Magana Cathcart & McCarthy

The Airline Employee Protection Act: Yet another Paper Tiger offered up by Congress

In 1997, the deregulation of the airline industry is a fait accompli, and the deregulated air carriers now fly the vagaries of the marketplace. The Airline Deregulation Act of 1978 ("ADA") abandoned industry-wide fare structures, altered the procedures for entry into new markets, and phased out the Civil Aeronautics Board. Understandably, Congress was concerned that such a massive restructuring of the airline industry might displace large numbers of employees. Anticipating job loss in the wake of deregulation, Congress added the Airline Employee Protection Program (EPP) to the Airline Deregulation Act of 1978 to assist laid-off employees. As a result of deregulation, no less than 40,000 employees lost their jobs. The EPP was supposed to provide for both monthly compensation and first-hire rights at other certified airlines. However, displaced employees never received the benefits Congress promised. This review considers the efficacy of the EPP, now reaching the final days of its existence, and the rights of those covered displaced employees and provides suggestions for future efforts by the government to protect employees.

The EPP protection program has two parts. When a qualifying dislocation occurs and a protected employee loses his or her job, the employee purportedly attained both a right of first hire at other certified airlines and a right to receive monthly compensation. Congress assigned to the Department of Labor (DOL) the responsibility for the EPP’s implementation. In essence, the EPP created a hiring preference for covered displaced employees within the airline industry.

The effectiveness of the EPP was hampered from its beginning. The DOL’s ability to make monthly assistance payments to displaced employees was nonexistent without congressional appropriation of the program and such funding has never occurred. Nearly twenty years after Congress signed the EPP into law the EPP’s compensatory aspects remain unfulfilled. To date, the Secretary has made no monthly assistance payments under the EPP’s financial assistance provisions.

A question also remains regarding the EPP’s duration. At least one court that has considered this issue reasoned that because the Secretary had not made any payments under the EPP, the "later" of the two sunset provision dates controls, that which specified that the EPP would terminate when the Secretary made the last payment under the Act. Thus, the court held that at least for those dislocated prior to December 31, 1988, the rights and duties under the first-hire provisions of the EPP remain effective beyond 1988, perhaps indefinitely. In so ruling, the court noted that the eligible pool of covered employees is narrowing and aging and the duty to hire will eventually end, absent congressional amendment. Thus, it remains to be decided just how far beyond 1988 the rights of first hire actually extend.

There was no legislative scheme of enforcement of the EPP. Neither was there any express authority for a private right of action. In an effort to obtain protection, covered displaced employees urged that a private right of action should be inferred from the statutory language. A private claim for violation of the EPP includes injunctive relief to compel the airlines to comply with the preferential hiring mandate of the ADA, as well a monetary relief to compensate for lost benefits in the event of airline non-compliance. Additional damages may also be recoverable under state law theories of recovery. As it turned out, this avenue was the only means to obtain any of the benefits promised by Congress.

The reasons why the EPP’s first-hire protections did not provide the expansive blanket of protection that Congress had intended should serve as the foundation for the design of future protective endeavors. The next time Congress seeks to protect employees, it should learn the lessons from the failure of the EPP. Only by identifying shortcomings in past efforts can Congress hope to provide meaningful protection in the future.

Congress must fund the program that it creates and provide the implementing agency with an authoritative means of enforcement. Many current programs provide guidance. For instance, the National Labor Relations Board possesses very strong enforcement power. Conversely, if Congress concludes that the statute can be reasonably enforced through private causes of action, then the statute should create this cause of action. In the EPP’s circumstances, where the size and wealth of the potential defendants in EPP suits is extraordinary, Congress should have concluded that the government’s enforcement resources would be required.

CONCLUSION

The Airline Deregulation Acts Employee Protection Program did not provide displaced airline employees with the benefits that had been promised by Congress. It was only by the filing of private civil actions that some employees were able to secure any of the rights they purportedly had been guaranteed by Congress. Any future legislation must contain clear and concrete procedures for enforcement, as well as an agency with the funds, authority and personnel to carry through on the promises made by Congress. Future employee protection endeavors must not be allowed to become a source of frustration for those who truly require such protection.

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