Airline Management Newsletter - February 2014

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·  Ninth Circuit Upholds Strike Injunction Against Non-Union Employees

Executive SummaryThe Ninth Circuit recently affirmed the decision of a federal trial court, which granted a strike injunction against unrepresented employees of Aircraft Service International, Inc., doing business as Aircraft Service International Group (ASIG).  The Ninth Circuit held that the employees had a duty under the Railway Labor Act (RLA) to engage in the Act's dispute resolution mechanisms before striking.  Because they failed to do so, the court held that the lower court did not abuse its discretion in issuing the injunction.  Additionally, the court held that the injunction did not violate the employees' First Amendment rights because it furthered the important governmental interest of regulating the economic relationship between labor and management and was no greater than essential to the furtherance of that interest.

ASIG provides services to air carriers throughout the country, including at Seattle-Tacoma International Airport (Sea-Tac).  At Sea-Tac, ASIG refuels approximately 75 percent of all commercial flights. 

Working Washington, which describes itself as a coalition of individuals and advocacy groups, has been supporting efforts to get airline contractors at Sea-Tac to pay higher wages.  In the fall of 2012, ASIG learned of a threatened job action by its employees at Sea-Tac, purportedly to protest the suspension of an ASIG fueler who allegedly had been active in "organizing" the employees and in speaking out on safety issues.  In October 2012, Working Washington announced that the employees had decided to strike, and that the ASIG fuelers could go on strike at any time.

ASIG immediately filed a complaint in federal district court seeking to enjoin the strike as unlawful under the RLA.  The district court granted a temporary restraining order prohibiting the employees and Working Washington from striking and subsequently issued a preliminary strike injunction.  On appeal, the Ninth Circuit affirmed the district court's order. 

Norris LaGuardia Act did not Deprive the Court of Jurisdiction

The Ninth Circuit held that the Norris LaGuardia Act (NLGA) did not deprive the court of jurisdiction to enjoin the strike.  Generally, the NLGA withdraws jurisdiction from federal courts to enjoin strikes growing out of labor disputes.  However, the NLGA does not deprive courts of jurisdiction to issue injunctions to ensure compliance with the provisions of the RLA.  The court noted that Congress enacted the RLA to eliminate interruptions in interstate commerce caused by labor disputes between carriers and their employees.  In accordance with that purpose, Section 2, First of the RLA requires all carriers and their employees to exert "every reasonable effort to make and maintain agreements concerning rates of pay, rules and working conditions, and to settle all disputes, whether arising out of the application of such agreements or otherwise" to avoid any interruption to commerce or the operation of the carrier arising out of disputes between the carrier and its employees. 

The court held that the Section 2, First duty applies to all carrier employees.  Because the employees conceded they were carrier employees, the court found that they had a duty under Section 2, First to make and maintain agreements and settle all disputes.  The court held that "[s]triking without even attempting to appoint a representative and collectively bargain violates this duty." 

The court rejected the employees' argument that Section 2, First is a policy, not an independent obligation.  The court noted that both the U.S. Supreme Court and the Ninth Circuit have rejected this interpretation of Section 2, First.  Further, the court held that the text of Section 2, First clearly indicates that its terms are to be regarded as a duty. 

The court also rejected the employees' argument that Section 2, First does not apply to them because they are not represented by a union, holding that the text of that Section applies to "all carriers['] . . . employees."  The court found that the employees were obligated to "exert every reasonable effort" to make labor agreements and settle labor disputes and that the provisions of the RLA provide the preliminary mechanism for doing so.  According to the court, failure to acknowledge the connection between Section 2, First's duties and the RLA's procedures would permit carrier employees to "leverage their critical role in interstate commerce and exploit it in their quest for concessions" in contravention of the RLA's purpose. 

The court found that the employees' decision to strike before appointing a representative and attempting to bargain collectively under the procedures of the RLA violated their duty under Section 2, First.  The court held that before striking the employees must appoint a representative according to the procedures in the RLA, then they could settle their dispute with ASIG and shoulder their duty under Section 2, First.  The court further noted that the employees in this case were not trying to deal independently with the employer; they were trying to strike, which they could do only if they had followed the RLA and carried out their duties under it.  The court found that this case presents the "very situation for which Congress enacted the RLA: carrier employees threatening a strike capable of single-handedly interrupting interstate commerce by shutting down an airport."   Accordingly, the court upheld the lower court's exercise of jurisdiction and issuance of the strike injunction, holding, "[s]imply because a group of carrier employees does not meet the typical unionized mold does not mean Congress intended their strike to be above the law."

The court also held that the NLGA did not deprive the lower court of jurisdiction because the employees failed to carry out their duties under the RLA, while ASIG had not shirked its own statutory duties.  Accordingly, the Ninth Circuit held that the lower court's exercise of jurisdiction was proper because the employees were covered by the RLA and had a legal obligation with which they had not complied.

No First Amendment Violation

The Ninth Circuit also held that the strike injunction did not violate the employees' First Amendment rights, noting that Congress has consistently held that actions inconsistent with the nation's labor laws generally are not protected by the First Amendment.  A court can enjoin informational picketing in the midst of a labor dispute if the injunction "furthers an important or substantial government interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest."  In this case, the injunction only prohibited the employees from striking against ASIG and prohibited both the employees and Working Washington from encouraging strikes.  The court found that the employees could freely exercise their First Amendment rights in seeking better working conditions in ways other than striking.  Thus, the Ninth Circuit held that the lower court did not abuse its discretion in finding that the balance of equities favored ASIG and issuing the strike injunction.  The defendants have requested that the court rehear the case en banc, but court has not issued a decision on that request.       

Doug Hall, a partner in our DC office and member of FordHarrison's Airline Industry practice group, represented ASIG in this case.  If you have any questions regarding this decision or other labor and employment issues impacting the airline industry, feel free to contact Doug at dhall@fordharrison.com or 202-719-2065.  You may also contact any member of the Airline Industry practice group or the FordHarrison attorney with whom you usually work.

·  Supreme Court Finds Truthful Statements Made to TSA are Entitled to Immunity

Executive Summary:  The U.S. Supreme Court recently overturned a $1.2 million jury verdict on a former Air Wisconsin pilot's defamation claims, holding that the statements made by the airline to the Transportation Safety Authority (TSA) were entitled to immunity under the Aviation and Transportation Security Act (ATSA).  In Air Wisconsin v. Hoeper, 2014 U.S. LEXIS 798 (January 27, 2014), the Court held that materially truthful statements made by airlines to the TSA regarding potential safety threats are entitled to immunity regardless of whether they were made with reckless disregard as to their truthfulness.  

Background

The plaintiff, Hoeper, was a Denver-based pilot for Air Wisconsin who attempted to become certified on the British Aerospace 146 (BAe-146) so that he could continue to fly out of Denver after the airline stopped Denver flights of the aircraft for which he was qualified.  Hoeper failed his proficiency test three times and admitted that his employment was at the discretion of the airline.  Air Wisconsin agreed to give him one more opportunity to pass the test, which included completing simulator training in Virginia.  During the simulator training, Hoeper failed to cope with a challenging situation created by the instructor, and the simulator showed the engines "flaming out" due to a loss of fuel.  When the instructor began to tell Hoeper he should know better, Hoeper became angry, threw his headset onto the glare shield, and began yelling at the instructor, using profanity and accusing him of "railroading the situation."  Hoeper told the instructor he wanted to call his union's legal department, and the instructor ended the simulator session so he could do so.

Comments to the TSA

The instructor subsequently reported the incident to the Wisconsin-based manager of the BAe-146 fleet.  The manager booked Hoeper on a United Airlines flight to Denver.  Several hours later, the manager discussed the situation with the airline's Vice President of Operations, its Managing Director of Flight Operations, and its Assistant Chief Pilot.  The officials were aware that Hoeper was a Federal Flight Deck Officer (FFDO) and, as such, was permitted to carry a firearm while providing air transportation.  Although the regulations did not permit him to carry a firearm to the training facility, the officials were aware that the Denver airport's security procedures made it possible for crewmembers to bypass screening, so that Hoeper could have carried his gun despite the rule.  In light of Hoeper's anger, his impending termination, the fact that he might be armed, and a history of assaults by disgruntled airline employees, the officials determined that they should call the TSA to make them aware of the situation.  The BAe-146 manager made the call, in which he stated that Hoeper "was an FFDO who may be armed," that the airline was "concerned about his mental stability and the whereabouts of his firearm," and that an "[u]nstable pilot in[the] FFDO program was terminated today."

In response to the call, TSA officials ordered Hoeper's airplane to return to the gate.  TSA officers boarded the plane, removed Hoeper, searched him, and questioned him about the gun.  The next day, Air Wisconsin terminated Hoeper's employment. 

Defamation Claims

Hoeper subsequently sued Air Wisconsin for defamation, based on the statements made to the TSA.  A state court jury returned a verdict of over $1.2 million in his favor.  The case made its way to the Colorado Supreme Court, which rejected Air Wisconsin's arguments that these statements were entitled to immunity under the ATSA.  The immunity provision in the ATSA provides:

[a]ny air carrier . . . or any employee of an air carrier . . . who makes a voluntary disclosure of any suspicious transaction relevant to a possible violation of law or regulation, relating to air piracy, a threat to aircraft or passenger safety, or terrorism, . . . to any employee or agent of the Department of Transportation, the Department of Justice, any Federal, State, or local law enforcement officer, or any airport or airline security officer shall not be civilly liable to any person under any law or regulation of the United States, any constitution, law, or regulation of any State or political  subdivision of any State, for such disclosure.

The Colorado Supreme Court held that in determining immunity under the ATSA, it was not required to decide whether the statements were true or false, but instead concluded that "Air Wisconsin made the statements with reckless disregard as to their truth or falsity." 

U.S. Supreme Court Finds Statements to TSA Entitled to Immunity under the ATSA

The airline sought U.S. Supreme Court review of this decision.  The U.S. Supreme Court overruled the Colorado Supreme Court and held that immunity may not be denied under the ATSA without a determination that the disclosure was materially false.  In reaching this conclusion, the Supreme Court noted that immunity under the ATSA is patterned after the actual malice standard the Court adopted for defamation claims involving public figures in New York Times Co. v. Sullivan, 376 U. S. 254 (1964).  The actual malice standard requires a finding of material falsity. 

Since the holdings requiring a finding of material falsity to establish actual malice were established when Congress enacted the ATSA, the Court presumed Congress  meant to adopt the material falsity requirement when it incorporated the actual malice standard into the ATSA immunity exception.  The Court held, "[t]he actual malice standard does not cover materially true statements made recklessly, so we presume that Congress  did not mean to deny ATSA immunity to such statements."

The Court held that the material falsity standard serves the purpose of ATSA immunity.  The ATSA shifted responsibility for assessing and investigating possible threats to airline security from the airlines to the TSA.  The Court found that Congress included the immunity provision in the ATSA to ensure that air carriers and their employees would not hesitate to provide the TSA with the information it needed.  According to the Court, it would defeat this purpose to deny immunity for substantially true reports on the theory that the person making the report had not yet gathered enough information to be certain of its truth. 

The Court then determined that the statements in this case were not materially false.  The Court noted that a materially false statement is generally one that "‘would have a different effect on the mind of the reader [or listener] from that which the . . . truth would have produced.'"  In the ATSA context, this standard suffices as long as the hypothetical reader or listener is a security officer.  In determining whether a statement produces a different effect on the mind of a security officer than the truth would have produced, a court must look at the impact of the statement on the TSA's behavior. 

Although Hoeper did not argue that the manager's statement that he "was an FFDO who may be armed" was false, he claimed that Air Wisconsin should have qualified this statement by adding that it had no reason to think he was actually carrying his weapon, especially since he was not permitted to do so under the regulations.  The Court rejected this argument, holding that any confusion caused by the failure to make such a qualification was immaterial, since a "reasonable TSA officer, having been told only that Hoeper was an FFDO and that he was upset about losing his job, would have wanted to investigate whether Hoeper was carrying his gun."  Further, the Court held that to accept the demand for such precise wording "would vitiate the purpose of ATSA immunity: to encourage air carriers and their employees, often in fast-moving situations and with little time to fine-tune their diction, to provide the TSA immediately with information about potential threats.  Baggage handlers, flight attendants, gate agents, and other airline employees who report suspicious behavior to the TSA should not face financial ruin if, in the heat of a potential threat, they fail to choose their words with exacting care."

Additionally, the Court was not troubled by Air Wisconsin's statement that it was concerned about Hoeper's mental stability.  Although some of the managers testified that they might not have framed their concerns in terms of "mental stability," the Court held that the manager's statements accurately conveyed the "gist" of the situation and that "it is irrelevant whether trained lawyers or judges might with the luxury of time have chosen more precise words."  The Court also rejected the partial dissent's argument that the manager's reference to Hoeper's "mental instability" was so egregious as to make his report to the TSA the basis of a $1.2 million defamation judgment.  A finding that Air Wisconsin lost ATSA immunity because its manager failed to be aware of every connotation of the term mental stability "would eviscerate the immunity provision."  According to the Court, "if such slips of the tongue could give rise to major financial liability, no airline would contact the TSA (or permit its employees to do so) without running by its lawyers the text of its proposed disclosure — exactly the kind of hesitation that Congress aimed to avoid." 

The Court concluded that, by incorporating the actual malice standard into the ATSA's immunity provision, Congress "meant to give air carriers the ‘breathing space' to report potential threats to security officials without fear of civil liability for a few inaptly chosen words" and "[t]o hold Air Wisconsin liable for minor misstatements or loose wording would undermine that purpose and disregard  the statutory text."

·  Recent NMB Results February 2014

United Airlines Inc./Continental Airlines – The International Brotherhood of Teamsters (IBT) won an election to represent Flight Simulator Technicians.  Out of 98 eligible employees, 91 valid votes were cast.  There were 78 votes for IBT and 13 no votes.  Certification September 5, 2013.   

U.S. Airways – The International Association of Machinists (IAM) won an election to represent Mechanics and Related Employees.  Out of 4,376 eligible employees, 3,350 valid votes were cast.  There were 1903 votes for IAM, 1,418 votes for IBT, 21 no votes, 8 votes for AMFA and 1 void vote.  Certification August 13, 2103. 

Silver Airways – The Transportation Workers Union of America (TWU) lost an election to represent Flight Dispatchers.  Out of 8 eligible employees, 8 votes were cast.  There were 5 no votes and 3 votes for TWU.  Dismissal May 2, 2013.

Topics:  Airlines, Airports, Aviation Industry, Collective Bargaining, Employer Liability Issues, Injunctions, Strike, Unions

Published In: Civil Procedure Updates, Civil Remedies Updates, Communications & Media Updates, Constitutional Law Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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