“Activities on the Outer Continental Shelf are governed exclusively by federal law. Congress has explicitly barred application of conflicting California law governing wage-and-hour standards.”
—Richard Samp, WLF Chief Counsel
WASHINGTON, DC—The U.S. Supreme Court today overturned a Ninth Circuit wage-and-hour ruling that had exposed oil and gas companies to hundreds of millions of dollars in back-pay liability. The decision in Parker Drilling Management Services, Inc. v. Newton was a victory for Washington Legal Foundation (WLF), which filed an amicus curiae brief urging reversal of the lower-court opinion. WLF argued that the Ninth Circuit improperly rejected a half century of federal law governing the wages paid to employees stationed on off-shore oil platforms.
Because of the remote location of oil platforms, employees generally remain on the platforms for several weeks at a time, even though they perform work at most 12 hours per day. Employees receive premium wages for the hours worked, but they are not paid for the hours spent sleeping and resting on oil platforms. This wage-and-hour scheme fully accords with federal labor law; and a law passed by Congress in the 1950s, the Outer Continental Shelf Lands Act (OCSLA), states that federal law applies to activities on oil platforms. Federal courts in Texas and Louisiana (whose coasts are home to most of the nation’s oil platforms) have long interpreted OCSLA as barring application of state law except where there are gaps in federal law that are in need of filling.
But last year the Ninth Circuit held, in a case involving an oil platform off the coast of California, that California wage-and-hour laws apply and that California requires employees to be paid 24 hours per day if their employer does not permit them to return home at the end of their shifts. The Supreme Court today unanimously reversed, agreeing with WLF that the appeals court’s ruling misinterprets OCSLA. It ruled that OCSLA incorporates the law of the adjacent State only if doing so is necessary to fill a gap in federal law. The Court said that because the federal Fair Labor Standards Act provides comprehensive standards governing wage-and-hour issues, there is no need to incorporate California law into those standards.
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