Calif. airline case could chill whistleblowers

By Gina Keating

LOS ANGELES, April 10 (Reuters) - The California Supreme Court was asked on Thursday to rule whether a laid-off airline whistleblower can pursue wrongful termination claims in state court after federal labor officials denied his claims, in a case that could chill employee reports of air safety problems.

The case, brought by ex-Alaska Airlines quality control auditor Kevin Murray, is playing out at the federal and state appellate levels as U.S. airlines cancel hundreds of flights to perform government-mandated safety checks on aging fleets.

Reports to Congress by whistleblowers and a government watchdog about maintenance lapses and ineffective oversight at Southwest Airlines Co (LUV.N) triggered an industrywide Federal Aviation Administration review of airline safety compliance.

The Ninth U.S. Circuit Court of Appeals, which has jurisdiction over the case, asked the state high court to resolve discrepancies in state law that governs when such claims can be relitigated and when they are barred.

If the California high court finds that Murray is allowed to opt out of the U.S. Department of Labor's claim process, the appellate court would let him litigate his claims against Alaska Airlines in federal district court.

If not, a lower court's dismissal of the case will stand.

"I think it's really significant here because the remedy that is available under (a federal airlines whistleblower law) is significantly inferior to what a person could get in state court or in federal court under a wrongful termination claim," Murray's attorney James Stoneman said.

A ruling against Murray "would send the wrong message to employers who are engaged in unsafe practices," Murray said.

"We want to establish practices that promote safety, which means we want to foster the right of whistleblowers ... to not be retaliated against," Murray said.

An Alaska Airlines spokesman said the airline does not comment on pending litigation.

Murray was laid off from a maintenance facility in Oakland, California, after bringing safety concerns to the FAA, which found "significant discrepancies relating the air carrier safety," the appeals court wrote.

He filed a complaint with the U.S. Secretary of Labor in 2004 seeking reinstatement and back pay, saying he had been denied the chance to compete for open positions at other Alaska facilities when the Oakland facility was closed.

The labor secretary ruled against Murray, finding that his termination was not connected to his whistleblower activities.

His state claim of wrongful termination was removed to a federal court, which dismissed it as a duplicative claim. (Editing by Gary Hill)