Oakland (Special to ZennieReport.com) – On September 7th, 2024, the City of Oakland filed a lawsuit called “City of Oakland v. Southwest Airlines Co.” and against one of its largest and most important employers, Southwest Airlines (a firm that’s not listed in its economic development page on its major businesses, which has not been updated since 2018). A link to the City of Oakland’s full website on the lawsuit is provided here and another one to the FAQ page is located here at “see FAQ“. The summary of the City’s lawsuit is as follows:
The City of Oakland claims that Southwest Airlines is not allowing its 3,000 Oakland International Airport employees to take “paid leave” (also called “sick leave”) and wants them to work literally overtime and even when ill. A large number of Southwest Oakland employees have asked the City of Oakland to step up on their behalf and make Southwest follow Oakland’s laws with respect to paid leave.
Focus On City of Oakland’s Minimum Wage and Sick Leave 2014 Ordinance
The Oakland City Attorney’s Office explains it this way: ” In 2014, Oakland voters overwhelmingly passed Measure FF, the Minimum Wage and Sick Leave Ordinance, which established a minimum wage and requires that Oakland employers provide paid sick leave to their employees. The paid sick leave provisions of the ordinance require, among other things, that employers not only provide paid sick leave but allow employees to use accrued paid sick leave for themselves as well as for qualifying family members and other individuals, without unreasonable conditions and fear of adverse employment consequences. The ordinance also prohibits retaliation and requires that employers provide employees with access their paid sick leave-related records.
City Of Oakland Says Southwest Workers Can’t Take Paid Sick Lease Due To Airline Policy
“For too long, workers have been unable to take Oakland paid sick leave when they need to because of Southwest’s policies and practices, which put workers and Southwest passengers at risk,” said Abilio Villaverde, President for the Transport Workers Union Local 555. “In many situations, we have been forced to either work while sick or take unpaid absences that result in discipline and risk our jobs. We are grateful that the City of Oakland is holding Southwest accountable. We hope that Southwest policies and practices will finally change for good,” said Eric Swygert, a Southwest employee and Local Elected Ramp Representative at the Oakland airport.
The City Attorney writes “The repercussions of Southwest’s practices were particularly detrimental during the COVID-19 pandemic, when many workers had no choice but to report to work even if they were ill – placing the public health at risk – or were needed at home to care for family members.”
The City Attorney adds “Since 2021, the City of Oakland spent years negotiating with Southwest regarding its breaches of the December 2020 settlement agreement and new paid sick leave violations, to no avail. Despite the City’s extensive efforts to reach resolution, Southwest has not complied with the law, has not complied with the December 2020 settlement agreement and has not provided relief to its employees.”
“Southwest is a major and valued company, but having reached an impasse after years of negotiations, our only option to protect workers’ rights and public health is to take Southwest to court,” said City Attorney Parker.
“It is important for our City to listen to and defend the rights of workers, enforcing the laws passed by voters and Council,” said City Council President Nikki Fortunato Bas. “Enforcement of labor laws not only benefits workers but also law-abiding employers and the City of Oakland as a whole.”
City of Oakland’s Demands On Southwest Don’t Include Any Olive Branch To The Airline
The City of Oakland’s demands made to Southwest are harsh and about a subtle as a punch in the face. It’s certainly not the way Oakland should treat a valued business like Southwest Airlines, and sends a message that seems to dare the travel organization to leave Oakland altogether.
The City’s lawsuit seeks, among other things, that Southwest:
- Comply with the law and with the December 2020 settlement agreement;
- Pay restitution, damages, penalties, and other relief to affected workers;
- Remedy any adverse employment consequences for employees resulting from Southwest’s unlawful policies and practices, including rescinding discipline; and
- Pay monetary penalties and the City’s enforcement costs.
The Case For A Different Approach Because Southwest Could Leave Oakland Altogether
The City of Oakland’s current approach could lead to Southwest leaving Oakland. Such an action would remove what’s estimated to be 85 percent of the market of passengers at Oakland. That, combined with the impact of the loss of the Raiders, Warriors, and Athletics sports teams, would damage Oakland’s economy for years to come. But the question is, how likely is it that Southwest could leave Oakland, and what should we do to prevent that scenario of happening?
Well, if a recent (September 25th, 2024) article called “How Recent Challenges Are Effecting Southwest Airlines” by Channing Reid in an online publication called “Simply Flying” at SimplyFlying.com is to be believed, Southwest’s departure from Oakland is more likely to happen than ever before in 2025, and because of the City of Oakland’s lawsuit.
Southwest Leaves Houston And Downsizes In Atlanta
Channing Reid reports that in response to declining profit margins and a revenue growth of just 1.6 percent over the previous period, Southwest Air “significantly scale back its operation at Hartsfield–Jackson Atlanta International Airport (ATL) . And then added the move out of Houston. The moves comes as the low-cost carrier has been struggling with its profitability in some markets.” That problem of profitability has attracted the attention of activist shareholder Elliott Investment Management.
In a recent September 25th special meeting, Elliott Investment Management ran by John Pike and Bobby Xu, and which has an 11 percent ownership in Southwest, sought to replace the airline’s management, starting with the CEO Bob Jordan (which has not happened as the crafty leader made moves to save his job), but almost half of the airline’s board of directors and executive chairman Gary Kelly (who will be out this year) are gone via resignation.
All of these developments impact Oakland, but it’s clear the Oakland City Attorney never bothered to pay attention to them, or does not care and just filed the lawsuit. Southwest is not trying to harm its workers so much as just trying to stay alive as a business impacted by internal strife. To that end, the carrier has made some dramatic moves, like pulling out of Houston, Texas entirely last year. Who’s to say Oakland will not be next? Throwing a cost-pushing lawsuit on Southwest at this time clearly isn’t the answer. Oakland should drop the lawsuit in exchange for a different approach.
Some Questions On Oakland Management In The Southwest Matter
There are some questions here. For example, where’s the Port of Oakland Board of Commissioners on this lawsuit matter. If the Port of Oakland is ultimately impacted by the actions of the City Attorney, shouldn’t its board speak out in defense of Southwest?
And where is the “task force” on the Oakland Airport and Southwest? A task force that brings together the Oakland City Attorney, the Port of Oakland’s lawyers and planners, the City of Oakland’s economic development and workforce head, an economic development staffer from that office, and two representatives of the Oakland City Council Districts 6 and 7, the Port’s Aviation Director and Real Estate Director, and representatives from Southwest Airlines.
And why is it that the Mayor of Oakland and no Oakland or Alameda County elected official has formed a task force to save Southwest Airlines? Does that mean they don’t care if yet another major business leaves? They’re certainly sending that message.
What Should An Oakland / Southwest Airlines Task Force Do? Build A Hotel / Convention Center At The Airport
Oakland has to take bold measures that involve a reformation of how we do economic development. In this case, Southwest would benefit from a venue right at the airport that allows for the production of business meetings and lodging. The travel patrons would get off the plane, get their luggage or have it ported over to the hotel, check in, change clothes, go to one of the restaurants, then get over to the ballroom for the event, and then either go to the special travel club, or back to the family-friendly restaurant, and back to their room, and then fly back home. All of that without leaving the airport and worrying about crime.
Revenues From The Venue Would Be Shared With Southwest Airlines And Other Airlines Workers
The revenue from the venue would be shared with workers from Southwest Airlines at Oakland International Airport in the way of paying paid leave costs or as much of that total cost as the revenue percentage would allow.
The task force will work out the details, but the idea is to form a long-term solution to the problem by bringing in Southwest Airlines as a development partner. The City of Oakland will use Enhanced Infrastructure Financing District Legislation to form an EIFD zone around the airport, and take advantage of the enormous amount of tax increment financing revenue potential that exists in the buildings and unsecured property like airplanes that are at the Oakland Airport and the surrounding area the EIFD might take in.
The point is, Oakland will be solving a problem here by drawing new flyers and visitors thanks to the hotel / convention complex, and it would improve its relationship with Southwest, and make its workers happy in the process. A win, win, win.
Appendix: How A Hotel Convention Center At Oakland Airport Might Work
Just how such a complex might work is presented in a rather testy answer I gave to a wrecklessly-skeptical Oaklander on Nextdoor. In response to the kind of mindless online article “cherry picking” of information that does not apply to a conversation, I became triggered to write the following response (paragraphs broken for readability):
Well, looks like I’m gong to have to hold your hand and walk you step-by-step, and then teach you how to see an apple from an orange. Because if you flub the term “ambient” because you fail to see the CONTEXT that it’s used in, I might as well be talking to a middle-school student.
Remember the setting; an airport and its surrounding area within the SF Bay Area, the East Bay, and Oakland. So, it stands to reason that “ambient” means “existing or present on all sides”. So, if we have large businesses around us in the East Bay and near in the Port of Oakland that would like ballrooom space to have expos focused on, say, the Maritime or the Security industry, which would draw their potential clients from around the World, a development at Oakland Airport where the hotel and convention center are essentially “one” with the terminal complex, thus creating a city within a city. A controlled environment that would realize an average 80 percent use rate.
Southwest could offer special event deals and partner with the hotel on site. Travelers who needed a hotel to stay at because their flight was cancelled and needed an on-site hotel. Flight attendants on layover. Digital nomads who needed a hotel suite to meetup with clients traveling in for over a few days. This facility can serve them.
Again, we have never had that. But if you’re going to mindlessly cherry pick an article about a hotel THAT IS NOT DESIGNED to be at the airport, like the Oakland Marriott, we can’t talk. If you can’t wrap your mind around what I presented, then you’re part of the reason Oakland’s in the shape its in.
And you’re the same kind of person that was around who did not see why the NFL would want to have a Super Bowl Game in Oakland, but then was SHOCKED that the NFL would make Oakland a finalist for the right to host the 2005 Super Bowl. But that is what happened and that was my effort.
So, please stop being one of those Oakland dwellers who lacks vision. Or, look, I have enough vision for both of us, so just follow me