On July 26, 2016, the National Labor Relations Board (NLRB) ruled that Menzies Aviation (USA), Inc. (Menzies) fell under its jurisdiction.
Executive Summary: On July 26, 2016, the National Labor Relations Board (NLRB) ruled that Menzies Aviation (USA), Inc. (Menzies) fell under its jurisdiction. In resolving a recurring dispute as to whether ground operations provided to air carriers by non-carriers fall within the jurisdiction of the NLRB or the National Mediation Board (NMB), the NLRB determined that the air carrier did not exercise sufficient control over Menzies’ employees to find the company was subject to the Railway Labor Act (RLA). Because Menzies was not exempt from its jurisdiction, the NLRB directed an election among Menzies’ cabin cleaner employees.
Menzies provides baggage, ramp, and aircraft servicing for air carriers at 140 airports around the world and employs more than 21,500 individuals. Menzies has a contract with Alaska Airlines (Alaska) at Portland International Airport (PDX). Although Menzies provides services at PDX to Horizon Airlines, an Alaska subsidiary, and SkyWest Airlines, an Alaska business partner, its single contract at the airport is with Alaska. At PDX, Menzies provides ramp and cleaning services for 40 flights a day and employs approximately 180 individuals, 50 of whom are cabin cleaners. In June of this year, the Service Employees International Union, Local 40 (SEIU) filed a petition for an election with the NLRB in an attempt to organize the PDX-based Menzies’ cabin cleaners.
Under the RLA, the NMB has jurisdiction over common carriers and over “any company which is directly or indirectly owned or controlled by or under common control with any carrier.” The National Labor Relations Act (NLRA) defines “employer” to exclude from its coverage any person subject to the RLA. Menzies argued that its employees were under the common control of Alaska and, therefore, the employees were covered by the RLA and exempt from the NLRA.
The NLRB applied the NMB’s two-part test to determine whether Menzies was subject to the RLA as a derivative carrier (i.e., an entity that, while not airline, is considered a “carrier” within the definition of Section 1, First of the RLA). First, the NLRB analyzed whether the nature of the work is the type traditionally performed by air carrier employees. Second, it analyzed whether the employer is directly or indirectly owned or controlled by, or under common control with, a carrier. Menzies had to meet both parts of the test for the NMB to assert jurisdiction. The NLRB determined that Menzies’ employees provided work of the nature typically performed by employees of air carriers and that Menzies did not operate aircraft and was not directly or indirectly owned by an air carrier. However, the NLRB held that Menzies was not subject to NMB jurisdiction because Alaska did not exert sufficient control over it.
In determining whether a carrier exerts sufficient control over a company to confer RLA jurisdiction, the following six factors are considered:
- The extent of the carrier’s control over the manner in which the company conducts its business;
- Access to the company’s operations and records;
- The carrier’s role in personnel decisions;
- The degree of supervision exercised by the carrier;
- The carrier’s control over training; and
- Whether the employees are held out to the public as employees of the carrier.
In analyzing these factors, the NLRB determined that although Alaska employees provided oversight as to how Menzies conducted its business at PDX, its influence was no greater than that exercised by air carriers in cases where the NMB had declined jurisdiction. The NLRB also found that while Alaska was able to capture real-time information from Menzies’ employees through cellphone software, the information was no different than what was previously captured on paper checklists. Moreover, Alaska did not have the right to hire, discipline, or discharge Menzies’ employees. Alaska could request that Menzies remove an employee from its contract, which had the effect of terminating the employee as Alaska is the only carrier with which Menzies contracts at PDX. However, the NLRB noted that Menzies could always transfer the employee to another airport. The NLRB focused on the fact that Menzies’ cleaners reported directly to Menzies’ managers, and the employees wore Menzies’ uniforms. The NLRB also stated that while Alaska created most of the training provided to Menzies’ employees, this was not sufficient to create meaningful control over them.
The NLRB acknowledged that the NMB had exercised jurisdiction over Menzies’ operations at PDX in 2003. However, the NLRB relied heavily upon the NMB’s subsequent 2014 decision finding that Menzies’ operations at Seattle-Tacoma International Airport (Sea-Tac) did not fall under the NMB’s jurisdiction. The NLRB noted that the primary contract at issue between Alaska and Menzies at PDX was the same as the contract between the two companies at Sea-Tac.
Based on its analysis of the factors regarding control, and in light of the fact that the NMB already declined to exercise jurisdiction over the Sea-Tac employees operating under the same contract, the NLRB determined that it had jurisdiction over Menzies. Accordingly, it directed an election, which is scheduled for August 16, 2016.
Employers’ Bottom Line
Traditionally, employers providing similar ground services to air carriers were afforded the protections of the RLA. However, this decision is part of a recent trend of the NLRB exercising jurisdiction over contract employees providing work typically performed by air carriers. The NLRB gives substantial deference to the NMB’s jurisdictional determinations, and the NMB’s decline of jurisdiction over Menzies at Sea-Tac greatly factored into the NLRB’s analysis here. Based on recent decisions by both the NMB and the NLRB, employers providing baggage, ramp, and aircraft cleaning services who are not owned by a carrier may find themselves falling under the NLRB’s jurisdiction unless the carriers with which they contract exert substantial control over their operations.
If you have any questions regarding this Alert or related issues, please feel free to contact the author, Jacquelyn Thompson, firstname.lastname@example.org, in our Washington, DC office. Jacki is a member of FordHarrison’s Airline Industry practice group. You may also contact the FordHarrison attorney with whom you usually work.