Executive Summary: In a complete reversal of its earlier decision, a California federal judge held that employees covered by a collective bargaining agreement (CBA) entered into in accordance with the provisions of the Railway Labor Act (RLA) are exempt from California’s statutory overtime requirements. The district court’s holding affirms the validity of a longstanding exemption applicable to the air and rail transportation industry.

In Angeles v. US Airways, Inc., Case No. C 12-05860, the airline industry scored a major success when a federal district court judge in California recently affirmed the validity of the “RLA Exemption,” a longstanding provision that exempts from the state’s statutory overtime requirements transportation employees who have entered into a CBA in accordance with the provisions of the RLA.

At issue in the case was whether the RLA Exemption—which has existed on California’s books for over 40 years—remained valid. The plaintiffs argued it was not, contending that it conflicted with and was implicitly repealed by another overtime exemption provision that applies across industries and concerns employees covered by CBAs meeting certain requirements.

In rejecting the plaintiffs’ argument, the district court recognized that the exemptions “provide two distinct ways for a CBA to exempt workers from [California’s] overtime requirements.” The court found no conflict between the two exemptions, noting that while the RLA Exemption applies to employees in the air and rail transportation industry, the other exemption applies across industries and lays out its own safeguards.

The Angeles opinion is notable not only because it affirms a decades-old provision within California’s complex wage-and-hour legal scheme, but it also confirms an enduring recognition of the unique nature and independence of the airline and air transportation industries. Previously, the district court in Angeles had ruled, much to the consternation of the airline and air transportation industries, that the RLA Exemption did not apply to the plaintiffs’ statutory overtime claim. With the Angeles court’s reversal, employers in the airline and air transportation industries should now be able to breathe a heavy sigh of relief.