And, the more I think about it, there probably is privity here inasmuch as the person receiving the family nonrev ticket is a third party beneficiary of the employment benefit being extended to the employee, and thus, has standing to sue.

But again, that is simply not relevant here. This case can proceed on an intentional discrimination theory and it doesn't matter one bit if the passenger was rev or nonrev. That is irrelevant where the airline engaged in interstate commerce denied boarding based on a protected trait such as race. The ket element of proof here will be: did race motivate this decision to disallow boarding? If the plaintiff can prove that, and, the jury follows the law, the plainitff should win this case.

As a second cause of action, I think there is also a good case for the tort of intention infliction of emotional distress, or even negligent infloction of emotional distress (in the latter, the plaintiff would need to prove actual emotional damages with accompanying physical manifestations, whereas in the former, since it is an intentional tort damages are assumed).

Since common carriers have a special duty, an extra high duty, to their passengers, way more than the duty owed by a normal business enterprise, this could be a very favorable cause of action here as well.

By all of this I simply mean to say, Continental better watch it when they deny boarding based on race (if that's what they allowed to happen here). They ought to have their pilots, who make these decisions and thus subject the corporation to vicarious liability, take some sort of mini legal as well as ethical/racial sensitivity training. These things can cost the company tons of damages.