BOSTON (CN) - The 1st Circuit tossed a jury award of more than $333,000 to nine Logan International Airport baggage porters, known as skycaps, who claimed a new policy of American Airlines to charge curbside baggage fees cheated them out of tips.
Most of the American Airlines skycaps at Logan are independent contractors working for G2 Secure Staff, though some skycaps work directly for the airline.
In 2005, following a trend to offset costs by charging fees for extra services offered to passengers, American Airlines instituted a mandatory $2-per-bag charge for curbside check-in. Though passengers commonly tipped the skycaps $1 per bag for the service when it was free, tips dropped off dramatically for the porters when the airlines started charging.
American Airlines kept 60 percent of the $2 fee and paid 40 percent to the skycaps' employer, G2.
Ten current and former skycaps, one of whom worked for American in St. Louis, sued American Airlines, claiming that passengers mistook the new fees as a mandatory gratuity.
The skycaps claimed that they were "service employees" and that American Airlines' baggage fee policy violated a Massachusetts statute governing tips that reads, "[n]o employer or other person shall demand ... or accept from any ... service employee ... any payment or deduction from a tip or service charge given to such ... service employee ... by a patron."
A jury awarded the nine Massachusetts skycaps $2 for every bag they checked at curbside from September 2005 to the start of the trial, "plus fees collected in March and April 2008" during the trial, for a total of $333,000. The lone St. Louis skycap, who only brought a tortious-interference claim under Missouri law, won nothing.
American Airlines appealed the award to the nine porters, however, arguing that the Airline Deregulation Act of 1978 bans states from having the power to "enact or enforce a law, regulation or other provision having the force and effect of law related to a price, route or service of an air carrier."
On May 20, the Boston-based federal appeals court agreed and reversed the ruling.
"Importantly, the tips law does more than simply regulate the employment relationship between the skycaps and the airline; unlike the cited circuit cases, the tips law has a direct connection to air carrier prices and services and can fairly be said to regulate both," Judge Michael Boudin wrote for a three-judge panel.
The appellate judges concluded that the fee was part of the service that American Airlines offered to its passengers as part of its airline pricing and that it was not subject to state regulations.
Both sides must pay their own costs related to the appeal, according to the 20-page ruling.
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