Ninth Circuit Directs District Court to Decide Whether California Wage and Hour Law Applies to Offshore Oil and Gas Platform Operating in Federal Waters

by Pillsbury - Gravel2Gavel Construction & Real Estate Law
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Pillsbury - Gravel2Gavel Construction & Real Estate Law

On February 5, the U.S. Court of Appeals for the Ninth Circuit decided an interesting Outer Continental Shelf Lands Act (OCSLA) case, Newton v. Parker Drilling Management Services, Ltd. The Ninth Circuit reversed the Central District Court’s dismissal of a California wage and hour complaint brought by a worker employed on an offshore oil and gas drilling platform fixed and located in federal waters and otherwise subject to the OCSLA and federal law.

The Ninth Circuit held:

[T]he absence of federal law is not, as the district court concluded, a prerequisite to adopting state law as surrogate federal law under the [OCSLA].

The Ninth Circuit framed the issue before it as:

[W]hether claims under [California] wage and hour laws may be brought by workers employed on drilling platforms fixed on the outer Continental Shelf.

In this case, the plaintiff Brian Newman, formerly employed by Parker Drilling Management, filed his lawsuit in state court, claiming that under applicable California wage and hour laws, the defendant violated applicable law when it did not pay him for his “controlled standby status” when he was off-duty. Newton was paid an hourly rate well above the federal and California minimum wage, but he argued that he was also entitled to be paid for the twelve hours he was on “controlled standby” each day.

The lawsuit was moved to federal court, where it was dismissed by the state court because, under the OCSLA, federal law governs and state law only applies to the extent that it is necessary to fill a significant void or gap in federal law, and that was not the case here.

On appeal, the Ninth Circuit held that the issue is whether the California wage and hour laws are consistent with existing federal law, and not which law—federal or state—is applicable. The Ninth Circuit adverts to the fact that its interpretation of the OCSLA and its provisions may be inconsistent with other circuit court rulings (such as Continental Oil Company v. London Steam-Ship Owners’ Mutual Ins. Assoc.). But, in any case, the Central District Court was directed to determine, on remand, whether the California wage and hour laws were “not inconsistent” with federal law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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