Sen. Warren Questions U.S. Treasury Secretary on Airlines’ Compliance With CARES Act Bailout Provisions

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The following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat.

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WASHINGTON DC United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Banking Committee, submitted Questions for the Record (QFRs) in which she asked U.S. Treasury Secretary Steven Mnuchin about the Treasury Department’s lack of enforcement action against airlines that cut the hours of their employees after receiving financial assistance under the under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The senator’s questions come after Secretary Mnuchin’s testimony before the Senate Banking Committee last week and follow a series of letters sent by Senator Warren to Delta and JetBlue in which she called on the airlines to immediately reverse their decision.

“Delta scooped up billions of dollars in taxpayer money and then turned around and cut workers’ paychecks,” said Senator Warren. “Secretary Mnuchin owes the American people and workers answers on how he will ensure airlines are following the law.” 

The CARES Act provided $50 billion in taxpayer funds to assist passenger airlines, and provided JetBlue and Delta with $935 million and $5.4 billion in financial assistance, respectively.

The law is clear that, as a condition of receiving this assistance, airlines must “refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020.”

However, JetBlue, and Delta-along with United Airlines-cut the hours of their employees after receiving this financial assistance, largely by imposing mandatory unpaid time off. United later reversed its decision after a union-led lawsuit. 

Senator Warren asked Secretary Mnuchin to answer the following:

  • Why has Treasury taken no action against companies that accepted payroll assistance and then cut worker hours, thereby reducing take home pay for workers?
  • Does the Treasury Department plan to issue guidance regarding whether cutting employee hours violates Section 4114 of the CARES Act for airlines receiving financial assistance under the payroll relief provisions? If yes, when will you release this guidance? If no, why not?
  • Have you, or any person in the Treasury Department, consulted with any representatives of Delta Air Lines regarding compliance with Section 4114 of the CARES Act, and did Treasury Department provide Delta Air Lines with any guidance regarding complying with CARES Act provisions? If so, when did this take place, who was involved, and what guidance was provided?
  • Did any airline receiving financial assistance for payroll relief under the CARES Act seek guidance from the Treasury Department regarding whether reducing employee hours, or implementing unpaid mandatory time off, complies with Section 4114 of the CARES Act? Did anyone at Treasury provide that guidance? If so, when did this take place, who was involved, and what guidance was provided?

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