Labor & Employment Law Daily Wrap Up, WAGE-HOUR—OVERTIME—N.D. Cal.: Choice-of-law questions in ‘traveling nurse’ case preclude summary judgment for employer, (Mar 7, 2025)

By Nadine E. Roddy, J.D.

But the employer was granted leave to renew its motion supported by more factual evidence.

A “traveling nurse” who had worked in California raised material fact questions concerning the extraterritorial application of California law to a wage-and-hour case in which neither party was a resident of California, a federal district court in California has ruled. The employer’s argument against the application of California law lacked sufficient factual support (Bourgeois v. Pentec Health, Inc., No. 4:23-cv-06375-HSG (N.D. Cal. March 4, 2025)).

Traveling nurse. A registered nurse, employed by a company that provides traveling nurses to health care facilities/providers in various states, brought suit against her employer in California state court, asserting overtime and related claims under the California Labor Code. The employer removed the case to federal court, as the employee was a resident of Texas, and the employer was headquartered in Pennsylvania. The employee alleged that for nearly four years, she had performed “substantial nursing duties” in California, although had she worked in other states as well. She had not tracked her actual hours worked during this time period, but she stated that she had regularly worked more than eight hours a day and 40 hours a week while in California. She had been told that her wages would be paid by a fixed salary without regard for the number of hours she worked.

At some later time, the employer informed her that it was reclassifying her position to an “hourly position that is eligible for overtime.” The employer ultimately calculated that the employee was entitled to 576 hours of back overtime pay for the last three years, and it made a direct back-wage payment to her for a net payment of $28,159.48 from gross wages of $46,403.25. Believing that she had worked “several thousand hours of overtime” while in California, the employee filed suit.

Before the court were the employer’s motion for summary judgment and the employee’s motion to remand one of her claims.

Extraterritorial application of state law. The employer argued that California law does not apply to a plaintiff nonresident employee working for a nonresident employer, and thus the employee’s claims failed as a matter of law. The court noted, however, that both the Ninth Circuit and California Supreme Court had recognized that some level of extraterritorial application of California law is permissible. Indeed, the California Supreme Court had explicitly stated that “[t]he state’s power to protect employees within its borders is not limited by whether the worker might be a nonresident or might be employed by a nonresident entity.” But the Supreme Court had never expressly addressed whether California law might apply when both the employee working in California and the employer are nonresidents of the state.

The court declined the employer’s invitation to adopt a bright-line rule, noting instead the California Supreme Court’s observation that “[t]here is no single, all-purpose answer to the question of when state law will apply to an interstate employment relationship or set of transactions.” To determine whether California law applies, “each law must be considered on its own terms” and in light of the circumstances of the case. But the employer in this case made no effort to parse the employee’s claims in this individualized way. It did not cite or address the actual language or legislative history of any of the specific Labor Code provisions. This alone was reason to deny summary judgment.

The employer then contended that Texas and Pennsylvania had strong interests in applying their laws to the case because of the parties’ respective residencies. The court believed that although such interests could be relevant, they were not conclusive, and the employer offered little detail about the nature or scope of the employee’s work in either Texas or Pennsylvania as compared to California. Thus, the employer’s analysis was “at best incomplete.”

Adequate remedy at law. The employer also argued that the employee’s claim based on California’s Unfair Competition Law (UCL), which provides only for equitable remedies, should be dismissed because the employee had adequate legal remedies under the Labor Code. The employee countered that her Labor Code claims would not compensate her for unpaid wages during her first year in California due to the applicable three-year statute of limitation. However, the Ninth Circuit had rejected such an argument, explaining that federal equitable relief must be withheld when an equivalent legal claim would have been available but for a time bar.

The court then denied the employer’s motion for summary judgment with leave to renew the motion with more factual support. The court also denied the employee’s motion to remand the UCL claim to state court, but it dismissed the claim without prejudice to refiling in state court.

The case is No. 4:23-cv-06375-HSG.

Judge: Gilliam, H.

Attorneys: Richard J. Vaznaugh (Law Office of Richard J. Vaznaugh) for Penny Bourgeois. David J. Rashe (Morgan, Lewis & Bockius) for Pentec Health, Inc.

Companies: Pentec Health, Inc.

Cases: WageHour Overtime WorkingTime Procedure CaliforniaNews