Wien Air Alaska, Inc. v. Bachner
| Decision Date | 13 January 1989 |
| Docket Number | No. 86-4356,86-4356 |
| Citation | 865 F.2d 1106 |
| Parties | 110 Lab.Cas. P 10,918, Bankr. L. Rep. P 72,636 WIEN AIR ALASKA, INC., dba Wien Airlines, Plaintiff-Appellee, v. Andrew BACHNER; Ronald Burkevich; Ted England; Keith Forsgren; Gary R. Gale; B. David Gates, III; Jeffrey D. Haddock; Carl Maerzluft; Donald L. Peterson; Dennis Slaughter; A. Grant Stoddard; Robert Wien; Keith Wilhelm, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
John H. Bradbury, Bradbury, Bliss & Riordan, Anchorage, Alaska, for defendants-appellants.
David H. Bundy, Guess & Rudd, Anchorage, Alaska, and Richard N. Appel, Daniel L. Nash and Brian A. Schaffer, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C., for plaintiff-appellee.
Appeal from the United States District Court for the District of Alaska.
Before BROWNING, NORRIS and O'SCANNLAIN, Circuit Judges.
We review the claims in bankruptcy of individual employees for damages arising from their employer's placing them on furlough allegedly in violation of a collective bargaining agreement. The bankruptcy court held that the employees lacked standing because only their collective bargaining agent could bring such claims, and the district court affirmed. We now affirm the district court.
Appellee Wien Air Alaska, Inc. ("Wien") and the bargaining representative for Wien pilots ("pilots"), the Air Line Pilots Association ("ALPA"), were parties to a comprehensive collective bargaining agreement ("Agreement"). The Agreement contained a provision that permitted Wien to furlough pilots upon 30 days written notice and set forth a variable compensation schedule for the pilots so furloughed based on seniority.
In November 1984, Wien announced its intention to furlough all its pilots as part of a plan to suspend temporarily its scheduled passenger flight service and to restructure its operation from a passenger airline to an aircraft charter, leasing, and maintenance business. ALPA responded by seeking an injunction in federal district court to prohibit Wien from executing the furlough plan unilaterally.
The district court granted the injunction, holding that in negotiating the furlough provision of the Agreement, Wien had not contemplated or made known the possibility that it might rely on the furlough provision to suspend flight operations. Air Line Pilots v. Wien Air Alaska, 120 L.R.R.M. (BNA) 3388, 3391 (D.Alaska 1984). It thus characterized the disagreement concerning the furloughs as a "major dispute" over which Wien had an obligation to bargain under the Railway Labor Act ("RLA"). 1 Id. To preserve the status quo during the bargaining, the court enjoined A few days later, Wien did just that, filing a voluntary petition in bankruptcy for reorganization under Chapter 11 of the Bankruptcy Code, 11 U.S.C. Secs. 1101-1174 (1986). Wien's disclosure statement showed that it was solvent, but running high operating losses.
Wien from furloughing pilots except in response to situations contemplated at the time of bargaining, such as those relating to reduced demand for scheduled services. Air Line Pilots Ass'n v. Wien Air Alaska, No. A84-516 (D.Alaska Nov. 23, 1984) (order granting preliminary injunction). In addition, the court provided that the injunction would expire upon Wien's filing a petition in bankruptcy. Id
ALPA then filed a proof of claim on behalf of the pilots in the bankruptcy proceeding. The portion of the proof of claim at issue asserted damages against Wien for an alleged breach of the Agreement based on its refusal to employ the pilots beyond the bankruptcy filing date. These so-called "shutdown damages" included wages, benefits, and accrued, unpaid sick leave to which the pilots were allegedly entitled for the period between the filing and the expiration date of the Agreement some two years later.
When Wien filed its reorganization plan, it excluded claims for shutdown damages; its disclosure statement recited that it expected such claims to be disallowed. The disclosure statement also stated that Wien had not rejected the Agreement, but had continued to comply with it.
Wien later filed an amendment to its original plan for reorganization that disclosed a tentative settlement agreement with ALPA. Under the settlement, ALPA agreed to drop both its claim for the pilots' shutdown damages and the suit in which it had obtained the injunction; Wien agreed to pay the pilots' claims for pre-petition damages. ALPA then sent its members a letter which stated that, while it had properly brought the claim for shutdown damages as the bargaining representative, it "ha[d] not undertaken to and w[ould] not settle any individual's claim without his express authorization," and asked members for such authorization. One third of the pilots authorized ALPA to settle their claims for shutdown damages; the balance, part of whom comprise appellants here ("individual pilots"), specifically instructed ALPA not to settle their claims or did not respond.
At the hearing on confirmation of the reorganization plan, Wien moved to dismiss the individual pilots' claims on the ground that they were encompassed within the parameters of the settlement with ALPA. The individual pilots questioned the good faith of ALPA in agreeing to the settlement and tried to introduce evidence that the chief of ALPA's bargaining unit had a conflict of interest. The bankruptcy judge did not admit the evidence, ruled that the individual pilots lacked standing to bring claims for shutdown damages, and confirmed the reorganization plan.
On appeal, the district court affirmed. Bachner v. Wien Air Alaska, Inc., No. A85-265 (D.Alaska Oct. 20, 1986). It concluded that because the conflict concerning Wien's decision to suspend its commercial passenger operations constituted a "major dispute" under the RLA, ALPA was entitled to represent the claims of all Wien pilots, even those who had not expressly authorized it to do so. Id.
The individual pilots now appeal.
Because we are in just as favorable a position as the district court to review the bankruptcy court's findings, we review the district court's decision de novo. Thus, we review the bankruptcy court's findings of fact under the clearly erroneous standard; we review its conclusions of law de novo. In re Woodson Co., 813 F.2d 266, 270 (9th Cir.1987) (citations omitted).
Disputes arising under the RLA are classified as either "major" or "minor." Elgin, Joliet & Eastern Ry. Co. v. Burley 325 U.S. 711, 723, 65 S.Ct. 1282, 1290, 89 L.Ed. 1886 (1945) ("Burley I "), aff'd on reh'g, 327 U.S. 661, 66 S.Ct. 721, 90 L.Ed. 928 (1946); International Ass'n of Machinists v. Aloha Airlines, 776 F.2d 812, 815 (9th Cir.1985). Major disputes concern the acquisition of statutory rights, such as the right to bargain collectively or to incorporate new rights into future agreements. Minor disputes "concern the interpretation or application of [existing] collective bargaining agreements." Id. If the position of one of the bargaining parties is predicated on the terms of an existing collective bargaining agreement, the matter should be resolved as a minor dispute. O'Donnell v. Wien Air Alaska, 551 F.2d 1141 (9th Cir.1977).
Under the RLA, parties to a dispute, whether major or minor, first have a duty to negotiate. 45 U.S.C. Sec. 152 (1986). In the event that negotiations fail to resolve the dispute, the RLA sets forth different procedures on how the parties to the dispute are to proceed, depending upon whether the dispute is characterized as major or minor. Because a major dispute will affect the future of the unit's entire constituency, its resolution lies exclusively within the authority of the employees' collective bargaining representative. Burley I, 325 U.S. at 728, 65 S.Ct. at 1292; see also Hendricks v. Airline Pilots Ass'n Int'l, 696 F.2d 673, 676-77 (9th Cir.1983). Minor disputes, on the other hand, are resolved through binding arbitration by the System Board of Adjustment. Aloha, 776 F.2d at 815; 45 U.S.C. Sec. 153(1)(i) (1986). The collective bargaining agent cannot bind employees to resolution of a minor dispute without express authorization. Burley I, 325 U.S. at 741, 65 S.Ct. at 1298. Thus, whether ALPA possessed authority to settle the individual pilots' claims for shutdown damages turns upon whether this labor dispute is major or minor.
We hold that the disagreement over Wien's decision to suspend its commercial passenger operations through the use of comprehensive furloughs is a major dispute. In so doing, we adopt the reasoning the district court employed upon granting the preliminary injunction when it determined that the negotiations leading up to the Agreement showed that neither party considered the effect of a total cessation of scheduled service when drafting the furlough provision.
The furlough provision ... does not provide for, nor was it intended to authorize, the suspension of all scheduled operations and the furloughing of the pilots in order to permit the airline to reorganize.... The carrier cannot unilaterally alter the terms of the furlough provision so that the Company may furlough its pilots for purposes other than to meet reduced demand for service.
Air Line Pilots v. Wien Air Alaska, 120 L.R.R.M. (BNA) 3388, 3391 (D.Alaska 1984). Because the dispute does not represent either an application or interpretation of the Agreement, the dispute underlying the pilots' claim is a "major" one under the RLA.
The individual pilots contend that once Wien decided to lay them off permanently via its petition for bankruptcy, the dispute changed from a major one under the RLA involving action not contemplated by the Agreement to a minor one involving only unsecured claims for accrued damages in bankruptcy. After all, they argue, ALPA had no role left...
To continue reading
Request your trial
-
Kincaid, In re
...Cir.1986). We review the bankruptcy court's findings of fact for clear error, and its conclusions of law de novo. Wein Air Alaska v. Bachner, 865 F.2d 1106, 1108 (9th Cir.1989). DISCUSSION I. The administrator claims that the trustee's action to recover the monies that represent Kincaid's i......
-
United Pub. Workers, Am. Fed. of State, Cnty., Municipal Emps., Local 646, AFL–CIO v. Ige
...is well established that a collective bargaining agreement cannot bind an employer to continue in business.” Wien Air Alaska, Inc. v. Bachner, 865 F.2d 1106, 1112 (9th Cir.1989). Employees' rights pursuant to a collective bargaining agreement do not survive a discontinuance of business and ......
-
Cascade Roads, Inc., In re
...Fed.R.App.P. 3, Rule 8001 mandates different requirements for the contents of a valid notice of appeal.") ; Wien Air Alaska, Inc. v. Bachner, 865 F.2d 1106, 1111 n. 4 (9th Cir.1989). Unlike Rule 3(c), Rule 8001(a) does not require that notices of appeal to the district court "designate the ......
-
In re Family Snacks, Inc., 00-6076
...Dispatchers Ass'n, 499 U.S. 117, 136 n. 2, 111 S.Ct. 1156, 113 L.Ed.2d 95 (Stephens, J., dissenting); Wien Air Alaska, Inc. v. Bachner, 865 F.2d 1106, 1111 n. 5, 1112 (9th Cir.1989)). We conclude that given the ambiguity in § 1113, § 365(b), coupled with Fed. R.Bankr.P. 600612 which provide......