California’s Healthy Workplace, Healthy Family Act (the Act) requiring most employers to provide paid sick leave for covered employees went into effect in 2015. However, in 2017 and 2021, two separate California federal district courts concluded that the Act was not applicable to rail workers due to preemption by the federal Railroad Unemployment Insurance Act (RUIA). The RUIA is a federal law that provides the exclusive source of unemployment and sickness benefits to railroad employees.

On July 26, 2022, the U.S. Court of Appeals for the 9^th Circuit in National Railroad Passenger Corp, et al. v. Su upheld the district court rulings. The question before the court was whether the RUIA preempted California law as to rail workers. The 9^th Circuit stated that the RUIA contains an express preemption provision disallowing railroad employees from having any right to sickness benefits under a sickness law of any State. Given that the Act provides sickness benefits, the Act falls within the express terms of the RUIA preemption.

The 9^th Circuit indicated the California Labor Commissioner’s argument that the Act should not be preempted because it offers a different kind of benefit than the RUIA was unpersuasive.