December 2020

Out of state businesses with out of state employees may now be subject to California labor requirements under the recently published case Gulf Offshore Logistics, LLC v. The Superior Court of Ventura County. In Gulf Offshore, the Court held that employees were entitled to protections under California law because they performed all or most of their work in California, despite living outside of California and working for a Louisiana based company.

The defendant company in Gulf Offshore was headquartered in Louisiana. The plaintiffs Gulf Offshore were “crew members on a vessel that provided maintenance services to offshore oil platforms.”  The crew members worked on a boat called the Adele Elise, which was registered in Louisiana.  Between 2011 and 2017, the Adele Elise operated out of Port Hueneme in California. The vessel regularly sailed through the Santa Barbara Channel out to four oil platforms located in United States territorial waters. 

None of the class representatives resided in California. Instead, the employer would fly the employees out from their homes in places like Ohio and Texas for lengths of employment called “hitches.”

The plaintiffs sued the defendant for failing to abide by wage and hour requirements under the California Labor Code, including failing to pay state minimum wages, failing to provide meal and rest breaks, and failing to provide itemized wage statements. The defendant argues that it was not subject to California laws because the business was based in Louisiana, the employees were out of state, and some of the work was performed in U.S. territorial waters.

The Court of Appeal concluded that the employees were entitled to the protections of California law because “they performed all or most of their work in [California].”  While some of the work was performed in territorial waters, California law still applied because federal law does not preempt the state’s ability regulate employment matters in territorial waters. The court held that “considerations, such as the residence of the employees or the location of the employer, are not relevant” to the determination of whether California employment laws applied to the crew members.

Gulf Offshore puts employers on notice that employees working in California, even if those employees do not reside in California, enjoy California employment protections. The employer in Gulf Offshore may be liable for significant unpaid wages and penalties. If you have questions about how California’s employment regulations impact your business, contact: