Court Opinion

ID: 4474176
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:10:48.050689+00
Date Added: 2024-06-11T12:23:12.342331
License: Public Domain

Thornton, J., concurring: The majority concludes that the per diem payments are deductible on the ground that the payments are compensatory in nature. The majority does not address to what extent, if any, this case implicates statutory rules (i.e., sections 162(a)(2) and 274(d)(1)) affecting the deductibility of travel expenses. Absent any clear indication to the contrary, the majority opinion might be construed as indulging a suppressed premise that the compensatory nature of the payments overrides or renders moot the operation of rules pertaining to travel expenses.1 To that extent, the majority opinion might be susceptible to criticism such as that registered by the dissenters. It would not appear necessary or appropriate, however, to construe any implicit premises of the majority opinion so broadly, for on the facts of this case, it appears that the per diem payments do not in fact represent travel expenses. The majority rightly concludes that the per diem payments were compensatory in nature. The facts also support an affirmative conclusion that these payments were not travel expenses. The pilots and flight attendants could use the per diem payments as they pleased, just as they could use their base salaries as they pleased. The per diem payments were not contingent on the employees’ incurring or accounting for any travel expenses. Indeed, the per diem payments were in addition to amounts United provided its employees for practically all travel expenses except meals and incidentals.2  Rather than provide its employees meals and incidentals, United agreed, as part of a negotiated union contract, to pay them small hourly wage enhancements for all hours they were on duty or on flight assignment. The union contract refers to the wage enhancements as per diem payments. The nomenclature does not affect the reality, however, that the bargain struck was for additional compensation, not for meals, incidentals, or other travel expenses. The fact that the per diem payments were computed by reference to time spent on duty or aboard the aircraft does not suggest that the per diem payments are travel expenses. Rather, it suggests the contrary. Hours on-duty or on board an aircraft would appear to encompass substantially all the pilots’ and flight attendants’ hours on the job. Moreover, from United’s perspective, hours its employees spend in flight do not represent travel away from its place of business (i.e., the aircraft), any more than aviation fuel represents a cost of travel. After all, United’s business is air transportation. Consider the hypothetical case of a flight crew that goes on duty and boards one of United’s aircraft only to sit on the tarmac for some hours (for any of the myriad reasons especially familiar to a traveling Court) without ever taking flight. Presumably, the pilots and flight attendants on this aircraft would be entitled to per diem payments based on the number of hours they were on duty, without having gone anywhere. Some of them might return home, if home were nearby; others might go to hotels. They might lay over variously for short times or long times, subsisting lavishly or meanly. But each of them would receive the predetermined per diem payment, based on the number of hours spent sitting on the tarmac. In this hypothetical case, it seems clear that the per diem payments are too indirectly related to any employee travel to be considered travel expenses. It would make no material difference to the analysis if the employees’ hours on duty were airborne. Wells, Chabot, Gerber, Beghe, and Marvel, JJ., agree with this concurring opinion.   Two possible bases for such a suppressed premise suggest themselves: (1) That treatment as compensation under sec. 162(a)(1) trumps treatment as travel expenses under secs. 162(a)(2) and 274(d)(1) — a proposition that seems difficult to square with the statutory regime; or (2) that because the per diem payments are compensatory, ipso facto they are not travel expenses. Without further explication, this latter proposition might be thought to exemplify a species of the so-called masked man fallacy (“I know who my father is; I do not know who the masked man is; so, my father is not the masked man.”). Blackburn, Think: A Compelling Introduction to Philosophy 30 (1999).    The record reveals that in addition to providing its pilots and flight attendants per diem payments, United also provided them — either directly or through reimbursement — lodging, ground transportation between airports and hotels, and uniform laundering.