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The three-judge panel's decision published Tuesday reversed a New Jersey judge's ruling that would have allowed the lawsuit to go forward and include all non-exempt hourly workers employed at Newark Liberty International Airport since April 2014.
Several employees, including mechanics and workers responsible for tasks such as cargo handling, filed the suit in 2016 and said American's timekeeping system automatically paid employees based on their schedules rather than on the hours they actually worked.
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They also alleged managers regularly refused to authorize overtime pay for work performed before and after scheduled shifts and during scheduled 30-minute lunch breaks. The lawsuit sought back pay as well as punitive damages. American denied the allegations.
The appeals court sided with the airline, which argued that while the timekeeping system applied to all employees, it would be wrong to group all employees into a class because it would have to be determined on a case-by-case basis which employees worked overtime.
"For example, some employees testified that they began working immediately after clocking in," the court wrote. "Others testified that they chatted with co-workers or watched TV after clocking in but before their shifts began. Thus, whether they were actually working pre- and post-shift is an open and inherently individualized question."
The court also questioned the judge's reliance on a 2016 ruling involving workers at a Tyson Foods pork-processing plant who weren't paid for the time they spent putting on and taking off protective equipment.
In that case, "all activities were common, unlike here," the judges wrote. "The record evidence here, on the other hand, demonstrates that employees were not always working while clocked in and there was substantial variability in what they were doing, even if some of it could be called work."
Brett Gallaway, an attorney representing the employees, said in an email Thursday that he disagreed with the ruling and his clients were considering their options.