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Hirst v. SkyWest, Inc.

United States Court of Appeals, Seventh Circuit

December 12, 2018

Andrea Hirst, et al., Plaintiffs-Appellants,
SkyWest, Inc., et al., Defendants-Appellees.

          Argued September 7, 2018

          Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. l:15-cv-02036 & l:15-cv-11117 - John J. Tharp, Jr., Judge.

          Before WOOD, Chief Judge, ROVNER, and Brennan, Circuit Judges.

          Brennan, Circuit Judge.

         In this case, a number of current and former flight attendants challenge an airline's compensation policy of paying for their work in the air but not on the ground. Plaintiffs-appellants ("the Flight Attendants") all work or worked for defendant-appellee SkyWest Airlines, Inc., an airline owned by co-defendant-appellee SkyWest, Inc. (collectively "SkyWest"). The Flight Attendants filed suit alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), and various state and local wage laws, seeking to certify a class of similarly situated SkyWest employees. The district court dismissed the complaint in its entirety, finding that the Flight Attendants had failed to allege a FLSA violation, and that the dormant Commerce Clause barred the state and local claims.

         The Flight Attendants plausibly allege they were not paid for certain hours of work. We agree with other federal circuits, however, that under the FLSA the relevant unit for determining a pay violation is not wages per hour, but the average hourly wage across a workweek. Because the Flight Attendants failed to allege even a single workweek in which one of them received less than the federal minimum wage of $7.25 per hour, we affirm the dismissal of those claims.

         We do not agree, though, with the application of the dormant Commerce Clause in this case. States possess authority to regulate the labor of their own citizens and companies, so we apply that doctrine sparingly to wage regulations. The dormant Commerce Clause does not preclude state regulation of flight attendant wages in this case, particularly when the FLSA itself reserves that authority to states and localities. Accordingly, we reverse the dismissal of the state and local wage claims and remand for further proceedings.

         I. Background

         This appeal is from a dismissal on the pleadings, so we recount the facts as alleged in the complaint, resolving all reasonable inferences in favor of the Flight Attendants. Sloan v. Am. Brain Tumor Ass'n, 901 F.3d 891, 893 (7th Cir. 2018).

         SkyWest, an airline headquartered in St. George, Utah, charters planes for other airlines. SkyWest employs over 2, 600 people as cabin crew, and either currently employs or formerly employed the eight plaintiffs-appellants in this case.[1]SkyWest flight attendants are based out of airports in ten different states, including these Flight Attendants' home states of Arizona, California, Illinois, and Washington. A new flight attendant at SkyWest earns $17.50 per hour, and wages increase with experience.

         A flight attendant's typical workday is long and varied, including time onboard the aircraft as well as in airports before, between, and after flights. SkyWest Flight attendants are paid only for their time in the air, known in the industry as "block time."[2] The amount of block time worked in a given day is much shorter than the "duty day."[3] The eight Flight Attendants each pleaded, with varying specificity, times during which they were not paid for portions of their duty days. For example, plaintiff-appellant Stover alleged a two-week period in October 2012 during which she was paid $656.25 for 86.07 hours of duty time, resulting in an average hourly wage of $7.62 per hour. In contrast, plaintiff-appellant Lozano alleged only that he worked many hours of duty time and included no wage-specific information. The common thread underlying the various Flight Attendants' allegations, though, is that none of them alleged a single workweek in which they were paid, on average, less than $7.25 per hour, the federal minimum wage under FLSA, 29 U.S.C. § 206(a)(1)(C).

         Plaintiffs-appellants Hirst, Stover, and Stroble Sze sued in March 2015 in the Northern District of Illinois alleging that SkyWest violated the FLSA and the Illinois Minimum Wage Law by failing to pay minimum wage. Several months later, plaintiffs-appellants Tapp, Sitavich, Hudson, Colson, and Lozano filed a similar action in the Northern District of California under the FLSA and state and local minimum wage laws and ordinances in California, Arizona, and Washington. Both complaints sought class certification of nationwide, state, and local classes. The two cases were consolidated in the Northern District of Illinois.

         After allowing multiple amended complaints and limited discovery, the district court dismissed all of the Flight Attendants' claims with prejudice. The court determined that, in assessing violations of the federal minimum wage, an employee's wage is calculated as the average hourly wage across the workweek. Because none of the Flight Attendants pleaded a single workweek in which they were paid an average wage of less than $7.25 per hour, the court concluded they had not properly pleaded a FLSA violation. The district court also held that their state and local wage claims were preempted by the dormant Commerce Clause. Applying the approach the Supreme Court delineated in Pike v. Bruce Church Inc., 397 U.S. 137 (1970), the district court ruled that requiring SkyWest to comply with state and local wage laws would impose too great of an administrative burden. The court reasoned that, with flight attendants flying to and from different states and cities all day, as well as flying over many more, the burden on SkyWest would be "clearly excessive in relation to the putative local benefits." Pike, 397 U.S. at 142; Nat'l Solid Wastes Mgmt. Ass'n v. Meyer, 63 F.3d 652, 657 (7th Cir. 1995) (same). The Flight Attendants timely appealed.

         II. ...

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