On September 11, 2014, the National Mediation Board (NMB), in a split decision, refused to exercise jurisdiction over an airline service provider performing cabin cleaning services for American Airlines at John F. Kennedy International Airport. The decision in Airway Cleaners, LLC, 41 NMB 262 (2014), which was issued over the dissent of Republican Board Member Nicholas Geale, continues the Board’s recent trend away from its past practice of exercising jurisdiction over most airline service providers and potentially opens the door to increased unionization of airline service providers on a location-by-location basis.

Background

In Airway Cleaners, LLC, the United Construction Trades and Industrial Employees Union Local 621 filed a petition with the National Labor Relations Board (NLRB) to represent certain Airway Cleaners employees at JFK, and Service Employees International Union (SEIU) Local 32BJ intervened. The NLRB ultimately referred the case to the NMB for a determination whether Airway Cleaners is covered by the Railway Labor Act (RLA) and subject to the NMB’s jurisdiction.

Two-Part Jurisdiction Test

By its terms, the RLA’s coverage extends beyond companies engaged directly in the transportation of goods and passengers and covers entities under the “direct or indirect ownership or control” of air carriers. These entities are sometimes called “derivative carriers.” For several decades, the NMB has used the same two-part test to determine whether an employer is subject to the RLA as a derivative carrier:

  1. whether the work performed by the entity’s employees is traditional airline work (the “function” prong); and
  2. whether an air carrier or air carriers exercise sufficient direct or indirect control over the entity’s business (the “control” prong).

Both components of the test must be met for the NMB to assert jurisdiction. The NMB has consistently found that many different airline service provider functions qualify as traditional airline work, but controversy has recently developed over the control prong of the test.

For close to 20 years, the NMB’s application of the control prong to airline service providers like Airway Cleaners almost always resulted in RLA coverage (and thus NMB jurisdiction). Between June 2012 and March 2013, however, the NMB declined jurisdiction in four jurisdictional cases involving airline service providers. The NMB never announced it was changing its control standard, but the Board appeared to apply the standard more restrictively.

NMB’s Analysis

In Airway Cleaners, LLC, which was the NMB’s first jurisdictional decision since March 2013, the Board again applied the control test restrictively to deny jurisdiction, concluding that Airway Cleaners’ relationship with its airline customer was merely a “typical subcontractor relationship” insufficient to support RLA jurisdiction. As it did in the prior four cases, the NMB emphasized carrier control over personnel decisions and determined that jurisdiction was inappropriate in large part because of a lack of evidence that the airline customer was involved in hiring, firing, and disciplining of Airway Cleaners’ employees. This case is again a departure from a large number of previous cases in which the NMB found jurisdiction over very similar types of companies with very similar types of airline customer relationships.

Member Hoglander’s Concurring Opinion

Board Member Harry Hoglander concurred in the result but argued that the Board should reject the traditional control test in favor of a new analysis measuring whether the service provider’s employees are “subject to the continuing authority” of an airline (rather than examining carrier control over the service providers themselves). SEIU (as distinct from Local 32BJ) advocated this analysis in a “policy brief” filed with the Board, but the majority decision apparently rejected the new standard, and the Board specifically refused to consider SEIU’s policy brief in reaching its decision.

Member Geale’s Concurring and Dissenting Opinion

Member Geale concurred in the majority’s use of the traditional control test but dissented from the outcome. Member Geale asserted that Airway Cleaners had demonstrated sufficient control under significant past NMB precedent and that sound public policy supports NMB jurisdiction over airline service providers like Airway Cleaners in order to effectuate the RLA’s goal of preventing interruptions to commerce.

Key Takeaways

The Airway Cleaners, LLC decision answers some questions raised by the NMB’s 2012-2013 anti-jurisdiction decisions but leaves others unanswered. On the one hand, it appears that the Board is not interested in explicitly changing its standard and will continue to examine the issue on a case-by-case basis under the traditional control analysis. On the other hand, it appears that the Board intends to continue to apply this test more restrictively than in past cases, and it remains to be seen whether any airline service provider will be able to satisfy the Board’s more restrictive application. At a minimum, any airline service provider seeking to demonstrate NMB jurisdiction should produce as much evidence of carrier control over personnel decisions as possible.

It also remains to be seen what will result from decreased NMB jurisdiction over airline service providers, and it is important to consider the broader context of the Airway Cleaners, LLC decision. A jurisdictional determination can have significant labor relations consequences. Unlike the NLRB, the NMB requires unionization on a “system-wide” basis and does not permit location-specific bargaining units that could give small groups of employees the ability to disrupt nationwide transportation systems. In addition, the RLA limits unions’ and employers’ ability to engage in “self-help” (strike, lockout, or other economic action). For these reasons, unions often perceive RLA coverage to be a disadvantage in both organizing and bargaining. Although some Airway Cleaners’ employees at JFK were already represented by a different union, most airline service provider employees are non-union, and unions have directed increasing focus at airline service providers in recent years. In particular, SEIU has engaged in significant campaigns to organize and change working conditions at several airports around the country, and the campaigns have included numerous filings with the NLRB that have been referred to the NMB. There are several jurisdictional cases still pending at the NMB, and we may see additional NMB jurisdictional decisions in the coming months, so stay tuned.

If the NMB continues the trend of limiting jurisdiction over airline service providers, the NMB’s jurisdictional decisions may make it easier for SEIU to organize these airline service providers on a location-by-location basis (or an even more fragmented basis, as the unions sought here) without the RLA’s protections against labor disruptions. The absence of RLA protections raises concerns that a small group of employees at one particular location may be able to interrupt an airline’s nationwide operations—a result the RLA was intended to avoid. One thing is clear: if disruptions to airline operations occur as a result of the NMB’s decision to limit jurisdiction over service providers, the NMB will have reduced its ability to assist in preventing interruptions to commerce.

As the Board issues more jurisdictional decisions, we may begin to have a better understanding of whether any airline service providers will be able to demonstrate sufficient control and whether the disruptions that some Board and industry watchers fear will come to pass.