Andrea Hirst v. Skywest, Inc. ( 2018 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 17-3643 & 17-3660
ANDREA HIRST, et al.,
Plaintiffs-Appellants,
v.
SKYWEST, INC., et al.,
Defendants-Appellees.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
Nos. 1:15-cv-02036 & 1:15-cv-11117 — John J. Tharp, Jr., Judge.
____________________
ARGUED SEPTEMBER 7, 2018 — DECIDED DECEMBER 12, 2018
____________________
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 compensa-
tion 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
2 Nos. 17-3643 & 17-3660
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 determin-
ing a pay violation is not wages per hour, but the average
hourly wage across a workweek. Because the Flight Attend-
ants 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 author-
ity 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 regula-
tion 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).
Nos. 17-3643 & 17-3660 3
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 for-
merly employed the eight plaintiffs-appellants in this case. 1
SkyWest flight attendants are based out of airports in ten dif-
ferent 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 dur-
ing 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
1 This consolidated suit was brought by plaintiffs-appellants Andrea
Hirst, Molly Stover, Emily Stroble Sze, Cheryl Tapp, Renee Sitavich, Sarah
Hudson, Brandon Colson, and Brüno Lozano.
2 As defined by the Flight Attendants, “block time” is the time be-
tween “block out” (when a flight attendant closes the main cabin door for
the aircraft to leave the gate) and “block in” (when an aircraft arrives at
the destination jet bridge and a flight attendant opens the main cabin
door).
3 As defined by the Flight Attendants, the “duty day” is the difference
between report time (the time at which a flight attendant must have
cleared security at the airport) and release time (fifteen minutes after the
cabin door opens at the day’s final destination).
4 Nos. 17-3643 & 17-3660
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 Cali-
fornia 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 Attend-
ants’ 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 aver-
age 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
Nos. 17-3643 & 17-3660 5
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. FLSA Claims
First, the Flight Attendants challenge the dismissal of their
FLSA claims. We review an appeal from a motion to dismiss
de novo. Adams v. City of Indianapolis, 742 F.3d 720, 727 (7th
Cir. 2014).
FLSA 29 U.S.C. § 206 reads: “Every employer shall pay to
each of his employees who in any workweek is engaged in
commerce … not less than—$7.25 an hour.” The Flight
Attendants argue compliance with this provision should be
measured differently depending on the wage practices of a
given industry. They contend compliance for flight attendants
should be measured by “pairing,” or work trip out and back
from their base airport, instead of by workweek. SkyWest
points out that every other federal circuit to reach this issue
has applied the workweek measure to all industries, and
FLSA compliance should therefore be determined from the
average hourly pay over a given workweek.
The text of 29 U.S.C. § 206 does not state what measure
should be used to determine compliance with the minimum
wage, nor do any of the surrounding provisions provide guid-
ance. In light of this, we turn to the interpretation of the
6 Nos. 17-3643 & 17-3660
Department of Labor, the administrative agency charged with
overseeing the FLSA. “When Congress leaves an administra-
tive agency with discretion to resolve a statutory ambiguity,
judicial review is deferential.” Ali v. Mukasey, 521 F.3d 737,
739 (7th Cir. 2008) (citing Chevron, U.S.A., Inc. v. Nat. Res. Def.
Council, Inc, 467 U.S. 837 (1984)). In 1940, less than two years
after the FLSA was enacted, the Department of Labor issued
a policy statement adopting the workweek as “the standard
period of time over which wages may be averaged to deter-
mine whether the employer has paid [the minimum wage].”
Wage & Hour Release No. R-609 (Feb. 5, 1940), reprinted in
1942 WAGE AND HOUR MANUAL (BNA) 185. While this policy
statement has never been codified into an official regulation,
to our knowledge and per the parties’ arguments, neither has
the Department of Labor ever deviated from this understand-
ing. Further, in the eighty years since the FLSA was passed,
Congress has never seen fit to amend the law to change this
understanding.
Other circuits have uniformly adopted the Department’s
per-workweek measure. See, e.g., Douglas v. Xerox Business
Services, LLC, 875 F.3d 884, 887–88 (9th Cir. 2017); Hall v.
DIRECTV, LLC, 846 F.3d 757, 777 (4th Cir. 2017); U.S. Dep't of
Labor v. Cole Enterprises, Inc., 62 F.3d 775, 780 (6th Cir. 1995);
Hensley v. MacMillan Bloedel Containers, Inc., 786 F.2d 353, 357
(8th Cir. 1986); Olson v. Superior Pontiac-GMC, Inc., 765 F.2d
1570, 1576 (11th Cir. 1985), modified on other grounds, 776 F.2d
265 (11th Cir. 1985); Dove v. Coupe, 759 F.2d 167, 171–72 (D.C.
Cir. 1985); Blankenship v. Thurston Motor Lines, 415 F.2d 1193,
1198 (4th Cir. 1969); United States v. Klinghoffer Bros. Realty
Corp., 285 F.2d 487, 490 (2d Cir. 1960). We see no reason to
deviate from the Department’s interpretation or the consen-
sus of other federal appellate courts. Therefore, we adopt the
Nos. 17-3643 & 17-3660 7
per-workweek measure for determining compliance with
29 U.S.C. § 206, without industry-specific carveouts.
We now apply the per-workweek measure to the plead-
ings before us. To survive a motion to dismiss for failure to
state a claim, the Flight Attendants needed to allege sufficient
facts to plead a claim for relief that is plausible on its face.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Several federal
circuits have analyzed the minimum pleading requirements
for FLSA claims under a similarly constructed provision gov-
erning overtime pay, 29 U.S.C. § 207(a)(1). For example, the
Second and Ninth Circuits have held that for overtime claims,
plaintiffs must “allege facts demonstrating there was at least
one workweek in which they worked in excess of forty hours
and were not paid overtime wages.” Landers v. Quality Comm.,
Inc., 771 F.3d 638, 646 (9th Cir. 2014) (emphasis added) (citing
Dejesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 90 (2nd Cir.
2013)). Though plaintiffs need not necessarily plead specific
dates and times that they worked undercompensated hours,
they must “provide some factual context that will nudge their
claim from conceivable to plausible.” Hall, 846 F.3d at 777
(emphasis in original) (quoting Dejesus, 726 F.3d at 90).
The same principles for pleading overtime pay violations
apply to minimum wage violations. In order to comply with
the requirements of Twombly, Iqbal, and FED. R. CIV. P. 8(a)(2),
a plaintiff alleging a federal minimum wage violation must
provide sufficient factual context to raise a plausible inference
there was at least one workweek in which he or she was
underpaid. Here, as demonstrated by the district court’s thor-
ough and detailed analysis, see Hirst v. SkyWest, Inc.,
283 F. Supp. 3d 684, 688–89 (N.D. Ill. 2017), no plaintiff did so,
8 Nos. 17-3643 & 17-3660
even after the district court permitted the Flight Attendants to
conduct limited discovery. Claiming they worked many
hours and citing several weeks in which they were paid the
minimum wage is not enough to render their claims plausible.
We affirm the dismissal of the Flight Attendants’ FLSA
claims.
III. State and Local Claims
The Flight Attendants next argue their state and local
wage claims should be reinstated. They contend the dormant
Commerce Clause does not apply to this case. Even if it does
apply, the Flight Attendants aver the district court did not
properly analyze the benefits to state and local governments,
and that the FLSA expressly permits the application of state
and local wage laws to employers. SkyWest responds that
under Pike the dormant Commerce Clause does apply to this
case, and that the district court accurately assessed the
burdens on SkyWest to comply with state and local wage
laws.
The Commerce Clause grants Congress the authority “[t]o
regulate Commerce … among the several States.” U.S. CONST.
art. I, § 8, cl. 3. The Supreme Court has inferred a “dormant”
aspect of the Commerce Clause “that limits states’ abilities to
restrict interstate commerce.” Minerva Dairy, Inc. v. Harsdorf,
905 F.3d 1047, 1058 (7th Cir. 2018) (citing New Energy Co. of
Ind. v. Limbach, 486 U.S. 269, 273 (1988)). 4 Under the dormant
4 Given its lack of a textual anchor, the continued validity of the
dormant Commerce Clause has been questioned, see, e.g., South Dakota v.
Wayfair, 138 S. Ct. 2080, 2100 (2018) (Thomas, J., concurring), id. at 2100(Gorsuch, J., concurring), but it remains valid law absent a Supreme Court
directive to the contrary.
Nos. 17-3643 & 17-3660 9
Commerce Clause, we invalidate a state law only where there
is a clear showing of discrimination against interstate com-
merce, “either expressly or in practical effect.” Park Pet Shop,
Inc. v. City of Chicago, 872 F.3d 495, 501 (7th Cir. 2017).
The dormant Commerce Clause serves as a bulwark
against local protectionism. As such, “if the state law affects
commerce without any reallocation among jurisdictions and
does not give local firms any competitive advantage over
those located elsewhere, we apply the normal rational basis
standard.” Minerva Dairy, Inc., 905 F.3d at 1053 (internal quo-
tation marks and citations omitted); see also id. at 1058–59. Sky-
West is subject to many minimum wage laws that impose
serious compliance costs. But the existence of a great regula-
tory burden on an employer does not necessarily mean mini-
mum wage laws have a discriminatory effect on interstate
commerce. State and local wage laws can burden companies
within their own localities just as much, if not more, than out-
of-state ones. All airlines—indeed all employers—are subject
to these laws, regardless of state citizenship. “Pike balancing
is triggered only when the challenged law discriminates against
interstate commerce in practical application.” Park Pet Shop,
872 F.3d at 502 (emphases in original). SkyWest has failed to
allege any discrimination against interstate commerce. This
failing precludes the application of the dormant Commerce
Clause to the Flight Attendants’ state and local claims.
Even if minimum wage laws did discriminate against
interstate commerce, the dormant Commerce Clause does not
apply to state and local laws expressly authorized by Con-
gress. See, e.g., Northeast Bancorp, Inc. v. Bd. of Gov’rs of Fed. Res.
Sys., 472 U.S. 159, 174 (1985) (“When Congress so chooses,
state actions which it plainly authorizes are invulnerable to
10 Nos. 17-3643 & 17-3660
constitutional attack under the Commerce Clause.”); Milwau-
kee Cty. Pavers Ass’n v. Fiedler, 922 F.2d 419, 424 (7th Cir. 1991)
(“If Congress wants, it can authorize states to engage in activ-
ities that but for the authorization would violate the dormant
commerce clause.”). The FLSA contains such an express
authorization. Section 218(a) of the FLSA reads: “No provi-
sion of this chapter or of any order thereunder shall excuse
noncompliance with any Federal or State law or municipal
ordinance establishing a minimum wage higher than the min-
imum wage established under this chapter … .” Because Con-
gress expressly authorized states and localities to legislate in
this realm, the application of multiple minimum wage laws to
an employer cannot violate the dormant Commerce Clause.
For the foregoing reasons, we AFFIRM the dismissal of the
FLSA claims, and REVERSE and REMAND for further proceed-
ings on the state and local claims.