Petition for Writ of Certiorari — Alaska Airlines, Inc. v. Brock

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Supreme Court, U.S.

87-49 FILED

Jur 7 8

No. 87- JOSEPH F. SPANMIOL. JR

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

ALASKA AIRLINES, INC., et al.,

Petitioners,

WILLIAM E. BROCK, SECRETARY OF LABOR, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

WILLIAM T. COLEMAN, JR.

Counsel of Record

DONALD T’. BLISS

JAMES P. NEHF

O’MELVENY & MYERS

555 13th Street, N.W.

Washington, D.C. 20004

(202) 383-5300

WILSON - EPes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

In 1978, Congress passed the Airline Deregulation

Act. Section 43 thereof authorized certain protections

against employment dislocation caused by deregulation.

The protections included a hiring preference scheme under

which certain air carriers certificated as of October 24,

1978, would be required to hire, before other more quali-

fied applicants, certain former employees of their com-

petitors with whom they have had no previous employ-

ment relationship (“protected employees”). Section 43

does not require a carrier to hire its own former em-

ployees or impose any hiring duty on carriers certificated

after October 24, 1978.

As construed by the Department of Labor in its No-

vember 1983 regulations, issued almost five years after

the statutory deadline, the hiring duty even applies to

employees terminated for reasons completely unrelated to

deregulation. Therefore, the questions presented are:

(1) Whether Section 43, by imposing the hiring duty

exclusively on pre-1978 carriers that have no prior rela-

tionship with a “protected” applicant, while exempting

the applicant’s former employer as well as all post-1978

carriers, violates standards of equal protection and due

process set forth by this Court in City of Cleburne

v. Cleburne Living Center, Inc., 473 U.S. 482 (1985) ;

Zobel v. Williams, 457 U.S. 55 (1982); and United

States Department of Agriculture v. Moreno, 413 U.S.

528 (1973), which require that statutorily imposed dis-

crimination be rationally related to a legitimate govern-

mental interest.

(2) Whether the imposition on certain air carriers,

“which have not contributed to employment dislocation

and are not seeking any government approval or benefit,

of a general duty to hire former employees of their com-

(i)

petitors, with whom they have had no previous relation-

ship, violates the due process and takings clauses of the

Fifth Amendment as applied in Usery v. Turner Elkhorn

Mining Co., 428 U.S. 1 (1976), and Connolly v. Pension

Benefit Guaranty Corp., 106 S. Ct. 1018 (1986), by im-

posing a statutory burden on specific employers that have

no connection whatsoever to the injury Congress intended

to remedy.

(3) Whether the imposition of a duty to hire employ-

ees furloughed or terminated for reasons completely un-

related to deregulation is contrary to the articulated leg-

islative purpose of protecting employees adversely af-

fected by deregulation.

(4) Whether the Department of Labor was authorized

to issue substantive regulations almost five years after

its Section 43(f) statutory authority had expired and

whether its construction of the statute to extend the

hiring duty to employees not affected by deregulation

contravenes this Court’s precedents requiring that the

scope of regulations be consistent with the design, origin

and purpose of the statute.

iii

PARTIES TO THE PROCEEDINGS

Petitioners are Alaska Airlines, Inc.; American Air-

lines, Ine.; Delta Air Lines, Inc.; The Flying Tiger Line,

Inc.; Midway Airlines, Inc.; Northwest Airlines, Inc.;

Piedmont Aviation, Inc.; Trans World Airlines, Inc.;

United Air Lines, Inc.; USAir, Inc.; and Western Air-

lines, Inc."

Respondents are William E. Brock, individually and as

Secretary of Labor (as successor in office to Raymond J.

Donovan); United States Department of Labor; the

United States of America; and the following intervenors:

Air Line Pilots Association, International; Association

of Flight Attendants; Brotherhood of Railway and Air-

line Clerks; Flight Engineers’ International Association;

International Association of Machinists and Aerospace

Workers; and Transport Workers Union of America.

1In accordance with Supreme Court Rule 28.1, the parent com-

panies, subsidiaries (except wholly owned subsidiaries) and af-

filiates of petitioners are set forth in Appendix F hereto.

TABLE OF CONTENTS OF PETITION

ie yt Bg yd | | en

PARTIES TO THE PROCEEDINGS ...............-..-.......---

TABLE OF CONTENTS OF PETITION ....................

TABLE OF CONTENTS OF APPENDIX ........00...0......

pee Be ys ty yee nen

IPR IO OE RTE scictnistcisics cimrasencenesininnvinnciuanienniascnesiiiansn

Pi ea EE

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS INVOLVED .......0...000000000.2....

REASONS FOR GRANTING THE WRIT ........2.....

I. BY IMPOSING THE HIRING DUTY ONLY

ON AIR CARRIERS THAT HAVE HAD NO

PREVIOUS RELATIONSHIP WITH PRO-

TECTED APPLICANTS, AND BY EXEMPT-

ING OVER HALF OF THEIR COMPETITORS,

THE HIRING PREFERENCE SCHEME VIO-

LATES PRINCIPLES OF THE FIFTH

AMENDMENT SET FORTH BY THIS

RPE, | aesitsnsninieeenstlesscuenieesivctsindicsininlecammmabtalibianeens

A. The Means Chosen To Implement The Hir-

ing Preference Violate The Takings Clause

And Equal Protection Concepts Embodied In

TEOO FUCC ATOMIC onsen nnccenescsceeen so

(v)

TABLE OF CONTENTS OF PETITION—Continued

Page

B. The Duty To Hire Program Is Not Ra-

tionally Related To The Articulated Legisla-

ARITA a ep Nn aC 16

C. The Hiring Preference Scheme Is Not Ra-

tionally Related To Any Legitimate Govern-

RERUN AIS cee ae 21

II. DOL’S INTERPRETATION THAT SECTION

43 IMPOSES A DUTY TO HIRE EMPLOY-

EES TERMINATED FOR REASONS UN-

RELATED TO DEREGULATION CONTRA-

VENES THIS COURT’S PRECEDENT RE-

QUIRING THAT REGULATIONS BE CON-

SISTENT WITH THE DESIGN, ORIGIN AND

PURPOSE OF A STATUTE ........ 23

oe copia spat TTR TCT EE 27

vii

TABLE OF CONTENTS OF APPENDIX

APPENDIX A—Opinion and Judgment of the United

States Court of Appeals for the Dis-

trict of Columbia Circuit in Alaska

Airlines, Inc. v.. Brock, Nos. 86-5042,

86-5085 & 86-5719 (D.C. Cir. Jan. 30,

BOI sicccsetebhtnctinidaniigintsensomnpemetnimmsisonn

APPENDIX B—Opinion of the United States District

Court for the District of Columbia in

Alaska Airlines, Inc. v. Brock, 632 F.

Bupe. 176 (0.0. IGS} ...................

APPENDIX C—Order of the United States Court of

Appeals for the District of Columbia

Circuit denying appellants’ petition

for rehearing in Alaska Airlines, Inc.

v. Brock, Nos. 86-5042, 86-5085 &

86-5719 (D.C. Cir. Mar. 9, 1987)...

APPENDIX D—Order of the United States Court of

Appeals for the District of Columbia

Circuit denying appellants’ sugges-

tion for rehearing en banc in Alaska

Airlines, Inc. v. Brock, Nos. 86-5042,

86-5085 & 86-5719 (D.C. Cir. Mar. 9,

|) EAI. BUG) Ce Pea earner eNOS

APPENDIX E—Constitutional Provisions, Statutes

and Regulations Involved ....................

APPENDIX F—Petitioners’ Parent Companies, Sub-

sidiaries (Except Wholly Owned Sub-

sidiaries) and Affiliates, Pursuant to

Supreme Court Rule 28.1 ....................

Page

19a

20a

viii

TABLE OF AUTHORITIES

CASES Page

Alaska Airlines, Inc. v. Brock, 632 F. Supp. 178

(D.D.C. 1986) .......... Fey TP TN ae Sec N CC ocr EN 6

Alaska Airlines, Inc. v. Brock, Nos. 86-5042, 86-

5085 & 86-5719 (D.C. Cir. Jan. 30, 1987)........ 6-7

Alaska Airlines, Inc. v. Brock, 107 S. Ct. 1476

2. | CS ee ee aoa « 2 0,6

Alaska Airlines, Inc. v. Brock, 106 S. Ct. 1259

(1986) (order granting certiorari) ..................... 6

Alaska Airlines, Inc. v. Donovan, 594 F. Supp. 92

8 SRE, eR Ones a a 6

Alaska Airlines, Inc. v. Donovan, 766 F.2d 1550

Ss AI. III ci tianitaersncicl nseahsininveoanouicniialepltimabniniatiabenns 6

Armstrong v. United States, 364 U.S. 40 (1960).... 11

City of Cleburne v. Cleburne Living Center, Inc.,

ee I Saar ceetenticdcensncenseneonntccniincinncna i, 9, 23

Cleveland Board of Education v. LaFleur, 414

ns i iis tichesacctnphieidiainiscipihipytiaathindiniomnenctapteoni 20

Connolly v. Pension Benefit Guaranty Corp., 106

i a a ctalaindn otetioont ii, 11

FBI v. Abramson, 456 U.S. 615 (1982) 22000... 24

Greene v. McElroy, 360 U.S. 474 (1959) .....00......... 27

Harriss v. Pan American World Airways, Inc.,

437 F. Supp. 413 (N.D. Cal. 1977), aff’d in part

and rev'd in part, 649 F.2d 670 (9th Cir. 1980).. 21

Immigration and Naturalization Service v.

Chadha, 462 U.S. 919 (1988) 2.0002. 3

In re Application of Employees of Aeroamerica,

~ Dkt. No. 38,885 (CAB Apr. 7, 1983), CAB

Order 83-4-36 ..................--- eliehaicusia tienda 19

Keystone Bituminous Coal Ass’n v. DeBenedictis,

Pe Fe I ED becicecseemsernsesscccneincoswaeveces 11

Massachusetts Board of Retirement v. Murgia,

errr 21

McGinnis v. Royster, 410 U.S. 263 (1973) _........... 21

Metropolitan Life Insurance Co. v. Ward, 470

Wii Me RD eric se cdenedcisirvinestinineononinidistieniascsomiaiel 9, 14, 23

Murnane v. American Airlines, Inc., 667 F.2d 98

(D.C. Cir. 1981), cert. denied, 456 U.S. 915

: EINE Ie ce TE RT AON 21

TABLE OF AUTHORITIES—Continued

. Page

NLRB v. Brown, 380 U.S. 278 (1965) ...........-.------- 24

NLRB v. Catholic Bishops of Chicago, 440 U.S.

490 (1979) iiicedpideibilihaiah sale Siaiescaadapaidmaidndanacsnibuae 27

NLRB v. Lion Oil Co., 352 U.S. 282 (1957)........ 24

National Muffler Dealers Association, Inc. v.

United States, 440 U.S. 472 (1979) .................-.-+ 24

National Railroad Passenger Corp. v. Atchison,

Topeka & Santa Fe Railway, 470 U.S. 451

CI isnccctcsisnsnineciningiptesibienahaabbiganmmeaeanedialaaaiebanaiaizie.is 13

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393

ETI: nspscsinsisnissinnscogntcnegieseacl aincpcnhcsiabecinseiimnactansalaiians 11

Railroad Retirement Board v. Alton Railroad, 295

Re I vcnissinectenscicinacidscleteiaes dataipamainisnitnaiiaedn 13

Rose v. Lundy, 455 U.S. 509 (1982) ......................- 24

San Antonio School District v. Rodriguez, 411

eee i OE eennlbcvidsscctibbbnadeineeisaidaiodiaiinie 17

South Dakota v. Dole, 55 U.S.L.W. 4971 (U.S.

I Fa ED ctcdindiniscitds apeacgntananiindidaiteseins 20

Spurlock v. United Airlines, Inc., 475 F.2d 216

I ei I ice Siena tesiiitahaeinineiiiation 21

Stafford v. Briggs, 444 U.S. 527 (1980) Silanliiitih acl 24

United States v. Lowden, 308 U.S. 225 (1939) ......9-10, 12

United States v. Vogel Fertilizer Co., 455 U.S.

i RRR eee ee ere em 23-24

United States Department of Agriculture v.

Moreno, 418 U.S. 528 (1978).........................-- i, 9, 33. 2

United States Department of Agriculture v.

Murry, 418 UB. GOR C1GTS) nc.c en. ncnccccccvcccsensenees 20

United States Railroad Retirement Board v.

PGR, GE Ti BO CD reas pieteinciniccriene 9,21

Usery v. Turner Elkhorn Mining Co., 428 U.S.

Ne CT vcvieticliptidrteentieen ii, 12-18, 14, 15, 16, 18, 19, 20, 22

Vlandis v. Kline, 412 U.S. 441 (1978) ...0..220- 20

Volkswagenwerk Akttengesellschaft v. Federal

Maritime Commission, 390 U.S. 261 (1968) ....... 24

Zobel v. Williams, 457 U.S. 55 (1982) .......2....2222.... i, 16, 21

CONSTITUTIONAL AND STATUTORY

PROVISIONS

U.S. Const. amend. V 2

TABLE OF AUTHORITIES—Continued

Page

Airline Deregulation Act of 1978, Pub. L. No.

95-504, 92 Stat. 1705 (codified in scattered sec-

tions of 49 U.S.C. app. (1982) ) .........-------------+++ passim

SD TTT. BI, BT accents siscccectncen since 2

49 U.S. ape. § 1802S) (8) -—-......-.................... 18

49 U.S.C. Gap. S IBZ) (4) ~~~ --.-ncccccreecocsecoioecone 15, 18

BD a GI eID sic erenieessctcescesscaccscnsce 21

BD Eis Ge TE ED ccvicsnnevncsnccssnvenncansecrnvopmne 21

ae I tii cinctiacinsnrerescccsnsaterenneriintind passim

49 UBC. GH. 8 DBCS) as .-22<22nncecccceresennccsevessse2 3

BD Tae Ge SED enscnetiiniresvessnesccceeeseseecoes 3

Pope Coe S|. EG | Beene 3

40 U.S.C. ape. § 1652 (e) ................................ ona 3

Pee oe |, ree aoe neree 3

MD VBA BS BD CD) onnncccrececessceccccenceness 4

es Ae ED hrc creincnscccenscecssenesssncmese 3

BD UR Ts BBE CLD nana. nase cnvneecnncccccsscs 18

49 U.S.C. app. § 1662(f) (2) ........2......-2..20000000000+-- 18

£0 UB. GD. S BBGE GE) (1) «.....-.20i..-.cccccceccscesses 3

Bus Regulatory Reform Act of 1982, Pub. L. No.

97-261, 96 Stat. 1102 (codified at 49 U.S.C.

BS _, 5 Peeve nna nem 14

Federal Aviation Act of 1958, Pub. L. No. 85-726,

72 Stat. 731 (codified as amended in scattered

sections of 49 U.S.C. app. (1982) )

PgR eS | Cem e are 21

Interstate Commerce Act, 49 U.S.C. § 11347

I chesleinadcscnndisbiidiclsstindscelivescedeniisaeisnitiasdibeadeinastiesiabaachigib 25

Rail Passenger Service Act, 45 U.S.C. § 565(b)

ORT cataiaickisculinsiniallalnaihiectinlatpinatinitebbietivinndaidniintinasacstinnianes 25

, BR Fee GT Ee — , SR eeenn nnn eC EN 2

LEGISLATIVE AND EXECUTIVE MATERIALS

H.R. 12611, 95th Cong., 2d Sess. (1978) ......2200.0.0200... 17, 24

S. 2493, 95th Cong., 2d Sess. (1978) .............0.0...2.0..0. 17, 25

H.R. Rep. No. 1779, 95th Cong., 2d Sess. (1978).. 25

S. Rep. No. 631, 95th Cong., 2d Sess. (1978) ....2-3, 10, 14,

15, 17, 18, 24

TABLE OF AUTHORITIES—Continued

Page

Airline Mergers and Acquisitions: The Question

of Labor Protection: Hearing Before the Sub-

comm. on Aviation of the Senate Comm. on

Commerce, Science and Transportation, 99th

Cong., lst Sess. (1985) 15-16

Regulatory Reform in Air Transportction: Hear-

ings Before the Subcomm. on Aviation of the

Senate Comm. on Commerce, Science and Trans-

portation, 95th Cong., lst Sess. (1977) .............. 10, 14

124 Cong. Rec. S5876-83 (daily ed. Apr. 19,

SETTI : <cisehnnisinpsacielapieieilienanaananiaenniiatniibadseacineaias 24, 25

124 Cong. Rec. H13,445-47 (daily ed. Oct. 14,

1978)

MAES Eeer Boer Osteen ace Sok WOR nee REE Mon oe mOnS 26

Jefferson’s Manual and Rules of the House of Rep-

resentatives, H.R. Doc. No. 277, 98th Cong., 2d

Be eiscesie Lr ccceshicahcincnatescnsllanictabbiandsniigabctimelanbianioe 26

Senate Manual, S. Doc. No. 1, 98th Cong., 2d Sess.

NN Sadia ciachth dacieneemiliseioaria hotertieiidalaseathiaseseossemnanianctaniaes 26

48 Fed. Reg. 52,854 (1983) 4

50 Fed. Reg. 53,094 (1985)................ sasseeee-ay 4, 5, 26

MISCELLANEOUS

Cappelli and Harris, Airline Union Concessions

in the Wake of Deregulation, 108 Monthly Lab.

) ae ae | ge} ne 16

Comments of the Department of Transportation,

Sept. 3, 1982, in In re Application of Employ-

ees of Aeroamerica, Dkt. No. 38,885 (CAB Apr.

«eee o wie 19

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

No. 87-

ALASKA AIRLINES, INC., et al.,

¢ Petitioners,

WILLIAM E. BROCK, SECRETARY OF LABOR, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE “ISTRICT OF COLUMBIA CIRCUIT

Alaska Airlines, Inc. and ten other airlines hereby peti-

tion for a writ of certiorari to the United States Court

of Appeals for the District of Columbia Circuit in this

case.

OPINIONS BELOW

The judgment and the memorandum of the court of

appeals affirming the district court in part, reversing the

district court in part and vacating and remanding the

district court in part is reprinted as Appendix (“App.’’)

A (la).1. The opinion of the district court is reported

at 632 F. Supp. 178 (D.D.C. 1986), and is reprinted as

App. B (6a).

JURISDICTION

The opinion and judgment of the court of appeals was

entered on January 30, 1987. The court of appeals de-

nied petitioners’ petition for rehearing and suggestion

for rehearing en bane on March 9, 1987. App. C (19a);

App. D (20a). On May 27, 1987, the Chief Justice

signed an order extending petitioners’ time for filing a

petition for a writ of certiorari to July 7, 1987. This

1 Citations to material printed in the Appendix appear as “——a.”

Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1)

(1982).

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS INVOLVED

United States Constitution, Fifth Amendment.

Section 43 of the Airline Deregulation Act of 1978,

49 U.S.C. app. § 1552 (1982).

Department of Labor regulations under Section 43 of

the Airline Deregulation Act of 1978, 50 Fed. Reg.

53,094 (1985).

The constitutional provisions, statutes and regulations

involved are reprinted in App. E (21a).

STATEMENT

On March 25, 1987, this Court decided Alaska Airlines,

Inc. v. Brock, 107 S. Ct. 1476 (1987), holding that the

legislative veto in Section 43 of the Airline Deregulation

Act (“Deregulation Act”) is severable from the remain-

ing provisions of that section. A threshold issue in this

case—whether Section 43 is unconstitutional in its en-

tirety—has thus been resolved. This petition addresses

petitioners’ specific constitutional and statutory chal-

lenges to the substance of the duty-to-hire provisions of

Section 43 and the Department of Labor’s (“DOL”)

regulations implementing those provisions.

A. Nature of the Case.

Petitioners are eleven airlines certificated by the Civil

Aeronautics Board (“CAB”) prior to October 24, 1978.?

On that date Congress enacted the Deregulation Act to

phase out economic regulation of domestic aviation, to en-

courage the entry of new air carriers, and to foster com-

petition on routes and fares. See 49 U.S.C. app. § 1802.

As protection against the “theoretical possibility” that

some employees might lose their jobs as a result of de-

regulation, Congress authorized labor protections in Sec-

tion 43 of the Deregulation Act. S. Rep. No. 631, 95th

2 One of the appellants below, Ozark Airlines, Inc., has merged

into petitioner TWA.

Cong., 2d Sess. 113 (1978) (“Senate Report’). Section

43 established an Employee Protection Program (“EPP”’)

that, for a period of ten years, authorized certain benefits

for “protected employees” (i.e., employees who as of Oc-

tober 24, 1978 had at least four years of employment

with a CAB-certificated interstate airline). Section 43

(h) (1); 49 U.S.C. app. § 1552(h) (1) (1982).

The EPP was to be one program with two interrelated

parts: first, government assistance payments to certain

“protected employees,” * and, second, to reduce the demand

on federal funds, a hiring preference under which certain

air carriers would have a duty to hire “protected em-

ployees” terminated or furloughed by competing airlines.

Section 43(d); 49 U.S.C. app. § 1552(d). Protected ap-

plicants must meet a hiring carrier’s minimum job quali-

fications. Congress expressly required DOL to promul-

gate regulations implementing the EPP by April 24, 1979,

six months after enactment. The regulations also were

subject to an elaborate two stage congressional review

process and a legislative veto.* Section 43(f); 49 U.S.C.

app. § 1552(f).

On November 22, 1983, almost five years after the

statutory deadline, DOL published final regulations ad-

3If an air carrier experienced a severe work force contraction

or bankruptcy as a result of the Deregulation Act, its furloughed

or terminated “protected employees” were entitled to monthly as-

sistance payments and other monetary benefits from the federal

government. See Section 43(a), (b), (c); 49 U.S.C. app.

§ 1552(a), (b), (c). DOL was to publish guidelines establishing

the amount of assistance payments for various employment cate-

gories. 49 U.S.C. app. § 1552(b) (1).

4 Proposed regulations were to be submitted to the aviation

committees of each House for thirty legislative days, and final

regulations were to be submitted to each House for sixty legisla-

tive days, during which period they were subject to a one-House

veto. These provisions had little impact, however, since the pro-

posed regulations at issue were not submitted to Congress until

after legislative veto provisions were declared unconstitutional in

Immigration and Naturalization Service v. Chadha, 462 U.S. 919

(1983).

dressing only the duty to hire portions of the EPP. 48

Fed. Reg. 52,854 (1983). Guidelines establishing the gov-

ernment compensation aspect of the program have never

been issued. The duty to hire regulations were later re-

issued with minor changes and initially became effective

on January 27, 1986. 50 Fed. Reg. 53,094 (1985).

As specified in Section 43, DOL’s regulations imposed

the hiring duty only on carriers certificated prior to

October 24, 1978 (“covered carriers”). By the time the

regulations were promulgated, however, less than one-

half of the certificated air carriers then operating were

subject to the hiring duty. For the most part, these

were the larger carriers, although much of the hiring

was being done by their new competitors, which the stat-

ute exempts from the hiring requirements.’ Significantly,

although Section 43 permits covered carriers to recall

first their own furloughed employees, it requires covered

carriers to grant hiring preferences only to employees

furloughed by other airlines. See 49 U.S.C. app. § 1552

(d) (1) (granting a protected employee furloughed by an

air carrier a hiring right at “any other air carrier,”

which “shall have a duty to hire such a person’; hiring

carrier first “may recall” its own furloughed employees)

(emphasis added). Thus, the hiring duty is imposed ex-

clusively on airlines that have had no previous employ-

ment relationship whatsoever with the “protected” appli-

cants.

In addition, although the undisputed purpose of Section

43 was to protect employees adversely affected by dereg-

ulation, DOL created a preferred class of “designated

employees” which includes employees terminated for rea-

sons totally unrelated to deregulation, even if they are

5 Today, as a result of further restructuring and consolidation

in the industry, the hiring duty is imposed on some air carriers but

not others, and on some airline divisions or subsidiaries but not

others under the same management. For example, American Air-

lines is covered but its sister subsidiary, AirCal, is not. US<Air is

covered, but its sister subsidiary, PSA, is not.

working for another airline when they apply. See 50 Fed.

Reg. 53,094, 53,102.

In the legislative veto case last Term, this Court stated

that the DOL regulations are “ancillary” in nature.

Alaska Airlines, 107 S. Ct. at 1482-83. But when the

regulations became effective more than seven years after

the Deregulation Act, their impact was far more than

“ancillary.” They not only imposed a substantial bur-

den on one segment of the industry at a time of intense

competition but they created new obligations not speci-

fied in the statute, and required the retroactive identifi-

cation and notification of “designated employees,” provid-

ing them with incentives to assert Section 43 hiring

preferences.®

6 The regulations, inter alia,

a. create a nationwide hiring pool of “designated employees”

who have been terminated or furloughed since 1978 for any

reason other than cause and thus are eligible to exercise hiring

preferences at any covered carrier.

b. impose a mandatory obligation to hire minimally qualified

“designated employees” for any job vacancies (e.g., pilots,

accountants, secretaries) over other better qualified job ap-

plicants, see 50 Fed. Reg. 53,102-03 (§ 220.11), even “des-

ignated employees” who have been furloughed because an

airline ceases operating during a prolonged strike. See 50 Fed.

Reg. 53,102 (§ 220.10).

c. require covered carriers to wait at least thirty days before

filling any job vacancy with an applicant who is not a “desig-

nated employee,” regardless of whether any designated em-

ployee has applied or is available and without any exception

for safety-related positions that must be filled immediately.

See 50 Fed. Reg. 53,103 (§ 220.24).

d. expressly prohibit covered carriers from applying to such

“designated employees” safety-related initial hiring age re-

quirements with which all other applicants must comply. See

id. (§ 220.21(a) (1)).

e. override most affirmative action and other legal hiring

duties imposed on the airlines by federal statute. See 50 Fed.

Reg. 53,102-04 (§§ 220.10, .11, .20, .23(j), .29).

f. establish a variety of extensive retroactive notification and

reporting requirements. See 50 Fed. Reg. 53,103-04 (§§ 220.22,

.28, .25, .27, .28).

B. Proceedings Below.

In February- 1984, petitioners brought this action

against DOL in the district court and on March 9, 1984,

filed a motion for summary judgment. DOL and several

labor union intervenors” then filed cross-motions for sum-

mary disposition. On May 18, 1984, the district court

(Judge Gesell) declared Section 43 unconstitutional in its

entirety because it contained an inseverable legislative

veto provision. Alaska Airlines, Inc. v. Donovan, 594

F. Supp. 92 (D.D.C. 1984). But on July 16, 1985, the

United States Court of Appeals for the District of Colum-

bia Circuit reversed, Alaska Airlines, Inc. v. Donovan,

766 F.2d 1550 (D.C. Cir. 1985), remanding the case to

the district court for consideration of the remaining issues.

On March 3, 1986, certiorari was granted on the legis-

lative veto issue, the only issue ripe for Supreme Court

review. Alaska Airlines, Inc. v. Brock, 106 S. Ct. 1259

(1986). On March 25, 1987, this Court held that the

unconstitutional legislative veto provision in Section 43 is

severable from the rest of the EPP. Alaska Airlines, 107

S. Ct. at 1480.

On remand, the district court decided the remaining

issues on January 22, 1986, invalidating one safety-

related provision, but otherwise upholding the statute and

the regulations. Alaska Airlines, Inc. v. Brock, 682

F. Supp. 178, 184 (D.D.C. 1986). On January 30, 1987,

the United States Court of Appeals for the District of

Columbia Circuit upheld Section 48 and the DOL regu-

lations in their entirety.* Alaska Airlines, Inc. v. Brock,

7Intervenors are Air Line Pilots Association, International;

Association of Flight Attendants; Brotherhood of Railway and

Airline Cterks; Flight Engineers’ International Association; In-

ternational Association of Machinists and Aerospace Workers;

and Transport Workers Union of America.

8 The court below affirmed the district court in all but two re-

spects. In a brief memorandum opinion, the court reversed the

district court’s decision invalidating and remanding one safety-

related regulation which prohibited airlines from applying initial

hiring age policies to pilot and flight crew applicants, and also

Nos. 86-5042, 86-5085, & 86-5719 (D.C. Cir. Jan. 30,

1987). The airlines’ petition for rehearing and sugges-

tion for rehearing en bane were denied on March 9,

1987.°

REASONS FOR GRANTING THE WRIT

As construed by DOL, Section 43’s grant of broad hir-

ing preferences to a limited class of airline employees and

the imposition on certain airlines, but not others, of a

duty to hire the former employees of their competitors

raises fundamental questions of constitutional law and

statutory interpretation.

The means chosen by Congress for allocating the hir-

ing burden violate principles of equal protection and just

compensation for a government taking embodied in the

Fifth Amendment. Section 43 imposes the burden eaclu-

sively on carriers that have no previous relationship

whatsoever with the protected applicants and dispropor-

tionately on carriers that have avoided layoffs and there-

fore have not contributed to any employment dislocation.

The hiring burden is not imposed as a condition of any

government approval or benefit, and it is not even im-

posed on the former air carrier employer of the “protected

employee.” Nor is the burden imposed on any of the

post-1978 carriers, even though they have created many

new jobs and, as fierce competitors of the covered car-

riers, have contributed to employment dislocation. Par-

ticularly since the hiring duty is not limited to employees

affected by deregulation, but has been expanded’ by DOL

to include employees furloughed as a result of recent,

intervening events, such as the air traffic controllers’

strike, there is no rational basis for the substantial com-

vacated a portion of the district court’s decision which attempted

to reconcile a conflict between the airlines’ equal employment op-

portunity requirements and their duty to hire.

® The Chief Justice granted an extension until J uly 7, 1987, in

which to file a petition for a writ of certiorari.

petitive disadvantage created by Section 43’s discrimina-

tion against certain pre-1978 carriers. Moreover, impos-

ing the hiring burden exclusively on these carriers with-

out prior notice, and thus relieving the responsible carrier

and the government of their financial obligations vio-

lates the takings clause because the hiring carrier incurs

substantial costs that are not related in any way to its

obligation to its own former employees. Nor does the

hiring carrier bear any responsibility for the employee’s

dislocation or receive any benefit from the government.

Further, the hiring preference scheme is not a rational

means of achieving Congress’ articulated purpose—to

protect employees adversely affected by deregulation.

Nor is it rationally related to any legitimate governmen-

tal interest because (1) by benefitting primarily employ-

ees who were furloughed for reasons unrelated to deregu-

lation (even those currently employed at other airlines)

the hiring scheme frustrates the legislative objective

by making it more difficult for employees adversely af-

fected by deregulation to find jobs; and (2) the estab-

lishment of a generalized, industry-wide regulatory hir-

ing program, creating a preferential class of employees

based solely on seniority, is no more reasonable than

distinctions based on past residence, sex or economic

status and is contrary to the deregulatory purpose of the

statute.

The court below failed to address these issues and to

provide a reasoned basis for its decision consistent with

this Court’s standards for due process and equal protec-

tion analysis. These issues are important to the airlines,

affecting the heart of their operations, i.e., safety, com-

petition, affirmative action and other employment policies,

and they warrant full review by this Court.

I. BY IMPOSING THE HIRING DUTY ONLY ON AIR

CARRIERS THAT HAVE HAD NO PREVIOUS RE-

LATIONSHIP WITH PROTECTED APPLICANTS,

AND BY EXEMPTING OVER HALF OF THEIR

COMPETITORS, THE HIRING PREFERENCE

SCHEME VIOLATES PRINCIPLES OF THE FIFTH

AMENDMENT SET FORTH BY THIS COURT.

Petitioners challenge the constitutionality of both the

duty to hire provisions of Section 43(d) and DOL’s im-

plementing regulations. Under due process requirements,

governmental discrimination among similarly situated

persons is invalid unless it is “rationally related to a

legitimate governmental interest.” United States Depart-

ment of Agriculture v. Moreno, 413 U.S. 528, 533 (1973) ;

City of Cleburne v. Cleburne Living Center, Inc., 473

U.S. 482, 440 (1985). Petitioners recognize that since

this case does not involve a constitutionally suspect clas-

sification, the standard of judicial review is rigorous. But

the legislature does not have carte blanche authority.

This Court does not automatically defer to any con-

ceivable public interest articulated by the government or

its counsel. Cleburne, 473 U.S. at 447-50; United States

Railroad Retirement Board v. Fritz, 449 U.S. 166, 188

(1980) (Brennan, J., dissenting). By accepting sum-

marily the government’s post hoc rationale without rea-

soned analysis, the court below failed to recognize that

in “practical operation” the means chosen by Congress

are not rationally related to a legitimate governmental

interest. See Moreno, 413 U.S. at 588; Cleburne, 473

U.S. at 446-47; Metropolitan Life Insurance Co. v. Ward,

470 U.S. 869, 875, 878-79 (1985).

A. The Means Chosen To Implement The Hiring Pref-

erence Violate The Takings Clause And Equal Pro-

tection Concepts Embodied In The Fifth Amend-

ment.

The duty to hire program is a complete departure from

the statutory labor protections previously upheld by this

Court. See, e.g., United States v. Lowden, 308 U.S. 225

(1939) (upholding against constitutional challenge labor

protections for employees of a specific carrier which are

imposed on that carrier as a condition of government ap-

proval of an action that may adversely affect its employ-

ees). Here, an entire class of carriers (i.e., the cov-

ered carriers) has a duty to hire employees with whom

the carriers have had no previous employment relation-

ship. These obligations are not triggered by any govern-

ment approval or carrier action authorized by the gov-

ernment; they are not connected to any regulated event.

Covered carriers are required to grant a hiring prefer-

ence to employees terminated or furloughed by their com-

petitors for any reason other than cause (e.g., a competi-

tor’s mismanagement, change in corporate strategy, labor

dispute or cost reduction program) .2°

The primary burden of the hiring program is on car-

riers that have sought to maintain employment stability

during the transition to deregulation (and thus have

no furloughed employees of their own to recall). After

hiring and training “protected employees,” in place of

other more qualified applicants whom they must reject,

the covered carriers then face the reality that “protected

employees” can be recalled by their former employers

(and indeed they have an incentive to return to former

jobs where they have accrued seniority and higher com-

pensation), leaving the covered carriers without needed

pilots, mechanics, and other skilled personnel.

10In Section 43, Congress was proposing for the first time an

unemployment insurance plan coupled with a system of enormous

employee re-hire rights that addressed not just “individual firms or

individual employees, but rather, the general regulatory structure

[encompassing] all of the areas and all the workers in the indus-

try.” Regulatory Reform in Air Transportation: Hearings Before

the Subcomm. on Aviation of the Senate Comm. on Commerce,

Science, Transportation, 95th Cong., 1st Sess. 709 (1977) (“Senate

Hearings”) (statement of Robert E. Ginther, Committee staff

member). See also Senate Report at 208 (Additional Views of

Sen. Zorinsky) (characterizing Section 438 as “new and without

precedent’).

By imposing the hiring duty on carriers with no prior

relationship with the protected employee, and no respon-

sibility for the employment dislocation, Section 43 trans-

fers to those carriers obligations that should have been

incurred by their competitors who were responsible for

the employees’ termination. It further relieves the govern-

ment of its financial assistance obligations, mandated by

Section 43 but never implemented. The hiring duty im-

poses actual, measurable costs on the hiring carrier which

include the payment of salaries and benefits to employees

who are less qualified and able than other applicants who

must be rejected and the cost of training and retraining

that can be amortized over fewer years or lost altogether

if the protected employee returns to his former employer.**

Imposition of these costs on carriers which bear no re-

sponsibility for the dislocation, and had no notice that

they would assume such obligations by virtue of their

participation in the airline industry, constitutes a taking

of property without just compensation. Connolly v. Pen-

sion Benefit Guaranty Corp., 106 S. Ct. 1018, 1026-2"

(1986) (upholding against “taking” challenge the with-

drawal liability provisions of pension law because lia-

bility “directly depends on the relationship between the

employer and the plan to which he made contributions”

and because employers had “more than sufficient no-

tice’); Armstrong v. United States, 364 U.S. 40, 49

(1960) (unlawful taking if regulation “forces some peo-

ple alone to bear public burdens which, in all fairness

and justice, should be borne by the public as a whole’).

See also Keystone Bituminous Coal Ass’n v. DeBenedictis,

107 S. Ct. 1232, 1258-59 (1987) (Rehnquist, C.J., dis-

senting) ; Pennsylvania Coal Co. v. Mahon, 260 U.S. 393,

415 (1922).

The failure of the EPP to apportion the costs of the

duty to hire program reasonably and equitably among the

11 See Affidavit of Dolores E. Wallace, Sr. Director, Selection

and Field Personnel Administration for American Airlines, ac-

companying motion for summary judgment below, at § 28 (initial

pilot training exceeds $12,000 per trainee).

cna aii aie ai

air carriers in relation to their responsibility to the ‘“pro-

tected employees” clearly distinguishes this case from in-

stances in which Congress has required a business to

assume obligations relating to its own employees, or to the

employees of a company it acquires. See United States

v. Lowden, 308 U.S. at 240 (railroad required to pay

part of the benefit it received to compensate the “loss to

employees occasioned by the exercise of the privilege’).

In its summary disposition of these issues, the court

below cites Usery v. Turner Elkhorn Mining Co., 428

U.S. 1 (1976), without any explanation. App. A (4a).

That decision, however, demonstrates why Section 43

fails the rational basis test. In Elkhorn, this Court up-

held a statute that imposed on coal mine operators cer-

tain costs for black lung disease (pneumoconiosis) of

their own former employees. The Court concluded that

“the Due Process Clause poses no bar to requiring an

operator to provide compensation for a former employee’s

death or disability due to pneumoconiosis arising out of

employment in its mines... .” Zd. at 19-20. Under such

circumstances, the statute “‘serves to spread the costs in

a rational manner—by allocating to the operator an ac-

tual cost of his business, the avoidance of which might

be thought to have enlarged the operator’s profits.” Id.

at 24-25,

12 The Court in Elkhorn was careful to show a rational connection

between burdens placed on an operator and his responsibility to the

employees. One provision of the statute created an “irrebuttable

presumption” that a former employee died of pneumoconiosis if

there was clinical evidence of the disease, regardless of the actual

cause of death. The Court noted that “[t]he damage resulting

from a miner’s death that is due to causes other than the opera-

tor’s conduct can hardly be termed a ‘cost’ of the operator’s busi-

ness.” Jd. at 25. But the Court found that the Act also intended

to compensate for injury to health and thus this statutory provi- -

sion “authorizes compensation for injury attributable to the opera-

tor’s business.” Jd. at 25. The Court also was concerned that an-

other statutory provision appeared “to preclude an operator’s

defense that the disease did pn vt arise out of employment in the

particular mines for which it was responsible.” Jd. at 35. The

district court had held that provision unconstitutional, but this

Court avoided the constitutional question by construing the provi-

Here, in contrast, the hiring burden is imposed exclu-

sively on companies with no previous relationship to the

protected employee whatsoever, and the one carrier with

a specific connection to the former employee, which was

responsible for his termination, escapes the burden al-

together. Such a scheme offends equal protection stand-

ards embodied in the due process clause. Cf. National

Railroad Passenger Corp. v. Atchison, Topeka & Santa Fe

Railway, 470 U.S. 451, 477-78 (1985) (cost-sharing

scheme allocates to railroad only the costs attributable to

its present and former employees).

Further, the EPP discriminates between the pre-1978

and post-1978 carriers even though they compete directly

with each other to provide airline service to the public.

sion narrowly, determining that Congress did not intend that it

apply to private operators. Jd.

13 The circumstances in this case are far more egregious than

in Ratiroad Retirement Board v. Alton Railroad, 295 U.S. 330

(1935). In Alton Railroad, the Court invalidated, on due process

grounds, a provision in the Railroad Retirement Act providing for

employer-financed pensions for former employees who, although not

in the employ at the time of enactment, had been so employed

within a year prior to passage. The Court found it “arbitrary in

the last degree” to require carriers to provide benefits for em-

ployees who may have resigned or been dismissed for any reason

whatsoever, and found this requirement unrelated to the legislative

goal of increasing efficiency in the railroads. Id. at 349. The

Court in Alton also found unconstitutional a requirement that if

a former employee of any carrier is hired by another carrier, a

railroad would be required to pay his pension based on his service

with both railroads. The Court stated:

The provision is not only retroactive in that it resurrects for

new burdens transactions long since past and closed; but as

to some of the railroad companies it constitutes a naked ap-

propriation of private property upon the basis of transactions

with which the owners of the property were never connected.

Id. at 349-50. This Court in Elkhorn was careful to distinguish

Alton Railroad, pointing out that the black lung benefits were not

simply provisions “to meet [a] generalized need for funds,” but

were intended to meet a specific need of a former employee created

by the conditions under which he labored, which was a measurable

cost of his former employer’s doing business. 428 U.S. at 19.

The imposition of a hiring duty on only one part of the

industry constitutes unfair discrimination because it is

not rationally designed to achieve a legitimate govern-

mental purpose. See Metropolitan Life Insurance Co. v.

Ward, 470 U.S. 869 (1985). Without analysis, the court

below accepted the government’s justification for this dis-

crimination (1.e., that the pre-deregulation carriers should

bear the entire burden of providing for dislocations caused

by deregulation), App. A (4a), even though Congress

said that the “public” and not a particular segment of

it should bear the burden, see Senate Report at 114, and

mandated a government financial assistance program

that DOL has never implemented. Cf. Elkhorn, 428 U.S.

at 40 n.5 (Powell, J., concurring).

The implication of the court below is that covered air

earriers benefitted from the regulatory era and therefore

should bear this newly created and exclusive burden of

employment dislocations caused by deregulation. This

assumption is not supported by the legislative history or

experience. Congress recognized that the regulatory era

did not result in substantial benefits to regulated air car-

riers. See Senate Report at 4. The industry earned, on

average, a low rate of return compared to nonregulated

industries, and at the time of deregulation air carriers

were burdened with high costs and inefficiencies that re-

sulted from the highly regulated structure.* Nor does

the hiring preference scheme place the hiring burden on

carriers that have contributed to employment dislocation.

If Congress had really intended to impose the burden of

employment dislocation on the responsible carriers, it

would have required carriers to hire back their own

former employees rather than_those of their competi-

tors.“ And it would not have devised a scheme that

14 See Senate Hearings at 306-11 (prepared statement of James

C. Miller, III) (estimating that the annual cost of regulation-

imposed constraints on carriers was about $1 billion per year).

15In the Bus Regulatory Reform Act of 1982, Pub. L. No. 97-

261, §27, 96 Stat. 1102, 1126 (codified at 49 U.S.C. § 10935 note

(1982) ), Congress required companies to hire back their own

hiesennieheeenaemnnieaiaieiniatiaiataaniatittiaeE.

allocated the burden disproportionately to carriers that

have maintained employment stability. Nor would it

have exempted the new entrants which have caused much

of the dislocation and created many of the new jobs. See

Elkhorn, 428 U.S. at 43-44 (Powell, J., concurring.) *®

This discriminatory hiring preference program has had

anomalous consequences. For example, Carriers A and B

competed on a particular route before the Deregulation

Act. As a result of deregulation, a low cost, low fare

new Carrier C.enters the market forcing Carrier A to

abandon the route and lay-off employees. Under these

circumstances, Carrier C has no hiring obligation with

respect to Carrier A’s employees, nor does Carrier A.

Only Carrier B has a Section 43 duty to hire Carrier A’s

former employees. By imposing the hiring duty on

only one segment of the industry the EPP creates a com-

petitive handicap which is inconsistent with the primary

purpose of the Deregulation Act to foster full and fair

competition among air carriers on an even handed

basis..7 See 49 U.S.C. app. § 1802(a) (4); Senate Re-

port at 1-5.

former employees and only to consider the former employees of

their competitors.

16 The classification scheme here does not even comport with the

rationale the government has devised in support of it. Midway

Airlines, for example, is a covered carrier subject to the hiring

duty because it was certificated just prior to enactment of the

Deregulation Act, even though it did not begin operations until

after deregulation. Yet, several of the large intrastate air carriers

(e.g., Southwest Airlines) are not covered carriers even though

they were substantial employers prior to deregulation and, apply-

ing the government’s logic, “benefitted” from the federal route and

rate restrictions applied to their competitors during the regulatory

era.

17 Covered carriers already are encumbered by substantially

higher labor costs generated during the regulatory period when

higher costs were passed through in rate proceedings. See Airline

Mergers and Acquisitions: The Question of Labor Protection:

Hearing Before the Subcomm. on Aviation of the Senate Comm.

on Commerce, Science and Transportation, 99th Cong., ist Sess. 7

(1985) (statement of Matthew V. Scocozza, Asst. Secy. for Policy

——s

The discriminatory burden facing the pre-1978 car-

riers results from Congress’ attempt to establish respon-

sibility on a retroactive basis to deal prospectively with

circumstances. created by deregulation. It is a pattern

that has often troubled this Court. See, e.g., Elkhorn, 428

U.S. at 16-17; id. at 42-44 (Powell, J., concurring) ;

Zobel v. Williams, 457 U.S. 55, 63 (1982). In Zobel the

Court rejected the state of Alaska’s attempt prospectively

to reward past contributions based on past residency,

concluding that distinctions based on intangible “past

contributions” did not further a legitimate state pur-

pose. Jd. at 63. As Justice Brennan noted, “In al-

most all instances, the business of the State is not

with the past, but with the present: to remedy con-

tinuing injustices, to fill current needs, to build on the

present order to better the future. ... Thus, the past-

contribution rationale proves much too little to provide a

rational predicate for discrimination ....” Jd. at 70-71

(Brennan, J., concurring).

Since the hiring duty is not limited to employees ter-

minated as a result of deregulation, there certainly is no

rational justification for imposing only on pre-1978 car-

riers the duty to remedy new injuries caused by more

recent events. Allocating such new burdens on a retro-

active basis contravenes a long established principle of

this Court.

B. The Duty To Hire Program Is Not Rationally Re-

lated To The Articulated Legislative Purpose.

This Court has stated that when a statute’s purpose

has been articulated, it is not necessary to “speculate as

to the objectives of the legislature.” Zobel, 457 U.S. at

61 n.7. The Court’s function is to determine whether

and Int’] Affairs, DOT) (“We have a completely different situation

after 1978 now. We have some of our more traditional carriers,

competing with post-deregulation carriers that have much, much

lower costs, very different operating scenarios, and much different

labor agreements”). See also Cappelli and Harris, Airline Union

Concessions in the Wake of Deregulation, 108 Monthly Lab. Rev.

87, 37-38 (June 1985).

the statutory scheme “rationally furthers” the legitimate,

articulated state purpose. San Antonio School District v.

Rodriguez, 411 U.S. 1, 17 (1973).

It is beyond dispute here that Congress’ express and

sole purpose in enacting Section 43 was to provide pro-

tections for employees adversely affected by deregulation.

The labor protections contained in both the final House

and Senate bills were provided only for employees af-

fected by deregulation. See H.R. 12611, 95th Cong., 2d

Sess. § 32 (1978) (“No authority granted by this Act

... Shall be exercised by any carrier unless prior to each

such exercise, [DOL] has certified . . . that the interests

of the employees who may be affected thereby have been

adequately protected ....”) (emphasis added) ; see also

S. 2498, 95th Cong., 2d Sess. § 22(h) (2) (1978) (finan-

cial benefits and hiring preferences accorded only to em-

ployees of carriers suffering bankruptcy or workforce re-

duction caused by a “change in regulatory structure”

provided by the Deregulation Act). The committee re-

ports of each house and the floor debates, prior to and

subsequent to the House-Senate Conference Report, over-

whelmingly confirm that Congress’ sole intention was to

protect employees adversely affected by deregulation.

See infra at 24-25. The legislative history further makes

clear that Congress intended one integrated, inter-

related EPP, consisting of financial benefits and a hiring

preference and that Congress wanted the program initi-

ated immediately to ease the transition to deregulation.

See Senate Report at 116.

DOL’s regulatory program, however, completely de-

parts from Congress’ articulated purpose in several cru-

cial respects. First, as noted above, DOL’s delay of five

years in promulgating its regulations is contrary to the

legislative purpose. In fact, DOL was without authority

to thrust this new regulatory burden on one segment of

the industry at the time it did, since Section 43 requires

that any regulations be issued within six months after

\ 18

October 24, 1978.1* By the time the regulations were

promulgated, thousands of employees had changed jobs,

earning “protected employee” status, and many of them

were working for competitors of their former em-

ployers, including dozens of new entrant air carriers. By

providing for retroactive notification of “designated em-

ployees,” DOL imposed a program “dictated by historical

patterns that may be wholly unrelated to the present

contours of the industry.” Elkhorn, 428 U.S. at 43

(Powell, J., concurrin;:). The hiring duty regulations,

for example, were imposed on fewer than half of the cer-

tificated carriers operating in 1986.

Second, DOL neglects altogether the government’s

compensation obligations. In the EPP’s integrated de-

sign, which originated in the Senate bill, the hiring

preference was intended to constrain the demand for

federal funding. See Senate Report at 116 (emphasizing

the “interaction” between the two program segments).

Congress expressly required that the compensation pro-

gram be established expeditiously, 49 U.S.C. app. § 1552

(f) (2), but DOL ignored this mandate and instead im-

plemented only the duty to hire provisions, thrusting the

entire new burden imposed by the EPP on the covered

air carriers.

18 Applying its technical reading of the statute consistently, see

infra at 25-26, DOL should have recognized that its authority to

issue duty to hire regulations had expired long before 1984. Sec-

tion 43(f) (1) states that “[t]he Secretary may issue ... such

... regulations as may be necessary for the administration of this

section,” but subsection (2) states that “rules or regulations which

the Secretary deems necessary ... shall be promulgated within

six months after October 24, 1978.” (emphasis added). Reading

the clauses together, it is apparent that DOL’s permissive au-

thority expired at the end of six months. Such a reading is con-

sistent with the objective of the EPP which was to ease the

transition into deregulation. Thrusting a comprehensive, new

regulatory program on the industry five years later would have

been inconsistent with the deregulatory purpose of the Act. See,

e.g., 49 U.S.C. app. § 1302(a) (4) (“maximum reliance on competi-

tive market forces”); id., §1302(a)(3) (no “unjust discrimina-

tions, undue preferences er advantages”); Senate Report at 5.

Third, despite Congress’ articulated purpose to help

employees adversely affected by the Deregulation Act,

DOL’s hiring preference program benefits primarily per-

sons whose dislocations are not attributable to deregula-

tion." Because DOL’s regulations are so overinclusive

they actually frustrate the statutory purpose by greatly

expanding the hiring pool and thereby diluting the job

opportunities available to those whom Congress intended

to protect (i.e., employees who lose their jobs because of

deregulation ) .”

DOL made no attempt to tailor its program or to

establish a nexus between the hiring burden and the

injury Congress intended to remedy. For example, Con-

gress or DOL could have established a rebuttable pre-

sumption that protected employees were adversely af-

fected by deregulation, allocating to the carriers the bur-

den to show they are not. In Elkhorn, this Court

scrutinized several statutorily created presumptions un-

der due process analysis to ensure that they did not break

the rational connection between the injury Congress in-

tended to repair and the burden placed on the responsible

employer. Elkhorn, 428 U.S. at 20-37. The statute cre-

19In the eight years since the Deregulation Act, many inter-

vening events have resulted in employment dislocation. DOL’s

retroactive notification provisions require the covered carriers to

search out and certify as “designated employees” persons who

had been terminated or furloughed since 1978 because, inter alia,

(a) a foreign government closes an international facility, (b) flights

are reduced as a result of the government’s firing of the air traffic

controllers in 1981, (c) a labor strike causes an airline to suspend

service temporarily, (d) federal safety enforcement grounds cer-

tain aircraft, or (e) an economic recession curtails service.

20 At the time DOL issued its final regulations, the expert

agencies, DOT and CAB, had concluded that almost all employment

dislocations since 1978 were attributable to causes other than

deregulation. See In re Application of Employees of Aeroamerica,

Dkt. No. 38,885 (CAB Apr. 7, 1983), CAB Order 83-4-36, at 7-10;

Comments of the Department of Transportation, Sept. 3, 1982 in

id. Thus, the hiring preference program established by DOL’s

regulations imposes a significantly greater burden on covered

carriers than Congress intended.

ated a rebuttable presumption that a coal miner with

ten years employment in the mines who suffered from

pneumoconiosis contracted his disease from his employ-

ment. The presumption was found constitutionally valid

because it “simply .. . shift{ed] the burden of going for-

ward with evidence from the claimant to the operator,”

and because the ten year period was supported by scien-

tific evidence presented in testimony by the Surgeon Gen-

eral to Congress. Jd. at 27.

In contrast, Section 43, as construed by DOL, creates

no presumptions but establishes an absolute, irrebuttable,

generalized hiring duty without reference to the harm

Congress intended to remedy—unemployment caused by

deregulation.24 Compare Elkhorn, 428 U.S. at 19.

Thus, the legislative scheme is both overinclusive and

underinclusive. The hiring right benefits primarily em-

ployees who are terminated for reasons unrelated to de-

regulation, but the hiring duty applies only to interstate

carriers certificated prior to deregulation. In “practical

operation,” some air carriers, but not all of them, have

a duty to hire some—but not all—of the employees dis-

placed by the air traffic controllers’ strike. Some—but

not ali—nonstriking employees furloughed when their

carrier is grounded because of a strike may exercise hir-

ing rights at some—but not all—of the striking carrier’s

competitors. Cf. South Dakota v. Dole, 55 U.S.L.W.

4971, 4974 (U.S. June 23, 1987) (O’Conner, J., dissent-

ing). It is difficult to conceive of a classification scheme

more “clearly irrelevant” to the stated purpose of the

Deregulation Act and Section 43.

21 This Court has invalidated such statutory classifications based

on irrebuttable statutory presumptions (e.g., that all terminations

are attributable to deregulation), in circumstances where individ-

ualized decisionmaking or a rebuttable presumption would have

achieved the legislative purpose. Cf. Cleveland Board of Education

v. LaFleur, 414 U.S. 632 (1974); United States Department of

Agriculture v. Murry, 413 U.S. 508 (1973); and Vilandis v. Kline,

412 U.S. 441 (1978).

Because the means chosen in Section 43 are not ra-

tionally related to the articulated legislative purpose,

the hiring preference scheme is invalid under the due

process clause. See Zobel, 457 U.S. at 61; McGinnis v.

Royster, 410 U.S. 263, 270 (1973) ; Massachusetts Board

of Retirement v. Murgia, 427 U.S. 307, 314 (1976);

United States Railroad Retirement Board v. Fritz, 449

U.S. at 188 (Brennan, J., dissenting).

C. The Hiring Preference Scheme Is Not Rationally

Related To Any Legitimate Government Interest.

The hiring preference scheme not only fails to further

the congressionally articulated purpose, it is not ration-

ally connected to any conceivable, legitimate government

interest. The EPP singles out a special class of employees

who happen to have accumulated four years of seniority

at a single covered air carrier as of October 24, 1978,

and who happen to have been furloughed during a ten

year period for any reason at all (except cause) even if

they are currently employed by an airline. Such employ-

ees are entitled to a hiring preference over more qualified

applicants, most beneficiaries of EEO and other federal

statutory programs, and even applicants adversely af-

fected by deregulation without the requisite four years

at a single carrier. The hiring duty further conflicts

with the air carriers’ primary statutory duty “to per-_

form their services with the highest possible degree of

safety,” 49 U.S.C. app. §1421(b) (emphasis added)

(see also §§ 13807(a), 1303(a)), by forcing them to

choose less qualified applicants for safety-related posi-

tions and to ignore safety-related initial hiring age pol-

icies.22 Severed from any connection to deregulation, an

industry-wide hiring preference based on seniority at a

22 See Murnane v. American Airlines, Inc., 667 F.2d 98, 101

(D.C. Cir. 1981), cert. denied, 456 U.S. 915 (1982); see also

Harriss v. Pan American World Airways, Inc., 437 F. Supp. 413,

434 (N.D. Cal. 1977), aff'd in relevant part, 649 F.2d 670 (9th

Cir. 1980); Spurlock v. United Airlines, Inc., 475 F.2d 216, 219

(10th Cir. 1972) (“[t]he public interest clearly lies in having the

most highly qualified persons available to pilot airliners’).

particular cut-off date does not serve a legitimate govern-

ment interest any more than a distinction based on date

of birth, color of hair, years of residence, race or sex.

In Moreno, this Court addressed a statutory classifica-

tion scheme under which households with unrelated per-

sons were excluded from the Food Stamp Program. The

Court first held that the classification was not rationally

related to the articulated legislative purpose of the Food

Stamp Act—to help the nation’s agricultural economy

and satisfy nutritional needs. 413 U.S. at 533-34. The

Court then examined whether the challenged classification

would “rationally further some legitimate governmental

interest other than those specifically stated” by Congress.

Id. at 584. Rejecting the government’s argument that

the classification would prevent fraud, the Court noted

that other statutory provisions dealt directly with fraud

and that “in practical effect, the challenged classification

simply does not operate so as rationally to further the

prevention of fraud.” Jd. at 537. Arguably, the exclu-

sion of unrelated persons would eliminate some fraud

just as the hiring duty may pick up some employees ad-

versely affected by deregulation, but these blunt instru-

ments are so overinclusive that they simply are not ra-

tionally related to a legitimate governmental purpose.

The government’s counsel suggested below that Con-

gress may have wanted to provide generalized protections

for airline employees who had made a significant work

commitment during the regulatory era in reliance on the

security of regulation. Brief for Federal Appellees, at 39,

Alaska Airlines, Inc. v. Brock, Nos. 86-5042 and 86-5085

(D.C. Cir. Jan. 30, 1987). Congress could have done this

through a financial assistance program, but it mandated

financial assistance only for employees adversely affected

by deregulation, and DOL, of course, has ignored this

mandate. Imposing such a general obligation inequitably

on certain covered air carriers, which have had no pre-

vious employment relationship with the protected em-

ployees, however, is not a rational means of achieving

such an objective. See Elkhorn, 428 U.S. at 19.

Simply because some post hoc rationale can be articu-

lated to advance a governmental interest does not estab-

lish that a discriminatory classification scheme is ra-

tional. See Moreno, 413 U.S. at 538; Cleburne, 473 U.S.

at 448-50 (concern about flooding and overcrowding did

not justify excluding home for mentally retarded from

neighborhood since such concerns applied equally to other

homes not subject to exclusion) ; Metropolitan Life, 470

U.S. at 822 (invalidating Alabama statute that purported

to encourage new capital investment by taxing out of

state insurance companies more heavily than Alabama

companies because in “practical operation” the statute’s

discrimination against nonresident competitors did not

serve “a legitimate state purpose.’”) In practical opera-

tion, Section 43 does not rationally further any legitimate

governmental interest.

II. DOL’S INTERPRETATION THAT SECTION 43 IM-

POSES A DUTY TO HIRE EMPLOYEES TERMI-

NATED FOR REASONS UNRELATED TO DE-

REGULATION CONTRAVENES THIS COURT’S

PRECEDENT REQUIRING THAT REGULATIONS

BE CONSISTENT WITH THE DESIGN, ORIGIN

AND PURPOSE OF A STATUTE. |

Congress included Section 43 in the Deregulation Act

in 1978 to assist employees who might be adversely af-

fected by the transition to deregulation. See infra at 24-26.

In light of Congress’ clearly articulated purpose, the cir-

cuit court’s affirmance of DOL’s wooden reading of the

statute to extend the hiring duty to persons terminated

for reasons unrelated to deregulation and even to persons

working for other airlines is contrary to the guidelines

of this Court on statutory interpretation. Those guide-

lines emphasize that regulations must be in harmony

with the purpose of the authorizing legislation. An

agency cannot rely on a technical reading of the statute

if such a construction is contrary to-congressional intent.

This Court has

rejected the suggestion that a regulation is to be sus-

tained simply because it is not “technically incon-

sistent” with the statutory language, when that

regulation is fundamentally at odds with the mani-

fest congressional design. ... The challenged Regu-

lation is not a reasonable statutory interpretation

unless it harmonizes with the statute’s “origin and

purpose,”

United States v. Vogel Fertilizer Co., 455 U.S. 16, 26

(1982) (quoting National Muffler Dealers Association,

Inc. v. United States, 440 U.S. 472, 477 (1979)) (cita-

tions omitted and emphasis added). See also Voikswagen-

werk Aktiengesellschaft v. Federal Maritime Commission,

390 U.S. 261, 272 (1968) (quoting NLRB v. Brown,

380 U.S. 278, 291 (1965)); FBI v. Abramson, 456 U.S.

615, 625 n.7 (1982) (quoting NLRB v. Lion Oil Co.,

352 U.S. 282, 297 (1957) (Frankfurter, J., concurring

in part and dissenting in part) ).*

The court below failed to apply these standards to

determine whether DOL’s regulations are consistent with

congressional intent. Congress enacted Section 43 as an

“insurance” policy against the “theoretical possibility”

of employment reductions resulting from the Deregula-

tion Act. 124 Cong. Rec. $5879 (daily ed. Apr. 19, 1978)

(statement of Sen. Cannon); Senate Report at 113 (pro-

tection provided against “employee dislocations that might

occur as a result of the new regulatory structure” (em-

phasis added) ). The final bills introduced in both houses

expressly provided protections only for employees affected

by deregulation. See supra at 17. The House bill,

H.R. 12611, authorized benefits similar to those previ-

ously provided to employees affected by governmental

action in other areas of transportation. H.R. 12611, 95th

Cong., 2d Sess. § 32 (1978) .*

23 See also Rose v. Lundy, 455 U.S. 509, 517 (1982) (court “must

analyze the policies underlying the statutory provision to deter-

mine its proper scope”); Stafford v. Briggs, 444 U.S. 527, 535

(1980) (citation omitted) (“‘in interpreting a statute, the court

will not look merely to a particular clause . . . but will take in

connection with it the whole statute ... and the objects and policy

of the law’ ”’).

24 The benefits authorized in H.R. 12611 were based upon those

established in section 5(2)(f) of the Interstate Commerce Act

“af

The bill passed by the Senate contained an entirely

different concept of employee protection, but it also lim-

ited the benefits to persons affected by deregulation.

The hiring preference was limited to employees termi-

nated by carriers that had gone bankrupt or suffered a

15 percent workforce reduction caused by the Deregula-

tion Act, as determined by the CAB. See S. 2493, 95th

Cong., 2d Sess. § 22 (1978) ; see 124 Cong. Rec. S5876-83

(daily ed. Apr. 19, 1978) (hiring right available only to

employees terminated as a consequence of deregulation).

Thus, although the House and Senate versions of em-

ployee protection were significantly different, when the

two bills went to conference they shared one common

limitation—they expressly applied only to individuals

adversely affected by the Deregulation Act.

The Conference Committee in essence adopted the Sen-

ate version, with two substantive modifications. First,

the Committee lowered the 15 percent threshold for a

workforce reduction caused by deregulation to 7.5 per-

cent. H.R. Rep. No. 1779, 95th Cong., 2d Sess. 105

(1978). Second, it deleted as a prerequisite for a termi-

nated employee’s exercise of a hiring right the require-

ment that the CAB determine after a formal hearing

whether his employer had gone bankrupt or suffered a

substantial workforce reduction. Id.

The Conference Committee did not explain the reason

for the deletion but it is logical to infer that Congress

intended that all employees terminated as a result of

deregulation be eligible and not simply those whose em-

ployers were most severely affected (¢.g., bankrupt car-

riers). Nonetheless, DOL seized upon the deletion of this

and section 405 of the Rail Passenger Service Act. In both of

those statutes, benefits were provided only to employees who were

adversely affected by governmental action. See 49 U.S.C. § 11347

(1982) (protective arrangements for employees terminated as a

result of railroad mergers approved by the Interstate Commerce

Commission); 45 U.S.C. §565 (1982) (protection for railroad

employees adversely affected by discontinuance of passenger route

authorized by statute).

requirement as its sole justification for concluding that

its authority to confer first-hire rights went beyond em-

ployees affected by deregulation. See 50 Fed. Reg. 58,094-

95 (1985). DOL’s mechanical interpretation completely

ignores the manifest purpose of Section 43 and both the

House and Senate bills that preceded it. There is no

indication that either the House or the Senate ever in-

tended to extend the protection to employees furloughed

for reasons completely unrelated to deregulation.»

The error of DOL’s interpretation is further demon-

strated by the statements Conference Committee members

made when reporting to their respective Houses. They

made clear that the purpose of the bill—despite the

changed language—was only to protect employees who

lost their jobs “as a consequence of the deregulation

bill.” 124 Cong. Rec. H13,445 (daily ed. Oct. 14, 1978)

(remarks of Rep. Anderson, Chairman of the House

Aviation Subcommittee) (emphasis added) .”°

Given the limited scope of the House and Senate bills,

which addressed specifically the consequences of the De-

regulation Act on employment, it is unthinkable that,

without any debate or discussion, Congress would have

intended to expand Section 43(d) dramatically to pro-

vide a generalized hiring preference for employees fur-

loughed for reasons unrelated to the purposes of the

25 Under the rules of the House and Senate, the Conference

Committee had no authority to delete the requirement in both

bills that benefits be provided only to employees adversely affected

by deregulation. See Jefferson’s Manual and Rules of the House

of Representatives, H.R. Doc. No. 277, 98th Cong., 2d Sess. 641

(1985) (Rule XXVIII) ; Senate Manual, S. Doc. No. 1, 98th Cong.,

2d Sess. 59 (1984) (Rule XXVIII).

26 See also 124 Cong. Rec. H13,445 (remarks of Rep. Snyder,

ranking minority member of the House Aviation Subcommittee) ;

id. at H13,447 (remarks of Rep. Johnson, Chairman of the House

Public Works and Transportation Committee); 124 Cong. Rec.

$18,796 (daily ed. Oct. 14, 1978) (remarks of Sen. Cannon, Chair-

man of the Senate Commerce, Science and Transportation Com-

mittee) ; id. at $18,800 (remarks of Sen. Stevenson, Chairman of

the Senate Aviation Subcommittee).

Ram a SIN eh SS is ea a

ott acaliabe

ee a eee eee

Deregulation Act. To infer that the Conference Com-

mittee created out of whole cloth such an intrusive and

unprecedented regulatory program in legislation other-

wise dedicated to deregulating the industry simply defies

common sense.’

At a minimum, DOL should have considered the con-

stitutional issues raised by the airlines during the rule-

making and tailored its program to meet the articulated

congressional purpose and to avoid due process and equal

protection violations. See Greene v. McElroy, 360 US.

474, 507 (1959); NLRB v. Catholic Bishops of Chicago,

440 U.S. 490, 507 (1979).

CONCLUSION

For the foregoing reasons, the petition should be

granted.

Respectfully submitted,

WILLIAM T. COLEMAN, JR.

Counsel of Record

DONALD T. BLISS

JAMES P. NEHF

O’MELVENY & MYERS

555 13th Street, N.W.

Washington, D.C. 20004

July 7, 1987 (202) 383-5300

27 For example, in a case now pending in a federal district court,

a purported class of some 3,000 flight attendants who struck peti-

tioner Trans World Airlines in 1986 and were permanently re-

placed, have sued TWA for over $80 million in damages, for failing

to issue notices which would evidence their first right of hire as

flight attendants with other airlines. See Long v. Trans World

Airlines, Inc., No. 86 C 7521 (N.D. Ill.). Although these employees

left TWA’s active payroll as a result of a labor dispute eight years

after deregulation, the Department of Labor opined that they are

entitled to hiring preferences under the EPP. The plaintiffs have

also threatened to sue other carriers, including several petitioners

herein, who have not hired them. It is inconceivable that Congress

intended the airline employee protection program to apply in such

circumstances.

APPENDICES

APPENDIX A

UNITED STATES COURT OF APPEALS

DISTRICT OF COLUMBIA CIRCUIT

Nos. 86-5042, 86-5085 & 86-5719

ALASKA AIRLINES, INC., e¢ al.,

Appellants

Vv.

WILLIAM E. BROCK, SECRETARY OF LABOR, et al.

Argued January 13, 1987

Decided January 30, 1987

Appeals from the United States District Court

for the District of Columbia

(D.C. Civil Action No. 84-0485)

Before: EDWARDS, BUCKLEY and D.H. GINS-

BURG, Circuit Judges.

JUDGMENT

These causes came on to be heard on the record on

appeal from the United States District Court for the

District of Columbia, and were briefed and argued by

counsel. While the issues presented occasion no need for

an opinion, they have been accorded full consideration by

the Court. See Local Rule 13(c). On consideration there-

of, it is

ORDERED and ADJUDGED, by this Court, that the

judgment of the District Court appealed from in Nos.

86-5042 and 86-5085 is hereby affirmed in part, reversed

in part, and vacated and remanded in part for the rea-

sons set forth in the accompanying memorandum. It is

FURTHER ORDERED and ADJUDGED, by this

Court, that the judgment of the District Court appealed

from in No. 86-5719 is affirmed insofar as it denies a

Rule 60(b) motion for relief from judgment for the rea-

sons set forth in the accompanying memorandum; and

that, in light of the disposition in Nos. 86-5042 and 86-

5085, the appeal is dismissed as moot insofar as the mo-

tion requested enforcement of a prior judgment or review

of subsequent agency action. It is

FURTHER ORDERED, by this Court, sua sponte,

that the Clerk shall withhold issuance of the mandate

herein until seven days after disposition of any timely

petition for rehearing. See Local Rule 14, as amended

on November 30, 1981 and June 15, 1982. This instruc-

tion to the Clerk is without prejudice to the right of any

party at any time to move for expedited issuance of the

mandate for good cause shown.

Per Curiam

For the Court:

/s/ George A. Fisher

GEORGE A. FISHER

Clerk

MEMORANDUM

In the District Court, the appellants, Alaska Airlines

and fourteen other airlines (the “Airlines’), raised a

number of challenges to regulations promulgated by the

Secretary of Labor (the “Secretary”) pursuant to his

statutory authority under section 43 of the Airline De-

regulation Act of 1978, 49 U.S.C. § 1552 (1982) (the

“Act’”’). Section 48 delineates the Act’s “employee pro-

tection program,” one provision of which imposes on

previously-regulated air carriers the duty to give a hir-

ing preference to certain airline employees (hereinafter

“protected employees”) who are terminated or furloughed

by such carriers within the ten-year period commencing

October 24, 1978. 49 U.S.C. § 1552(d) (1) (1982). Sec-

tion 43 authorizes the Secretary to “issue, amend, and

repeal such rules and regulations as may be necessary”

to administer this program. Id. § 1552(f) (1). Following

notice and comment, the Secretary promulgated the reg-

ulations in question. Airline Employees Protection Pro-

gram, 50 Fed. Reg. 53,093 (1985) (to be codified at 29

C.F.R. pt. 220.)

The appellants argue that the Secretary’s rules are in-

consistent with. the Act, violate the carriers’ Fifth

Amendment rights, and fail to reconcile the requirements

of the employee protection program with the carriers’

safety and civil rights obligations. The District Court

rejected all but one of these challenges.

In all respects save one, we find that the regulations

are clearly reasonable, consistent with the terms of the

Act, and within the Secretary’s statutory authority. Ac-

cordingly, under the standard of review dictated by the

Administrative Procedure Act, 5 U.S.C. § 706(2) (1982),

we uphold all but one portion of the challenged regula-

tions as a lawful exercise of the Secretary’s statutory

authority.

The Airlines’ challenge to the statute and regulations

on Fifth Amendment grounds is also without merit. Con-

gress’ decision to place certain of the burdens of airline

deregulation solely on the previously-regulated carriers

satisfies the standard of rationality that applies to eco-

nomic regulation. See Usery v. Turner Elkhorn Mining

Co., 428 U.S. 1, 15 (1976); City of New Orleans v.

Dukes, 427 U.S. 297, 303 (1976); Washington Star Co.

v. International Typographical Union Negotiated Pension

Plan, 729 F.2d 1502, 1509-11 (D.C. Cir. 1984).

Accordingly, we affirm the judgment of the District

Court except as indicated below.

We uphold the Secretary, and thus reverse the District

Court, on the issue that is the subject of the Air Line

Pilots Association’s cross-appeal. We hold that the District

Court erred in invalidating and remanding 29 C.F.R. 4

§ 220.21(a) (1) to the Secretary with instructions to con- :

sider the carriers’ safety concerns. The regulation in

question specifies that the carriers’ duty to hire protected

employees precludes the application of an employer’s

maximum hiring age criteria (except with respect to re-

tirement ages) to job candidates who qualify for the

hiring preference. We reject the District Court’s conclu-

sion that, with respect to flight officers and pilots, the

Secretary was obliged to adddess the carriers’ concern

that the regulation conflicts with the carriers’ obligation

to maintain air safety. In the express language of sec-

tion 48, Congress made it absolutely clear that the hir-

ing preference should apply “regardless of age.” 49

U.S.C. § 1552(d) (1) (1982). The safety concerns raised

by the Airlines are fully taken account of in sections

220.11(a), 220.20(a), and 220.21(a) of the Secretary’s

regulations, which leave carriers free to establish and

apply safety-related job qualifications to protected em-

ployees. These provisions clearly authorize carriers to

deny employment to protected employees on safety .

grounds; it is only the maximum age qualification in and

of itself which is prohibited.

i i it aa ied

NE ee Te Te Te ee

Beats ic 5 oie

On the record before us, there is one aspect of the

Secretary’s regulations that we find problematic under 5

U.S.C. § 706(2) (1982). The District Court interpreted

29 C.F.R. § 220.29 and 29 C.F.R. § 220.01(j) to mean

that “any valid equal employment opportunity agree-

ment” overrides the duty to hire protected employees.

However, the actual language of section 220.01(j) sug-

gests that the exception created by section 220.29 is a

narrower one. In this appeal, counsel for the government

has stated no clear position on the meaning of section

220.01(j). We therefore vacate and remand this portion

of the District Court’s decision with instructions to re-

mand the issue to the Secretary for clarification of the

scope of the equal employment opportunity exception.

Finally, we affirm the District Court’s denial of the

Airlines’ Rule 60(b) motion. The court clearly did not

abuse its discretion in declining to give the appellants

relief from its original judgment. See Browder v. Di-

rector, Department of Corrections, 434 U.S. 257, 263 n.7

(1978) (abuse of discretion standard governs review of

district court’s ruling on Rule 60(b) motion). Insofar

as the appellants’ motion attempted either to enforce the

District Court’s original mandate to the Secretary or to

present an appeal from the Secretary’s subsequent re-

promulgation of 29 C.F.R. § 220.21(a) (1), their appeal

to this court is rendered moot by our reversal of the Dis-

trict Court’s decision invalidating and remanding the

regulation.

Ga.

APPENDIX -B

UNITED STATES DISTRICT COURT

DISTRICT OF COLUMBIA

Civ. A. No. 84-0485

PRO ey |

ALASKA AIRLINES, INC., et al.,

Plaintiffs,

WILLIAM E. BRocK, SECRETARY OF LABOR, et al.,

Defendants,

AIR LINE PILOTS ASSOCIATION INTERNATIONAL, et al.,

Intervening

Defendants.

January 22, 1986

MEMORANDUM

GESELL, District Judge.

This case involves a multitude of chalienges to the

Department of Labor’s regulations under the employee

protection provisions of the Airline Deregulation Act.

49 U.S.C. § 1552. The case is before the Court after

remand on motions for summary judgment or affirmance

of the Secretary’s regulations, there being no material

facts in dispute. After reviewing the original and sup-

plementary briefs of the parties and hearing two oral

arguments on these issues, the Court makes the following

rulings.

Sa \eatd dere

Background

When Congress passed the Airline Deregulation Act of

1978 it included an employee protection program to pro-

tect employees who had relied on employment with regu-

lated carriers and might be displaced in the transition

to a deregulated, competitive market. Airline Deregula-

tion Act, § 43, Pub. L. No. 95-504, 92 Stat. 1705, 1750

(1978) codified at 49 U.S.C. § 1552. Although this pro-

gram, § 43 of the Act, has been in effect for over seven

years, its turbulent history has prevented airline em-

ployees from receiving any substantial benefits from its

provisions.

Section 43 contains two prongs. The first directed the

Secretary of Labor to establish a program for providing

displaced workers with monetary assistance funded from

the United States Treasury, 49 U.S.C. § 1552(a)-(c).

Congress has never appropriated funds for this program

so no implementing regulations have been promulgated

and no assistance has ever been provided by the govern-

ment.

In addition to this monetary assistance, the statute

establishes a second program, § 43(d), which obligates

the airlines to give certain “protected employees” a first-

right-of-hire when filing job vacancies. The Secretary of

Labor’s original proposed regulations were noticed for

comment in 1979 but never resulted in a final rule. 44

Fed. Reg. 19146 (1979). A revised set of proposed regu-

lations was issued in 1982 and published as a final rule

in 1983. 47 Fed. Reg. 41304 (1982) ; 48 Fed. Reg. 53854

(1983). On the date these regulations became effective,

this Court concluded that the unconstitutional legislative

veto provision of the statute was not severable from its

other provisions and therefore the regulations were in-

valid. Alaska v. Donovan, 549 F. Supp. 92 (D.D.C. 1984).

The Court of Appeals disagreed and remanded the case

to resolve plaintiffs’ remaining challenges to the regula-

tions. Alaska Airlines, Inc. v. Donovan, 766 F.2d 1550

(D.C. Cir. 1985), petition for cert. filed, No. 85-920

(November 27, 1985).

Due to this combination of Congressional inaction, ad-

ministrative delay and litigation, protection for airline

employees has remained an unfulfilled promise. Many

airlines have resisted recognizing any duty to hire or

taken the position that there is no duty until the De-

partment of Labor regulations become effective. The

courts are just now beginning to address the issue of

whether a private right of action exists to enforce the

duty to hire. See McDonald v. Piedmont Aviation, Inc.,

84 Civ. 8262-CLB (S.D.N.Y. January 6, 1986) (holding

that private cause of action exists).

The Secretary has now reissued his regulations defining

the airlines’ duty to hire and requiring airlines to main-

tain a list of vacancies to assist protected employees in

finding jobs. 50 Fed. Reg. 53094 (December 27, 1985).

The plaintiffs, representing fifteen airlines that were

certificated by the Civil Aeronautics Board prior to de-

regulation, argue that the Setcretary’s regulations are

based on an erroneous and unconstitutional interpreta-

tion of the Act and that the Secretary arbitrarily and

capriciously ignored the conflicts between his regulations

and other legal obligations of the airlines.

Discussion

I. The Scope of the Duty to Hire.

The Airlines’ primary argument is that the Secretary

of Labor’s interpretation of the statutory duty to hire is

too broad. According to the Airlines, Congress only in-

tended to protect the victims of deregulations—not em-

ployees who are terminated due to other reasons, such

as poor business practices or general business conditions.

But under the Secretary’s regulations there is no require-

IN ABS ne at

ment that employees show that their termination or fur-

lough was related to deregulation. An employee is eli-

gible for the hiring preference if he had four years of

service with a single regulated airline at the time of

deregulation and is involuntarily terminated or fur-

loughed within ten years after the date of deregulation.

The only exceptions from this broad definition of eligi-

bility are airline employees who are retired, terminated

for cause, on strike, or who voluntarily -resign or quit.

29 C.F.R. § 220.10. The Secretary maintains that the

broad scope of these regulations is compelled by the lan-

guage and legislative history of the Act.

Resolving this dispute requires a careful examination

of the language of the Act. Congress defined the phrase

“protected employee” as a person who at the date of

deregulation had been employed for at least four years

by a certificated air carrier. 49 U.S.C. § 1552(h) (1).

The Airline’s argument that not all “protected employ-

ees” are protected by the hiring preference is not based

on the language of the duty to hire, but on the language

used to define those eligible for monetary assistance:

The Secretary of Labor shall, subject to such

amounts as are provided in appropriation Acts,

make monthly assistance payments . . . to each in-

dividual who the Secretary finds, upon application,

to be an eligible protected employee. An eligible

protected employee shall be a protected employee who

on account of a qualifying dislocation (A) has been

deprived of employment, or (B) has been adversely

affected with respect to compensation.

49 U.S.C. § 1552(a) (emphasis added). Congress defined

a “qualifying dislocation” as a bankruptcy or major con-

traction of an air carrier occurring during the first ten

calendar years after deregulation “the major cause of

which is the change in regulatory structure provided by

the Airline Deregulation Act of 1978, as determined by

10a

the Civil Aeronauties Board.” 49 U.S:C. § 1552 (h) (2).?

Thus, displaced employees were required to trace their

unemployment to a CAB determination that they were

victims of deregulation in order to qualify for monetary

assistance as a “eligible protected employee.”

In defining the beneficiaries of the duty to hire pro-

gram, however, Congress did not use the term “eligible

protected employees,” but provided that

Each person who is a protected employee of an air

carrier . . . who is furloughed or otherwise termi-

nated by such an air carrier (other than for cause)

prior to the last day of the 10-year period beginning

on October 24, 1978, shall have first right of hire,

regardless of age, in his occupational speciality, by

any other air carrier hiring additional employees...

49 U.S.C. § 1552(d) (1) (emphasis added).

The Court cannot ignore this difference in terminology

or dismiss it as accident or mistake. Congress used dif-

ferent terms, separately and carefully defined to describe

the employees eligible for these two programs.? Only

those who are seeking monetary assistance from the gov-

ernment are required to make the rigorous showing that

deregulation was the cause of their termination. ‘Pro-

tected employees” who cannot make this showing are still

“protected” by the duty to hire provision.

1A “major contraction” is defined as a reduction by at least 714

percent of the total number of full-time employees of an air

carrier within a 12-month period. 49 U.S.C. § 1552(h) (4).

2The duty to hire provisions of §43(d) does use the phrase

“eligible protected employee” to establish a special duty on the

Secretary to assist those employees receiving monetary assistance

from the government in obtaining reemployment. 49 U.S.C.

§ 1552(d) (2), (8). Congress’s special concern with having these

employees rehired appears to have been based on the fact that

encouraging these employees to invoke the duty to hire would

minimize the costs of the monetary assistance program.

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This interpretation is consistent with the legislative

history of § 43(d). The original version of the Senate

Bill limited the duty to hire to protected employees who

were “furloughed or otherwise terminated . .. on ac-

count of a qualifying dislocation... .” S. 2493, 95th

Cong., 2d Sess., § 22(d) (2) (1978). The House Bill was

more generous, requiring that before carriers could exer-

cise authority under the new act, the Secretary of Labor

had to certify that the interests of airline employees

who may be affected have been “adequately protected

by fair and equitable arrangements providing levels of

protection no less beneficial and protective of such in-

terests than those established pursuant” to the employee

protection provisions of the Interstate Commerce and

Rail Passenger Service Act.* H.R. 12611, 95th Cong.,

2d Sess., § 382 (1978). As is often the case, the Confer-

ence Committee produced a compromise. The Committee

adopted almost all of the Senate Bill but deleted the ‘on

account of a qualifying termination” requirement from

the duty to hire provision. H.R. Rep. No. 95-1779, 95th

Cong., 2d Sess. 105 (1978). Congress enacted this ver-

sion, retaining the causation requirement for monthly

assistance payments but extending the duty to hire to

all protected employees terminated or furloughed within

the ten year period after deregulation.

Nevertheless, the Airlines argue that even if a “qualify-

ing dislocation” is not required, the Secretary should

have considered whether some showing that the employees

were terminated due to deregulation should still be re-

quired before they can invoke the duty to hire. There

is no support in the statute or its legislative history for

this position. The duty to hire in §48(d) is without

qualification and there is no indication that Congress

delegated any authority to the Department of Labor to

limit eligibility or create a system to determine which

3§5(2) (f) of the Interstate Commerce Act, 49 U.S.C. § 11347;

§ 405 of the Rail Passenger Service Act, 45 U.S.C. § 565.

12a

terminations are due to deregulation. The Secretary has

consistently interpreted the statute according to its plain

language since his first regulations in 1979. The Air-

lines’ real quarrel is with Congress, which decided not

to limit airline employees’ rights with the same causation

requirements found in some other labor protection stat-

utes.

Congress’s decision to make the hiring preference over-

inclusive may create a burden for the Airlines and lead

to anomalous results in individual cases, but it is not

unconstitutional. Airline representatives testified before

Congress that there was no way to determine which

employees were victims of general business circumstances

and which were victims of regulatory reform.* Given

this testimony it was reasonable for Congress and the

Secretary of Labor to adopt a broad definition of the

duty to hire in order to insure that employes who may

have been displaced by deregulation receive some protec-

tion. If each employee had to demonstrate that their

termination or furlough was connected to deregulation

many deserving individuals might be denied the hiring

preference. The fact that Congress apparently chose to

be more generous with the airlines’ money than with

the public’s does not provide any basis for the Court to

impose a different interpretation and invalidate the Sec-

retary’s regulations. “We are not members of Congress,

with the power to rewrite the terms of a law which may

have revealed infirmities in its implementation.” Ameri-

can Federation of Government Employees, AFL-CIO v.

Federal Labor Relations Authority, No. 84-1512, slip op.

at 23 (D.C. Cir., December 13, 1985).

Even if the Secretary’s position was not so strongly

supported by the language of the statute and its history,

4Statement of Richard J. Ferriss, President, United Airlines,

Hearings before the Subcommittee on Aviation of the Committee on

Public Works and Transportation of the House of Representatives

on H.R. 8813, 95th Cong., 1st Sess. 1868 (1977).

13a

the Airlines have been unable to point to any indication

that Congress considered this issue and intended to limit

the duty to hire. The numerous statements quoted by

the Airlines only indicate that Congress intended to help

those who were victims of deregulation, not that they in-

tended to exclude those who could not demonstrate a con-

nection. The Secretary of Labor’s regulations are con-

sistent with the language of the statute and his inter-

pretation of Congress’s intent is a reasonable one that

must be upheld by the Court. Chevron, U.S.A., Inc. v.

National Resources Defense Council, 104 S.Ct. 2778

(1984). In addition, it may be noted that the Secre-

tary’s regulations have been before Congress since No-

vember of 1983 and despite the Court of Appeal’s deci-

sion holding that §43(d) is severable from the uncon-

stitutional legislative veto provision, Congress has not

taken any action to alter the mandate of § 43(d) or the

Secretary’s interpretation of it.5

Finally, the Airlines also argue that the statute and

the Secretary’s regulations violate due process and equal

protection because the duty to hire is only imposed upon

airlines that had received CAB certification before de-

regulation and does not apply to intrastate carriers who

were never certified and new airlines that have arisen

since deregulation. This contention is without merit.

Economic regulation must be upheld against due process

and equal protection challenges unless the statute’s classi-

fication is wholly irrational. At the time the Deregula-

tion Act was passed Congress believed that regulated

carriers had been the beneficiaries of a system which pro-

tected them from competition, resulting in more costly

and less efficient service to consumers. S. Rep. No. 95-

5 The Airlines have also voiced a last minute objection that the

reissued regulations have not been submitted to Congress for the

sixty-day period required by §$ 43(f), 49 U.S.C. §1552(f). Since

these regulations are substantially the same as those submitted to

Congress in 1983 no resubmission is required.

14a

631, 95th Cong., 2d Sess. 113 (1978). Congress decided

that the beneficiaries of regulation should bear the bur-

den of displacements that might occur as a result of de-

regulation. Placing the duty to hire on all certificated

carriers as of the date of deregulation may have been a

crude way of achieving this result, but it is not irrational

or unconstitutional.

II. Conflict with Other Legal Obligations of the Airlines.

The Secretary of Labor argues that many of the other

challenges raised by the Airlines are not ripe for ad-

judication. It is clear that many of the questions dis-

cussed or alluded to in the parties’ briefs are not yet

ripe. This Court need not determine whether their air-

line employees have a private right of action under the

act as the Secretary has suggested and one federal court

has found. Nor is the question of the termination date of

the program ripe for decision. Nor is the issue of

whether a protected employee who subsequently finds a

job with another airline can quit and invoke the duty to

hire preference in seeking another job ripe.

Nonetheless, the issues Airlines have pressed are ripe

for review to the extent they present facial challenges to

the Secretary’s rulemaking. All of the prerequisites for

review are satisfied. These final rules are a final agency

action. They will have a “direct and immediate” impact

on the way the Airlines conduct their personnel prac-

tices. Finally, the questions of whether these regulations

on their face improperly conflict with other legal obliga-

tions of the Airlines are fit for judicial resolution. Better

Government Association v. Department of State, No. 84-

5928, slip op. at 11-14 (D.C. Cir., January 3, 1986).

A. Safety Considerations.

The Airlines argue that three aspects of the Secre-

tary’s regulations interfere with their obligation to

maintain the highest possible standard of safety. Al-

15a

though there is no indication that Congress considered

how the employee protection provisions were to relate

to safety concerns, it did state that implementation of

the Deregulation Act should result in “no diminution of

the high standard of safety in air transportation at-

tained in the United States on October 24, 1978.” 49

U.S.C. §13807(a). Congress and the courts have re-

peatedly emphasized that airlines are under a legal obli-

gation to operate with the highest possible degree of care.

Murnane v. American Airlines, 667 F.2d 98, 101 (D.C.

Cir. 1981), cert. denied, 456 U.S. 915 (1982).

The Airline’s first objection on safety grounds has been

thoroughly and adequately answered by the Secretary in

the course of the rulemaking. The Airlines argue that

the regulations’ requirement that they keep a vacancy

open for thirty days in order to allow a protected em-

ployee to apply for the position imposes an unworkable

requirement that will, among other things, impairs

safety. See 29 C.F.R. § 220.24. The Secretary addressed

these concerns in promulgating the final rule and con-

cluded that they were speculative in light of the indus-

try’s practice of accepting advance applications and any

problems could be mitigated by maintaining files of ad-

vance applications or listing anticipated vacancies. 50

Fed. Reg. at 53095 (1985). Employees unexpectedly die,

retire, become ill or resign everyday and the airlines are

able to adjust by hiring temporary employees or reassign-

ing staff without jeopardizing their safety record. The

Secretary’s imposition of a waiting period was not arbi-

trary or capricious.

The Airlines’ second safety concern raises one rather

technical defect. The regulations permit carriers to apply

any prerequisites or qualifications they desire, except

limitations based on seniority, recall rights or previous

experience with another airline and initial hiring age

(excluding retirement ages). 29 C.F.R. § 220.21. Be-

cause the initial hiring age of flight officers and pilots

ee Tn

16a

may affect the amount and adequacy of the training and

experience they receive, the courts, in the context of the

Age Discrimination Act, have recognized otherwise im-

permissible initial age requirements may be bone fide

occupational qualifications because of the safety obliga-

tions of the airlines. Murnane v. American Airlines, 667

F.2d 98, 101 (D.C. Cir. 1981), cert. denied 456 U.S. 915

(1982). Although the Airline Deregulation Act states

that the duty to hire shali apply “regardless of age,” an-

other judge of this court, in construing Congress’s intent

in this provision, concluded that Congress must not have

intended to prohibit age requirements imposed for safety

reasons. “Only this interpretation preserves the impor-

tant occupational qualifications required in the interest

of air safety.” Murnane v. American Airlines, Inc., 482

F. Supp. 135, 153 (D.D.C. 1979), aff'd, 669 F.2d 98.

Although the interpretation in the Murnane decision

is “dicta,” it demonstrates that the Airlines’ concern is a

substantial one. The arguments now advanced by counsel

for the Secretary for a different interpretation may be

correct, but they are still after-the-fact rationalizations

that cannot satisfy the need for the Secretary himself to

address such an important issue when it is raised in

rulemaking comments, as it was here. Action On Smok-

ing and Health, 699 F.2d 1209, 1216 (1983); Ace Motor

Freight v. I.C.C., 557 F.2d 859, 864 (D.C. Cir. 1977).

Invalidating the entire rule under these circumstances is

obviously not an appropriate remedy. The Court will in-

validate the provision on initial hiring age as to flight

officers and pilots alone, and remand the issue to the

Secretary for further explanation.®

The Airlines’ final safety complaint is meritless. They

object that the regulations prevent them from hiring the

“safest” employees possible because they have a duty to

6 The Secretary need not reopen the existing record if he finds

that it is adequate to address this issue on remand.

ee eee Te oi _ Je

17a

hire protected employees first. This objection was never

raised in any significant way during the rulemaking. It

is not a real conflict, but an effort by the Airlines to

create an apparent conflict that would undermine the

language and purpose of the statute. If carriers had ab-

solute discretion to choose the “safest” applicants, the

hiring preference would be virtually meaningless. More-

over, aside from the restrictions mentioned above, the

regulations permit carriers to require that job applicants,

including protected employees, meet any standard qualifi-

cations the carriers’ desire and give them discretion in

choosing from among the pool of protected employees who

meet these requirements. Finally, it is inherent in the

statute itself that protected employees will already be

experienced in their fields and airline safety.

B. Equal Employment Opportunity.

The Secretary’s regulations provide that the duty to

hire shall take precedence over any equal employment

opportunity obligations unless the airline is subject to

a specific equal employment requirement pursuant to a

federal court or administrative order, consent decree or

conciliation agreement providing relief by virtue of the

earrier’s unlawful employment discrimination and the

airline cannot meet these requirements from the pool of

employees eligible for the hiring preference. 29 C.F.R.

§§ 220.01(j) ; 220.29. The Airlines’ object that the ex-

emption is inadequate because it conflicts with their gen-

eral obligation under Title VII and other statutes and

does not cover voluntary decrees which contain no ad-

mission of unlawful discrimination.

There is no merit in this contention. There is no facial

conflict between Title VII and the Secretary’s regulations

under the Airline Deregulation Act. An individual deci-

sion or a pattern of hiring decisions dictated by the stat-

ute’s duty to hire could not be the basis for a claim of

unlawful discrimination against a carrier. The Airlines’

challenge is largely based on a misinterpretation of the

18a

regulations, which the Department of Labor says in-

cludes any valid equal employment opportunity agree-

ment, with or without a recital of liability. Unlike the

comments on safety and hiring age, the Secretary di-

rectly addressed the Airlines’ comments on conflicts with

equal employment obligations by consulting with the

Equal Employment Opportunity Commission, amending

the initial rule to provide more flexibility and giving his

reasons in the statement on the final rule. 50 Fed. Reg.

at 538095-96 (1985). His conclusion that the duty to

hire should take precedence, except in those instances

provided in the rule, is a reasonable accommodation of

the conflicting policies.

C. Conflict with the Railway Labor Act.

The Airlines’ final objection is that the regulations im-

properly upset the delicate employer-employee “balance”

established by the Railway Labor Act by giving termi-

nated strikers rights under the duty to hire. The con-

tention that this will somehow “tilt” the balance in a

way that is inconsistent with the statutory scheme for

handling labor disputes is based on the most imaginative

type of speculation. The Secretary directly and ade-

quately addressed this supposed “conflict” in fashioning

the final rule and his decision was a reasonable accom-

modation of the policies involved.

The remaining objections in the Airlines’ broadside at-

tack are equally frivolous and must be rejected. An ap-

propriate order dismissing the complaint, except with

respect to the initial hiring age of flight officers and

pilots, as indicated above, filed herewith.

19a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 86-5042 and Consolidated Cases 86-5085, 86-5719

ALASKA AIRLINES, INC., et al.

WILLIAM E. Brock, individually

and as Secretary of Labor, et al.

March 9, 1987

BEFORE: EDWARDS, BUCKLEY and D. H. GINS-

BURG, Circuit Judges ———

ORDER

Upon consideration of appellants’ petition for rehearing,

it is ORDERED, by the Court, that the petition is denied.

Per Curiam

For THE CouRT:

GEORGE A. FISHER

Clerk

By: /s/ Robert A. Bonner

ROBERT A. BONNER

Chief Deputy Clerk

20a

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 86-5042 and Consolidated Cases 86-5085, 86-5719

ALASKA AIRLINES, INC., et al.

WILLIAM E. Brock, individually

and as Secretary of Labor, et al.

March 9, 1987

BEFORE: Wald, Chief Judge; Robinson, Mikva, Ed-

wards, Ruth B. Ginsburg, Bork, Starr,

Silberman, Buckley, Williams and D. H.

Ginsburg, Circuit Judges

ORDER

Appellants’ suggestion for rehearing en banc has been

circulated to the full Court. No member of the Court

requested the taking of a vote thereon. Upon considera-

tion of the foregoing, it is

ORDERED, by the Court en banc, that the suggestion

- is denied.

Per Curiam

FOR THE CouRT:

GEORGE A. FISHER

Clerk

By: /s/ Robert A. Bonner

ROBERT A. BONNER

Chief Deputy Clerk

Circuit Judge Silberman did not participate in this order.

2la

APPENDIX E

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS INVOLVED

CONSTITUTION OF THE UNITED STATES

AMENDMENT V

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in

the land or naval forces, or in the Militia, when in actual

service in time of War or public danger; nor shall any

person be subject for the same offence to be twice put

in jeopardy of life or limb; nor shall be compelled in any

criminal case to be a witness against himself, nor be

deprived of life, liberty, or property, without due process

of law; nor shall private property be taken for public

use, without just compensation.

STATUTES

49 U.S.C. app. § 1552 (1982). Employee protection pro-

gram.

(a) General rule

(1) The Secretary of Labor shall, subject to such

amounts as are provided in appropriation Acts, make

monthly assistance payments, or reimbursement pay-

ments, in amounts computed according to the provisions

of this section, to each individual who the Secretary finds,

upon application, to be an eligible protected employee.

An eligible protected employee shall be a protected em-

ployee who on account of a qualifying dislocation (A)

has been deprived of employment, or (B) has been ad-

versely affected with respect to his compensation.

(2) No employee who is terminated for cause shall

receive any assistance under this section.

22a

(b) Monthly assistance computation

(1) An eligible protected employee shall, subject to

such amounts as are provided in appropriation Acts, re-

ceive a monthly assistance payment, for each month in

which he is an eligible protected employee, in an amount

computed by the Secretary. The Secretary, after con-

sultation with the Secretary of Transportation, shall, by

rule, promulgate guidelines to be used by him in deter-

mining the amount of each monthly assistance payment

to be made to a member of each craft and class of pro-

tected employees, and what percentage of salary such

payment shall constitute for each applicable class or

craft of employees. In computing such amounts for any

individual protected employee, the Secretary shall deduct

from such amounts the full amount of any unemployment

compensation received by the protected employee.

(2) If an eligible protected employee is offered reason-

ably comparable employment and such employee does not

accept such employment, then such employee’s monthly

assistance payment under this section shall be reduced to

an amount which such employee would have been en-

titled to receive if such employee had accepted such em-

ployment. If the acceptance of such comparable employ-

ment would require relocation, such employee may elect

not to relocate and, in lieu of all other benefits provided

herein, to receive the monthly assistance payments to

which he would be entitled if this paragraph were not in

effect, except that the total number of such payments

shall be the lesser of three or the number remaining

pursuant to the maximum provided in subsection (e) of

this section.

(ec) Assistance for relocation

If an eligible protected employee relocates in order to

obtain other employment, such employee shall, subject

to such amounts as are provided in appropriation Acts,

PO SO FT

23a

receive reasonable moving expenses (as determined by

the Secretary) for himself and his immediate family.

In addition, such employee shall, subject to such amounts

as are provided in appropriation Acts, receive reimburse-

ment payments for any loss resulting from selling his

principal place of residence at a price below its fair

market value (as determined by the Secretary) or any

loss incurred in cancelling such employee’s lease agree-

ment or contract of purchase relating to his principal

place of residence.

(d) Duty to hire protected employees

(1) Each person who is a protected employee of an

air carrier which is subject to regulation by the Civil

Aeronautics Board who is furloughed or otherwise ter-

minated by such an air carrier (other than for cause)

prior to the last day of the 10-year period beginning on

October 24, 1978, shall have first right of hire, regard-

less of age, in his occupational speciality, by any other

air carrier hiring additional employees which held a cer-

tificate issued under section 1371 of this Appendix prior

to October 24, 1978. Each such air carrier hiring addi-

tional employees shall have a duty to hire such a person

before they hire any other person, except that such air

carrier may recall any of its own furloughed employees

before hiring such a person. Any employee who is fur-

loughed or otherwise terminated (other than for cause),

and who is hired by another air carrier under the pro-

visions of this subsection, shall retain his rights of senior-

ity and right of recall with the air carrier that fur-

loughed or terminated him.

(2) The Secretary shall establish, maintain, and peri-

odically publish a comprehensive list of jobs available

with air carriers certificated under section 1371 of this

Appendix. Such list shall include that information and

detail, such as job descriptions and required skills, the

Secretary deems relevant and necessary. In addition to

publishing the list, the Secretary shall make every effort

24a

to assist an eligible protected employee in finding other

employment. Any individual receiving monthly assist-

ance payments, moving expenses, or reimbursement pay-

ments under this section shall, as a condition to receiving

such expenses or payments, cooperate fully with the Sec-

retary in seeking other employment. In order to carry

out his responsibilities under this subsection, the Secre-

tary may require each such air carrier to file with the

Secretary the reports, data, and other information nec-

essary to fulfill his duties under this subsection.

(3) In addition to making monthly assistance or re-

imbursement payments under this section, the Secretary

shall encourage negotiations between air carriers and

representatives of eligible protected employees with re-

spect to rehiring practices and seniority.

(e) Period of monthly assistance payments

(1) Monthly assistance payments computed under sub-

section (b) of this section for a protected employee who

has been deprived of employment shall be made each

month until the recipient obtains other employment, or

until the end of the 72 months occurring immediately

after the month such payments were first made to such

recipient, whichever first occurs.

(2) Monthly assistance payments computed under sub-

section (b) of this section for a protected employee who

has been adversely affected relating to his compensation

shall be paid for no longer than 72 months, so long as

the total number of monthly assistance payments made

under this section for any reason do not exceed 72.

(f) Rules and regulations

(1) The Secretary may issue, amend, and repeal such

rules and regulations as may be necessary for the ad-

ministration of this section.

(2) The rule containing the guidelines which is re-

quired to be promulgated pursuant to subsection (b)

shisha AN AKA PRR

ib eiacscis.n pital

25a

of this section and any other rules or regulations which

the Secretary deems necessary to carry out this section

shall be promulgated within six months after October 24,

1978.

(3) The Secretary shall not issue any rule or regula-

tion as a final rule or regulation under this section until

30 legislative days after it has been submitted to the

Committee on Commerce, Science, and Transportation of

the Senate and the Committee on Public Works and

Transportation of the House of Representatives. Any

rule or regulation issued by the Secretary under this

section as a final rule or regulation shall be submitted to

the Congress and shall become effective 60 legislative

days after the date of such submission, unless during

that 60-day period either House adopts a resolution stat-

ing that House disapproves such rules or regulations,

except that such rules or regulations may become effec-

tive on the date, during such 60-day period, that a

resolution has been adopted by both Houses stating that

the Congress approves of them.

(4) For purposes of this subsection, the term “legisla-

tive day” means a calendar day on which both Houses of

Congress are in session.

(g) Airline employees protective account

All payments under this section shall be made by the

Secretary from a separate account maintained in the

Treasury of the United States to be known as the Air-

line Employees Protective Account. There are authorized

to be appropriated to such account annually, beginning

with the fiscal year ending September 30, 1979, such

sums as are necessary to carry out the purposes of this

section, including amounts necessary for the administra-

tive expenses of the Secretary related to carry out the

provisions of this section.

26a

(h) Definitions

For the purposes of this section—

(1) The term “protected employee” means a per-

son who, on October 24, 1978, has been employed for

at least 4 years by an air carrier holding a certifi-

cate issued under section 1371 of this Appendix.

Such term shall not include any members of the

board of directors or officers of a corporation.

(2) The term “qualifying dislocation” means a

bankruptcy or major contraction of an air carrier

holding a certificate under section 1371 of this Ap-

pendix, occurring during the first 10 complete cal-

endar years occurring after October 24, 1978, the

major cause of which is the change in regulatory

structure provided by the Airline Deregulation Act

of 1978, as determined by the Civil Aeronautics

Board.

(3) The term “Secretary” means the Secretary of

Labor.

(4) The term “major contraction” means a reduc-

tion by at least 714 percent of the total number of

full-time employees of an air carrier within a 12-

month period. Any particular reduction of less than

7% percent may be found by the Board to be part

of a major contraction of an air carrier if the

Board determines that other reductions are likely to

occur such that within a 12-month period in which

such particular reduction occurs the total reduction

will exceed 714 percent. In computing a 714-percent

reduction under this paragraph, the Board shall not

include employees who are deprived of employment

because of a strike or who are terminated for cause.

(i) Transfer of authority of Board

The authority of the Board under this section is trans-

ferred to the Department of Transportation on January

1, 1985.

27a

(j) Termination

The provisions of this section shall terminate on the

last day the Secretary is required to make a payment

under this section.

(Pub. L. 95-504, § 48, Oct. 24, 1978, 92 Stat. 1750.)

REFERENCES IN TEXT

The Airline Deregulation Act of 1978, referred to in

subsee. (h) (2), is Pub. L. 95-504, Oct. 24, 1978, 92

Stat. 1705, as amended. For complete classification of

this Act to the Code, see Short Title of 1978 Amendment

note set out under section 1301 of this Appendix and

Tables.

CODIFICATION

Section was enacted as part of the Airline Deregula-

tion Act of 1978, and not as part of the Federal Avia-

tion Act of 1958 which comprises this chapter.

TRANSFER OF FUNCTIONS

All functions, powers, and duties of the Civil Aero-

nautics Board were terminated or transferred by sec-

tion 1551 of this Appendix, effective in part on Dec. 31,

1981, in part on Jan. 1, 1983, and in part on Jan. 1,

1985.

For transfer of certain enforcement functions of the

Secretary or other official of the Department of Trans-

portation relating to compliance with this chapter and

the authorizations and regulations issued thereunder to

the Federal Inspector, Office of Federal Inspector of the

Alaska Natural Gas Transportation System, see Trans-

fer of Functions note set out under section 1301 of this

Appendix.

28a

28 U.S.C. § 1254 (1982). Courts of appeals; certiorari;

appeal; certified questions

Cases in the courts of appeals may be reviewed by the

Supreme Court by the following methods:

(1) By writ of certiorari granted upon the peti-

tion of any party to any civil or criminal case

before or after rendition of judgment or decree;

(2) By appeal by a party relying on a State

statute held by a court of appeals to be invalid as

repugnant to the Constitution, treaties or laws of

the United States, but such appeal shall preclude

review by writ of certiorari at the instance of such

appellant, and the review on appeal shall be re-

stricted to the Federal questions presented;

(3) By certification at any time by a court of

appeals of any question of law in any civil or crimi-

nal case as to which instructions are desired, and

upon such certification the Supreme Court may give

binding instructions or require the entire record to

be sent up for decision of the entire matter in con-

troversy.

29a

REGULATIONS

DEPARTMENT OF LABOR

Bureau of Labor-Management

- Relations and Cooperative Programs

29 CFR Part 220

Airline Employee Protection Program

AGENCY: Bureau of Labor-Management Relations and

Cooperative Programs, Labor.

ACTION: Final rule.

SUMMARY: The Department of Labor, through the

Bureau of Labor-Management Relations and Cooperative

Programs (BLMRCP), is issuing regulations to imple-

ment the Airline Employee Pretection Program estab-

lished by Section 43 of the Airline Deregulation Act of

1978 (Pub. L. 95-504). By Secretary’s Orders Number

1-79 and 5-84, the (_BLMRCP) has been assigned re-

sponsibility for provisions concerning protected employ-

ees’ priority hire rights, air carriers’ duty to hire and

the comprehensive job listing. These rules are designed

to effectuate those provisions.

EFFECTIVE DATE: January 27, 1986.

FOR FURTHER INFORMATION CONTACT: Jeffrey

Salzman, Airline Employee Protection Program, Division

of Employee Protections, Room N-5416 U.S. Department

of Labor, 200 Constitution Avenue, NW., Washington,

D.C. 20210. Phone: (202) 357-0473.

SUPPLEMENTARY INFORMATION:

Background

On October 24, 1978, the Airline Deregulation Act of

1978, Pub. L. 95-504 (the Act), was signed into law to

bring to a close economic regulation of the airline indus-

30a

try. Although airline deregulation is expected to result

in expanded overall employment opportunities over the

long term. Congress recognized the possibility of reduc-

tion of the labor force of one or more air carriers as they.

make the adjustment from government regulation to an

economic environment governed by market forces. Sec-

tion 43 of the Act provides in general terms for certain

employee protective provisions to be administered by the

Secretary of Labor. Those provisions include both a

legal hiring preference for certain unemployed airline

workers and, under contain defined circumstances, a

benefit program. These regulations apply only to the

first-right-of-hire and job list provisions contained in

Section 43 of the Act (the Rehire Program).

Under the Act, those persons (other than members of

the board of directors or corporate officers) who as of

October 24, 1978 (the Trigger Date) had been employed

for at least four years by an air carrier which had been

certificated under section 401 of the Federal Aviation

Act of 1958 on or before that date (any such carrier

being hereinafter called a covered air carrier) are pro-

tected employees for purposes of the Rehire Program.

All protected employees who are furloughed or termi-

nated (other than for cause) by their employer during

the ten year period subsequent to the Trigger Date (here-

inafter called “designated employees”) are entitled to a

first-right-of-hire in their occupational speciality by any

covered air carrier which is hiring new employees, ex-

cept that any such covered air carrier is specifically en-

titled to recall its own furloughed or terminated employ-

ees or promote or transfer existing employees before

hiring a designated employee. Air carriers which are

not covered carriers for purposes of the Act do not have

any duty to hire designated employees. In addition, the

Act requires the Secretary to compile and publish a com-

prehensive list of jobs available with certificated air car-

riers, whether or not such carriers are subject to the

duty to hire designated employees.

era e TN See ke

3la

In January of 1979, public meetings were held with

interested parties from the airline industry to obtain

their views concerning development of this program.

Proposed regulations were published in March of 1979

in the Federal Register and public comments were re-

ceived. However, a final rule from this rulemaking pro-

ceeding was never published.

The Department published a revised proposal on Sep-

tember 17, 1982, 47 FR 41304, with a 30-day review

and comment period.

Final Regulations were published on November 22,

1983, 48 FR 52854, with an effective date of 60 legisla-

tive days after submission to Congress. The regulations

were submitted to Congress on November 17, 1983, and

took effect on May 17, 1984. Technical amendments to

reflect the re-organization of the Labor-Management

Services Administration and provide information collec-

tion control numbers were published on May 18, 1985.

The Department also published a notice of effective date

at that time. 49 FR 21053.

On May 17, 1984, however, the United States District

Court for the District of Columbia held that the legisla-

tive veto provision in section 43 of the Airline Deregula-

tion Act was unconstitutional and that other provisions

of section 43 were also invalid because they were not

severable from the legislative veto provision. Alaska

Airlines, et al. v. Donovan 594 F. Supp. 92 (D.C.D.C.

1984). On May 24, 1984, the Department published a

notice rescinding the May 18 notice of effective date,

pursuant to court order. 49 FR 21499. On July 16, 1985,

the United States Court of Appeals for the District of

Columbia Circuit reversed the District Court. Alaska

Airlines v. Donovan (D.C. Cir. 1985). The mandate

from the Court of Appeals was issued on October 9,

1985.

The Court of Appeals remanded the case, now titled

Alaska Airlines v. Brock to the District Court for further

32a

proceedings on other issues raised by the carriers. In

the absence of further legal impediments to implementa-

tion of the Rehire Program and because there have al-

' ready been lengthy delays, the Department intends to

implement the Rehire Program at the end of the normal

30-day notice period.

Discussion of Major Comments and Changes

The Department received written responses from 34 air

carriers, labor organizations, civil rights organizations,

and employees. The Department gave full consideration

to all comments and suggested changes. Discussed below

are the major comments and changes.

Rehire Program and Qualifying Dislocation

Section 43 of the Act distinguishes between protected

employees and eligible protected employees. In the pro-

posal accordingly we took the position that protected em-

ployees who are furloughed or terminated other than for

cause (“designated employees” under this rule) are en-

titled to a first-right-of-hire. There is no requirement

for determinations by the Civil Aeronautics Board or its

successor, the Department of Transportation (DOT),

that there has been a major contraction in employment

or that such contraction was due to deregulation. Eli-

gible protected employees may receive monetary benefits

if the DOT makes the above determinations.

Air carriers took issue with the foregoing interpreta-

tion. They argued that the distinction between protected

and eligible protected employees is not supported by the

Act nor by its legislative history. Moreover, the air car-

riers stated that such a distinction, providing the first-

right-of-hire without the need for a major employment

impact or a finding of cause by the DOT was not con-

sistent with other protective statutes, which were spe-

cifically remedial.

33a

The Department has reviewed the legislative history

and has concluded that the interpretation set forth in the

proposed regulations accurately reflects Congressional in-

tent to provide the first-right-of-hire even though a bank-

ruptey or major contraction has not occurred. Key to

the Department’s interpretation is the deletion from the

legislation as finally enacted of the precise language

which formerly conditioned the first-right-of-hire on the

triggering requirements outlined above for monetary

benefits. These triggering requirements were clearly a

condition for both forms of benefits (hiring and mone-

tary) when the deregulation bill (S. 2493) was passed

by the Senate. However, the final bill which emerged

from the joint House-Senate Conference dropped the

triggering conditions for the first-right-of-hire provi-

sions. The conference bill was passed into law un-

changed. In the face of this clear and deliberate action

on the part of the Congress, the Department has no lati-

titude to reintroduce these requirements for the hiring

priority benefit.

Waiting Period

The Department proposed that covered air carriers

could hire nondesignated employees if no qualified desig-

nated employees had applied in a timely manner. The

waiting period before carriers could hire nondesignated

employees would end 30 days after the listing had been

called in to the Center. Carriers stated that this period

would be too long and would place an excessive burden

on their operations. The Department, however, believes

that the prevalent practice in the industry of accepting

advance applications, which this regulation recognizes,

will relieve carriers of delays in filing vacancies. A car-

rier will be free to fill a job with a designated employee

from an advance application at the time it lists the

vacancy with the Center, and there will be no waiting

period. Such a listing should indicate that the job has

34a

already been filed, and the carrier would not receive

unwanted applications.

A number of smaller covered carriers stated that the

30-day waiting period worked a particular hardship on

their operations. They generally do not hire in large

classes, and their small work forces at many stations

have greater difficulty performing additional duties while

a job is being filled. We agree that any burden which

might occur as a result may be greater on such smaller

carriers. The Department seriously considered reducing

the waiting period for carriers operating smaller air-

craft. But the period of time that elapses between a list-

ing and its availability to employees precludes any sig-

nificant relief which would still afford designated em-

ployees an opportunity to apply for the job. We have

concluded that a 30-day period is necessary to effectuate

the statutory rights of protected employees. Smaller car-

riers, however, can mitigate any possible burdens by

_ maintaining files of advance applications or by listing

anticipated vacancies.

One commentator suggested that carriers should be

required to retain applications for a 12-month period.

The Department rejected this provision because a uni-

form requirement might unduly burden some carriers.

However, we suggest that carriers develop prudent reten-

tion policies for unsolicited and advance applications in

the event that a designated employee alleges that a car-

rier did not consider the employee’s application prior to

hiring a non-designated employee.

Exemption From the Duty to Hire

Several smail regional and former charter carriers

sought exemption from the duty to hire on a variety of

grounds. Two carriers, for example, had obtained their

certificates only weeks before the Act became effective.

Others suggested that it was anomalous to cover such

carriers, many of which had no protected employees.

eS ae

35a

These carriers commented that they had not enjoyed

the benefits of the regulated system and thus should not

be encumbered with the protective requirements under

deregulation. Congress, they stated, could not have in-

tended to burden this group of carriers. Several noted

that they essentially resembled the new entrants, which

do not have a duty to hire.

The Department cannot agree with these claims. The

explicit language of Section 43(d) imposing the duty on

all covered carriers is clear and compelling. Congress

anticipated that carriers would experience economic ad-

justments in a deregulated environment. Under the stat-

ute, protected employees, who lose jobs at a shrinking

carrier, will be able to obtain employment with a grow-

ing one. Statutory language must be construed in the

context of the overall statutory purposes—in this case,

the reemployment of designated employees. The Depart-

ment therefore has concluded it would be inappropriate

to provide exemptions and reduce preferential hiring

opportunities.

Definition of Protected Employee

The proposal provided protection based on accrued

seniority as well as employment. The Department re-

ceived comments supporting its proposed definition as

well as comments seeking to broaden the definition or to

restrict it. An industry association suggested that we

amend proposed section 220.01(j) to require a protected

employee to be in compensated service for 40 consecutive

months and have an employment relationship with that

carrier on the Trigger Date (October 24, 1978). We be-

lieve that the suggested requirement of consecutive com-

pensated service would be excessively restrictive and

would not provide an accurate measure of long term

attachment to the industry, which is the general basis

on which Congress conferred protection on airline em-

ployees.

36a

Upon review of the statutory definition of a protected

employee, however, we do agree with the association that

protected employees should have an employment relation-

ship with a covered air carrier on the effective date of

the Act. Employees who have -been furloughed and re-

called display that attachment to the industry. Simi-

larly, employees who have the four years of service or

accrued seniority with a particular carrier, but who shift

employment to another covered carrier, also have had

that same reliance on the regulated system as the em-

ployee whose entire career is spent at one carrier.

Pursuant to our requirement for an employment rela-

tionship, we have altered the notice of protected status

in § 220.25(c) (1) so that such notice would go to the

carriers workers who had an employment relationship

on October 24, 1978. This requirement would focus the

notice on those employees who meet at least one of the

two criteria for attaining protected status and will fa-

cilitate the process of determining who is protected.

Other commentators stated that the Department was

too restrictive. One union suggested utilizing an em-

ployee’s date of hire as the beginning of the service pe-

riod for determining protected status because contracts

differ on determining accrual of seniority. We note,

however, that the contractual provisions which that union

submitted generally provide for accrual of seniority dur-

ing major breaks in compensated service such as fur-

loughs, sick leave, maternity leave. While we recognize

that the Department’s definition may lead to differential

results among similarly situated employees, we do not

believe that the differentiation will be substantial.

Several commentators disagreed with the Depart-

ment’s position that four years of service or seniority had

to be with a single carrier in order to achieve protected

status. Thus an employee who had spent only two years

with one carrier and only two years with another car-

rier prior to 1978 would not be protected. The Depart-

ment bases its position on the explicit language of Sec-

37a

tion 48(h) (1): “* * * employed for at least four years

by an [emphasis added] air carrier * * *.” The Senate

Commerce Committee in reporting out the legislation,

used the term service with “a particular [emphasis

added] airline.” We believe that the statutory language

and the committee report reflect a Congressional intent

that service or seniority must be with only one carrier

in order to qualify as a protected employee.

Equal Employment Opportunity

Section 29 of the proposed rule stated that the first-

right-of-hire shall take precedence over any equal em-

ployment opportunity [EEO] obligations which a carrier

may have. After consultations between the Department

of Labor and the Equal Employment Opportunity Com-

mission, it was agreed that latitude existed to accommo-

date the requirements of both the ADA and EEO sstat-

utes. Since covered air carriers remain free to select

any applicant from among the pool of designated em-

ployees, the Department believes that air carriers will be

able to accommodate both their duty to hire designated

employees and their equal employment obligaticns in most =

cases. Where this is not possible, a carrier having a

specific equal employment requirement as defined in sec-

tion 220.01(j) of the regulation may hire a non-desig-

nated employee. Every carrier remains responsible for

following the hiring procedures set forth in the regula-

tion.

New Entrants’ Requirement to List Vacancies

The Department had proposed that new entrant car-

riers as well as the prederegulation carriers list their job

vacancies in the comprehensive listing. Several new en-

trants objected to this obligation. They argued that the

comprehensive list required by Section 43(d) (2) was in-

tended only to complement the duty to hire and that the

Department’s application of this requirement to new en-

trants was unreasonable and unnecessary. Such listings,

38a

they believe, would be futile since carriers which do not

have an obligation to hire would be required to list jobs

they already may have filled by the time designated em-

ployees applied.

In proposing this section, the Department was guided

by the explicit language of section 43(d) (2) which es-

tablishes the requirement for a comprehensive list of jobs

available with all carriers certificated under section 401

of the Federal Aviation Act. By contrast, the duty to

hire is imposed on carriers certificated prior to deregu-

lation. Furthermore, publication of a truly comprehen-

sive list is consistent with the overall statutory purpose

of section 43. The Congress anticipated that while the

industry as a whole would grow, there might be some job

losses at some carriers. A protection program was writ-

ten to cushion adverse effects on workers. Publication of

a comprehensive list will announce job vacancies to these

workers and facilitate their reemployment. To the ex-

tent that some of these workers may be eligible for

monetary benefits, assistance to them in obtaining any

reasonable comparable employment will lessen the cost of

the monetary benefits program.

Recall Rights

The proposed rule preserved, in accordance with ex-

press statutory language, seniority and recall rights at

the designated employee’s former carrier. In implement-

ing this provision, the Department proposed to permit

carriers to require disclosure of any such rights. Several

unions objected to the disclosure of recall rights on the

grounds that it would either preclude hiring of desig-

nated employees possessing these rights or coerce em-

ployees into relinquishing these rights.

While the Department recognizes that the commenta-

tors’ contentions may have some validity, it believes that

carriers hiring designated employees have a compelling

interest in retaining these designated employees. Consid-

Sv website Racine a

39a

erable time and expense is usually invested in new hires,

and the regulations must reflect these practical consid-

erations. Disclosure does not, in any event, diminish the

carrier’s duty to hire. It only permits a carrier to dis-

tinguish among designated employees according to the ex-

tent of seniority or recall rights in addition to other

criteria.

Several commentators sought to have carriers hire on

the basis of the seniority of the designated employees. It

is clear, however, that the statute does not require this

approach. Moreover, any program based on it would be

virtually impossible to administer. The Department has

sought to implement this program without imposing any

new obligations on the carriers that are not required by

the statute as it pertains to the selection of employees.

Temporary and Seasonal Employees

Recognizing the prevailing practice in the industry of

hiring temporary and seasonal employees, such as college

students and military personnel during the Christmas

holidays and periods of peak summer travel, the Depart-

ment proposed to permit carriers to fill seasonal and

temporary positions outside of the Rehire Program. Un-

der the proposed rule, carriers could not promote or re-

assign such employees into permanent positions unless the

employees held seniority or recall rights.

Several carriers opposed this restriction on promotion

because their typical employee selection procedure is to

hire initially on a temporary or seasonal basis and pro-

mote into permanent positions. The regulations would

force them to change their hiring practices. The Depart-

ment cannot accept these comments without defeating the

overall purpose of the Rehire Program. Where carriers

utilize temporary or seasonal employment as a means of

selecting permanent employees, they should list the va-

cancies and hire designated employees. They would then

be free to promote them into permanent jobs; we have

40a

modified § 220.20(b) accordingly. In other instances

where carriers accord seniority or recall rights to tem-

porary or seasonal workers, those workers would not be

defined as temporary or seasonal under these regulations,

and the restriction on promotion would not apply.

One union requested that the Department specify the

duration of temporary or seasonal employment. How-

ever, because seasonal or temporary periods may vary

greatly from carrier to carrier and a uniform time pe-

riod may be unworkable for some carriers, the Depart-

ment does not believe that it would be appropriate to

make a fixed rule concerning the duration of seasonal or

temporary periods.

Responsibilities of Non-Operating Carriers

Several commentators noted that carriers which were

no longer operating might not be able to provide the lists

of protected employees or the notices of rights required

by §§ 220.25 and 220.27. The statute requires all certifi-

cated carriers, whether operating or not, to meet the

requirements of §§ 220.25 and 220.27. However, we rec-

ognize that compliance may be more difficult for some

carriers. We have written letters to officials or owners

of those carriers which we believe are not presently op-

erating seeking information on any problems they might

expect in complying. The Department is attempting to

provide an opportunity for full participation of all desig-

nated employees in the Rehire Program.

Participation of Labor Organizations

Several unions sought an enhanced role in the imple-

mentation of the program. One union suggested that the

list of protected employees should be made available to

collective bargaining representatives to minimize subse-

quent appeals. The Department naturally hopes to mini-

mize appeals, but since consultations appear to be in the

interests of both carriers and unions, we think it is un-

Ala

necessary to regulate this activity. In § 220.26 the com-

mentator sought authorization for unions to file appeals

on behalf of their members. We agree, to the extent that

representation is authorized, and have made the appro-

priate change.

In addition, this union also wanted collective bargain-

ing representatives to receive copies of the comprehensive

job list. The Department has made provision for some

500 additional copies of the list beyond those to be sent

to the local offices of the employment service. Prior to

the effective date of these regulations, the Department

will determine those unions, media, or other organiza-

tions which will receive the job listings.

Eligibility for Designated Status

Under the proposed § 220.10 fhe Department set forth

criteria to determine whether or not a protected em-

ployee has been furloughed or terminated within the

meaning of the Act. In addition to retirees and volun-

tary quits, we stated that strikers, employees who re-

spect picket lines, or employees who had been terminated

for being on strike would not be eligible for the Rehire

Program. Several unions opposed these positions arguing

that our prohibitions would have a chilling effect on the

exercise of rights to concerted activity under the Railway

Labor Act.

We think it is evident that strikes and sympathy

strikes are neither furloughs nor terminations, which the

Act requires to initiate a preference in hiring. A con-

trary interpretation would be inconsistent with the Act

and would provide striking employees with a significant

weapon in labor disputes. We do not believe that Con-

gress intended such a result. On the other hand, we agree

that terminations for being on strike are similar to other

forms of involuntary termination, and we have deleted

that exclusion.

42a

One union noted that the phrase “has withheld serv-

ices” in § 220.10(b) (4) could be interpreted to exclude

employees who had ever done so. The Department did

not intend this, and we have changed the paragraph to

make it parallel to the exclusion for being on strike.

Notices of Rights

In proposed § 220.27 carriers would have as much as

180 days to provide furloughed employees with notices of

their designated status. We have reduced that period to

60 days. Carriers should not have any difficulty in meet-

ing this requirement, regardless of whether they use au-

tomated personnel systems. Employees should not have

to wait six months to obtain the document which con-

firms designated status and eligibility for the Rehire

Program. In addition, we specifically require carriers to

replace lost notices of rights.

E ffective Period

The Department indicated in its notice of proposed

rulemaking that the regulations would apply on their

effective date. Certain carriers construed the proposed

rule to indicate that the duty/to hire and the first-right-

of-hire would not apply until the regulations become ef-

fective. This is a misunderstanding of the Department’s

position. While any requirements imposed by the regu-

lations will of course not be in force before the rule’s

effective date, the rights and duties under section 43(d)

which flow directly from the Act have existed since Octo-

ber 24, 1978. These regulations merely facilitate the ex-

ercise of statutory rights and duties. We have modified

$§ 220.01(g) and 220.50 to prevent any further misun-

derstanding with respect to the effective date of these

regulations and the statutory rights and obligations.

Additional Modifications

In addition to the modifications discussed above, the

Department has also made the following changes: (1)

43a

In § 220.25(c) (3) we have imposed a 15-day period for

carriers to answer appeals and a corresponding change in

section 220.26(a). (2) In § 220.28 we require two copies

of the semi-annual report.

Summary of the Final Rule

There follows a summary of the final rule, as modified

in the fashion discussed above. The regulations are di-

vided into six subparts:

Subpart A contains the purpose, scope, responsibilities

and definitions applicable to this Part 220. It should be

noted that a number of these provisions contain signifi-

cant administrative interpretations of the Act. Of par-

ticular importance is the definition of a protected em-

ployee contained in § 220.01(1). This definition limits

the scope of the Rehire Program to an employee who had

an employment relationship with a covered air carrier

on the Trigger Date and who occupies a position which

entitles the individual to accrue seniority rights or to

possess recall rights under the applicable collective bar-

gaining agreement or company policy. Specifically, this

definition exempts a seasonal or temporary employee who

does not occupy such a position.

Similarly, positions which are seasonal or temporary

and do not confer seniority or recall rights have been

exempted from the vacancy filing requirements cortained

in Section 220.22. This interpretation recognizes the in-

dustry practice of hiring temporary or seasonal workers,

such as college students and military personnel, over

Christmas holidays and periods of peak summer travel.

These workers do not accrue any seniority rights, and

their employment is terminable at will without recall

rights. Because the Rehire Program is intended to fa-

cilitate the permanent reemployment of employees with a

long-term commitment to the industry, the Department

believes that coverage of seasonal and temporary em-

44a

ployees and positions, so long as they do not confer sen-

iority or recall rights, was not intended by the Act.

While air carriers are free to hire non-designated em-

ployees to fill seasonal or temporary positions, Section

220.20(b) prohibits an air carrier from filling a vacancy

which would otherwise be available to a designated em-

ployee by promoting a seasonal or temporary employee

until the carrier has made the vacancy available to desig-

nated employees in accordance with the regulations. Con-

versely, carriers which fill permanent jobs by selection

from among their temporary or seasonal employees can

maintain this practice by listing their temporary and sea-

sonal positions with the Center established under these

regulations and hiring designated employees to fill those

positions.

It should also be noted that under the regulations the

Rehire Program is applicable only to certain protected

employees. A “designated employee” is defined in

§ 220.01(f) as a protected employee who meets certain

statutory eligibility tests as set forth in § 220.10. Only

designated employees are entitled to exercise the first-

right-of-hire.

Subpart B prescribes the eligibility requirements for,

as well as the rights of, designated employees under the

Rehire Program.

Section 220.10 implements the statutory limitation that

only designated employees are eligible for the first-right-

of-hire. Specifically excluded from eligibility as desig-

nated employees are protected employees who retire, vol-

untarily quit, strike, or withhold services in support of

other employees on strike.

Section 220.11 provides that designated employees shall

have a first-right-of-hire, regardless of age, in their occu-

pational specialty and also protects existing seniority and!

recall rights with their former air carriers. This section

45a

additionally permits covered carriers to establish job quali-

fications or other hiring criteria which applicants must

satisfy, subject to the limitations on such criteria set forth

in § 220.21.

Subpart C enumerates the duties of covered air carriers

under the Rehire Program.

Section 220.20 implements the statutory duty of covered

air carriers to hire qualified designated employees before

hiring any other applicant from outside the furloughed or

existing work force of the hiring carrier. This section also

explicitly recognizes a covered carrier’s right to select the

applicant of its choice from among the designated em-

ployees who apply for a given position.

Section 220.21 provides that, solely with respect to the

Rehire Program, employment opportunities for designated

employees may not be limited by a covered air carrier on

the basis of initial hiring age, seniority or recall rights,

or previous experience with another air carrier. This pro-

vision implements the express language of the Act that

protected employees have a first-right-of-hire ‘regardless

of age,” thereby invalidating existing initial hiring age

criteria of covered air carriers as they apply to designated

employees in the Rehire Program.

Further, the Department believes that air carriers may

not require the absence of seniority, recall rights or pre-

vious experience as a condition of employment for pro-

tected employees in the Rehire Program. However, these

regulations are not intended to affect in any manner the

hiring practices of covered air carriers regarding persons

who are not designated employees or retirement policies

of such carriers which do not discriminate against des-

ignated employees.

Section 220.22 provides that all certificated air carriers,

including those certificated after the passage of the Act,

must list their job vacancies with a Center established by

46a

the Secretary which will maintain and publish a compre-

hensive listing of available airline jobs (See § 220.40).

This requirement was established in order to ensure that

the comprehensive listing contains a listing of all available

jobs, even if some listed jobs are not subject to the ex-

press duty to hire imposed under the Rehire Program. In

addition, the availability of such a comprehensive list

should provide the maximum opportunity for unemployed

airline workers to obtain reasonably comparable employ-

ment at the earliest possible time.

Section 220.23 prescribes the content of vacancy list-

ings which must be filed by air carriers.

Section 220.24 prohibits covered air carriers from fill-

ing a vacancy (other than on a temporary basis) with

anyone other than a designated employee until the vacancy

has been listed with the Center, pursuant to § 220.22, for

at least 30 days.

Section 220.25 establishes a list of protected employees

to be published by the Department. Covered air carriers

are required to report specific identifying information for

all persons who qualify as protected employees. Addition-

ally, air carriers are required to notify each employee

who had an employment relationship with the carrier on

the Trigger Date as to whether or not that employee is

deemed a protected employee. It should be emphasized

that the employer is not required to use any particular

form in notifying employees as to whether or not they are

protected. Thus, for example, the carrier is free to notify

current employees of their status by placing a statement

to that effect on their pay stub.

An employee whom the air carrier determines is not a

protected employee may submit evidence in support of his

or her claim to protected employee status to the air car-

rier, and, under procedures outlined in § 220.26, the em-

ployee or his or her representative may appeal any ad-

verse final determination by the air carrier to the Secre-

47a

tary. Any air carrier contemplating hiring a designated

employee will be able to verify the employee’s initial

status as a protected employee by reviewing the list pub-

lished by the Department.

Section 220.27 requires an air carrier to furnish each

protected employee who is furloughed or terminated, other

than for cause, during the ten years following the Trigger

Date with appropriate written evidence that such em-

ployee is a designated employee at the time of such action.

This requirement applies unless the furlough is for a

specific period of less than 90 days. This requirement

applies to all such furloughs or terminations between the

effective date of the regulations and October 24, 1988. In

addition, covered air carriers are required to make reason-

able efforts to provide comparable evidence to protected

employees who were furloughed or terminated by such

carrier between October 24, 1978 and the effective date

of the regulations.

Section 220.28 requires covered air carriers to make a

semi-annual report of vacancies filled to the Department.

For each vacancy filled by a non-designated employee, this

report must contain a certification that no qualified des-

ignated employee filed a timely application.

Section 220.29 provides that a carrier under a specific

EEO requirement emanating from a federal court or ad-

ministrative order, consent decree, or conciliation agree-

ment shall, to the extent possible, satisfy this obligation

by hiring qualified designated employees. Where no such

designated employees are available, the carrier may meet

its EEO requirement by hiring nondesignated employees.

The EEO obligation does not change a carrier’s respon-

sibility for following the hiring procedures established by

this regulation.

Subpart D prescribes the obligations of designated em-

ployees in seeking to exercise the first-right-of-hire, includ-

ing seeking suitable employment, making application for

48a

specific positions with covered air carriers and providing

proof of eligibility for the first-right-of-hire.

Subpart E prescribes the responsibilities of the Depart-

ment of Labor under the Rehire Program.

Section 220.40 provides that the comprehensive list of

jobs available with air carriers will be established and

maintained at the Center established by the Secretary.

Air carriers may list jobs with this facility by telephone

or in writing. The comprehensive list of vacancies will

be published on a periodic basis, probably weekly, or as

determined necessary by the Secretary.

Section 220.41 provides for the list of protected em-

ployees to be published by the Department and circulated

to covered carriers.

Subpart F prescribes the beginning and ending dates

of the effective period of these regulations and provides

for the disclosure of information, collected by the Depart-

ment, consistent with the Privacy Act (5 U.S.C. 552a).

Enforcement

The Act and its legislative history are silent on the

existence of a means to enforce the Rehire Program,

whether by seeking damages for failure to carry out re-

quirements of the Act or any accompanying regulations

or otherwise. After careful study, the Department has

concluded that it is without specific enforcement authority

inder the Act. However, it appears that a private right

of action may be available to a qualified designated em-

ployee who actually applied for job vacancies. (See Cort

v. Ash, 442 U.S. 66, 78 (1975).

Drafting Information

This document was prepared under the direction and

control of Hugh Reilly, at the time, Executive Assistant to

the Assistant Secretary for Labor-Management Relations.

49a

Privacy Act

These regulations will create a system of records, which

will include a list of protected airline employees, appeals

and decisions on protected status, and reports of desig-

nated employees hired. The Department will publish in

the Federal Register a notice of that system in accordance

with section 552a(e) (4) of the Privacy Act.

Executive Order 12291

These regulations contain several provisions which

entail economic costs for certificated air carriers and the

Federal Government. In particular, these regulations

establish: (1) Eligibility requirements and procedures

for implementing the first-right-of-hire obligation estab-

lished under the Act, (2) a comprehensive listing of air-

line job openings for all air carriers, including those certi-

ficated after the Trigger Date, (3) a list of protected em-

ployees to be published by the Department, (4) a one-time

notice to all employees of covered carriers employed on the

Trigger Date stating whether or not they qualify for pro-

tected status under the Act, (5) notices to furloughed and

terminated employees, and (6) semi-annual reporting of

any new hires to the Department, which includes certifica-

tion for all jobs filled by someone other than a desig-

nated employee.

For several reasons the Department expects the actual

economic impact of the regulations to be minimal. First,

the essential element of the regulations—the duty to hire

designated employees—is a statutory obligation, not one

created by these regulations. Second, the program does

not interfere with covered air carriers’ internal promo-

tion and recall practices for existing employees. Many job

vacancies are filled internally through promotions of exist-

ing employees, while the Act and this rule are limited to

outside hiring to fill job vacancies. This reduces substan-

tially the number of actual job openings where first-right-

of-hire provisions will apply. In addition, covered carriers

50a

are entitled to recall their own furloughed or terminated

employees prior to offering positions to designated em-

ployees. Finally, the regulations contain an exemption

allowing carriers to hire temporary and seasonal em-

ployees without preference to covered workers so long as

such workers are not subsequently granted seniority or

recall rights, or given permanent employment. Thus the

regulations will affect neither existing seniority, promo-

tion, or layoff policies nor short-term hiring practices.

Additionally, the exemption of seasonal and temporary

positions recognizes a prevalent practice in the industry

and allows employers maxim

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