Sky Chefs May Owe LAX Workers Back Pay for a Benefit Change the Union Claimed Was Unilateral

The Ninth Circuit just handed LSG Sky Chefs a serious problem.

LSG Sky Chefs, the airline catering company operating at LAX, may owe its workers significant back pay for implementing a health benefit change that UNITE HERE — the union representing those workers — claimed was a unilateral move made without proper bargaining. The U.S. Court of Appeals for the Ninth Circuit recently ruled that a California federal judge erred by not ordering back pay in this dispute. The liability hasn’t been quantified publicly, but the legal exposure is real and the case is genuinely strange.

How does a company end up in this position? The answer is the Railway Labor Act, a nearly century-old law that treats airline caterers like LSG Sky Chefs as if they’re airlines themselves — and that distinction has consequences most people outside labor law circles have never thought about.

What the Railway Labor Act actually does

The RLA was enacted in 1926, originally for railroads, then expanded to airlines in 1936. The whole point of the law is to prevent labor disputes from shutting down industries critical to interstate commerce. It does that partly by mandating extremely long negotiation and mediation processes — years, not months — and by requiring employers to maintain the “status quo” on working conditions throughout those negotiations. The right to strike is also heavily restricted compared to what workers get under the National Labor Relations Act.

That status quo requirement is what caught Sky Chefs here. In April 2022, the company changed employee health benefits at LAX. The union claimed this was a unilateral action taken without proper bargaining — and under the RLA, making a modification to benefits during active contract talks is a problem regardless of the substance of the change, because you’re supposed to hold everything frozen until negotiations conclude. Think of it like escrow: nothing moves until the deal closes.

The contract negotiations between Sky Chefs and UNITE HERE haven’t just been ongoing — reports indicate they’ve been going for approximately eight years. Eight years. Under the RLA’s framework, that means Sky Chefs had been operating under a status quo obligation for the better part of a decade.

Understanding the back-pay exposure

Back pay in an RLA status quo dispute reflects the difference between what workers actually received and what they would have received had the employer maintained the status quo and gone through proper procedures. The workforce size, the specific value of the benefit change, and how long the back-pay period runs all feed into that calculation — and the Ninth Circuit’s ruling means the full liability math now has to happen. The brief says the dispute also involves compliance with a local living wage ordinance at LAX, which adds another layer to the calculation.

Here’s a simplified illustration of how these numbers can compound quickly: say a benefit change reduces the effective value of health coverage for a group of workers by several hundred dollars per month per person. Over a period of years — and this dispute spans years — even a modest per-worker impact multiplied across a sizable workforce produces a liability that’s genuinely significant for a contractor operating on catering margins. I’m not putting a specific dollar figure on it because the brief doesn’t provide one, but the structure of the exposure is straightforward, and the Ninth Circuit’s reversal means the workers’ attorneys now get to make that argument in front of the district court.

The living wage ordinance complication

The health benefit dispute is tied to LAX’s local living wage ordinance, which sets minimum compensation standards for workers at the airport. The brief indicates the dispute concerns both the benefit change and compliance with that ordinance — so Sky Chefs was operating in an environment where local law imposed requirements on worker compensation, while federal labor law required any changes to go through proper RLA bargaining procedures. That’s a real tension, and it illustrates how layered the compliance environment is for airport contractors.

Being an airport contractor means navigating local wage rules, your airline clients’ demands, and whichever federal labor law framework applies to you. Getting any of those wrong can have serious retroactive consequences.

The bigger legal shift: RLA vs. NLRA for contractors

This case is playing out against a backdrop of genuine legal uncertainty about whether airline contractors like Sky Chefs should be covered by the RLA at all. Historically, the answer has been yes — caterers and similar contractors were swept into RLA coverage because of their operational integration with airlines. But there’s an emerging trend in federal labor law to re-examine that classification.

The NLRA — the law that covers most private employers — operates differently. Under the NLRA, the rules around collective bargaining and the right to strike are distinct from the more restrictive RLA framework. Airlines and railroads are specifically carved out of the NLRA because a strike at a major carrier can paralyze the national air system. The argument increasingly being made is that the operational connection for a catering contractor isn’t tight enough to justify the same extreme restrictions.

If future courts or regulatory decisions shift contractors like Sky Chefs from RLA to NLRA coverage, it would fundamentally change how their labor relations work. That’s a significant shift — and whatever happens to Sky Chefs is going to be a data point in that evolving legal argument.

What this means if you’re a frequent flyer

Most points-and-miles travelers aren’t tracking catering labor disputes when they’re booking award seats. But airport labor law has a way of showing up in the travel experience eventually. The living wage ordinances at major airports were partly designed to reduce worker financial pressure that leads to turnover and service quality problems. Disputes like this one — protracted, legally complex, with large potential liabilities — create uncertainty for contractors and the airlines that rely on them.

The broader question of whether RLA or NLRA coverage applies to contractors will shape how labor relations at airports work going forward. That matters for operational stability in ways that eventually reach the gate.

Frequently asked questions

What is the Railway Labor Act and why does it apply to a catering company?

The RLA is a federal law from 1926, extended to airlines in 1936, that governs labor relations in rail and air transportation. It requires lengthy negotiation processes and mandates that employers maintain the “status quo” on working conditions during those talks. Courts have historically applied the RLA to airline contractors like Sky Chefs because of their operational integration with carriers, though that classification is now being reconsidered.

What makes the April 2022 benefit change legally problematic?

Under the RLA, the process matters as much as the outcome. The union claimed Sky Chefs made the change unilaterally without completing the RLA’s required bargaining process. The back-pay liability, if ordered, would reflect the difference between what workers received and what they would have received had proper procedures been followed.

How long have Sky Chefs and UNITE HERE been negotiating?

Approximately eight years, based on available reporting. That’s an extraordinarily long negotiation period by any standard, though it’s less surprising under the RLA, which is specifically designed to slow down labor disputes through mandatory mediation and cooling-off periods. The downside is that workers and companies can be locked in legal limbo for years.

Could this ruling affect other airline contractors?

Potentially. The Ninth Circuit’s decision reinforces the RLA’s status quo obligations for contractors currently classified under that law. At the same time, the broader legal trend toward questioning whether contractors should be under the RLA at all means this area of law is genuinely in flux. Contractors, their unions, and the airlines that rely on them are all watching how these classification questions get resolved.

Bottom line

The Sky Chefs situation shows how the RLA’s status quo requirement — designed to prevent industry-wide work stoppages — can produce significant retroactive liability for contractors operating in a complex, multi-layered compliance environment. An approximately eight-year negotiation period suggests the system isn’t working cleanly for anyone involved. Whether Sky Chefs ultimately pays a large back-pay bill, and whether the broader legal shift away from RLA coverage for contractors picks up momentum, will matter well beyond LAX.