Monday, July 31, 2006

Federalizing of airport screeners did not force companies to violate labor laws

It its probably a once-in-a lifetime question considering the world we live in now, but it was one the 9th Circuit court of appeals was forced to answer. Did the privatization of airport screeners by the federal government after 9/11 force massive layoffs in violation of federal laws requiring employers to give 60 days notice before ordering such layoffs?

At the heart of the 9th Circuit's July 26 decision, is the termination of four San Jose International Airport screeners who worked for Globe Airport Security Services. The four plaintiffs and other airport security personnel were laid off after Congress passed the Aviation and Transportation Security Act in 2001. The airport screeners filed a class action lawsuit in California federal court alleging they were required to be given 60 days notice of the layoffs under the federal Worker Adjustment and Retraining Notification Act, also known as the WARN Act.

Congress passed the Aviation and Security act just over two months after the terrorist attacks on New York City and Washington D.C. It took effect in February of 2002 and the TSA began taking over airport screening operations on Oct. 1, 2002. From that date until January 2003, Globe laid off workers in four waves.

San Jose District Judge James Ware granted ruled in favor of Globe, holding that the federal government essentially eliminated the employees and Globe had no input on how or when the screeners were terminated.

The plaintiffs appealed, but the 9th Circuit agreed with Judge Ware. The question for the court was whether WARN applied to the federal government's privatization of an industry.

"We believe the language of the WARN Act is straightforward; it unambiguously provides that the Act applies when an employer orders a mass layoff," the court said in a 13-page decision authored by 9th Circuit Judge Pamela Ann Rymer. "There is no question here that the layoffs were the result of the federal government’s replacing private screeners with federal employees...Thus it was the government, not Globe, that ordered Globe’s employees out of work at [San Jose International Airport] Terminal C. This being so, the WARN Act does not apply."

Because of the uniqueness of the situation, there was little federal law to guide the judges, other than the traditional methods of statutory interpretation. The appellate panel held that the situation at the San Jose Airport was more akin to a Supreme Court decision rejecting the argument that the WARN act applied in a case where the FDIC took over a failing bank, sold of its assets and then terminated a number of employees.

"Although Globe was certainly the employer that executed the mass layoff, it did so as a result of the federally-ordered takeover that replaced private employees with federal
employees," the 9th Circuit said. "Nothing in the pleadings suggests that the government’s takeover of screening operations at [San Jose International Airport] Terminal C did not effectively oust Globe from providing screening personnel at that terminal. As TSA moved in to assume that responsibility, Globe had to move out."

The panel also rejected the plaintiffs invocation of court decisions holding that the WARN act applied to employers who lay off workers due to the cancellation of a government contract. The court said those cases involved the question of whether certain defenses applied to the employers, and not whether the act applied to the situation to begin with.

Based on their conclusions, the court affirmed Judge Ware's decision to rule in favor of Globe based on the pleadings.

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