Airline Labor Law: The Railway Labor Act and Aviation after Deregulation

Absent any contractual agreement, most employees can only look to state-mandated unemployment compensation benefits to ease the blow of a job loss. ¹ In the airline industry, however, "labor protection plans" are an additional vehicle for easing the effects of job displacement. "Labor protection" is a term of art referring to the mitigation of the effects of mergers of transportation companies upon their employees. ² Such labor protection may require an employer to continue a worker's redundant job. At the very least, the employer must pay moving or retraining expenses, or cash payments to ensure that the employee's economic status is not diminished by the merger. In the air (and rail) transportation industries, both statute and regulatory decisions have called for labor protection in merger agreements. In some cases, carriers have voluntarily agreed with unions on labor protection plans. ³

Before 1978, the airline industry was accustomed to extensive government regulation and intervention. Congress had assumed that government regulation was necessary to protect the interests of carriers, passengers, shippers, and employees. ⁴ Moreover, labor protection provisions were ordinarily imposed as part of the regulatory structure and as a condition to approval of airline mergers. With the intent to move the airline industry rapidly toward deregulation, Congress passed the Airline Deregulation Act of 1978. ⁵ The purpose of the ADA was to encourage, develop, and attain an air transportation system that relied on market forces to determine the quality, variety,

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