Do you Know What Information Must be Included on Your Company’s Pay Stub?
Earlier this week, a California federal judge blessed a $53.5 million settlement between United Airlines and a group of California based flight attendants. The settlement is the result of a 2014 class action brought by United flight attendants who had complained that the company failed to issue sufficiently detailed wage statements in violation of California law, Ward et al. v. United Airlines Inc. (“Ward”).
On Monday, in approving the settlement, U.S. District Judge Philip Gutierrez ruled that all members of the class would receive an average net recovery of $3,240. The class covered in the settlement consisted of all flight attendants employed by United who were based at a California airport dating back to August 2014.
In his order, Judge Gutierrez stated that pursuant to California law, each class members’ recovery at trial would have been capped at $4,000, as a result the settlement amount represented between 81% and 100% of the maximum potential recovery any class member could have obtained at trial and therefore the settlement was well within the appropriate range for approval.
The calculation for each member’s actual settlement payment will be based on the number of wage statements received during the class period.
The settlement came after Judge Gutierrez granted a partial summary judgment in favor of the flight attendants in May of 2022, finding that United had failed to provide the flight attendants with their hourly wages on their pay stubs. In reaching that decision, Judge Gutierez rejected United’s claim that since the company did not pay flight attendants on an hourly basis it was not necessary for them to provide hourly rates on the flight attendants’ pay stubs.
The flight attendants alleged violations of California’s labor code under the Labor Code Private Attorneys General Act (“PAGA”). PAGA is a the California labor law which authorizes aggrieved workers the right to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations.
What’s interesting to note in this case is that Judge Gutierrez had initially awarded United a pretrial victory six years prior, having ruled California law did not apply because (i) United is not headquartered in California and (ii) the flight attendants worked primarily outside of the state. However, that argument was ultimately undone by the California Supreme Court when it heard a similar case on the matter, whereby the California Supreme Court ruled that because the flight attendants were based out of California it was appropriate for California law to be applied.
As a result of that decision, the Ninth Circuit revived Ward, and on remand modified the definition of the class to now cover flight attendants that were based in California and either (i) worked the majority of their time in California or (ii) did not work the majority of their time in any other single state.
After Judge Gutierrez granted the partial summary judgment in favor of the flight attendants in May of 2022, the matter went to mediation and the parties ultimately came to agreement. The final approval is set to be heard later this year.
Takeaway for Our Clients
While you may not own an international airline with flight attendants in California it is important for all business owners and HR professionals to understand the labor laws that impact their employees, no matter where they are situated. This is especially true now with the expansion of hybrid and work from home policies leading to the uncertainty of the home state for these workers. And if you guess wrong, it could cost you millions of dollars!
Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws. If we can be of assistance in this area, please contact us at email@example.com or 203.454.0560.