Union’s Challenge to Southwest Airlines’ HFWA Settlement Survives … for the Moment
Brett Whitley, Associate
On October 7, 2024, the Colorado District Court for the City and County of Denver denied Southwest Airlines’s (“Southwest’s”) motion to dismiss the Transport Worker Union of America, AFL-CIO, Local 556’s (the “Union’s”) Complaint seeking a declaratory judgment that the settlement reached between Southwest and the Division of Labor Standards and Statistics (the “DLSS”) is unenforceable. However, the Court is also requiring the Union to join in its lawsuit all of its members that are absent from the lawsuit. The Court’s denial of Southwest’s Motion to Dismiss indicates that Colorado courts may allow unions to contest settlements reached between the employers of its members and Colorado’s state agencies if the settlement affects the union members’ rights under Colorado law.
Background and Procedural Posture[1]
In March 2022, the DLSS investigated, then cited and fined Southwest approximately $1.3 million (the largest fine in DLSS’ history) for violations of multiple Colorado labor and employment laws (“Citation”), though most violations related to violations of the Colorado Healthy Families and Workplaces Act (“HFWA”). The DLSS cited Southwest for acts like penalizing employees for taking leave for medical needs and refusing to provide sick leave for preventative care or for the care of sick child, all of which the DLSS found to have violated the HFWA. Southwest contested the DLSS’ citation, in part, by filing a lawsuit against the Director of the DLSS in federal court in the summer of 2022. However, Southwest and the DLSS reached a settlement in the summer of 2023 in exchange for Southwest paying a fraction of the fine ($133,140.00) to the DLSS and the DLSS agreeing that Southwest was exempt from the HFWA under its Collective Bargaining Agreement Exemption and therefore, it would not further investigate Southwest’s compliance with the HFWA.
The Union, which represents approximately 20,000 Southwest flight attendants nationwide, was not a party to the negotiations between the DLSS and Southwest. Upon learning of the settlement, it quickly sued Southwest and certain Colorado state representatives and agencies in August of 2023, in part, to have the settlement declared invalid. Southwest filed a Motion to Dismiss the Union’s Complaint in October of 2023, arguing the Union lacked standing to assert its claims against Southwest and the Court lacked jurisdiction over the Union’s claims, in part, because the Union’s suit did not include all of its Colorado-based members as parties to the suit and the Union otherwise did not have associational standing to bring the suit. Southwest likewise argued that the Union’s claim for declaratory relief did not present an actual controversy to the court because Southwest has complied, and continues to comply, with the HFWA and therefore any impact of the settlement on Union members’ HFWA rights is speculative.
The Court’s Order
The Court’s order was limited to the Union’s fourth and fifth claims for relief, specifically whether the Union stated a claim for relief to have the court declare the settlement unenforceable and that the Union’s members are protected under the HFWA. The Court first found that the Union successfully pleaded associational standing to bring its claim for declaratory relief because the Union sought a declaration of its members’ rights under the settlement, the members would have standing to sue in their own right, and the interests the Union sought to protect were germane to its purposes. Additionally, the declaratory relief claim did not otherwise require the participation of each individual member, further supporting a finding of associational standing. The Court then found that the claim presented an actual controversy before the court, since whether the settlement between the DLSS and Southwest is valid or invalid would unequivocally impact the membership’s rights under the agreement itself and under the HFWA generally.
The Union Still Needs to Join Its Members to its Lawsuit by November 11, 2024
Despite holding the Union’s individual members did not need to participate in the Lawsuit and, therefore, the Union had associational standing, the Court also ruled that the Union must join as parties to the Lawsuit all of its members that are currently absent from the Lawsuit. The Court’s ruling indicates that though the Union’s absent members need not participate in the Lawsuit, the absent members must nonetheless be joined as parties in the Lawsuit. The Court reasoned the absent members must be joined to the Lawsuit because a declaratory judgment on the settlement in Southwest’s favor would not be binding on the Union’s absent members, thereby allowing these members to still bring their own lawsuits. However, the Court did not dismiss the Lawsuit due to the absent members not yet being joined in the Lawsuit. Instead, the Court gave the Union until November 11, 2024, to join its absent members, which total approximately 20,000 Southwest flight attendants. The Union did not address whether joinder of its absent members would be unfeasible, but the Court is allowing the Union to address feasibility with the Court if it is an issue.
Employer Considerations
While the dispute between Southwest and the Union over the DLSS settlement is far from over, the Court’s rejection of Southwest’s motion to dismiss based on standing and actual controversy issues signals that, while employers may reach settlements with Colorado state agencies to resolve wage and hour or other employment-related violations without union involvement, they do so at the risk of additional protracted litigation if the union elects to challenge the enforceability of any settlement based on the impact to its membership. Campbell Litigation will continue to monitor this case and remains available to assist employers with HFWA compliance issues and litigation, as well as with labor/management relations
[1] Transport Workers Union of America, AFL-CIO, Local 556 v. Jared Polis, in his official capacity as Governor of the State of Colorado, et al., Case No. 2023CV32342 (Colo. Dist. Ct. Aug. 14, 2023).