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TIDEWATER MARINE WESTERN, INC., Zapata Gulf Pacific, Inc. and Offshore Marine Service Association, Plaintiffs and Respondents, v. Victoria L. BRADSHAW, as Labor Commissioner of the State of California, Division of Labor Standards Enforcement, Industrial Welfare Commission of the State of California, and Alvin Allen, et al., Defendants and Appellants.
The Labor Commissioner of the State of California (Labor Commissioner), the Industrial Welfare Commission (IWC), and the Division of Labor Standards Enforcement (DLSE) appeal from a judgment granting respondents Tidewater Marine Western, Inc. (Tidewater), Zapata Gulf Pacific, Inc. (Zapata) and Offshore Marine Service Association a permanent injunction and peremptory writ of mandate. The judgment prohibits appellants from “․ applying the statutes, Wage Orders, regulations, manuals and other provisions of California law pertaining to maximum hours of work and overtime pay to any of [respondents'] employees who work beyond the State of California's territorial borders located three nautical miles off the coast.” In addition, the trial court stayed actions filed by many present and former employees of Tidewater and Zapata to recover unpaid overtime compensation. The Labor Commissioner, DLSE, IWC and 31 employees appeal from the judgment.
We hold that the Labor Commissioner, the IWC, and the DLSE are empowered to regulate overtime compensation of California residents who work on vessels operating exclusively to and from a California port or ports if they enter into employment contracts in California. This covers the oil boat workers who work principally in the Santa Barbara Channel. We further hold that IWC has exercised its jurisdiction over employees so engaged by promulgating wage order 9–90, and that the DLSE enforcement policy properly extends that wage order to the employees in this action. (Cal.Code Regs., tit. 8, § 11090.) Accordingly, we reverse.
Facts
Tidewater and Zapata operate fleets of seagoing vessels which transport workers and supplies between the California mainland and oil drilling platforms lying within the Santa Barbara Channel from one to twelve nautical miles off shore. Tidewater also operates an oceanographic research vessel which travels up to 50 nautical miles off the coast and is engaged in voyages that may last several months.1 Respondent, Offshore Marine Service Association, is a trade association which represents owners and operators of vessels engaged in similar services.
All of respondents' vessels depart from and return to ports within the State of California. The vessels are equipped with sleeping quarters and kitchens for use by crew members. Crew members work on a schedule of seven or fourteen days on and seven days off, with duty periods of twelve hours within each twenty-four hour period. While on board, crew members are on call 24 hours a day. Consistent with the standard among maritime employers, crew members are paid a flat daily rate of pay without overtime compensation. Current rates range from slightly less than $100.00 to over $200.00 per day. The crew members at issue here are California residents who begin and end their work periods in this state. They are paid in California and pay California income taxes.
The Federal Fair Labor Standards Act specifically exempts these employees from federal overtime regulations. (29 U.S.C. § 213, subd. (b)(6), 29 C.F.R. §§ 783.29, et seq.) Maximum hours of work and working conditions on the vessels are, however, regulated by the Federal Shipping Act and regulations issued by the United States Coast Guard. (46 U.S.C. §§ 8101, 8104; 46 C.F.R. § 15.101, et seq.) Neither the Federal Shipping Act nor the coast guard regulations require or preclude payment of overtime compensation.
In 1988, Tidewater and other maritime employers filed an action in the United States District Court for the Central District of California challenging attempts by DLSE to apply state overtime regulations to crew members on vessels operating in the Santa Barbara Channel. Tidewater contended that federal maritime law preempted the California regulations. Although this argument was successful in the district court, the Ninth Circuit Court of Appeals reversed, holding that federal maritime law did not preempt California regulation of the wages, hours and working conditions of such employees. (Pacific Merchant Shipping Ass'n v. Aubry (9th Cir.1990) 918 F.2d 1409, 1416; cert. denied, 504 U.S. 979, 112 S.Ct. 2956, 119 L.Ed.2d 578 (1992).) 2 Respondents then filed this action seeking a ruling that state overtime compensation regulations did not apply to the crew members on respondents' vessels.
The California Constitution, Statutes, Orders, and Policies
California Constitution, article XIV, section 1 provides: “The Legislature may provide for minimum wages and for the general welfare of employees and for those purposes may confer on a commission legislative, executive, and judicial powers.” The IWC and its parent agency, the Department of Industrial Relations, are charged with the responsibility “․ to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment.” (Lab.Code, § 50.5.) To that end, the IWC issues wage orders which regulate “․ the hours and conditions of labor and employment in the various occupations, ․ in which employees are employed in this state․” (Lab.Code, §§ 1173, 1178.5.) The Legislature has declared that “[i]t is the policy of this state to vigorously enforce minimum labor standards in order to ensure employees are not required or permitted to work under substandard unlawful conditions․” (Lab.Code, § 90.5, subd. (a).) 3
IWC wage order 9–90 sets the minimum wage and maximum work hours for “all persons employed in the transportation industry.” (Cal.Code Regs., tit. 8, § 11090, subd. (1).) 4 The “transportation industry” includes “any industry, business, or establishment operated for the purpose of conveying persons or property from one place to another whether by rail, highway, air or water․” (Cal.Code Regs., tit. 8, § 11090, subd. 2(C).) Among other things, the wage order specifies the circumstances under which employees in the transportation industry are entitled to receive overtime compensation. (Cal.Code Regs., tit. 8, § 11090, subd. 3.)
IWC wage orders and other minimum labor standards are enforced by DLSE. (Lab.Code, § 82.) In section 10.65 of its “Operations and Procedures Manual,” DLSE has declared: “IWC standards apply to crews of fishing boats, cruise boats, and similar vessels operating exclusively between California ports, or returning to the same port, if the employees in question entered into employment contracts in California and are residents of California. Employees in the commercial fishing industry are not covered by the IWC regulations․” This policy has never been published in the California Code of Regulations and was not adopted pursuant to the Administrative Procedures Act. (Gov.Code, §§ 11340, et seq.)
The Trial Court Ruling
The trial court credited respondents' contention and ruled that the Labor Code, wage order 9–90 and DLSE policy do not apply outside the territorial boundaries of California as established by federal law. In so ruling, the trial court said that the Labor Code “․ does not expressly include a declaration of legislative intent that the IWC's rulemaking extend to workers who depart from California, perform their daily work in the territory of another sovereign (the United States), and then return to California to bank their pay and engage in off-duty pursuits․ [E]ither the Legislature never considered the problem, or ․ the Legislature intended these acts to have no extraterritorial operation.” Even if the Labor Code allowed IWC to regulate “extraterritorial” employment, the trial court ruled that IWC had never exercised its jurisdiction because its wage order does not explicitly refer to “offshore workers whose job sites are outside” the state, and because the IWC never “specifically announced its intent to regulate these sorts of offshore enterprises․”
Appellant's Contention
Appellants argue that the Legislature's intent to regulate the working conditions of respondents' maritime employees may be inferred from the history and purpose of the Labor Code, if not from its express terms. They contend that DLSE was not obligated to follow the Administrative Procedure Act in promulgating its internal policy because the policy is an interpretation of wage order 9–90 rather than a new regulation. Appellants also challenge the scope of the judgment, arguing that it inappropriately restricts the ability of DLSE and IWC to regulate the hours and working conditions of employees who spend even a small fraction of their work hours outside the territorial boundaries of California.
Standard of Review
In ruling on an appeal from the grant of a summary judgment, we apply the same analytical process as the trial court. “First, we identify the issues framed by the pleadings․ [¶] Secondly, we determine whether the moving party's showing has established facts which ․ justify a judgment in movant's favor․ [¶] [T]he third and final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue. [Citations.]” (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064, 225 Cal.Rptr. 203.)
Because an appeal from a summary judgment motion raises only questions of law, we must independently analyze the supporting and opposing papers to determine whether there is a triable issue as to any material fact. (Code Civ.Proc., § 437c, subd. (c); Planned Parenthood v. City of Santa Maria (1993) 16 Cal.App.4th 685, 690, 20 Cal.Rptr.2d 391.) We view the evidence before the trial court in the light most favorable to the non-moving parties. (Gibb v. Stetson (1988) 199 Cal.App.3d 1008, 1011, 245 Cal.Rptr. 283; (Gomez v. Ticor (1983) 145 Cal.App.3d 622, 627, 193 Cal.Rptr. 600.)
The Reach of California Law
The territorial boundaries of California as established by federal law differ from those established by state law. As a matter of federal law, California's “․ territorial claims in Santa Barbara Channel are confined to three-mile belts seaward from the mainland and around the perimeter of each of the islands in the channel.” (People v. Weeren (1980) 26 Cal.3d 654, 662, 163 Cal.Rptr. 255, 607 P.2d 1279; see also United States v. California (1965) 381 U.S. 139, 172–75 [85 S.Ct. 1401, 1419–21, 14 L.Ed.2d 296, 316–18].)
The California Constitution and Government Code, however, provide that the state's territorial boundary runs “three English nautical miles oceanward of lines drawn along the outer sides of the outermost of the islands, ․ along and adjacent to the mainland and across intervening waters․” (Gov.Code § 170.) In addition, the territory of the state extends throughout its inland waters, which include, “[a]ll waters between the mainland and the outermost of the islands․” (Gov.Code, § 171.)
In People v. Weeren, supra, 26 Cal.3d 654, 163 Cal.Rptr. 255, 607 P.2d 1279, our Supreme Court held that, “․ when the extent of a state's territorial jurisdiction is relevant to the operation of federal law, the [federal] delineation of state boundaries prevails over conflicting state assertions.” (Id. at p. 660, 163 Cal.Rptr. 255, 607 P.2d 1279.) The Weeren court also said, “[f]airly read, California II established the state's ‘boundaries' for all purposes, political and proprietary, ‘as between Nation and State.’ ” (Id., at p. 663, 163 Cal.Rptr. 255, 607 P.2d 1279.) However, where the interests of the federal and state governments do not conflict, and the state has a legitimate interest at stake, the state may give effect to its laws for the benefit of workers on federally defined waters. This is especially appropriate where state law has defined such waters as being within the state territorial boundaries. (See Weeren at pp. 669–670, 163 Cal.Rptr. 255, 607 P.2d 1279.)
In Weeren a California resident was subject to criminal prosecution for using fishing methods prohibited by state law, even though the fishing occurred beyond the three mile federal limit but within the boundary as defined by state law. (Id. at pp. 659, 669, 163 Cal.Rptr. 255, 607 P.2d 1279.) The Supreme Court ruled that California had a legitimate interest in regulating fishing activity along its coast and that the relevant state and federal regulations did not conflict. (Id. at pp. 666–667, 163 Cal.Rptr. 255, 607 P.2d 1279.) Thus, “․ the state boundaries as defined by our state Constitution and statutes ․ are the limits to which the Legislature implicitly intended to extend California's criminal laws, including Fish and Game Code section 2000.” (Id. at p. 669–670, 163 Cal.Rptr. 255, 607 P.2d 1279.) Accordingly, the Fish and Game Code applied to conduct occurring within the Santa Barbara Channel, despite the fact that the statute contained no express reference to “extraterritorial” jurisdiction over fishing methods.
The same reasoning applies here. If the state can regulate the taking of fish in the Santa Barbara Channel, it can surely regulate labor of its own residents who work there. The employees at issue in this case spend all of their working hours within the Santa Barbara Channel. The Ninth Circuit Court of Appeals has already determined that there is no conflict between federal and state regulation of overtime compensation for these workers. (Pacific Merchant Shipping Ass'n v. Aubry, supra, 918 F.2d 1409, 1427.) Accordingly, there is no reason to limit the application of California law to the boundaries established by the federal government and there is a reason to hold that the remedial legislation designed to protect California residents follows them on the Santa Barbara Channel provided they are otherwise described in wage order 9–90.
In North Alaska Salmon Co. v. Pillsbury (1916) 174 Cal. 1, 162 P. 93, the Supreme Court held that it is possible for California to apply its statutes outside the state, but the state's intention to do so “will not be declared to exist unless [it] is clearly expressed or reasonably to be inferred ‘from the language of the act or from its purpose, subject matter or history.’ ” (Id. at p. 4, 162 P. 93, quoting Kennerson v. Thames Towboat Co. (1915) 89 Conn. 367, 94 A. 372 [L.R.A. 1916A, 436, 94 Atl. 372].)
North Alaska held that California's original workers' compensation statute did not apply to injuries suffered by a California resident while working in Alaska for a California employer. First, the statute did not expressly “indicate that the compensation provisions were intended to apply to injuries occurring in foreign jurisdictions․ Nothing is said about the place of injury.” (North Alaska Salmon Co. v. Pillsbury, supra, 174 Cal. at p. 4, 162 P. 93.) Second, because the statute declared itself to be the exclusive remedy for workplace injuries, its application would necessarily have prevented Alaska from applying its own law to an injury occurring within its borders. The court refused to assume “․ that the legislature of this state undertook to pass a law which would trench upon the sovereign powers of any other jurisdiction.” (Id. at p. 5, 162 P. 93.) Finally, while the case was pending, the legislature amended the statute to add a section which expressly provided coverage for certain employees injured while working outside the state. The Supreme Court considered this “․ more or less significant as indicating that the law-making body itself did not consider the original statute as covering extraterritorial injuries.” (Id. at p. 6, 162 P. 93.)
Here, as in North Alaska, California's wage and hour statutes do not expressly state that IWC wage orders apply to California employees who cross the federal boundary during the workday. However, there is within the Labor Code a clearly expressed intention to protect the interests of such employees. The IWC and DLSE are charged with the obligation to “․ foster, promote, and develop the welfare of the wage earners of California․” (Lab.Code, § 50.5.) As indicated (see ante, fn. 3) legislative enactments regulating work hours and overtime compensation are remedial in nature, and must be liberally construed for the protection and benefit of the employee. The employees at issue here reside, are paid wages, and pay income taxes in California. They are, therefore “wage earners of California” entitled to the protection of California laws regulating their hours of work and overtime compensation.
The remaining factors which restricted application of the workers' compensation statute in North Alaska are not present here. Applying California law to these workers would not infringe on the sovereignty of any other nation or state. There is no conflict between federal and California law in this area, and no other state claims jurisdiction over the Santa Barbara Channel. (Pacific Merchant Shipping Ass'n v. Aubry, supra, 918 F.2d 1409, 1427.)
In addition, the subsequent conduct of the Legislature demonstrates its belief that the IWC and DLSE have jurisdiction over these employees. IWC Wage Order 9–80, the predecessor to the current wage order, took effect in January 1980. In 1986, the Legislature enacted Labor Code section 1182.3, exempting licensed commercial fishers and employees of commercial passenger fishing boats from IWC wage and hour regulations. Employees of commercial fishing and passenger fishing vessels, like the employees at issue here, frequently cross the federal boundary in the Pacific Ocean. The fact that the Legislature found it necessary to exempt those employees from IWC regulation is a strong indication that the Legislature believes it has granted IWC the power to regulate other employees who perform work beyond the federal boundary in the Pacific Ocean.
The IWC Has Exercised Its Jurisdiction Over Respondents' Maritime Employees by Enacting Wage Order 9.90
The trial court concluded that the IWC had not exercised jurisdiction over respondents' maritime workers because its wage orders “․ do not contain a clear and distinct statement that they are intended to be applied to workers who reside in California but leave its boundaries to reach their jobs.” According to the trial court: “The impact of these rules on offshore commercial enterprises is sufficiently great that due process requires that before these rules be given extraterritorial effect, that intent must be publicly declared and submitted to the regular process of publication and comment which attends all valid administrative rulemaking.” We disagree.
Due process does not require that the IWC specifically identify every conceivable job title or category of employer subject to an industry-wide wage order. At most, the wage order must “․ give the person of ordinary intelligence a reasonable opportunity to know” which employers and employees are covered by the order. (Cranston v. City of Richmond (1985) 40 Cal.3d 755, 763, 221 Cal.Rptr. 779, 710 P.2d 845. See also Rutherford v. State (1987) 188 Cal.App.3d 1267, 1276, 233 Cal.Rptr. 781.)
Wage order 9–90 applies to “all persons employed” in “․ any industry, business, or establishment operated for the purpose of conveying persons or property from one place to another ․ by ․ water․” (Cal.Code Regs. tit. 8, § 11090, subd. 1, 2(C).) Respondents concede their employees fit this definition. Nevertheless, respondents claim they had no idea that wage order 9–90 would apply to their employees because the wage order does not explicitly refer to workers who spend a portion of their workday outside the state. The argument is disingenuous at best. These workers convey persons and property over the water from the mainland to oil drilling platforms. Persons of ordinary intelligence are capable of discerning that these employees are engaged in the transportation industry and, therefore, subject to the terms of wage order 9–90. IWC's exercise of jurisdiction over these employees did not violate due process.
DLSE's Internal Policy is a Valid Administrative Interpretation of IWC Wage Order 9–90.
The DLSE internal policy at issue here provides that wage order 9–90 applies to “․ crews of fishing boats, cruise boats, and similar vessels operating exclusively between California ports, or returning to the same port, if the employees in question entered into employment contracts in California and are residents of California.” Relying upon cases such as Armistead v. State Personnel Board (1978) 22 Cal.3d 198, 149 Cal.Rptr. 1, 583 P.2d 744, respondents contend, and the trial court determined, that this policy constitutes “underground rulemaking” and violates the Administrative Procedures Act because it expands the scope of wage order 9–90 to cover workers not specifically considered by the IWC during its public rulemaking. (Gov.Code, § 11340 et seq.)
The IWC must comply with the rulemaking procedures outlined in the Labor Code before it may adopt, amend or rescind a wage order. (Lab.Code, § 1178.5.) Absent compliance with those procedures, any wage order or other regulation adopted by the IWC or DLSE is void. (Gov.Code, § 11347.5.)
A regulation is “a rule of general application which implements, interprets and makes specific the statute․” (Division of Lab. Stds. Enforcement v. Ericsson Information Systems, Inc. (1990) 221 Cal.App.3d 114, 128, 270 Cal.Rptr. 75; see also Gov.Code, § 11342, subd. (b).) DLSE internal policies which interpret or construe the words of a wage order and apply the order to a specific situation are not regulations within the meaning of the Administrative Procedures Act. (Aguilar v. Association for Retarded Citizens (1991) 234 Cal.App.3d 21, 27, 285 Cal.Rptr. 515.)
Here, the DLSE policy interpreted IWC wage order 9–90 to include California residents employed in the transport of goods or persons by water, including the “crews of fishing boats, cruise boats and similar vessels․” This interpretation is consistent with the language and intention of the wage order. Rather than establishing a new rule of general application throughout the industry, the DSLE policy interprets the term “transportation industry” and applies the wage order to a specific group of employers. The DSLE policy is not, therefore, a regulation subject to the Administrative Procedures Act. (Id. at p. 27, 285 Cal.Rptr. 515; Skyline Homes Inc. v. Department of Industrial Relations (1985) 165 Cal.App.3d 239, 253, 211 Cal.Rptr. 792.)
Conclusion
The trial court erred in restricting the scope of the Labor Code and wage order 9–90, in concluding that IWC had not adequately identified respondents' employees as persons subject to the wage order, and in concluding that DLSE had incorrectly interpreted the wage order with respect to those employees. This decision protects California employees, is consonant with article XIV, section 2, of the California Constitution, and implements the purpose of the remedial statutes passed by the Legislature.
The judgment is reversed. Costs to appellants.
FOOTNOTES
1. The record contains little information concerning this vessel. It is not referred to in the pleadings, motions for summary judgment or statements of undisputed material facts. In fact, respondents' pleadings refer exclusively to crew members of supply, crew, and towing vessels which “regularly travel up to 25 nautical miles off the California coast [,]” a description which appears to exclude employees working on the oceanographic research vessel. We conclude, therefore, that respondents' pleadings have not placed in issue the status of employees working on that vessel. Thus, neither the judgment nor this opinion addresses the extent to which California may regulate the maximum hours of work or overtime compensation due such employees.To the extent that the judgment purported to adjudicate the status of employees on the oceanographic research vessel, it would be reversed because numerous issues of material fact remain unresolved. For example, the record does not disclose the locations where this vessel operates nor does it contain any information concerning the job duties of employees on this vessel. It is therefore impossible to determine whether these employees are employed in the transportation industry within the meaning of wage order 9–90. (Cal.Code Regs., tit. 8, § 11090, subd. (2)(C).)
2. Zapata was not a party to the federal action. Here it reprises Tidewater's argument that the California regulations are preempted by federal law. The Ninth Circuit has exhaustively and correctly analyzed these issues. We decline the invitation to revisit them.
3. It is beyond question that these statutes are remedial legislation. “[I]n light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.” (Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 702, 166 Cal.Rptr. 331, 613 P.2d 579; see also Ford Dealers Assn. v. D.M.V. (1982) 32 Cal.3d 347, 356, 185 Cal.Rptr. 453, 650 P.2d 328.) Here the trial court strictly construed the Labor Code to defeat application of wage order 9–90 to respondents' employees. As we shall explain, this strict construction was erroneous. (See infra, at p. 418, et seq.)
4. Wage order 9–90 supersedes wage order 9–80, which was in effect when respondents initiated their action in federal court. For all purposes relevant to this appeal, the two orders are identical.
YEGAN, Associate Justice.
STEVEN J. STONE, P.J., and GILBERT, J., concur.
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Docket No: No. B082689.
Decided: August 01, 1995
Court: Court of Appeal, Second District, Division 6, California.
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