United Employee Says Workers Can Sue Over $5B Virus Relief

By Alyssa Aquino
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Law360 (July 28, 2020, 7:42 PM EDT) -- A United Airlines Inc. worker told an Illinois federal court on Tuesday that the airline's $5 billion coronavirus bailout wasn't a "run-of-the-mill" deal that barred employees from holding the airline accountable for sending them home without pay after accepting the cash.

Kenneth England urged U.S. District Judge Martha M. Pacold to allow his proposed class action to move forward, arguing that because the cash was supposed to go toward payroll, workers could pursue third-party claims that United Airlines violated the relief deal by directing staff to take 20 days of unpaid leave.

"The … agreement is not a run-of-the-mill government contract sought to be enforced by the general public, it is precisely the kind of government contract that England may enforce as a third-party beneficiary," he said.

England filed suit in May seeking to hold United Airlines accountable for instructing its entire management and administrative workforce to take 20 days of unpaid time off, two weeks after the airline accepted emergency government funding.

The directive flew in the face of the company's promises to refrain from payroll reductions or involuntary furloughs until September 30, conditions that the government attached to the relief package, England alleged.

United Airlines fought back, saying its workers volunteered to go on leave and that it was using "every penny" of the funding to cover payroll and employee benefits, according to court filings.

Moreover, the CARES Act doesn't allow for employees like England to sue over how the emergency funding is spent, the airline argued in a July 2 bid to toss the case.

But England argued on Tuesday that Congress clearly intended for airline workers to benefit from the emergency relief when lawmakers authorized the federal government to pour funding into payroll support. This intention was further laid out in United Airlines' funding agreement, which states that the money must be used "exclusively" for employees' paychecks and benefits, England said.

As intended beneficiaries, workers could press third-party claims over the government funding, England argued.

England also pushed back against United Airlines' arguments that the instant suit was "virtually identical" to that of Astra USA Inc. v. Santa Clara, a case where the Supreme Court ruled against a third party's right to enforce a government contract.

He pointed out that the agreements at the core of the Supreme Court case came with an entire enforcement arm to resolve consumer claims, a sign that Congress didn't want third parties to push claims in the judiciary system. In contrast, Congress' virus relief was an "isolated injection of funds" that lacked ways for workers to keep employers compliant with the funding deal, England argued.

"The act contains no civil penalty with which England's claim would compete. As a result, a third-party contract claim to enforce United's promise … is entirely consistent with both the language and purpose of the act," England said.

Counsel for England and United Airlines didn't immediately respond to requests for comment.

England is represented by Douglas M. Werman and Michael M. Tresnowski of Werman Salas PC.

United is represented by Douglas W. Hall, Donald J. Munro, Ann-Marie Woods and Scott J. Mainquist of Jones Day.

The case is England et al. v. United Airlines Inc., case number 1:20-cv-02877, in the U.S. District Court for the Northern District of Illinois.

---Additional reporting by Craig Clough. Editing by Steven Edelstone.

For a reprint of this article, please contact reprints@law360.com.

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Case Information

Case Title

England v. United Airlines, Inc.


Case Number

1:20-cv-02877

Court

Illinois Northern

Nature of Suit

190(Contract: Other)

Judge

Honorable Martha M. Pacold

Date Filed

May 13, 2020

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