Brown v. Delta Airlines, Inc.

         Providence County Superior Court

          For Plaintiff: Vicki J. Bejma, Esq.

          For Defendant: Thomas R. Gonnella, Esq.; Rebecca M. Murphy, Esq.; William E. O'Gara, Esq.; Matthew C. Reeber, Esq.; Sean M. Fontes, Esq.

          DECISION

          MCGUIRL, J.

         The Plaintiffs-Kathleen Brown, Robin Brindle, Sandra Carter, Kimberly Clayman, Marcie Laporte, and Kevin Ramirez (Plaintiffs)-seek judicial review of a decision of the Board of Review of the Department of Labor and Training (Board of Review or DLT). In its decision, the Board of Review rejected the Plaintiffs' claims for wages and found that requiring Delta Airlines, Inc. (Delta) to pay its employees one and one-half times the normal rate of pay for hours worked on Sundays and holidays, as required by G.L. 1956 § 25-3-3, is related to the rates, routes, or services of airline carriers and therefore is preempted by the Airline Deregulation Act (ADA), 49 USC § 40101(a)(12). The Court exercises jurisdiction pursuant to G.L. 1956 §§ 42-35-15, et seq. For the reasons set forth herein, this Court affirms the DLT's decision.

         I Facts and Travel

         The Plaintiffs were employees of Delta at Delta's facility in the T.F. Green Airport in Warwick, Rhode Island (TF Green). Between September 6 and September 13 of 2011, the Plaintiffs filed complaints with the DLT, alleging that Delta violated provisions of §§ 25-3-1, et seq., entitled "Work on Sundays or holidays." Specifically, the Plaintiffs claimed that Delta violated § 25-3-3^[1] by failing to pay them one and one-half times their normal rate of pay (premium pay) for the hours they worked on Sundays and holidays.

         On May 9, 2012, Mary Ellen McQueeney Lally, a DLT hearing officer (Hearing Officer), conducted a hearing on the Plaintiffs' claims against Delta. See Ramirez v. R.I. Dep't of Labor and Training, 2014 WL 4412618 (R.I. Super. Sept. 3, 2014). During such hearing, Delta moved to dismiss the case as a matter of law and asserted that requiring Delta to provide its employees with premium pay for the hours that they worked on Sundays and holidays is related to Delta's rates, routes, or services, and therefore triggers preemption under the ADA.^[2] See id. The DLT issued six decisions^[3] and found that requiring Delta to provide the Plaintiffs with premium pay relates to its prices, routes, and services. See id. The DLT explained that as a result, the ADA preempted the Plaintiffs' claims under § 25-3-3, and therefore, the statute could not be applied against Delta. See id. Accordingly, the DLT ruled that it was "preempted from enforcing wage laws for airlines employees" and that it had no jurisdiction to adjudicate the Plaintiffs' claims. Id.

         Thereafter, on June 15, 2012, the Plaintiffs timely appealed^[4] to the Superior Court. See id. at *2; see also § 42-35-15. In their appeal, the Plaintiffs asserted that the DLT's decision was affected by error of law because it misconstrued the breadth of the ADA. See Ramirez, 2014 WL 4412618 at *4. The Plaintiffs further claimed that Delta failed to produce any evidence to support the DLT's conclusion that requiring Delta to compensate its employees with premium pay for hours worked on Sundays and holidays would have a significant impact on its rates, routes, and services, and therefore, such statutory requirement was not preempted by the ADA. See id. at *7. In response, Delta asserted that the DLT properly found that the Plaintiffs' claims for premium pay were preempted by the ADA. See id. As a result, Delta moved to dismiss the Plaintiffs' claims. See id. at *4.

         On September 3, 2014, this Court issued a decision concluding that the DLT erred in dismissing the Plaintiffs' claims without the presentation of factual evidence on the preemption issue. See id. at *8-9. This Court remanded the matter to the DLT for a further hearing and a finding of fact on the issue of the effect of employee wages on Delta's rates, routes, and services. See id. at *9.

         Consequently, on May 4, 2015, the parties went before the DLT for the remanded hearing that was ordered on this matter. See Department of Labor and Training, Division of Labor Standards Claim No. LS 2011-396, September 1, 2015 decision at 2 (Decision). During the hearing, Kelly Fredericks (Mr. Fredericks), President and CEO of the Rhode Island Airport Corporation (RIAC), and Sandra LaPlante (Ms. LaPlante), station manager for Delta at TF Green, testified on behalf of Delta. See id. Neither witness qualified as an expert.

         Mr. Fredericks testified that he was President and CEO of the RIAC for two years, but had experience in the aviation and transportation industry as a civil engineer and as the chief operating officer of an international airport for approximately thirty-five years. Tr. at 19-20, 21-22. Mr. Fredericks stated that as President and CEO of RIAC, a critical component of his job is attracting and maintaining air carrier services at TF Green. Id. at 22-23. Mr. Fredericks testified that TF Green services eight airline carriers and approximately 10, 000 travelers per day, with Sundays and holidays being some of its most important days. Id. at 20-21, 32-33. Mr. Fredericks further stated a statute that allows employees to either refuse to work on Sundays and holidays without repercussions or receive premium pay for such hours, could significantly impact the air carriers that service RIAC. Id. at 32-33. In addition, Mr. Fredericks stated that the two main factors that influence whether a carrier will locate in Rhode Island are cost and demand. Id. at 24, 37, 40-45. When asked if additional labor costs in Rhode Island would make RIAC less competitive in the market for air services, Mr. Fredericks answered affirmatively. Tr. at 25-26. Mr. Fredericks further claimed that increased costs could make Rhode Island a less attractive site to airlines in general. Id. at 26-27. Specifically, Mr. Fredericks testified that increased labor costs "could lead to reduction in service from a flight frequency opportunity, " and could "diminish[] [RIAC's] competitive advantage." Id. at 31.

         Ms. LaPlante testified that she has been Delta's station manager at TF Green for three years but has worked for Delta for twenty years. Id. at 47-48. Ms. LaPlante explained that as a station manager, her job is to oversee day-to-day operations, perform administrative work, provide superior customer service, manage schedules, and lead a team of twenty-five employees. Id. at 49-50. Ms. LaPlante testified that Sundays and holidays are extremely important to Delta because it is open seven days per week and operates approximately four to five flights on Sundays. Id. at 53-54. Ms. LaPlante also claimed that, as a station manager, she is responsible^[5]for managing the employee schedule to ensure that minimum staff is available to operate Delta's flights at TF Green and is in charge of ensuring counter, gates, and baggage staffing. Id. at 57, 59, 71-73. In addition, Ms. LaPlante explained that she is also responsible for allocating money for employee salaries and benefits from the budget that she obtains from Delta's corporate headquarters. Id. at 63. Ms. LaPlante asserted that if Delta is required to pay premium pay to its Rhode Island employees for the hours worked on Sundays and holidays, that requirement could impact or modify the services that Delta provides on such days. Id. at 61-63, 64. Additionally, Ms. LaPlante stated that the increased cost could likely cause airlines to reduce staff on Sundays and holidays, making Delta less competitive. Id. at 63.

         Based on the testimony given and the evidence submitted, the DLT reasoned that "[a]n increase in salaries would change [Delta's] budget with the possibility that an adjustment in services or staffing would have to be made." See Decision at 4. In reaching its conclusion, the DLT reasoned that "the logical effect[s] that . . . [§ 25-3-3] has on [Delta's] delivery of services or the setting of rates" is "sufficient even if indirect." Id. at 5 (internal citations omitted). The DLT explained that Ms. LaPlante's testimony, which indicated that an increase in employees' wages would, in fact, affect Delta's services, was both "persuasive" and from "a unique perspective." Id. at 4. The DLT also noted that, although Mr. Fredericks' testimony was not particular to Delta, it was "credible as pertaining to air carriers and supportive of the points made by Ms. LaPlante." Id. Therefore, the DLT found that compensating employees with the premium pay is related to Delta's rates, routes, and services, and, as a result, the ADA preempts § 25-3-3's application against Delta. Id. at 5, 6.

         Thereafter, on November 18, 2015, the Plaintiffs again timely appealed the DLT's Decision to this Court. See Pls.' Brief; see also § 42-35-15. In their appeal, the Plaintiffs assert that the DLT committed an error of law in finding that § 25-3-3 was preempted by the ADA because the possible increase in labor costs posed by the Sunday and holiday premium pay requirement is insufficient to trigger preemption. See Pls.' Brief at 7, 21. The Plaintiffs also assert that even if the DLT did not commit error of law, the DLT's Decision is clearly erroneous because Delta failed to prove, by reliable and substantial evidence, that increased labor costs would have a significant impact on its rates, routes, or services. See id. As a result, the Plaintiffs contend that the Court should reverse the DLT's Decision and remand the case solely for the purpose of calculating wages, penalties, and attorney fees. See id. Conversely, Delta asserts that the DLT did not commit an error of law because § 25-3-3 is a "blue law" that dictates how airline carriers, like DLT, can employ and, in and of itself, is sufficient to trigger preemption. See Defs.' Brief at 1, 5, 14. Delta further asserts that the DLT's Decision is not clearly erroneous because reliable and substantial evidence in the record proves that requiring Delta to abide by § 25-3-3 would significantly impact its rates, routes, and services. Id. at 10.

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