Donovan v. American Airlines, Inc.

• Decision Date: 19 May 1981
• Docket Number: Civ. A. No. CA-3-79-1527-G.
• Citation: 514 F. Supp. 526
• Parties: Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. AMERICAN AIRLINES, INC., a corporation, Defendant.
• Court: U.S. District Court — Northern District of Texas

514 F. Supp. 526

Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. AMERICAN AIRLINES, INC., a corporation, Defendant.

Civ. A. No. CA-3-79-1527-G.

United States District Court, N. D. Texas, Dallas Division.

May 19, 1981.

Donald Hill, Barbara Heptig, Attys., Office of the Solicitor, U. S. Dept. of Labor, Dallas, Tex., for plaintiff.

Glen Walker, American Airlines, Inc., Legal Department, Dallas-Ft. Worth Airport, Tex., and Louis P. Bickel and Thomas L. Case, Bickel & Case, Dallas, Tex., for defendant.

MEMORANDUM OPINION

PATRICK E. HIGGINBOTHAM, District Judge.

The Secretary of Labor here contends that the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201 et seq., requires American Airlines, Inc. ("American") to pay the minimum wage to flight attendants and airline reservation sales agents while they are full-time students in an American learning center. Most of the underlying facts are undisputed.¹

Flight Attendants

Twenty-four years ago, American opened its "Stewardess College" at Fort Worth, Texas. Other than its change to a flight attendant training program, reflecting the airline's move to gender neutrality, and some changes in teaching methods, the program has remained the same. Flight attendant trainees receive five weeks of training conducted in the classrooms and aircraft mock-up facilities in the Learning Center. Training is conducted in an academic environment much like the setting of a college campus but with a more intense regimen. Roughly forty percent of the curriculum is devoted to training which the Federal Aviation Administration ("FAA") requires of flight attendants on passenger air carriers, 14 C.F.R. Part 121. The balance of the curriculum is devoted to a variety of subjects including the preparation and serving of meals and drinks, grooming, interpersonal relationships, and aviation history. During the five week training period, students reside in dormitory facilities, receiving both room and board at no expense to them. This educational setting is wholly independent of the airline operation in the sense that no flight attendant trainee replaces or supplements the work of any American employee or otherwise performs any task immediately useful to American. Otherwise stated, there is no on-the-job-training aspect to the five week course. Attendant trainees do not assist on commercial flights, nor do they have contact with passengers, except for two observation trips, one in which trainees fly as passengers, and one orientation flight required by the FAA. In the orientation flight, a trainee wears civilian clothes and is identified by a trainee badge. Even then the student serves as an extra crew member during the minimum two and one-half hour flight segment and replaces no civilian employee.

The Department of Labor in this suit challenges American's practice of not paying students during the five week training period. American does furnish direct subsistence, consisting of meals, lodging, ground transportation, laundry service, security service and recreational facilities. American explains that the subsistence is provided because the students are in school full-time and, therefore, are not earning income during their training, and because they usually come from places distant from the school. While the students are expected to reside at the Learning Center and take their meals there, they are not required to do so. Some stay at home or with friends in the Dallas-Fort Worth area, and commute to and from the Learning Center.

Contrary to veiled suggestions by government counsel, the students are hardly "serfs" in a fiefdom such as described some coal and ore mine employers of the late 30's and 40's. In fact, when employed, a flight attendant becomes a member of a powerful union. That union has made no contention in this suit that its protective wing ought to be extended to these students. The position of a flight attendant, in fact, appears to be a highly desired one. So much so, that supply and demand forces of the relevant labor pools favor American as demonstrated by the statistic that during relevant times, there were 70,000 applicants each year for the 800 trainee slots. But it cannot fairly be said that most of these eager applicants are unfamiliar with the conditions of the training they seek. Each accepted applicant acknowledges, in writing, that they are not an employee while in training and are not compensated as such. They are told explicitly that successful completion of the training program is a prerequisite to ultimate employment, a condition supported by the fact that as many as 20% of those accepted fail to complete the training.

While it appears that many applicants have contrary expectations, the airline expressly informs applicants that successful completion of the school does not guarantee a job. American denies that it was obligated itself to hire the trainees, pointing out that on occasion it has not employed successful graduates. No job was offered to an entire class of attendants who completed training in the summer of 1980. On other occasions, positions were not available immediately after graduation, and the trainees were not offered paid employment until positions opened. Yet, despite the airline's efforts, some applicants believed that on entering the training program they were assured of a position as a flight attendant if they successfully completed the training. Present recollections of that "belief" arguably are supported by the fact that many trainees left secure positions of employment, forfeited rental deposits, and did other things consistent with a confidence that a new job was forthcoming. Their confusion is an anticipatable by-product of both the historical fact that, with few exceptions, successful completion of the training did result in employment as an American flight attendant, as well as the failure of eager applicants to focus upon American's disclaimer of any obligation to hire graduates.

That successful completion of training did, in fact, virtually ensure employment of all graduates is no accident. American is careful to match its forecasted need for flight attendants with the number of accepted applicants to avoid unnecessary training or attendant shortages. Recent economic difficulties of the airlines to one side, it is the accuracy of this match between anticipated and actual needs that has operated to ensure employment of virtually all successful trainees.

Training similar to that offered by American is available at over fifty other institutions, including preparatory schools and junior colleges. There are differences, however, because the flight attendant training at the American training center is tailored to the needs of American. For example, the basic required FAA training is given, but much of the additional time is devoted to teaching policies and practices of American. Flight attendants in American's course are trained only to work in aircraft flown by American. At least one junior college offering flight attendant training, however, periodically reviews American's program in determining its own curriculum.

While many of the learned skills are unique to American, many are transferable. Yet, industry practice is to require all applicants to be trained in each airline's own school. Although a transferring trainee would substantially replicate earlier training, the requirement does not stem from a judgment that the skills are not transferable, but from the fact that there are insufficient numbers of transfers to justify creating a supplemental training program separate from the regular curriculum. The court is persuaded that a substantial percentage of flight attendant skills acquired through the American school (there was testimony that all other major airlines have substantially the same training program) is fully fungible.² An American flight attendant employed by another airline would require only a minimum of training to be prepared fully to assume flight attendant duties. Non-transferability is then not so much a product of the "uniqueness" of training but the unwillingness of the airlines to offer training tailored to transferees. This refusal is bottomed upon the economic reality that given the relatively low number of applicants who are graduates of other airline schools, the marginal costs operate in favor of "full retraining" rather than creation of separate schools. It is against this background of economic reality that the uniqueness of the training question must be viewed.

Parts of the American flight attendant training program are sufficiently fungible that other air carriers have sent their trainee flight attendants to American's Learning Center for partial training identical to that provided the American trainees. American, of course, is paid by the contracting carriers for such training.

Finally, private corporate "airlines" have been hiring laid-off American flight attendants with no or little retraining, relying largely on the training initially provided by American.

The cost of training itself suggests that the market place recognizes the transferability of flight attendant training. The schools offering training similar to that of American are not cheap; and there are sufficient numbers of persons willing to pay for the training to support the institutions offering it. Even with the closely managed American school, the training of a flight attendant is expensive. While the techniques of cost accounting were debated at trial, it cost American several hundred dollars to train a flight attendant.

Reservations Sales Agents

At the same training center, American trains approximately 1,000 reservation agents annually from among approximately 30,000 applicants. As with flight attendants, each applicant for reservation agent acknowledges, in writing, that they are not an employee during training, and acceptance for training is not an offer of...