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The Court of Federal Claims and the Court of Appeals for the
Federal Circuit have considered similar per diem allowances,
albeit in the context of the employment tax regime. Am.
Airlines, Inc. v. United States, 40 Fed. Cl. 712 (1998), affd. in
part, revd. in part, and remanded 204 F.3d 1103 (Fed. Cir. 2000);
Am. Airlines, Inc. v. United States, 204 F.3d 1103 (Fed. Cir.
2000). In its opinion, the Court of Federal Claims found that
the portion of the per diem allowance attributable to meal
expenses was the equivalent of a wage concession in the context
of a labor negotiation. Am. Airlines, Inc. v. United States, 40
Fed. Cl. at 721.8 The court noted:
The evidence that American’s per diem rates were driven
by competitiveness with other airlines is not helpful
to plaintiff, as it is equally consistent with a
different motivation than compensating for employees’
actual expected travel expenses, to wit, keeping up
with its competitors’ wage and benefit packages.
* * * [Id. at 720.]
7(...continued)
Even though we have found that the meal allowance was
not intended as additional compensation, it was
obviously compensatory to a trooper to the extent it
paid for food which he otherwise would have had to pay
for from some other source. * * * [Id. at 52.]
8“It would be naive to ignore that the ‘meal expense’
concession was tantamount to wage concessions in the context of a
labor negotiation.” Am. Airlines, Inc. v. United States, 40 Fed.
Cl. 712, 721 (1998), affd. in part, revd. in part, and remanded
204 F.3d 1103 (Fed. Cir. 2000).
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