TGIF: April 14, 2017 – On Being United…Against Ambiguous Contract Terms

Despite what you may have heard, lawyers are, in fact, human beings with interests and hobbies all their own. They are not, I repeat not, robots sent from the future solely for the purpose of billing hours, drafting documents, and negotiating terms.  Not all of them anyway.  

In TGIF, I touch on some of my own interests primarily through the lens of the “Rules of the Game”, focusing on the rules and incentives that affect many aspects of our daily lives. I may even crack a joke or two. Hard to say.

TGIF will be published regularly on (surprisingly enough) Friday mornings. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

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United, Dr. Dao, and The Contract of Carriage

Well, United Airlines had an interesting week, didn’t they?  For those of you who missed it, this is how Wikipedia (!) summarizes the events of Flight 3411.

On April 9, 2017 just before 5:20 p.m., O’Hare International Airport police forcibly removed passenger David Dao from United Express Flight 3411 after he refused to depart the airplane upon the demand of management. Dao screamed as officers pulled him out of his seat, and his face hit an armrest during the struggle. Officers then dragged him by his arms on his back along the aircraft aisle past rows of onlooking passengers. He was later seen with blood around his mouth. Prior to the confrontation, managers offered compensation to passengers to vacate their seats to make room for four airline employees who needed to travel to the destination, Louisville International Airport. Three other passengers complied, and Dao was selected to be fourth.

After video of the removal (and apparent physical injury) went viral, more information came out.

Background

First, some Orwellian newspeak from United CEO Oscar Munoz immediately following the incident:

This is an upsetting event to all of us here at United. I apologize for having to re-accommodate these customers. Our team is moving with a sense of urgency to work with the authorities and conduct our own detailed review of what happened. We are also reaching out to this passenger to talk directly to him and further address and resolve this situation.

“Re-accommodate” is almost a parody of corporate PR. Perhaps they needed to better synergize their boarding denial core competencies.

But, it gets worse.

From Mr. Munoz’s summary of the situation to United employees that same day (presumably based on the aforementioned review):

On Sunday, April 9, after United Express Flight 3411 was fully boarded, United’s gate agents were approached by crewmembers that were told they needed to board the flight.

So, the seats they needed were for their own people.  Important items to note here: (i) United’s own admittance that events occurred “after [the flight] was fully boarded“, and (ii) the fact that the crewmembers at issue presumably did not pay for the seats that they were to use.

We sought volunteers and then followed our involuntary denial of boarding process (including offering up to $1,000 in compensation) and when we approached one of these passengers to explain apologetically that he was being denied boarding, he raised his voice and refused to comply with crew member instructions.

Now this is interesting.  Despite stating in the immediately prior sentence that the flight was “fully boarded”, Mr. Munoz now invokes a procedure referred to as the “denial of boarding process”.  How does one “deny” a boarding that has already happened? That’s important.

He was approached a few more times after that in order to gain his compliance to come off the aircraft, and each time he refused and became more and more disruptive and belligerent.

Ahhh, Dr. Dao was “disruptive and belligerent”.  That’s another thing to keep in mind, as it goes directly to one of the rights United is impliedly claiming: the right to remove unsafe or problem passengers.

(It is also evocative of similar language used by police or law enforcement to justify arrest or other action in some cases: “failure to comply with a lawful order”, “disorderly conduct”, etc.  Potential parallels here to some topics of more importance than commercial air travel.)

And in summary of the report:

Our employees followed established procedures for dealing with situations like this. While I deeply regret this situation arose, I also emphatically stand behind all of you, and I want to commend you for continuing to go above and beyond to ensure we fly right.

“Established Procedures”.  That sounds as if Mr. Munoz believes that United was within its rights.  While undoubtedly foolish from a PR perspective, as a corporate lawyer that idea intrigues me. Pulling a quiet, paying customer off a plane with the help of law enforcement doesn’t seem like something an airline should be able to do, but as a defender of “freedom of contract” I was curious to see just how United’s own agreements might cover such a circumstance.

The Contract of Carriage

In this case the “contract” at issue is the United Contract of Carriage.

The preamble of the thirty-rule, pages-long Contract of Carriage document states on its face that by purchasing a ticket or accepting transportation with United, the passenger agrees to be bound thereby. So whether you know about it or not (and let’s be honest, no one knows about it until something like this happens), the words on that website govern the rights of both United and its passengers in the course of an ordinary commercial flight. (And United is most assuredly not alone in this; every airline has similar rules.)

So what set of terms in the Contract of Carriage might suggest to United that it has the right to forcibly remove a passenger already sitting on one of its planes because it needs to seat its own crew?

While United has not cited specific sections of its carriage contract for this purpose, we can use their statements to make some educated guesses.

Rule 21

The phrase “remove from the aircraft” appears in only one place in the Contract of Carriage: “Rule 21 Refusal of Transport”.  In pertinent part:

UA [United] shall have the right to refuse to transport or shall have the right to remove from the aircraft at any point, any Passenger…whenever refusal or removal of a Passenger may be necessary for the safety of such Passenger or other Passengers or members of the crew including…Passengers whose conduct is disorderly, offensive, abusive, or violent…[or] Passengers who fail to comply with or interfere with the duties of the members of the flight crew, federal regulations, or security directives…

So we can see why Mr. Munoz (or more likely United’s attorneys) was interested in establishing that Dr. Dao was “disruptive and belligerent”, but unless United can establish some other right for legally requesting him off the plane, it would appear that he had every right to be.  The law imposes a duty of good faith and fair dealing in respect of the parties to a contract.  Otherwise contracts would be less useful than they (at times) already are.

In other words, United cannot spit in passengers’ faces until they become unruly, and then invoke Rule 21 to have them removed.  There needs to be another contract term in play that gives them the right to seek removal in the first place. Rule 21 is not such a rule based on the facts we know (all of which were admitted to by the airline directly).

If United truly wishes to claim that their rights arose due to a passenger’s belligerent response to an unlawful order, they will find they have an uphill battle to climb.

Rule 25

So with Rule 21 looking like a non-starter, let’s look for another place from which United’s rights in this case might have otherwise sprung. The next (and only) most likely candidate is the one referenced by Mr. Munoz himself: the “Denial of Boarding” process. (“…we then followed our involuntary denial of boarding process…”)

Such a process is outlined in “Rule 25 Denied Boarding Compensation”.

Under Rule 25 (edited for readability):

When there is an Oversold UA flight that originates in the U.S.A. or Canada, the following provisions apply:

UA will request Passengers who are willing to relinquish their confirmed reserved space in exchange for compensation in an amount determined by UA (including but not limited to check or an electronic travel certificate).

If a flight is Oversold, no one may be denied boarding against his/her will until UA or other carrier personnel first ask for volunteers who will give up their reservations willingly in exchange for compensation as determined by UA.

If there are not enough volunteers, other Passengers may be denied boarding involuntarily in accordance with UA’s boarding priority [Higher Fare, Frequent Fliers, and Check-in Time]

So the first thing that sticks out is the capitalized term “Oversold”.  We need a definition for that.

Oversold Flight means a flight where there are more Passengers holding valid confirmed Tickets that check-in for the flight within the prescribed check-in time than there are available seats.

“Tickets” are defined as you would expect, but what of “available seats”? Do the four United personnel the airline wished to seat reduce the number of “available seats”? What if there were 50?  Does it matter that the extra tickets were not “sold”, given that the term “Oversold” implies commercial transactions and not corporate logistical management? None of these questions are answered in the contract.

Given that United is responsible for writing the contract (and the perhaps more important fact that no one has ever read the thing prior to purchasing a ticket), the law might well be inclined to construe such ambiguities against the airline.  In this specific case, given additionally that any lack of “available seats” was caused by United’s own mismanagement (in moving its own personnel or in having them show up after boarding), I think Dr. Dao or anyone else would be well within their rights to challenge the description of this flight as “Oversold”.  If they won that fight, they would almost assuredly win the day.

But ultimately such a technical argument likely does not matter:  the flight was already “boarded” (by United’s own admission) even if it was “Oversold”.  Rule 25 should not apply.

Rule 25 is clearly designed to encourage stand-by and compensation discussions “prior” to boarding the plane, and the mere existence of a separate rule covering removal from the plane evidences that point. The very term “denial” implies the prevention of an occurrence that has not yet happened; “removal” the remedy available after such occurrence.  This is a clear reading of the contract, and unambiguous.

Further, the contract itself contemplates “denial” and removal as separate events.  From Rule 16 (emphasis added):

A Service Animal will be denied boarding or removed from the flight by UA if the animal cannot be contained by the passenger or otherwise exhibits behavior that poses a threat to the health or safety of other passengers or a significant threat of disruption.

A conjunctive term would not be necessary in such a rule were “boarding” and “removal” deemed to be similar events.

But boarding was not “denied” in the case of Flight 3411.  The passengers had been seated, and United itself acknowledges that the flight was “fully boarded” (past tense) prior to any excitement.  You can’t deny someone boarding after they have boarded.  By common sense such an action is a removal, and Rule 21 is applicable.

“United” in Opposition

There is nothing in United’s Contract of Carriage that permits them to call in security forces to remove an otherwise docile, harmless passenger.  Not because they oversold the plane.  Not because their own crew needs seats.  Boarding the plane is drafted, in their own contract, as a bright line between one set of rights (denial) and another (removal).

It is unfortunate that United did not receive the information regarding their own crew’s needs prior to boarding (though the question of whether a flight is “Oversold” would still be at play), but since they did not they should have realized they were playing in a different contractual pool by the time they sought to remove their own paying passengers.

And at the end of the day, despite their previous statements to the contrary, United appears to know it too.  From their most recent comments (published yesterday):

First, we are committing that United will not ask law enforcement officers to remove passengers from our flights unless it is a matter of safety and security.

This was always the case under Rule 21.  United overstepped their bounds and they are now reaping the PR whirlwind.  But it’s important to note that the same result would have followed even if the Contract of Carriage permitted United to do what was done to Dr. Dao.

It’s a lesson I try to impart on my clients all the time:

At the end of the day, contract terms are “words on paper”.  Just because you have the right to do something doesn’t mean you should (not just to be a nice citizen, but, in some cases, to avoid losing millions).

Business, political, and logistical considerations all need to play a role. If the Contract of Carriage said United could kidnap its passengers, steal their belongings, and perform psychological tests upon them, then perhaps they could, legally, but it would still be a PR disaster.  “Legal” does not mean “ethical“.  There’s more to running a business then simply doing what the lawyers say is acceptable under your “Terms and Conditions”.

United would be finding that out right now one way or the other, no matter what their contract said.

Word of the Week – Indiscretion

A lack of good judgment

“Observers could only marvel at the indiscretion on display.”

Yes, this is the same Word of the Week as last week.  While that might be an indiscretion of its own, it seemed apt in the face of some truly terrible message management both this week and last.

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Thanks for stopping by.  Want to tell me how wrong I am?  How right? Feel free to leave a comment down below, and be sure to check out the rest of Rules of the Game and www.hoeglaw.com for legal insights, commentary, and (hopefully) helpful articles.

Have a great Friday everybody!