Massachusetts judges part ways on scope of ADA preemption in skycap tips cases

Travers v. JetBlue Airways Corporation (D. Mass. July 23, 2009).  According to the plaintiff skycaps, JetBlue diverted tip revenue to itself by imposing a $2 fee for each bag checked by a passenger at the curbside.  The skycaps claimed that their compensation, most of which took the form of tips, had decreased substantially because few passengers gave them tips after paying the airline’s $2 curbside check-in fee.

In their amended complaint, the skycaps sought damages and injunctive relief under the federal Fair Labor Standards Act, the Massachusetts Minimum Wage Law, the Massachusetts Tips Law and various state common law tort doctrines.  JetBlue moved to dismiss the state statutory and common law claims on the grounds that they were preempted by the Airline Deregulation Act, 49 U.S.C. § 41713(b)(1), which provides that “a State . . . may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart.”

The court granted JetBlue’s motion.  In its ruling, the court relied on New Hampshire Motor Transport Ass’n v. Rowe, 448 F.3d 66 (1^st Cir. (Me.) 2006), aff’d, 128 S.Ct. 989 (2008), for support of the proposition that the ADA preemption analysis must focus “on the effect that the state law has on airline operations,” not on “the state’s purpose for enacting the law.”  The court in Travers held that because a verdict for the plaintiffs on their state law claims would have a significant effect on the “price” of JetBlue’s curbside check-in “service,” such claims were preempted as “related to a price, route, or service of an air carrier.”

In making his ruling, the judge in Travers disagreed with a decision by another U.S. district judge in Massachusetts, who had ruled in favor of the skycaps on the same ADA preemption issue two years before in a case against a different airline.  In DiFiore v. American Airlines, Inc., 483 F. Supp.2d 121 (D. Mass. 2007), the judge held that the ADA did not preempt the skycaps’ claims, reasoning that the relationship between employee claims and an airline’s “price, route, or service” is “too tenuous to support preemption.”  The judge in Travers disagreed with the judge’s reasoning in DiFiore, ruling instead that a court’s ADA preemption analysis must focus on the effect of the state law on the airline’s prices and services, not on the identity of the particular plaintiff in the case.

Note:  In 2008, a jury in the DiFiore case awarded the skycaps damages exceeding $325,000 on their state statutory and common law claims.

Legacy carriers battle over New York sales employee

American Airlines, Inc. v. Imhof and Delta Airlines, Inc. (S.D.N.Y. June 3, 2009).  After 22 years as an American employee, the managing director of the airline’s New York Sales Division resigned to accept a similar job with Delta.  During the weeks before he resigned, he copied various documents relating to American’s business, including a PowerPoint presentation involving New York passenger sales, from American’s computers to his personal possession.  He did so by downloading some documents to his personal (and newly-purchased) external hard drive and by emailing other documents to his “family e-mail address.”  He even bought a BlackBerry for the purpose of “transferring the contacts on his American-issued BlackBerry to his own.”

After the employee had started work for Delta, American discovered that he had copied the documents and promptly filed a lawsuit seeking an injunction barring him from continuing to work for Delta and for other relief.  Delta claimed that it had not received any of American’s documents from the employee, who offered to return the documents to American or destroy them.

The court granted American’s motion for a temporary restraining order but denied its motion for a preliminary injunction, primarily on the grounds that American had failed to prove that it was likely to suffer “irreparable injury” in the absence of the injunction.  In support of its ruling as to “irreparable injury,” the court found that there was “no material risk” that the employee would retain copies of the downloaded documents, “much less that he would disclose them to Delta,” that, in any event, the documents contained public information and “fluff” rather than “competitively sensitive information” and that American had failed to prove that it was likely to suffer any “material effect” from the employee’s use of sensitive company information that he may have memorized.

In the final paragraph of its opinion, the court suggested that the lesson of this case is that an employer should get an employee to sign a noncompete agreement to prevent the employee from going to work for a competitor rather than attempt to rely on a court to impose, in essence, “the substantial equivalent by judicial decree without paying for it.”  It seems, however, that American’s primary complaint was not that the employee had departed to work for a competitor, but that he had secretly stuffed his pockets with American’s trade secrets as he was on his way out the door to join the competitor.

Update:  On July 28, 2009, American filed a motion requesting that the court dismiss the case without prejudice, with each party to bear his or its own costs and fees.