Cook v. Pan American World Airways, Inc.

• Decision Date: 22 August 1985
• Docket Number: D,No. 875,875
• Citation: 771 F.2d 635
• Parties: 38 Fair Empl.Prac.Cas. 1344, 38 Empl. Prac. Dec. P 35,536, 103 Lab.Cas. P 11,638 John C. COOK, et al. (listed in Appendices A and B), Plaintiffs-Appellants, v. PAN AMERICAN WORLD AIRWAYS, INC.; Air Line Pilots Association, International; Air Line Pilots Association, Pan Am Chapter; Flight Engineers International Association; Flight Engineers International Association, Pan Am Chapter, Respondents-Appellees. ocket 84-7972.
• Court: U.S. Court of Appeals — Second Circuit

Page 635

771 F.2d 635

38 Fair Empl.Prac.Cas. 1344,

38 Empl. Prac. Dec. P 35,536,

103 Lab.Cas. P 11,638

John C. COOK, et al. (listed in Appendices A and B), Plaintiffs-Appellants, v. PAN AMERICAN WORLD AIRWAYS, INC.; Air Line Pilots

Association, International; Air Line Pilots Association,

Pan Am Chapter; Flight Engineers International Association;

Flight Engineers International Association, Pan Am Chapter,

Respondents-Appellees.

No. 875, Docket 84-7972.

United States Court of Appeals, Second Circuit.

Argued March 5, 1985.

Decided Aug. 22, 1985.

Jeffrey C. Londa, Houston, Tex. (Butler & Binion, Houston, Tex., Robert E. Cohn, Kevin F. Flynn, Shaw, Pittman, Potts & Trowbridge, Washington, D.C., Jeffrey Bernbach, New York City, of counsel), for appellants.

Richard Schoolman, New York City (Patricia J. Langer, Pan Am Legal Dept., New York City, of counsel), for appellee Pan American World Airways, Inc.

Robert A. McCullough, Washington, D.C. (Gary Green, Air Line Pilots Ass'n, Int'l, Washington, D.C., of counsel), for appellee Air Line Pilots Ass'n, Int'l.

Asher W. Schwartz, New York City (O'Donnell & Schwartz, New York City, of counsel), for appellees Flight Engineers' Intern. Ass'n, Pan Am Chapter and Flight Engineers' Intern. Ass'n, AFL-CIO.

Before MANSFIELD, NEWMAN and KEARSE, Circuit Judges.

MANSFIELD, Circuit Judge:

John C. Cook and more than 400 other current or former Pan American Pilot-Flight Engineers, all over age 40, appeal from a judgment of the Southern District of New York, Robert J. Ward, Judge, dismissing their complaint against Pan American World Airways, Inc. ("Pan Am") and four union defendants--Air Line Pilots Association ("ALPA"), International; ALPA, Pan Am Chapter; Flight Engineers' International Association ("FEIA"); FEIA, Pan Am Chapter--for lack of subject matter jurisdiction. Their complaint alleged that, by adopting and implementing a 1981 seniority list integrating the pilots and flight engineers of two merged airlines, Pan Am and National, the defendants had violated the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. Secs. 623-31 (1982), and New York Human Rights Law ("NYHRL"), N.Y.Exec.Law Secs. 290, et al. (McKinney 1982 & Supp.1984-85), and that defendant unions had in addition violated the Railway Labor Act, 45 U.S.C. Secs. 151 et seq. (1982). Finding that plaintiffs' action constituted an impermissible collateral attack on a final order of the Civil Aeronautics Board ("CAB"), not appealed in accordance with the provisions of Sec. 1006 of the Federal Aviation Act, 49 U.S.C. Sec. 1486(a), Judge Ward dismissed their complaint for lack of subject matter jurisdiction. We affirm in part, reverse in part, and remand for further proceedings.

This case arises out of Pan Am's acquisition of control of and merger with National Airlines, effective January 19, 1980. The merger was approved by the CAB pursuant to 49 U.S.C. Sec. 1378(b), which empowers it to determine whether mergers are "consistent with the public interest" and to approve them "upon such terms and conditions as it shall find to be just and reasonable and with such modifications as it may prescribe". The CAB conditioned its approval of the merger upon compliance with its labor protection provisions ("LPPs"), see Flying Tiger-Slick Merger Case, 18 C.A.B. 326 (1954) (approving airline merger but imposing labor protective conditions and retaining jurisdiction), and retained jurisdiction "to make such amendments, modifications, and additions to the labor protective conditions as the circumstances may "Section 3. Insofar as the merger affects the seniority rights of the carriers' employees, provisions shall be made for the integration of seniority lists in a fair and equitable manner, including, where applicable, agreement through collective bargaining between the carriers and the representatives of the employees affected. In the event of failure to agree, the dispute may be submitted by either party for adjustment in accordance with section 13.

require...." CAB Order 79-12-164, at 1. Two of the LPPs are central to this case:

* * *

* * *

"Section 13(a). In the event that any dispute or controversy * * * arises with respect to the protections provided herein, which cannot be settled by the parties within 20 days after the controversy arises, it may be referred by any party to an arbitrator * * *. The decision of the arbitrator shall be final and binding on the parties."

On March 19, 1980, the four unions involved--the ALPA Master Executive Council ("MEC") for the Pan Am pilots, ALPA's MEC for the National Pilots, FEIA's Pan Am Chapter, and FEIA's National Chapter--agreed on a procedure for determining how to integrate the seniority lists. In the event that agreement on seniority integration should not be reached within a limited period arbitration was to be "mandatory," and "[t]he Award of the Arbitrator shall be final and binding as to all flight deck operating crew members and shall be defended by the parties." March 19, 1980, Agreement p 8(j).

After unsuccessful inter-union negotiation and mediation on seniority integration, arbitration took place before Lewis M. Gill, whom the parties had designated as their first choice. The four union representatives participated fully in the arbitration hearing, which lasted approximately 35 days and closed on January 14, 1981. Arbitrator Gill subsequently held 15 days of executive session with the union parties. The final record contained over 4,700 transcript pages and hundreds of exhibits. Arbitrator Gill issued his Award on March 12, 1981.

In his lengthy opinion explaining the award Gill identified several issues. First, the "cross-bidding" arrangements between pilots and flight engineers at Pan Am were entirely different from those at National. Although both airlines required three crewmen in the cockpit, Pan Am used a pilot/flight engineer ("PFE") as the third crewman, while National used an engineer who was not qualified as a pilot. Pan Am accordingly maintained a single seniority list, with PFEs being allowed to bid for pilot vacancies and fall back to engineer positions, bumping less senior PFEs to avoid furlough. National, however, maintained two independent seniority lists, one for its pilots and one for its flight engineers, and did not permit cross-bidding or displacement between the groups.

Having decided not to disturb the premerger cross-bidding situation, Gill constructed two integrated lists. One, the "Pilot List," contained National pilots and all Pan Am airmen; the other, the "Engineer List," contained National engineers and all Pan Am airmen. Gill then directed that cross-bidding be

"[a]s before on each airline. Pan Am airmen continue cross-bidding practices vis-a-vis each other, but Pan Am Pilots cannot bump National Engineers. National Pilots cannot bid Engineer positions, National Engineers cannot bid Pilot positions. National Engineers to have same rights as [a small class of Pan Am engineers who did not qualify as pilots] against being displaced from Engineer seats by Pilots." (Award at IV.C.)

A second issue, labelled "explosive" by Gill, concerned the manner in which approximately 400 Pan Am pilots on furlough at the time of the merger were to be integrated. This large number of furloughees resulted from Pan Am's switch from smaller planes to B747s, the largest wide-bodied aircraft, and Pan Am's poor financial health in the preceding few years. Gill stated that this furlough situation created "a head-on clash over the relative equities as between large numbers of National airmen hired between 1968 and 1978 and actively employed at the time of the merger, and large numbers of these Pan Am furloughees with earlier dates of hire who still have recall rights but who brought no active jobs to the merger." (Gill Op. at 8).

Gill's solution was to calculate the Pan Am furloughees' length of service at the time of their recall, and to slot them into the list by comparing their length of service with that of the active airmen at that time. (An exception was made for about 34 furloughed Pan Am pilots who had received notice of recall before January 19, 1980). He indicated a willingness, had the parties (or the "JANUS" group, representing the furloughees) submitted a proposal estimating the likely dates of recall of the furloughees and the likely length of service of the active pilots at those dates, to integrate the furloughees on that basis. However, no such proposal was forthcoming "[p]erhaps because of the difficulties in fashioning projections of that nature." Id. at 41. While noting that his solution to the furloughee problem might seem novel, Gill observed that

"the problem itself is novel--there has not been any previous merger case called to my attention where such massive numbers of furloughees, with such long periods of being off the property, were pitted against active airmen from the other airline who brought current jobs to the merger." Id. at 40.

Finally, differences between Pan Am and National created further conflicts between the interests of the various union groups. While Pan Am's fleet consisted primarily of B747s, National mostly used the smaller B727s. Although National was in "a healthy financial condition at the time of the merger," Pan Am had been in financial difficulties over the preceding few years. Because of these and other differences, the parties before Gill advocated three different methods for integrating the seniority lists: (1) the National pilots and engineers advocated "ratio" methods; (2) the Pan Am pilots a mixed length of service ("LOS") and date of hire ("DOH") method; and (3) the Pan Am engineers a straight DOH method. Under a ratio method, a certain number of identified airmen from one airline are listed followed by a similar listing of a specified number of airmen from the other airline (e.g., 1 National pilot followed by 3 Pan Am pilots). The ratios can form all or part of a master list. In the...