On June 10, 2019, the U.S. Supreme Court reversed a decision of the Ninth Circuit Court of Appeal and unanimously held that California state wage-and-hour laws do not apply to drilling workers off the coast of California.

In Parker Drilling Management Services, Ltd. v. Newton, the Court held that, under the Outer Continental Shelf Lands Act (“OCSLA”), state law “is not adopted as surrogate federal law” on the Outer Continental Shelf (“OCS”) if “federal law addresses the relevant issue.”

In the case, an employee on the OCS brought claims under a variety of California wage-and-hour laws, including alleging that he was not compensated for time spent on standby.  Under the OCSLA, the laws of each state adjacent to the OCS are applied, as long as those state laws are “applicable” and not inconsistent with federal law.  The Ninth Circuit interpreted that to mean that state laws are “applicable” when they “pertain[] to the subject matter at hand,” and that such laws are “inconsistent” with federal law only “if they are mutually incompatible, incongruous, [or] inharmonious.”  The Ninth Circuit concluded that California wage-and-hour laws are not inconsistent with the FLSA because “the FLSA saving clause ‘explicitly permits more protective state wage and hour laws.’”

The Supreme Court reversed, holding that “state laws can be ‘applicable and not inconsistent’ with federal law under [the OCSLA] only if federal law does not address the relevant issue.’”  The key question, the Court explained, is not whether there is a conflict between state and federal law, but rather “whether federal law has already addressed the relevant issue.”  Accordingly, the Court held that California law was not applicable to the plaintiff’s  claims for standby pay because “federal law already addresses this issue.”  The same was true for the plaintiff’s claims based on California’s minimum wage.

Because this case concerned the OCSLA, its impact will likely be relatively limited.  However, it may shed light on the Court’s views of statutory interpretation, especially considering the unanimity of the decision.

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