On Monday, the Supreme Court of the United States, in a unanimous ruling, overruled a federal appeals court and declared that offshore drilling workers come under federal wage law, not California state law, and thereby denied an oil rig worker’s salary demand for time spent on standby. The case is Parker Drilling Management Services Ltd. v. Brian Newton.
The respondent, Brian Newton, worked for Parker Drilling Management Services (“Parker”) on a drilling platform fixed on the Outer Continental Shelf (OCS). Mr. Newton worked for Houston-based Parker on drilling platforms off California’s coast, with 14-day shifts. This required him to work 12 hours per day on duty and spend the remaining 12 hours per day on standby, during which he could not leave the platform.
During his employment with Parker, Mr. Newton alleged that he ate for 15 to 30 minutes during his shifts, without clocking out, and that Parker did not provide 30-minute meal periods for each five hours worked. After Parker terminated his employment, Mr. Newton sued in a state court for wage and hour violations under California Law; Parker removed the case to federal district court.
Mr. Newton filed a class action in California state court alleging violations of several California wage-and-hour laws and related state court claims, including that California’s minimum wage and overtime laws, which required Parker to compensate him for the time he spent on standby. As such, the question boiled down to which set of laws controlled – either federal law (the Fair Labor Standards Act (FLSA)), or California minimum wage laws.
After Parker removed the case to U.S. District Court in Los Angeles, the parties agreed the Parker’s platforms were subject to the OCSA. The Outer Continental Shelf Lands Act, 43 U.S.C. § 1331, et seq. gives the federal government complete control of and jurisdiction over the Outer Continental Shelf of the United States. The Act provides that all law on the Outer Shelf is federal law, and that adjacent states’ laws are deemed to be federal law “[t]o the extent that they are applicable and not inconsistent with” other federal law.
Applying precedent established by the 5th U.S. Circuit Court of Appeals in New Orleans, the district court ruled the Federal Fair Labor Standards Act, not California state law, applied, and ruled in Parker’s favor. The 9th Circuit vacated the ruling and remanded the case, ruling state law was applicable.
The Supreme Court agreed with the District Court. “Although this is a close question of statutory interpretation, on the whole we find Parker’s approach more persuasive,” said the ruling.
The Supreme Court went on to reason that the Outer Shelf is not subject to overlapping federal and state jurisdiction. Instead, the federal government has exclusive jurisdiction over the Outer Shelf and federal law is the only law on the Outer Shelf, with federal law simply adopting state law when it is “applicable and not inconsistent” with federal law. Accordingly, because federal law already addresses wages and hours for time an employee spends on standby, the Court concluded that California law on those topics does not apply to the Outer Shelf. Thus, Mr. Newton’s claims relying on that California law failed. The Court remanded the case so that claims that had not been analyzed by the Ninth Circuit could be adjudicated.