## Facts

- Allied Pilots Association (APA) was the exclusive bargaining representative for American Airlines pilots.
- During a labor dispute in February 1999, APA organized a “sick-out,” i.e., coordinated false illness reporting to cause a work stoppage.
- Between February 6–9, 1999, the work disruption delayed or stranded hundreds of thousands of passengers.
- On February 10, 1999, a federal district court issued a temporary restraining order (TRO) requiring APA to make “all reasonable efforts” to end the sick-out and direct pilots to return to work.
- APA did not end the sick-out after the TRO; contempt proceedings followed.
- The district court found APA in civil contempt and awarded American Airlines $45 million in compensatory damages for losses caused by violating the TRO.
- Passenger classes (more than 300,000 affected) filed suits seeking economic damages under state law, including tortious interference with their contracts of carriage, based on APA’s continuing post-TRO conduct.
- The district court dismissed federal claims and state claims based on pre-TRO conduct as preempted, but allowed the post-TRO state tortious-interference claim to proceed.
- APA appealed the refusal to dismiss the remaining post-TRO state-law claims.

## Issues

1. Whether passengers’ state-law tortious-interference claims seeking damages from a union sick-out continuing after a federal TRO are preempted under Garmon labor-law preemption principles as applied in the airline context.
2. Whether violation of a federal court order enforcing federal labor law removes otherwise preempted work-stoppage conduct from the preemption field and permits state tort remedies.

## Decision

- The Fifth Circuit reversed the order allowing the post-TRO state-law tort claim to proceed.
- The court held the passengers’ remaining state-law claims were preempted under Garmon principles.
- The case was remanded with instructions to dismiss the post-TRO state-law claims with prejudice.
- The court did not reach the alternative argument that the claims were preempted by the Airline Deregulation Act.

## Legal Principles

- State-law claims seeking damages for conduct arguably protected or prohibited by federal labor law are preempted to preserve uniform national labor policy and the exclusivity of federal remedial mechanisms (Garmon preemption).
- Preemption focuses on preserving the federal system for regulating and remedying labor-dispute conduct; preemption may apply even where the conduct is unlawful under federal labor law.
- A federal court’s labor-related injunction (and subsequent contempt sanctions) does not convert the underlying work-stoppage activity into a distinct, non-preempted state-law wrong for third-party economic loss.
- Allowing state tort damages to supplement federal contempt remedies risks conflicting sanctions and disrupts the federal balance of remedies in labor disputes.

## Conclusion

The Fifth Circuit held that passengers could not recover state-law tort damages for losses caused by a union sick-out continuing after a federal TRO, because such claims would add state remedies to federally regulated labor-dispute conduct and are therefore preempted under Garmon; the remaining state claims were ordered dismissed with prejudice.


Kaufman v. Allied Pilots Ass'n, 274 F.3d 197 (5th Cir. 2001)