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The Supreme Court found a California law that would have offered more generous compensation to oil drilling workers doesn't override federal law that governs waters off the coast.
The U.S. Supreme Court ruled Monday that state wage laws do not apply to offshore oil workers stationed on platforms off the California coast.
The case before the court was brought by an oil worker, who argued that under California law employees who live and work on drilling platforms should be paid for time they remain on platforms on standby but aren't working. The high court was asked to decide whether federal or state wage laws applied to workers based on a platform located in waters on the outer continental shelf (OCS) near Santa Barbara, California.
State laws govern waters within three miles of the coast. Under the Outer Continental Shelf Lands Act (OCSLA) of 1953, federal law applies to waters beyond that, but adjacent state laws can fill in any statutory gaps so long as they are “applicable and not inconsistent” with federal law.
The Supreme Court’s unanimous decision overrules the 9th U.S. Circuit Court of Appeals, finding California’s minimum wage and maximum hours law does not apply to the oil drilling workers because federal law, specifically the Fair Labor Standards Act, already addresses the issue.
“Our consistent understanding of the OCSLA remains: All law on the OCS is federal, and state law serves a supporting role, to be adopted only where there is a gap in federal law’s coverage,” wrote Justice Clarence Thomas in the 15-page opinion.
Oil worker Brian Newton brought the case against his employer, Parker Drilling Management Services, in 2015. Workers rotated between 14-day shifts on the platforms followed by 14 days off. While on the platforms, Newtown was paid for 12-hours shifts he spent on duty each day, but was not compensated for the remaining 12 hours that he spent on the platform on standby. During standby, he and other employees could be called back to work. Newton argued that under California labor laws, workers should be paid for the standby time, including while asleep.
A ruling in Newton’s favor would have given oil workers the same wage protections as other California workers, attorney Andrew Ellison told the New Republic ahead of the oral arguments in the case.
“If they were on land in California, they’d be paid for this work,” Ellison said. “Why, when you cross an arbitrary line in the water, do you cease to be paid for something you would be paid for in California?”
Oil industry groups and the Trump administration also weighed in on the case, urging the high court to rule in Parker Drilling’s favor and find that federal, not state, law applies.
The U.S. Chamber of Commerce and other industry groups argued the 9th Circuit’s ruling should not be allowed to stand because it would have implications far beyond the wage laws in question and could open the door for states to adopt legislation intended to disrupt the oil industry.
“States opposed to development of the outer continental shelf could attempt to enact targeted laws that make offshore operations more difficult or economically infeasible—precisely the sort of state interference Congress sought to avoid when making explicit that the outer continental shelf was an area of exclusive federal jurisdiction,” the Chamber of Commerce wrote in an amicus brief.
In their own brief, oil industry groups argued that the 9th Circuit decision “could inflict hundreds of millions of dollars of liability on employers.”
Allowing the 9th Circuit ruling to stand would create new burdens on the federal officials charged with enforcing and administering laws, and create a split with rulings by the 5th U.S. Circuit Court of Appeals, which governs several states on the Gulf Coast, wrote Justice Department officials in an amicus brief submitted by the Trump administration.
“Subjecting OCS employers to the wage-and-hour requirements of various adjacent States would disrupt settled expectations and require substantial changes to business arrangements,” the Justice Department brief states.
During oral arguments, the Justice Department emphasized the degree to which the 9th Circuit decision could complicate cases, noting that 97 percent of OCSLA cases arise in the 5th Circuit, SCOTUSblog reported.
Andrea Noble is a Staff Correspondent with Route Fifty.
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