802 F.2d 886 (7th Cir. 1986), 85-2726, Air Line Pilots Ass'n, Intern. v. United Air Lines, Inc.

Docket Nº:85-2726, 85-2833.
Citation:802 F.2d 886
Party Name:AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Plaintiff-Appellee, Cross- Appellant, v. UNITED AIR LINES, INC., Defendant-Appellant, Cross-Appellee.
Case Date:September 29, 1986
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 886

802 F.2d 886 (7th Cir. 1986)

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL,

Plaintiff-Appellee, Cross- Appellant,

v.

UNITED AIR LINES, INC., Defendant-Appellant, Cross-Appellee.

Nos. 85-2726, 85-2833.

United States Court of Appeals, Seventh Circuit

September 29, 1986

        Argued April 16, 1986.

        As Amended Sept. 30, 1986.

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        Stephen P. Sawyer, United Air Lines, Inc., Elk Grove Township, Ill., for defendant-appellant, cross-appellee.

        Michael E. Abram, Cohen, Weiss & Simon, New York City, for plaintiff-appellee, cross-appellant.

        Before WOOD, and Coffey, Circuit Judges, and NOLAND, District Judge. [*]

        HARLINGTON WOOD, Jr., Circuit Judge.

        This case arises out of a twenty-nine day strike by the Air Line Pilots Association, International ("ALPA") against United Air Lines, Inc. ("United"). Although the parties ultimately reached a new collective bargaining agreement, three issues which evolved as a result of the strike remain for judicial resolution. The first issue concerns United's plan that allowed pilots who worked during the strike to "bid" for vacancies left by the striking pilots. The second issue involves permanent replacement pilots that United hired during the course of the strike. United agreed to pay these pilots a guaranteed salary as a means of inducing them to work for the airline. The final issue involves the treatment of prospective new second officers who were in training prior to the commencement of the strike (hereinafter the "Group of 500"). United had anticipated using these trainees as replacement pilots and had offered them employment beginning on May 17, 1985, the day ALPA went on strike.

        With respect to these issues, ALPA filed suit alleging various violations of the Railway Labor Act, as amended, 45 U.S.C. Sec. 151 et seq. (1982) (the "RLA" or the "Act"). Following a ten-day trial, Judge Nicholas J. Bua concluded: (1) that United had violated the RLA by opening vacancies to rebidding by pilots who had crossed the picket line; (2) that the terms and conditions under which United hired its permanent replacements, including the guaranteed salaries, were lawful; and (3) that the Group of 500, although not employees during their training period prior to the strike, became employees of United on May 17, and that United's failure to extend them employee status on that date was in contravention of the RLA. In the alternative, even assuming that the Group of 500 never became employees, the trial judge found that United: (1) violated the RLA's status quo provisions by treating the trainees as non-employees during the training period; and (2) violated the RLA's provision against coercing persons not to join a union by making employment for the Group of 500 contingent on crossing the picket line. 1 The district court initially enjoined United from implementing the bid awards made during the strike as well as barred the airline from giving nonstrikers preference in any vacancy arising subsequent to the strike. The court also ordered United to reinstate those members of the Group of 500 who had respected the picket line and "to assign them immediately to line pilot service if they completed their training without discrimination, and then enter line service, with seniority in all cases accrued from May 17, 1985." 614 F.Supp. at 1051. Thereafter, the district court amended its order regarding the Group of 500 to provide that United only be required to place these pilots on a preferential hiring list so that they would be hired as positions became available. In addition, the court denied ALPA's motion seeking back pay for the Group of 500.

        On appeal, United argues that the court erred in holding: (1) that its bidding procedures were unlawful; (2) that the Group of

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500 became employees on May 17; and (3) that the status quo provisions of the RLA were violated by United's considering the Group of 500 as non-employees during training. United also argues that the district court erred in granting injunctive relief to ALPA since the union had used economic coercion during the statutory status quo period before the strike and had initially refused to ratify its agreement with United until United reached a satisfactory back-to-work agreement with its flight attendants. ALPA cross-appeals alleging that the district court erroneously: (1) upheld United's guaranteed salaries to replacement pilots; (2) ruled that the Group of 500 were not entitled to immediate reinstatement; and (3) refused to award the Group of 500 back pay for the time between the end of the strike and their reinstatement.

        We affirm the district court's decisions with respect to the replacement pilots and the implementation of the rebid procedures. However, we reverse the court's decision regarding the Group of 500.

       I.

        The district court made extensive findings of fact which we summarize below. We are, of course, required to adopt these factual findings unless they are shown to be clearly erroneous. See Fed.R.Civ.P. 52(a). 2

        The present action was commenced by ALPA on May 16, 1985, i.e., one day prior to the commencement of the strike. ALPA is the duly certified representative for United's airline pilots under the RLA. The representation of United's pilots is controlled by the United Air Lines Master Executive Council ("UAL-MEC"). UAL-MEC is composed of three elected member pilots from each of United's nine pilot domiciles. 3

        For a number of years prior to the strike United and ALPA had been parties to successive collective bargaining agreements. The agreement controlling prior to the strike had been in effect since October 1981. This agreement was to be effective until October 1983 and would automatically renew itself for a one-year period each October thereafter unless either party sought a change. In January 1984, both parties served notice of their desire to discuss new contractual terms. United sought to renegotiate, among other things, compensation to be paid both incumbent employees and new hires as well as the method used to assign cockpit seats to pilots. United was seeking changes, in part, as a result of economic pressures to cut costs which accompanied the deregulation of the airline industry. As negotiations progressed, it became obvious that the key issue was United's desire to have a reduced pay scale for those pilots hired during the duration of a new agreement. United expressed concern that without cost-cutting measures it would not be competitive in the newly deregulated market. Indeed, although United had an operating profit of in excess of $500 million in 1984, it had sustained operating losses in the preceding five years.

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        Although continuing with the negotiations, United, in the fall of 1984, began to prepare for a pilots' strike by establishing a task force to develop contingency plans. The task force devised the "operations adjustment plan" which had an objective of breaking any strike and forcing settlement on United's terms. At the same time, United also began to experience a shortage of pilots. United had last hired pilots during the period from 1977-1979. At that time, it had been United's policy to consider its student pilots as employees beginning with their first day of training. These trainees were paid and earned seniority from the first day of their hire. Once these student pilots completed the training process, they were brought into United to serve in the entry-level position of second officer. 4

        With the need for new pilots evident, United, beginning in November 1984, selected numerous candidates (i.e., the Group of 500) for its training program. During this time, however, while United negotiated with ALPA with respect to the new-hire pay scale, the airline did not want the trainees on its property fearing that their presence would make an agreement with ALPA on new-hire pay more difficult. United also was opposed to paying the trainees the rates for incumbents as provided in the 1981 agreement. United therefore stated that these trainees would not be offered employment until after an agreement had been reached with ALPA. Indeed, the student pilots who were selected for training were required to execute a "Flight Officer Training Agreement." Under this agreement, the student pilots would receive training without charge from United as well as $30 per day to cover their expenses. The students agreed that during training they were not employees of United and received no compensation for their services apart from the expense money. The agreement, which each trainee signed, also provided:

I understand that graduates of Flight Officer Training will constitute a pool of trained candidates for Flight Officer employment, which United Airlines may employ, if needed, within twelve months of graduation. I understand that in order to be offered such employment, that I must continue to meet the requirements and qualifications for the flight officer position.

        Pursuant to the agreement United was free, without incurring liability, to terminate the training or never make an offer of permanent employment.

        In April 1985, United offered approximately 375 members of the Group of 500, who had successfully completed their training, positions as second officers. The offers of employment were effective May 17, 1985, regardless of whether a strike had commenced. The district court concluded that when initially offered employment the Group of 500 were not hired to serve as "crossovers" in the event of a strike. Indeed, several of the student pilots indicated that United had told them that they would not be asked to cross a picket line....

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