Oman v. Delta Air Lines, Inc.

610 F.Supp.3d 1257

Dev Anand OMAN, et al., Plaintiffs,

v.DELTA AIR LINES, INC., Defendant.

Case No. 15-cv-00131-WHO

United States District Court, N.D. California.

Signed July 8, 2022

Matthew C. Helland, Daniel S. Brome, Nichols Kaster, LLP, San Francisco, CA, for Plaintiffs.

Robert Jon Hendricks, Taylor D. Horn, Morgan, Lewis & Bockius LLP, San Francisco, CA, Andrew Paul Frederick, Morgan, Lewis & Bockius LLP, Palo Alto, CA, Brendan T. Killeen, Pro Hac Vice, Morgan Lewis Bockius LLP, New York, NY, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART CROSS-MOTIONS FOR SUMMARY JUDGMENT

Re: Dkt. Nos. 99, 100

WILLIAM H. ORRICK, United States District Judge

INTRODUCTION

Plaintiffs Todd Eichmann and Albert Flores are flight attendants who work for Defendant Delta Air Lines, Inc. ("Delta"). Plaintiffs¹ allege that Delta's wage statements lack certain information required under California law and seek to represent a class of similarly situated flight attendants. The parties cross-moved for summary judgment on plaintiffs’ wage statement claims under California Labor Code sections 226 and 204 and their derivative California Private Attorneys General Act ("PAGA") claims.

The facts regarding how and when flight attendants are paid and what information they are given regarding their wages are not in dispute. The two issues I must decide are whether plaintiffs have shown that the protections of the California Labor Code provisions at issue apply to them under the Ward test, and, if so, whether Delta's wage statements comply with California law. I conclude that given the undisputed facts in this case, plaintiffs have shown that Ward applies.

As explained below, I GRANT summary judgment to plaintiffs for their derivative PAGA claims based on section 226 and section 204 for the pay periods at issue up until September 1, 2018. I GRANT summary judgment for Delta for the section 204 PAGA claims for pay periods after September 1, 2018. Finally, because I find that Delta is entitled to a good faith defense for its violations of section 226(a) that occurred on or before January 10, 2022, I GRANT summary judgment to Delta for plaintiffs’ claims for statutory damages under section 226(e) for the wage statement violations prior to January 10, 2022. Because Delta is not entitled to a good faith defense for section 226(a) violations that occurred after January 10, 2022, I GRANT summary judgment to plaintiffs for their claims for statutory damages for wage statement violations that occurred after January 10, 2022, to present.

BACKGROUND

I. DELTA'S PAY FORMULAS

Delta pays its flight attendants on a bid packet and rotation system where each month Flight Attendants "bid" on Rotations that are scheduled to depart from the Flight Attendant's base the following month.² For each Rotation, the Bid Packets describe the number and length of the Duty Periods encompassed within the Rotation, the Report Times for each Duty Period, the scheduled total flight time for each Segment within the Rotation (which is measured from Block Out to Block In), and the amount of time that the Flight Attendant can expect to be away from base. The Bid Packets show which of Delta's four pay formulas will apply to the Rotation, what the credit value of the Rotation is, and calculates the minimum compensation for each Rotation. The credit valuation included in the Bid Packets for each Rotation serves as a minimum guarantee for Flight Attendants with respect to credits. The actual compensation may increase as a result of delays, changes, or other contingencies; it cannot decrease.

Delta's bidding and compensation policies are laid out in Delta's Work Rules. Delta uses four formulas to determine a Flight Attendant's actual pay. The "Flight Pay" formula is based on the actual flight time and/or scheduled flight time of the Segments, whichever is greater. Under the "Duty Period Credit," Delta "credits" flight attendants with "1 hour of flight pay for every 2 hours on duty for any given period." The "Minimum Duty Period Credit" (MDC) multiplies 4:45 hours by the Flight Pay Rate for each Duty Period within a Rotation that has at least one flight Segment. And under the "Trip Credit" formula, Flight Attendants receive credit for 1 hour of flight time for each 3.5 hours they are away from base.

Delta runs calculations for each Flight Attendant's Rotation and pays the Flight Attendant using the formula that results in the highest amount of pay. In no event is a Flight Attendant's pay less per hour worked in the Duty Period (all hours worked), than the California minimum wage rate. Each formula uses a "base" which Delta defines as "Flight Pay Rate." But the Flight Pay Rate is not an agreed to "hourly rate of pay"; it is instead part of the mathematical equation Delta runs to determine actual pay.

II. DELTA'S WAGE STATEMENTS

Although the format of the wage statements that Delta has issued to plaintiffs have changed over the years, it is undisputed that the statements have never included the total hours worked or the rates of pay for all hours worked. See Declaration of Matthew Helland ("Helland Decl.") [Dkt. 99-1] Exs. 6–14. The first relevant format of wage statements was in effect until approximately July 2017. See Helland Decl. Ex. 15. These wage statements did not list the total hours worked in the pay period. Helland Decl. Ex. 7 (April 2016 Eichmann Wage Statement). There is a column for "hours," but the column is blank. Id. Next to the "Hours" column there is a "Rate" column, which is also blank. Id.

In the summer of 2017, Delta changed the format of its wage statements in connection with its migration to a new H.R. platform. Hellman Decl. Ex. 19 (Cox Depo. Tr.) at 30:5–9; Helland Decl. Ex. 15. The new format of the wage statements listed credited hours and the flight pay rate for each credited hour. Helland Decl. Ex. 11 (2018 Eichmann Wage Statements); Ex. 12 (2018 Flores Wage Statements); Cox Depo. Tr. at 56:2–58:4. The wage statements still did not list the total hours worked, nor did they list the rates of pay for non-flight work hours. Id.

With the change to bi-weekly pay in September of 2018, Delta's wage statements changed one last time. Helland Decl. Exs. 9–10, 13–14. The wage statements still did not list the total hours worked, nor did they list the rate of pay for non-flight work hours. Id. Delta has not made any substantive changes to its flight attendant wage statements since the fall of 2018. See Cox Depo. Tr. at 59:13–60:14; see also Declaration of Todd Eichmann, Ex. A [Dkt. 104-1] (2022 Eichmann Wage Statements); Declaration of Albert Flores, Ex. A [Dkt. 104-2] (2021–2022 Flores Wage Statements).

III. DELTA'S WAGE TRACKING AND PAYMENTS

From January 2014 to September 1, 2018, Delta paid flight attendant wages on a delayed payment schedule. Helland Decl. Ex. 4 at DELTA 00808; Helland Decl. Ex. 5 at DELTA 011689; Declaration of Brian Moreau ("Moreau Decl.") [Dkt. 59-2] ¶ 9. Because Delta did not know a flight attendant's final schedule for a bid period until it was complete, this payment schedule assumed a base allotment of 45 credit hours a month. Moreau Decl. ¶ 9. Delta paid half of the minimum credit hours each pay period of the month they were worked. Helland Decl. Ex. 4 at DELTA 00808. For example, for the month of September, the September 15^th paycheck included 22.5 September hours and the September 30 paycheck included 22.5 September hours. Id. Any hours over 45 were paid in the following month, half on the 15^th and half on the last day of the following month. Id.

Following the close of the pay period, Delta calculated the total credits for that bid period, determined what premium pay rates should be applied, and what additional payments should be made. Moreau Decl. ¶ 9. Under this system, some September work hours were not paid until October 31^st, over 30 days later. Helland Decl. Ex. 4 at DELTA 00808.

Delta's work rules included the following example to illustrate the delayed payment scheme. Id. ; see also Plaintiffs’ Cross-Motion for Summary Judgment ("Pl. MSJ") [Dkt. 99] at 3.

EXAMPLE: Your pay is comprised of:

  Pay Period Ending October 15           Pay Period Ending October 31
  22:30 (half of the minimum             22:30 (half of the minimum
  average of 45 hours for the            average of 45 hours for the
  current month), plus....               current month), plus
  50% of all fight/credit, premium       50% of all flight/credit, premium
  pay, and TAFB earned in                pay, and TAFB earned in
  September                              September

Plaintiffs contend—and Delta does not dispute—that they regularly worked over 45 hours in a month. Helland Decl. Exs. 2–3.

On September 1, 2018, Delta changed its payment schedule for flight attendants in two ways. First, Delta transitioned from a semi-monthly to a bi-weekly pay period. Helland Decl. Ex. 5 at DELTA 011689. Under this new system, Delta issued paychecks to its flight attendants every other Friday. Id. Second, Delta paid all wages earned during each pay period on the following payday, which was seven days after the close of the pay period. Id. These changes meant that the September 28, 2018 wage statement, for example, included all pay earned for the September 8-21, 2018 pay period. Declaration of Andrew Frederick ("Frederick Decl.") [Dkt. 103-2] Ex. L.

IV. PLAINTIFFS’ WORK HISTORY

Plaintiff Eichmann has been based out of Los Angeles International Airport (LAX) since February 2014. Eichmann Depo Tr. [Dkt. 103-2] at 35:16-22; 95:14-16. From January 1, 2014, through June 30, 2016, when engaged in flight-related activities, Eichmann was on duty for 3,723.7 hours, of which he spent approximately 319.6 hours (or 8.6%) working in California. Expert Report of Valentin Estevez ("Estevez Rep.") [Dkt. 99-24] at 2, 5.

Plaintiff Flores has been based out of LAX since November 2010. Flores Depo Tr. [Dkt. 103-2] at 82:7-12. From January 1, 2014, through June 30, 2016, when engaged in flight-related...