The National Academies

ACRP 11-01/Topic 07-02 [Final]

Preemption of Worker Retention and Labor Peace Agreements at Airports
[ ACRP 11-01 (Legal Aspects of Airport Programs) ]

  Project Data
Funds: $55,000
Research Agency: Kaplan Kirsch Rockwell
Principal Investigator: Eric T. Smith
Effective Date: 10/20/2015
Completion Date: 10/20/2016

Airport authorities impose (or consider imposing) labor peace and worker retention agreements on various companies that do business at the airport. The labor peace agreements generally require that, as a condition of operating on airport property, a company must become signatory to a valid collective bargaining agreement with a labor organization. The company must also require any work done by subcontractors to be performed under the same conditions. Worker retention agreements typically require a successor company taking over for a predecessor company to hire all of the predecessor’s employees who worked for the predecessor prior to the successor taking over operations. For decades, the federal courts have ruled that when a state or other subdivision of the state attempts to regulate activity that is either arguably protected or prohibited by the National Labor Relations Act (“NLRA”), the state’s conduct is preempted and the state is forbidden from taking any kind of action that interferes with federal labor laws and national labor policy. The Supreme Court has allowed lawsuits for damages against state governmental authorities who have imposed regulations found to be preempted by federal labor law under 42 U.S.C. § 1983. However, there is an exception to federal labor law preemption under a Supreme Court case called Boston Harbor. (Building and Constr. Trades Council v. Associated Builders & Contractors of Mass/RI, Inc. [“Boston Harbor”], 507 U.S. 218, 224 [1993]) When a state, as an owner or manager of property, acts as a private participant in the marketplace, the state is not subject to preemption because preemption only applies to state regulatory actions, but not when the state is acting as a proprietor or a market participant. In the Boston Harbor case, it was permissible for a state agency to require a project labor agreement for any contractor that was going to work on a project to clean up the Boston Harbor. Because a private entity could require a project labor agreement under the NLRA, it was permissible for a state agency to require a project labor agreement when it was contracting with an employer to provide goods or services to the state. The preemption doctrine also exists under the Railway Labor Act (“RLA”) for air carriers covered by the RLA, and entities owned or controlled by air carriers that perform traditional airline functions. The Supreme Court and other federal courts have held that preemption similar to the NLRA exists under the RLA. While there do not appear to be specific cases that say a Boston Harbor-type of market participant exception to preemption definitively exists, the courts could find such an exception to preemption under the RLA given that federal courts often look to the NLRA to interpret the RLA. Similarly, the Airline Deregulation Act (“ADA”) prohibits state or local government regulation of an air carrier’s “price, route, or service,” subject to an exception preserving an airport operator’s “proprietary powers.”
The objective of this research is to produce an analysis of the scope of the preemption doctrine applicable to efforts by airport authorities to control or regulate the labor relations practices of various companies that do business at the airport or with the airport authority. The analysis should provide background on the theory and underlying legal sources for the principle of the market participant exception or proprietary exception as applied in the airport context. It should also identify the various categories of companies doing business at the airport and analyze the scope of preemption as applied to those businesses, including but not limited to the following:
  • Air carriers and their wholly owned subsidiaries performing aeronautical activities;
  • Companies licensed by the airport to perform aeronautical services to air carriers, including companies that pay privilege fees (either fixed or as a percentage of gross receipts) to the airport;
  • Companies licensed by the airport to provide services to the passengers, such as wheelchair or electric cart operators, whose contracts are with air carriers, whether or not privilege fees are imposed;
  • Companies, concessionaires, or contractors selected by the airport operator to provide services to the public; and
  • Companies or contractors selected by the airport to provide services directly to the airport authority.

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