In 2018, Mastagni Holstedt, A.P.C., filed a class action lawsuit on behalf of five pilots and other similarly situated individuals against their employers, Cathay Pacific Airways Ltd. and U.S.A. Basing Ltd. (“Cathay”), seeking unpaid overtime wages, minimum wages, meal periods and rest break payments, waiting time penalties, and other penalties. While working for Cathay, these pilots flew transatlantic flights to and from Hong Kong out of their home bases in San Francisco and Los Angeles. They were required to perform pre-flight and post-flight duties throughout their employment without being compensated for their time. The pilots also did not receive overtime or double-time, despite the fact that their regular flight took approximately 14 hours.
In California, pilots’ compensation requirements are governed by Wage Order 9, which has adopted the U.S. Department of Labor’s (“D.O.L.”) Administrative, Executive, and Learned Profession Exemptions as were in effect in 2001. Previously, the Plaintiffs obtained published rulings that the Plaintiffs were subject to California labor law because they were home based in California, even as to work performed outside California’s borders. The California Supreme Court ultimately confirmed the District Court’s ruling.
On January 18, 2023, Cathay filed a motion for summary adjudication, based on its last remaining affirmative defense, claiming Plaintiffs were exempt from California’s Labor Code under California’s “Learned Professional Exemption.” The Plaintiffs filed a cross-motion arguing against the application of the exemption. In part, the Plaintiffs argued that the 2001 version of 29 C.F.R. § 541.301, is inapplicable because the exemption “customarily” requires attaining a college or advanced degree as a standard prerequisite to satisfy the first prong of the exemption. Neither Cathay nor the applicable licensing standards require even a high school diploma to be a pilot, notwithstanding the requisite technical skills typically acquired through flight experience and instrument ratings. Plaintiffs also argued Plaintiffs do not spend the majority of their time performing exempt tasks requiring intellectual learning or independent judgment.
On April 3, the Court issued its ruling, granting the Plaintiffs’ motion for summary adjudication and denying Cathay’s. Through this ruling, the Court knocked out Cathay’s last major affirmative defense in this case. The Court concluded that the Plaintiffs are not exempt from California’s wage and hour protections. The Court stated, “[n]o one disputes the importance of a commercial pilot’s work or the weight of their responsibility. Nor does anyone dispute that their expertise is highly technical and even specialized. But no reasonable juror could conclude that the airline pilots, in this case, meet the definition of a learned professional set forth in Wage Order 9 and 29 C.F.R. § 541.301.”
The Court agreed with the Plaintiffs that “learned professions are those that ‘customarily’ entails ‘an advanced academic degree [a]s a standard (if not universal) prerequisite.’ 29 C.F.R. § 541.301(e)(1); see also 29 C.F.R. § 541.301(d) (explaining that the word ‘customarily’ is used to ‘meet a specific problem,’ that is, to account for the rare professional who attains the same level of knowledge as their peers through means other than the usual formal education).” The Court noted that neither the “Airline Transport Pilot License, the F.A.A.’s highest level of certification attainable by commercial pilots,” nor Cathay “require an advanced degree or even a high school diploma as a condition of employment.”
The Court concluded that pilots’ extensive training consists “primarily of flight hours and other practical experience, not extensive intellectual study.” Further, the Court determined Plaintiff’s job duties were “not primarily intellectual in character.” The Court concluded that “[a]lthough commercial pilots are occasionally called upon to exercise discretion and independent judgment, most commercial flights are routine if not largely automated.”
This ruling is significant because the dispute over the application of the Learned Professional Exemption is an issue of first impression in the Ninth Circuit. A Circuit split over whether pilots meet the learned professional exemption exists between the Third and Fifth Circuits. While taking a position of non-enforcement, the D.O.L. has indicated in administrative guidance that the exemption does not apply to pilots. District Court Judge Vince Chhabria found the D.O.L. analysis more persuasive than the Fifth Circuit precedent, marking a significant win for airline workers in California.
