreed upon.”  (Lab. Code, § 222.) 
5  
“Where any statute or contract requires an employer to 
maintain the designated wage scale, it shall be unlawful to 
secretly pay a lower wage while purporting to pay the wage 
designated by statute or by contract.”  (Lab. Code, § 223.) 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
18 
wage obligations for those activities that are compensated at 
less than the minimum wage under the CBA or contract” (fn. 
omitted)].)  In practical terms, this means that an employer who 
contracts to pay $18 per hour for two hours of work, but who 
then demands a third hour of unpaid work, cannot argue that it 
has complied with a $12 hourly minimum wage (see, e.g., Lab. 
Code, § 1182.12, subd. (b)(1)(C), (2)(C)) because it has paid $36 
over three hours, or $12 per hour.  Under the DLSE’s 
interpretation of the Labor Code, the employer must pay the full 
$18 required by contract for the first two hours.  Then, for the 
third uncontracted-for hour for which no compensation was 
promised, it must pay no less than the applicable minimum 
wage. 
The Court of Appeal in Armenta, supra, 135 Cal.App.4th 
314, endorsed the DLSE’s reasoning in a similar context.  The 
employer in Armenta, which maintained utility poles, had 
promised in a collective bargaining agreement to pay set hourly 
rates for hours spent engaged in “productive” tasks directly 
related to pole maintenance.  But employees were required to 
engage in other, “nonproductive” activities, such as travel time 
and paperwork, for which they received no compensation.  (Id. 
at p. 317.)  The court held this unlawful, notwithstanding the 
fact that the average of the paid and unpaid hours exceeded the 
minimum wage.  The court reasoned that an employer who 
promises to compensate particular hours worked at a particular 
rate cannot borrow some of that compensation and apply it to 
other compensable hours for which no compensation is provided.  
To do so would effectively compel an employee to sacrifice 
contractually promised compensation and breach the employer’s 
contractual commitments, in violation of either Labor Code 
section 222 (governing collective bargaining agreements) or 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
19 
Labor Code section 223 (governing ordinary contracts).  (See 
Armenta, at p. 323 [averaging pay across any uncompensated 
hours “contravenes these code sections and effectively reduces 
[the employee’s] contractual hourly rate”].) 
Since Armenta, other Courts of Appeal have uniformly 
followed its lead.  These decisions have extended the no-
borrowing rule to employees under a collective bargaining 
agreement (Bluford v. Safeway Inc. (2013) 216 Cal.App.4th 864, 
872–873 (Bluford)) and an ordinary contract (Gonzalez, supra, 
215 Cal.App.4th at pp. 50–51), and without regard to whether 
the basis for compensation is hourly (Sheppard v. North Orange 
County Regional Occupational Program (2010) 191 Cal.App.4th 
289, 297–298, fn. 5), by piece rate (Bluford, at p. 872; Gonzalez, 
at pp. 51–52), or by commission (Vaquero v. Stoneledge 
Furniture, LLC (2017) 9 Cal.App.5th 98, 108–114 (Vaquero)).  
Although we have not previously had occasion to address the 
issue, we agree with this consensus:  State law prohibits 
borrowing compensation contractually owed for one set of hours 
or tasks to rectify compensation below the minimum wage for a 
second set of hours or tasks, regardless of whether the average 
of paid and unpaid (or underpaid) time exceeds the minimum 
wage.  Even if that practice nominally might be thought to 
satisfy the requirement to pay at least minimum wage for each 
hour worked, it does so only at the expense of reneging on the 
employer’s contractual commitments, in violation of the contract 
protection provisions of the Labor Code. 
Synthesizing the authorities, we summarize the principles 
this way.  The compensation owed employees is a matter 
determined primarily by contract.  Compensation may be 
calculated on a variety of bases:  Although nonexempt employee 
pay is often by the hour, state law expressly authorizes 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
20 
employers to calculate compensation by the task or piece, by the 
sale, or by any other convenient standard.  (See Lab. Code, 
§ 200, subd. (a) [compensation may be “fixed or ascertained by 
the standard of time, task, piece, commission basis, or other 
method of calculation”]; Wage Order No. 9, § 4(B) [compensation 
may be “measured by time, piece, commission, or otherwise”].)  
In many employment agreements, such as the one at issue in 
Armenta, the unit of time or activity by which an employer 
promises to pay an employee is easily ascertainable.  (See 
Armenta, supra, 135 Cal.App.4th at p. 317 [“Under the terms of 
the parties’ collective bargaining agreement, respondents were 
paid hourly wages . . . .”].)  In other cases, the employer may 
compensate employees based on a combination of methods.  
(See, 
e.g., 
Vaquero, 
supra, 
9 
Cal.App.5th 
at 
p. 103 
[compensation determined by the greater of sales commission or 
hourly minimum pay]; Gonzalez, supra, 215 Cal.App.4th at p. 41 
[compensation determined by greater of repair tasks completed 
or minimum hourly pay].)  Consistent with general contract 
interpretation principles, the unit for which pay is promised 
should be determined based on the “mutual intention of the 
parties as it existed at the time of contracting.”  (Civ. Code, 
§ 1636.) 
Whatever the task or period promised as a basis for 
compensation, however, an employer must pay no less than the 
minimum wage for all hours worked.  (See Wage Order No. 9, 
§§ 2(H), 4.)  The employer must satisfy this obligation while still 
keeping any promises it has made to provide particular amounts 
of compensation for particular tasks or periods of work.  (Lab. 
Code, §§ 221–223.)  For all hours worked, employees are entitled 
to the greater of the (1) amount guaranteed by contract for the 
specified task or period, or (2) the amount guaranteed by the 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
21 
minimum wage.  Whether a particular compensation scheme 
complies with these obligations may be thought of as involving 
two separate inquiries.  First, for each task or period covered by 
the contract, is the employee paid at or above the minimum 
wage?  Second, are there other tasks or periods not covered by 
the contract, but within the definition of hours worked, for 
which at least the minimum wage should have been paid?   
For purposes of evaluating whether an employee has 
received at least the hourly minimum wage for tasks or periods 
compensated under the contract, it is generally permissible to 
translate the contractual compensation—whether it be done by 
task, work period, or other reasonable basis—into an hourly rate 
by averaging pay across those tasks or periods.  An employer 
can, for example, pay by the day, with daily pay averaged across 
all hours worked to determine whether the resulting hourly 
wage exceeds the minimum.  But an employer who instead 
promises to pay by the hour may not compensate any given hour 
at less than minimum wage.  Nor may the employer make up for 
the shortfall by pointing to other hours for which contractual 
compensation exceeds the minimum wage.  As the DLSE 
explained in its letter, if a contract or bargaining agreement 
expressly guarantees compensation for one set of tasks or one 
specific period, that compensation may not be reduced to 
supplement pay for other tasks or periods within the purview of 
the 
contract 
or 
bargaining 
agreement, 
but 
otherwise 
undercompensated 
by 
them. 
 
(DLSE 
Opn. 
Letter 
No. 2002.01.29, supra, at p. 11; Lab. Code, §§ 221–223.)   
The same “no borrowing” principle applies when an 
employer requires work not covered by the contract at all, but 
which falls within the definition of hours worked under the 
minimum wage law.  So, for example, in Armenta, supra, 135 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
22 
Cal.App.4th 314, the collective bargaining agreement ensured 
pay at or above the minimum wage for hours engaged in 
specified productive tasks, and under the agreement and Labor 
Code section 222, the employees were entitled to their promised 
wages without diminution.  But for other periods not 
compensated under the contract, but during which employees 
were on duty and thus owed compensation under the wage 
order, the minimum wage was also due. 
B. 
So far, we have described common ground:  Delta does not 
challenge the no-borrowing principle as it has been elaborated 
in the Armenta line of cases.  The parties’ disagreement concerns 
whether Delta’s flight attendant compensation scheme violates 
this no-borrowing principle.  Because the relevant provisions of 
the Labor Code prohibit borrowing only when it results in 
failure to maintain the wage scale designated by contract, the 
resolution necessarily turns on the nature of Delta’s contractual 
commitments.  (See Lab. Code, § 223 [prohibiting an employer 
from “secretly pay[ing] a lower wage while purporting to pay the 
wage designated . . . by contract”].) 
Delta’s Work Rules, which are disclosed to all its flight 
attendants, promise to compensate attendants by the rotation 
rather than by particular hours worked.  This is evident both 
from the structure of the compensation scheme outlined in the 
Work Rules and the procedures Delta employees follow to obtain 
work assignments. 
Each rotation contains one or more duty periods, 
interspersed with layovers between duty periods.  A duty period 
begins when a flight attendant reports to an airport before a 
flight.  Thereafter, the flight attendant may have preboarding 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
23 
obligations, in-flight obligations, posttouchdown obligations, 
transit or sit time—the period in another airport before the next 
flight is ready for boarding—and a similar set of obligations 
during the next or each subsequent flight until the end of the 
duty period.  As Delta acknowledges, flight attendants are on 
duty continuously during a duty period, from first reporting 
until release after the last flight of the period.  For his part, 
Oman does not contend flight attendants are on duty or entitled 
to compensation for layovers between duty periods.   
Under the Work Rules, compensation is first determined 
for each duty period within a rotation by comparing three 
calculations and choosing the highest pay from among these:  
“Each duty period of a rotation pays the greatest of:   [¶]  1) flight 
time (includes deadhead flight time, minutes under, and flight 
pay for ground time), or  [¶]  2) 4:45 minimum duty period credit 
(MDC), or  [¶]  3) 1 for 2 duty period credit (DPC).”  Second, the 
maximum pay for all duty periods within a rotation is summed 
and compared against a fourth formula based on the length of 
the rotation, and flight attendants are paid whichever of these 
two amounts is greater.6  Thus, although hours worked, or 
credited, are elements in these successive computations and 
comparisons to determine an employee’s pay, Delta does not 
promise to pay by the hour, nor does it promise to pay for certain 
hours and not others. 
                                        
6  
Under this alternative rotation formula, “[t]he sum of the 
duty period credits listed above is then compared to 1 for 3.5 trip 
credit (TRP), which guarantees at least 1 hour pay for every 3.5 
hours away from base.  You will be paid the greater of the two 
values.” 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
24 
The promise to pay by rotation is also reflected in the 
procedures Delta uses for distributing work assignments.  The 
nature of these procedures is undisputed:  Each month, Delta 
circulates a bid packet to its flight attendants listing rotations 
each employee can request.  The bid packet presents the number 
of duty periods and length of each duty period within each 
rotation; report times and total scheduled flight times for the 
flights within each rotation; and the amount of time the flight 
attendant can expect to be away from base.  The bid packet also 
shows which formula will apply and the minimum amount flight 
attendants would be paid for the rotation at their particular 
contractually established “flight pay” rate.  (See Oman v. Delta 
Air Lines, Inc., supra, 153 F.Supp.3d at pp. 1096–1098.)  Flight 
attendants then submit their rotation preferences, with the 
understanding that their pay for each rotation will be no less 
than the amount derivable from the bid packet.  That Delta pays 
flight attendants by the rotation, and what it will pay for any 
particular rotation, are fully disclosed.  Delta then gives flight 
attendants access to electronic databases that track credits and 
pay earned for each assigned rotation.  
Delta’s four-formula method for calculating compensation 
guarantees that flight attendants are always paid above the 
minimum wage for the hours worked during each rotation 
without borrowing from compensation promised for other 
rotations.  Under one of the four formulas—the one-for-two duty 
period credit formula—pay is calculated by multiplying the 
attendant’s established flight pay rate by the total hours in the 
duty period, divided by two.  To borrow the simple example 
contained in Delta’s 2014 Work Rules, a flight attendant 
working a duty period that lasts 12.5 hours would receive 6.25 
hours of credit at the flight pay rate—a rate that in 2014 ranged 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
25 
from $23.28 to $53.52 depending on the employee’s years of 
service.  So long as the flight pay rate equals or exceeds twice 
the applicable minimum wage, this formula ensures a flight 
attendant is paid for all hours worked in every duty period at no 
less than the minimum wage.  And because pay for a rotation is 
never less than the sum of the pay for each duty period, rotation 
pay also will always meet or exceed the hourly minimum wage. 
Oman does not contend that any flight attendant’s flight 
pay rate was ever less than twice the applicable minimum wage.  
But he nevertheless contends that the duty period credit 
formula fails to compensate flight attendants for all hours 
worked and instead compensates them for only half the hours 
worked—leaving the other half entirely uncompensated, 
contrary to state minimum wage law.  Specifically, as Oman 
reads the Work Rules, the flight attendant working a 12.5-hour 
duty period is being paid for only half of that time, 6.25 hours, 
with the remaining 6.25 hours unpaid. 
Oman’s reading is unsound.  The Work Rules do not, as he 
suggests, purport to compensate flight attendants only for every 
other hour—which is to say, they do not require a flight 
attendant to work an hour for free in order to earn full flight pay 
credit for working a second hour.  Instead, flight pay credit 
accumulates continuously as the duration of the duty period 
lengthens:  Every additional minute on duty earns an employee 
an additional 30 seconds of flight pay credit.  As an example, a 
flight attendant subject to a $40 flight pay rate who works an 
eight-hour duty period would receive $160; for an 8.5-hour duty 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
26 
period, $170; for a nine-hour duty period, $180; and so on.7  Each 
and every increment of on-duty time is compensated under the 
formula, and at a rate equal to or greater than the hourly 
minimum wage.  There is no impermissible borrowing from 
hours for which full flight pay was promised to cover hours for 
which no compensation is provided, both because every hour is 
compensated at the same rate (half flight pay) and because 
Delta never promised full flight pay for any particular hour 
under this formula. 
The duty period credit formula is, however, only one of 
four 
formulas 
that 
may 
determine 
flight 
attendant 
compensation; if any one of the other formulas yields a greater 
amount of compensation, it will instead control.  Oman argues 
that when pay is based on one of these other formulas, Delta 
violates the state minimum wage law. 
Oman focuses in particular on a second formula, the flight 
time formula, which supplies the measure of pay for most duty 
periods.  (Oman v. Delta Air Lines, Inc., supra, 153 F.Supp.3d at 
pp. 1100–1101.)  Under this formula, an attendant is paid at the 
contractually established flight pay rate for each period between 
flight “block out” and “block in”—the period between when each 
flight departs the block, or gate, and arrives at the destination 
gate.  The established flight pay rate is multiplied by the longer 
of the scheduled flight time or the actual flight time.  Time 
                                        
7  
The same is true no matter what causes the duty period to 
extend.  If the same flight attendant with a $40 flight pay rate 
works a duty period consisting of flights in and out of San 
Francisco, and the second flight is delayed by fog, requiring 
additional sit time in San Francisco, the amount owed under the 
duty period credit formula will still rise, at the rate of $20 per 
hour, for every extra minute of delay. 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
27 
between reporting for duty and the first flight block out, during 
any between-flights sit time, and after the last flight block in 
until release, is not directly factored into the calculation.  For 
duty periods where the flight time comprises less than 50 
percent of the total on-duty time, a flight attendant can still be 
compensated according to the duty period credit formula 
described above; the flight time formula operates only to supply 
additional compensation, above and beyond the compensation 
that would be owed under the duty period credit formula, for 
periods where flight time exceeds this 50 percent threshold. 
As Oman observes, there are on-duty periods to which the 
flight time formula does not directly attribute compensation, 
such as preflight briefings.  Oman contends that Delta’s failure 
to specify a particular pay rate specific to these periods of time 
violates the obligation to pay at least minimum wage for all 
hours worked.  And, according to Oman, any attempt to satisfy 
the minimum wage law by averaging the flight attendant’s pay 
over the entire span of the duty period would violate the no-
borrowing rule of Armenta and its progeny. 
Oman’s argument depends on a particular view of the role 
of the flight time formula under the parties’ contract:  That, by 
offering flight attendants a fixed amount of compensation for a 
particular rotation, but also disclosing the formula on which it 
has arrived at that amount, Delta has in effect promised to 
compensate flight attendants at their full flight pay rate for 
hours in flight, and not to compensate them at all for their other 
hours worked.  But even if this were a plausible view of the flight 
time formula in isolation, it is not a plausible view of the formula 
as it operates in the broader context of the Work Rules.  Under 
those rules, the flight time formula is just one of four 
components of a single compensation scheme that constitutes 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
28 
Delta’s contractual promise to its flight attendants.  Flight 
attendants are presented with information about the entire 
scheme and bid on their work assignments according to the 
entire scheme.  And the scheme, taken as a whole, does not 
promise any particular compensation for any particular hour of 
work; instead, as discussed above, it offers a guaranteed level of 
compensation for each duty period and each rotation.  Because 
there are no on-duty hours for which Delta contractually 
guarantees certain pay—but from which compensation must be 
borrowed to cover other un- or undercompensated on-duty 
hours—the concerns presented by the compensation scheme in 
Armenta, supra, 135 Cal.App.4th 314 and like cases are absent 
here. 
The same logic applies when either of Delta’s remaining 
two formulas is used to calculate flight attendant compensation.  
In all cases, flight attendants are guaranteed at least the 
amount of compensation owed under the duty period credit 
formula, which, as already discussed, always exceeds the 
minimum wage.  To forbid Delta from offering greater pay than 
the amount owed under that formula based on the flight time 
formula or one of the other two formulas would do nothing to 
ensure workers are paid fair or adequate wages for all hours 
worked.  (See Barrentine v. Arkansas-Best Freight System (1981) 
450 U.S. 728, 739 [minimum wage laws serve to ensure “ ‘ “[a] 
fair day’s pay for a fair day’s work” ’ ”]; Brooklyn Bank v. O’Neil 
(1945) 324 U.S. 697, 706 [minimum wage protections serve “to 
protect certain groups of the population from sub-standard 
wages . . . due to . . . unequal bargaining power”].)  There is no 
evident inadequacy or unfairness in permitting Delta to 
compensate flight crew members on a per-rotation basis, at a 
level no less than contractually promised and in excess of the 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
29 
hourly minimum wage—nor is there any unfairness in 
permitting Delta to increase that compensation when, for 
example, duty periods include a greater percentage of flight time 
or rotations include more drawn-out off-duty layovers between 
duty periods. 
Resisting this commonsense conclusion, Oman leans 
heavily on Gonzalez, supra, 215 Cal.App.4th 36, but Gonzalez 
will not support the weight.  There, the employer auto 
dealership and service center compensated auto technicians on 
a piece-rate basis.  Each repair task was assigned a set number 
of “flag hours” roughly corresponding to the length of time it 
ought to take to complete.  The service center promised its 
technicians a flat rate tied to their experience level multiplied 
by the number of flag hours completed.  Technicians also had 
significant wait time, during which no repair orders were 
pending and so no flag hours could be accrued, but during which 
the employer required them to remain on premises in case new 
customers arrived.  The employer also calculated a “ ‘minimum 
wage floor,’ ” which equaled the total hours a technician 
remained on the premises multiplied by the applicable 
minimum wage.  (Id. at p. 41.)  If a technician’s “flag hour” 
compensation fell below the minimum wage floor, the employer 
supplemented the technician’s pay to make up for the difference.  
(Id. at pp. 41–42.)  Employees sued for minimum wage 
violations based on the failure to pay for wait time. 
The Court of Appeal concluded that the employer’s 
compensation scheme violated California minimum wage law.  
It explained that the Armenta no-borrowing rule “applies 
whenever an employer and employee have agreed that certain 
work will be compensated at a rate that exceeds the minimum 
wage and other worktime will be compensated at a lower rate.”  
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
30 
(Gonzalez, supra, 215 Cal.App.4th at p. 51.)  In such 
circumstances, pay at an agreed higher rate cannot be borrowed 
to make up for sub-minimum wage pay during other worktime.  
As the Gonzalez court read the parties’ contract, the case before 
it involved such a situation:  The employer’s contractual 
commitment to its workers was a guaranteed piece-rate for 
completing various repair tasks.  Having promised a particular 
amount of compensation for each flag hour, the employer could 
not borrow from that promised compensation to supply at least 
a minimum hourly wage for unpaid wait time hours without 
violating Labor Code section 223 and the Armenta no-borrowing 
rule.  The court illustrated with the hypothetical case of a 
worker promised $20 per flag hour who completed repair tasks 
assigned four flag hours but was then obligated to spend an 
additional four hours on site, during which no new orders came 
in.  In the Gonzalez court’s view, paying the employee only $80 
for this shift would either (1) violate the minimum wage, 
because the four hours of wait time were uncompensated, or 
(2) require the employee to forfeit half of his or her promised $20 
per flag hour to cover the unpaid wait time, in violation of 
section 223.  (Gonzalez, at p. 50.)  In other words, the additional 
wait time constituted periods not covered by the employer’s 
commitment to piece-rate pay, but within the definition of hours 
worked, for which at least the minimum wage should have been 
paid. 
This case is different from Gonzalez in critical respects.  In 
Gonzalez, the court understood the contract at issue to promise 
pay at a certain rate for certain tasks completed.  The minimum 
wage floor, which “supplement[ed]” employee pay only when 
“necessary,” did not alter the nature of that promise.  (Gonzalez, 
supra, 215 Cal.App.4th at p. 40.)  We do not address here, and 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
31 
express no opinion concerning, a scenario in which a minimum 
wage floor was written into a contract that otherwise promised 
pay by the piece.8  Because the employer in Gonzalez required 
technicians to remain at work while waiting for customers—
time not accounted for by the piece-rate system—the Court of 
Appeal concluded the employer violated the no-borrowing rule 
by attempting to use piece-rate pay as a credit against its 
obligations to pay for wait time.  By contrast, as we have 
explained, Delta’s Work Rules reflect a promise to pay by the 
rotation, and for each rotation, the compensation Delta promises 
will, no matter which of the four formulas applies, always exceed 
the state minimum wage per hour worked.  Thus, Delta satisfies 
state minimum wage law without ever needing to compromise 
its contractual commitments. 
The minimum wage laws exist to ensure that workers 
receive adequate and fair pay, not to dictate to employers and 
employees what pay formulas they may, or may not, agree to 
adopt as a means to that end.  (See Madison Ave. Corp. v. Asselta 
                                        
8  
Since Gonzalez, this particular scenario has been 
addressed by the Legislature, which endorsed Gonzalez’s 
overarching principles and codified for piece-rate workers a 
statutory right to separate pay, at no less than the minimum 
wage, for otherwise uncompensated nonproductive and rest 
time.  (Lab. Code, § 226.2, subd. (a), added by Stats. 2015, 
ch. 754, § 4; see Sen. Rules Com., Off. of Sen. Floor Analyses, 3d 
reading analysis of Assem. Bill No. 1513 (2015–2016 Reg. Sess.) 
as amended Sept. 9, 2015, pp. 2 [bill “[c]odifies the Gonzalez and 
Bluford decisions that nonproductive time, rest breaks, and 
recovery breaks are separately compensated”], 3 [bill “[c]odifies 
that, for nonproductive time, the rate of compensation is not less 
than the minimum wage”].) 
OMAN v. DELTA AIR LINES, INC. 
Opinion of the Court by Kruger, J. 
32 
(1947) 331 U.S. 199, 203–204.)  Delta’s arrangement may be 
relatively unusual, but it is not unlawful. 
IV. 
We answer the Ninth Circuit’s questions as follows: 
(1) 
Labor Code sections 204 and 226 do not apply to pay 
periods in which an employee works only episodically and for 
less than a day at a time in California unless the employee 
works primarily in this state during the pay period, or does not 
work primarily in any state but has his or her base of operations 
in California. 
(2) 
State law limits on wage borrowing permit 
compensation schemes that promise to compensate all hours 
worked at a level at or above the minimum wage, even if 
particular components of those schemes fail to attribute to each 
and every compensable hour a specific amount equal to or 
greater than the minimum wage. 
(3) 
In light of the answer to the question about the 
substantive application of the state’s minimum wage laws, we 
do not address the separate question concerning the geographic 
scope of that law’s application. 
 
 
 
 
 
 
 
     KRUGER, J. 
 
We Concur: 
CANTIL-SAKAUYE, C. J. 
CHIN, J. 
CORRIGAN, J. 
LIU, J. 
CUÉLLAR, J. 
GROBAN, J. 
OMAN v. DELTA AIR LINES, INC. 
S248726 
 
Concurring Opinion by Justice Liu 
 
Today’s opinion endorses the rule against wage borrowing 
established in Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 
314 (Armenta) and reaffirmed in subsequent decisions.  (Maj. 
opn., ante, at p. 19.)  The court holds that an employer may not 
satisfy its obligation to pay at least the minimum wage for all 
hours worked by “borrowing compensation contractually owed 
for one set of hours or tasks to rectify compensation below the 
minimum wage for a second set of hours or tasks.”  (Ibid.)  Delta 
Air Lines, Inc.’s (Delta) flight attendant compensation scheme 
does not violate this “no-borrowing” rule.  (Id. at pp. 22–31.) 
While agreeing with today’s opinion, I write to highlight 
the first step in applying the no-borrowing rule:  identifying the 
nature of the employer’s contractual commitment to its 
employees.  Because the rule requires employers to keep their 
contractual commitments in the course of fulfilling their 
minimum wage obligations, whether the rule is violated turns 
on what an employer’s contractual commitments are.  Courts 
should be careful not to allow employers to characterize their 
contractual commitments in ways that would effectively 
circumvent the no-borrowing rule. 
Although Armenta established the no-borrowing rule in 
the context of a “minimum wage” claim, it is important to clarify 
that the rule’s purpose is not to ensure that employees are paid, 
on average, hourly wages at or above a minimum threshold.  In 
OMAN v. DELTA AIR LINES, INC. 
Liu, J., concurring 
2 
no-borrowing cases, there is no dispute that the employees are 
paid at least the minimum wage when total compensation is 
averaged over all hours worked.  The question is whether the 
employer is using contractually promised pay for certain tasks 
or hours worked to make up for failing to pay the minimum wage 
for other tasks or hours worked.  As today’s opinion explains, the 
purpose of the no-borrowing rule is to prevent employers from 
using clever accounting to effectively “reneg[e] on the employer’s 
contractual commitments, in violation of the contract protection 
provisions of the Labor Code.”  (Maj. opn., ante, at p. 19.)  
Plaintiff flight attendants do not claim that their average pay 
ever fell below the minimum wage.  Rather, they claim that the 
pay structure Delta promised did not compensate them for all 
the hours they worked. 
Whether Delta or any other employer violates the no-
borrowing rule thus turns on the nature of the pay structure the 
employer has promised.  “The compensation owed employees is 
a matter determined primarily by contract.”  (Maj. opn., ante, at 
p. 19.)  Employers may legally compensate their employees on 
any number of bases, including “by the standard of time, task, 
piece, commission basis, or other method of calculation.”  (Lab. 
Code, § 200, subd. (a); see Industrial Welfare Commission, wage 
order No. 9-2001, § 4(B) [compensation may be “measured by 
time, piece, commission, or otherwise”].)  The unit of pay is often 
straightforward.  In Armenta, the plaintiff employees “were paid 
hourly wages ranging between $9.08 to $20, depending on 
whether they were crew members or foremen.”  (Armenta, supra, 
135 Cal.App.4th at p. 317.)  In other cases, the compensation 
scheme may be more complex.  Employers may use a 
combination of methods (e.g., Bluford v. Safeway Inc. (2013) 216 
Cal.App.4th 864, 867 [truck drivers’ compensation based on a 
OMAN v. DELTA AIR LINES, INC. 
Liu, J., concurring 
3 
combination of miles driven and hours worked]) or alternative 
pay formulas that are triggered when certain conditions are met 
(e.g., Vaquero v. Stoneledge Furniture, LLC (2017) 9 Cal.App.5th 
98, 103 (Vaquero) [compensation determined by the greater of 
sales commission or hourly minimum pay]; Gonzalez v. 
Downtown LA Motors, LP (2013) 215 Cal.App.4th 36, 41 
(Gonzalez) [compensation determined by the greater of repair 
tasks completed or hourly minimum pay]). 
Consistent 
with 
general 
contract 
interpretation 
principles, the employer’s contractual commitment, including 
the unit of promised pay, is based on the objectively reasonable 
expectations of the parties at the time of contract.  (See Civ. 
Code, § 1636 [“A contract must be so interpreted as to give effect 
to the mutual intention of the parties as it existed at the time of 
contracting, so far as the same is ascertainable and lawful.”].)  
Such principles include interpreting the employment agreement 
as a whole (id., § 1641) and, if the contract language is 
ambiguous, looking to the context surrounding its formation 
(id., § 1647) as well as the subsequent conduct of the parties (1 
Witkin, Summary of Cal. Law (11th ed. 2017) Contracts, § 772). 
Correctly 
identifying 
an 
employer’s 
contractual 
commitment is critical to ensuring that employers do not 
circumvent the no-borrowing rule simply by inserting into 
employment agreements a minimum wage floor — i.e., an 
agreement to make up the difference if an employee’s promised 
pay, averaged over all hours worked, falls below the applicable 
minimum wage.  A minimum wage floor, by incorporating the 
concept of borrowing into the contract, would seem to be an easy 
way for an employer to inoculate itself against a no-borrowing 
claim. 
OMAN v. DELTA AIR LINES, INC. 
Liu, J., concurring 
4 
Courts 
applying 
Armenta 
have 
rejected 
such 
compensation schemes.  In Vaquero, a furniture store paid its 
salespeople on a commission basis and did not separately 
compensate them for legally mandated rest breaks.  (Vaquero, 
supra, 9 Cal.App.5th at p. 103.)  The employer also calculated 
employee pay based on the total number of hours an employee 
worked, including rest breaks.  If a salesperson failed to earn 
more than an average of $12.01 per hour on commission, the 
employer made up the difference and subtracted that amount 
from the salesperson’s earnings in the next pay period.  (Ibid.)  
Construing the compensation scheme to promise payment by 
commission, the Court of Appeal concluded that the scheme 
failed to separately pay employees for rest breaks and therefore 
failed to pay for all hours worked.  (Ibid.)  The no-borrowing rule 
barred the employer from using pay promised for an employee’s 
commission to fulfill its obligation to pay for rest breaks.  (Id. at 
pp. 114–117.)  The fact that the employer supplemented an 
employee’s commission if it fell below a specified hourly floor did 
not cure the violation.  (Ibid.) 
Likewise, in Gonzalez, an automobile servicing company 
paid its mechanics for each repair they completed but did not 
compensate them for wait time between repairs.  (Gonzalez, 
supra, 215 Cal.App.4th at p. 41.)  The employer also calculated 
what it called a “ ‘minimum wage floor’ ” (ibid.):  If a mechanic’s 
compensation for repairs fell below what the mechanic would 
have made if paid the minimum wage for all hours worked, 
including wait time, the employer made up the difference.  (Id. 
at pp. 41–42.)  Despite such a minimum wage floor, the Court of 
Appeal affirmed the trial court’s finding that the employer failed 
to pay for all hours worked.  (Id. at p. 55.)  The court found that 
the compensation system was a “piece-rate system” because the 
OMAN v. DELTA AIR LINES, INC. 
Liu, J., concurring 
5 
“technicians [were] paid primarily on the basis of repair tasks 
completed.”  (Id. at p. 41.)  It concluded that the no-borrowing 
rule developed in Armenta also applied to piece-rate 
compensation schemes.  (Id. at p. 49.)  Because the employer’s 
piece-rate scheme did not separately compensate mechanics for 
wait time between repairs, the employer did not pay employees 
for all hours worked.  Under the no-borrowing rule, the employer 
could not use pay promised for repair tasks to cover its 
obligations to pay for wait time.  (Id. at p. 50; see also 
Balasanyan v. Nordstrom, Inc. (S.D.Cal. 2012) 913 F.Supp.2d 
1001 [finding a violation of California wage law under Armenta 
where a department store paid salespeople on a commission 
basis and supplemented commissions if it fell below an average 
hourly minimum].) 
Although Vaquero and Gonzalez did not extensively 
discuss the nature of each employer’s respective contractual 
commitments, the reasoning of those decisions recognizes that 
employers cannot circumvent their obligation to pay employees 
for all hours worked or to pay the full amount of commissions, 
piece rates, or other compensation promised to employees 
simply by inserting a minimum wage floor into an employment 
agreement.  A contrary conclusion would make it all too easy to 
evade the rule; a minimum wage floor would become a standard 
term in many employment contracts, and the rule would be 
emptied of real substance.  The rule developed in Armenta is 
grounded in the protections of the Labor Code that prohibit an 
employer from diluting an employee’s contractually promised 
wages.  (Armenta, supra, 135 Cal.App.4th at p. 323 [discussing 
Lab. Code, §§ 221, 222, 223].)  Vaquero and Gonzalez held that 
the employers in those cases made contractual commitments to 
commission and piece-rate pay, respectively, and the addition of 
OMAN v. DELTA AIR LINES, INC. 
Liu, J., concurring 
6 
a minimum wage floor did not change those commitments.  (Cf. 
Cardenas v. McLane FoodServices, Inc. (C.D.Cal. 2011) 796 
F.Supp.2d 1246, 1252 [finding a violation of California wage law 
under Armenta even though the employer did not violate an 
“explicit agreement”].)  Today’s opinion leaves those decisions, 
and the protective force of the no-borrowing rule, intact. 
 
LIU, J. 
 
I Concur:  
CUÉLLAR, J. 
 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion  Oman v. Delta Airlines, Inc. 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding XXX on request pursuant to rule 8.548, Cal. Rules of Court 
Review Granted  
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S248726 
Date Filed:  June 29, 2020 
__________________________________________________________________________________ 
 
Court:    
County:    
Judge:    
 
__________________________________________________________________________________ 
 
Counsel: 
 
Nichols Kaster, Matthew C. Helland, Daniel S. Brome; Altshuler Berzon, Michael Rubin and Barbara J. 
Chisholm for Plaintiffs and Appellants. 
 
Carol Vigne, Katherine Fiester; Cynthia L. Rice; Olivier Schrieiber & Chao, Monique Olivier; Anna 
Kirsch; and Nayantara Mehta for California Employment Lawyers Association, California Rural Legal 
Assistance Foundation, Legal Aid at Work, National Employment Law Project and Women’s Employment 
Rights Clinic as Amici Curiae on behalf of Plaintiffs and Appellants. 
 
Mastagni Holstedt, David E. Mastagni and Isaac S. Stevens for Dan Goldthorpe, James Donovan, Chris 
Bennett, James Isherwood and David Vincent as Amici Curiae on behalf of Plaintiffs and Appellants. 
 
Duckworth Peters Lebowitz Olivier, Monique Olivier and J. Erik Heath for California Employment 
Lawyers Association as Amicus Curiae on behalf of Plaintiffs and Appellants. 
 
Morgan, Lewis & Bockius, Thomas M. Peterson, Robert Jon Hendricks and Andrew P. Frederick for 
Defendant and Respondent. 
 
Ogletree, Deakins, Nash, Smoak & Stewart, Robert R. Roginson and Christopher W. Decker for Employers 
Group and California Employment Law Council as Amici Curiae on behalf of Defendant and Respondent. 
 
Mayer Brown, Donald M. Falk, John P. Zaimes and Ruth Zadikany for Cathay Pacific Airways Limited as 
Amicus Curiae on behalf of Defendant and Respondent. 
 
Greines, Martin, Stein & Richland, Robert A. Olson and Cynthia E. Tobisman for California New Car 
Dealers Association as Amicus Curiae on behalf of Defendant and Respondent. 
 
Jones Day, Douglas W. Hall, Shay Dvoretzky and Vivek Suri for Airlines for America as Amicus Curiae 
on behalf of Defendant and Respondent. 
 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Matthew C. Helland 
Nichols Kaster, LLP 
235 Montgomery St., Suite 810 
San Francisco, CA 94104 
(415) 277-7235 
 
Robert Jon Hendricks 
Morgan, Lewis & Bockius LLP 
One Market Street, Spear Tower 
San Francisco, CA 94105 
(415) 442-1000