High Court Rules Federal Labor Law Covers Offshore Rigs

WASHINGTON (CN) – The Supreme Court on Monday unanimously rejected a California drilling company employee’s claim that he is entitled to overtime under Golden State laws while on standby on an offshore oil rig.

On one of many oil drilling platforms that spot the Santa Barbara coastline, Brian Newton clocks two-week shifts at 12 hours on duty per day, followed by 12 hours on standby.

Alleging his employer violated several California wage-and-hour laws, Newton sued Parker Drilling Management Services for additional compensation to cover the hours he spends on standby unable to leave the platform.

The Ninth Circuit found that state laws could be applied in Newton’s case under the Outer Continental Shelf Lands Act, which covers temporary and permanent structures attached to the seabed beginning 3 nautical miles off of the coast. The law stipulates that in cases where no federal laws apply, the relevant state law is applicable as long as it is not inconsistent with federal law.

Kellogg Hansen attorney David Frederick argued on behalf of Newton at oral arguments before the U.S. Supreme Court in April, comparing his client’s case to how states sometimes choose to set minimum wages higher than required by federal law.

But the nation’s highest court rejected Newton’s claims Monday, overturning the Ninth Circuit’s decision.

Justice Clarence Thomas delivered the court’s unanimous opinion, writing that Newton was paid well above the California and federal minimum wages for his time on duty, while acknowledging that the employee was not paid for his standby time.

Still, the court found the state laws cannot be adopted as “surrogate laws” if the federal law addresses the relevant issues.

Parker Drilling’s attorney, Paul Clement with Kirkland & Ellis, had argued before the justices in April that the Ninth Circuit ruling was incorrect and state laws do not apply because the Fair Labor Standards Act sets a nationwide standard for employment requirements.

If the California wage laws were carried out to sea, Justice Samuel Alito remarked in oral argument proceedings, the state would extend 200 miles offshore.

Assistant to the Solicitor General Christopher Michel had also warned against siding with Newton, saying it would have required the Supreme Court to overturn decades of precedent set by the Outer Continental Shelf Lands Act.

“Respondent’s position … would essentially replicate the position on mainland California on the outer continental shelf, with the small exception that federal officials would enforce the law, which we think is inconsistent with the text, the purpose and the history of OCSLA,” Michel said.

In Monday’s opinion, the justices agreed with Parker Drilling and the federal government.

“Because federal law is the only law on the [Outer Continental Shelf], and there has never been overlapping state and federal jurisdiction there, the statute’s reference to ‘not inconsistent’ state laws does not present the ordinary question in pre-emption cases—i.e., whether a conflict exists between federal and state law,” Thomas wrote. “To the extent federal law applies to a particular issue, state law is inapplicable.”

Attorneys for both parties did not immediately respond to requests for comment.

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