Federal Court to Decide Whether a Constitutional Challenge to Colorado’s Healthy Families and Workplaces Act May Proceed

Ashley Graves, Associate

In a recent federal lawsuit challenging Colorado’s Healthy Families and Workplaces Act (“HFWA” or the “Act”), plaintiff Airlines for America (“A4A” or the “Association”) alleges that the Act unconstitutionally violates the dormant Commerce Clause because it creates conflicting regulations and unduly burdens interstate commerce.  On January 22, 2024, Scott Moss, in his capacity as Colorado’s Director of the Division of Labor Standards and Statistics (“DLSS”), filed a Motion for Judgment on the Pleadings seeking dismissal of the Association’s claims, underscoring a potential conflict between the need for national uniformity in labor and employment laws within the airline industry, and the State’s interest in requiring mandatory paid sick leave benefits for Colorado employees.    

Air Transport Association of America, Inc. v. Moss - Background

In its complaint, filed on September 15, 2023, A4A alleges that, among other contentions, the HFWA violates the dormant Commerce Clause of the United States Constitution[1] and is otherwise preempted by both the Airline Deregulation Act and the Railway Labor Act (“RLA”).[2]  Specifically, regarding the dormant Commerce Clause argument, the Association contends that “the burdens [the Act] imposes on the Airlines and interstate commerce is clearly excessive compared to the minor, local benefits[.]”  A4A surmises that airline compliance with the HFWA’s paid sick leave protections “has caused and/or will logically cause an increase in employee use and abuse of sick leave,” which will contribute to or cause flight delays and cancellations.  Further, A4A argues that the employee benefits conferred by the HFWA, as applied to airlines, are minimal since the airlines “already provide generous paid leave benefits[.]”

A4A also asserts that permitting Colorado to impose its own comprehensive paid sick leave scheme on employees who are subject to nationally applicable company policies and collective bargaining agreements may frustrate Congress’ goals in enacting the RLA, which requires “prompt and orderly settlement of disputes[.]”  The HFWA’s mandates are, allegedly, incompatible with the RLA because they directly interfere with the collective bargaining process and undermine airlines’ and unions’ reliance on collective bargaining agreements.  The Association asserts that states and localities may be emboldened to enact their own paid sick leave laws, which could potentially result in conflicting and inconsistent paid leave policies that create a “substantial and unconstitutional burden” on airlines and, in turn, on interstate commerce.

Mr. Moss’s Motion for Judgment on the Pleadings (“Motion”)

On January 22, 2024, Mr. Moss filed a Motion for Judgment on the Pleadings[3] requesting that the court enter judgment in the State’s favor, countering that the HFWA is not unconstitutional because “paid sick leave laws are not among the aspects of the interstate transportation industry that require national uniformity,” and added that it is not impossible to comply with multiple paid sick leave laws.  Mr. Moss also suggests that there is not a significant burden on interstate commerce because “the burden is borne exclusively or equally by in-state interests.”  In other words, per Mr. Moss, A4A’s claim should fail because the HFWA does not adversely affect interstate commerce for the State of Colorado’s benefit.  Moreover, the Second Circuit already rejected a similar challenge where the court held that “a law is only clearly discriminatory in its effect where it ‘confer[s] a competitive advantage upon local business vis-à-vis out-of-state competitors.’”[4] 

Mr. Moss also argues that the RLA does not preempt the Act because, under Supreme Court precedent, substantive employment protections provided by state law, independent of any collective bargaining agreement rights (e.g., state regulations pertaining to health and safety or state laws providing additional whistleblower protections), are not preempted under the RLA.  Thus, according to Mr. Moss, the HFWA’s paid sick leave protections constitute the sort of substantive employment protections which states are free to implement notwithstanding the RLA’s preemption of labor and employment disputes arising out of collective bargaining agreements.

Key Takeaways

This case presents an interesting challenge to the HFWA based on both Constitutional and federal preemption grounds.  While the case is in its infancy, if the court denies Mr. Moss’s motion and permits the litigation to move forward, then the dispute could have profound effects on air carriers and their employees within the state of Colorado.

[1]Generally speaking, a state law violates the dormant Commerce Clause if it (1) favors in-state business over out-of-state competitors; (2) unduly burdens interstate commerce; or (3) asserts control over commerce occurring entirely outside the boundaries of the state.  

[2]Complaint for Declaratory and Injunctive Relief, Air Transp. Ass’n of Am., Inc. d/b/a Airlines for Am. v. Moss, No. 1:23-cv-02421-DDD-KAS (D. Colo. Sept. 15, 2023), ECF No. 1

[3]Defendant’s Motion for Judgment on the Pleadings as to Plaintiff’s First, Second, and Third Claim for Relief, Air Transp. Ass’n of Am., Inc. d/b/a Airlines for Am. v. Moss, No. 1:23-cv-02421-DDD-KAS (D. Colo. Jan. 22, 2024), ECF No. 31

[4]Rest. L. Ctr. v. City of New York, No. 22-491-CV, 2024 WL 57029, at *11-14 (2d Cir. Jan. 5, 2024)