Who cares about the rules? This is about maintain customer satisfaction. What they should have done is maintain customer satisfaction. For starters they shouldn't have overbooked the plane. If they couldn't bribe anybody to get off the plan they'd just have to find a way to transport their staff on another plane. Is this really that complicated to figure out?
This was a PR disaster. No need to change the rules. They've already been punished. I'm sure they've learned their lesson.
First of all, this was not an "overbooked flight". The airline fucked up and needed 4 more seats for their own staff in order to avoid a fine from the FAA for failing to staff the appropriate locations in legal way in the first place.
Second of all, "overbooked" is a term that I would like to lose from our vocabulary, with respect to some thing that airlines are expected to do. It is one thing to take more reservations for a thing than you have space for, expecting people will not show up, for which you do not accept payment until the customer shows up. like every single other business establishment in existence... they cannot charge you for not showing up to your dinner reservation - they just give the table to someone else that is willing to pay for it. They can choose not to accept future reservations from you if you abuse that.
When the airline accepts your money, there better be a service waiting for you when you arrive on time in the agreed upon location. If not, then the airline is committing fraud. You cannot legally sell something (take money for it) with no intention or possibility of providing it (if you sell 500 seats on a 450 seat plane, you have committed 50 counts of fraud).