On Monday, the Supreme Court held in Parker Drilling Management Services, Ltd. v. Newton that state wage-and-hour laws do not apply to drilling workers off the Coast of California, overruling a Ninth Circuit decision and resolving a split between the Fifth and Ninth Circuits.
Plaintiff Brian Newton worked as a roustabout and painter for defendant Parker Drilling Management Services on drilling platforms off the Coast of California. Newton’s 14-day shifts involved 12 hours per day on duty and 12 hours per day of standby time. He was not paid during standby time nor could he leave the platform.
Newton filed a class action in California alleging violations of several California wage-and-hour laws and related state-law claims. Significantly, if the federal Fair Labor Standards Act, rather than state law, applied to the offshore platform his claims could not survive. Newton’s claims thus turned on an interpretation of the Outer Continental Shelf Lands Act, which provides that state laws apply on the Outer Continental Shelf if they are “applicable” and “not inconsistent with” other federal laws.
A trial court judge dismissed Newton’s suit, citing Fifth Circuit precedent stating that state law is “applicable” under the OCSLA only if it is needed “to fill a significant void or gap” in a federal statute. The trial court then determined that the FLSA constitutes a comprehensive federal wage-and-hour scheme, leaving no significant gap for state law to fill.
The Ninth Circuit reversed and revived the class action, stating that under the OCSLA, a state wage law is “applicable” to drilling platforms on the Outer Continental Shelf if it pertains to the issue at hand in a case. Applying this broad standard, the three-judge panel found that California wage law was applicable and, further, was not “inconsistent” with the FLSA, which generally permits more protective state wage and hour laws.
The Supreme Court vacated the Ninth Circuit’s decision and adopted the Fifth Circuit approach, clarifying: “All law on the OCS is federal, and state law serves a supporting role, to be adopted only where there is a gap in federal law’s coverage.” Writing for a unanimous Court, Justice Clarence Thomas reasoned that the Ninth Circuit’s interpretation “would render much of the OCSLA unnecessary.” Accordingly, the justices said that Newton’s claims relating to standby pay were invalid to the extent they relied on California state law. Likewise, the Court held that California minimum wage does not apply on the OCS.
The effect of the decision is that if federal law addresses a particular issue, a state law on the same subject will not apply on the OCS.
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