Air Line Pilots Ass'n v. Miller

• Decision Date: 26 May 1998
• Docket Number: 97428
• Citation: 140 L.Ed.2d 1070,523 U.S. 866,118 S.Ct. 1761
• Parties: AIR LINE PILOTS ASSOCIATION, Petitioner, v. ROBERT A. MILLER et al
• Court: U.S. Supreme Court

523 U.S. 866

118 S.Ct. 1761

140 L.Ed.2d 1070

AIR LINE PILOTS ASSOCIATION, Petitioner,

v ROBERT A. MILLER et al.

No. 97-428.

Supreme Court of the United States

Argued March 23, 1998.

Decided May 26, 1998.

Syllabus^*

Petitioner Air Line Pilots Association (ALPA or Union), a private-sector labor organization covered by the Railway Labor Act (RLA), represents, as exclusive bargaining agent, pilots employed by Delta Air Lines (Delta). The collective-bargaining agreement between ALPA and Delta includes an "agency shop'' clause that requires nonunion Delta pilots to pay ALPA a monthly service charge for representing them. For 1992, the first year ALPA collected an "agency fee'' under the agency-shop agreement, the Union ultimately determined that 19 percent of its expenses were not germane to collective bargaining. Accordingly, ALPA collected an agency fee that amounted to 81 percent of its members' dues. Alleging that the Union had overstated the percentage of its expenditures genuinely attributable to "germane'' activities, respondents, 153 Delta pilots, challenged in this federal-court action the manner in which ALPA calculated agency fees. Under ALPA's "Policies and Procedures Applicable to Agency Fees,'' adopted to comply with the "impartial decisionmaker'' requirement set forth in Teachers v. Hudson, 475 U.S. 292, 310, 106 S.Ct. 1066, 1077-1078, 89 L.Ed.2d 232, pilots who object to the fee calculation may request arbitration under procedures devised by the American Arbitration Association (AAA). When 174 Delta pilots (including 91 of the respondents) filed timely objections to the 1992 agency-fee calculation, ALPA treated the objects as a request for arbitration and referred them to the AAA for resolution in a single, consolidated proceeding. The arbitrator declined to stay the arbitration in deference to the court proceeding, and sustained ALPA's calculation in substantial part. The District Court then granted ALPA's motion for summary judgment, concluding, inter alia, that pilots seeking to challenge the fee calculation must exhaust arbitral remedies before proceeding in court. Reversing, the Court of Appeals found no legal basis for requiring objectors to arbitrate agency-fee challenges when they had not agreed to do so. Having determined that the arbitrator's decision was no longer part of the legal picture, the appellate court remanded the case to the District Court.

Held: When a union adopts an arbitration process to comply with Hudson's "impartial decisionmaker'' requirement, agency-fee objectors who have not agreed to the procedure may not be required to exhaust the arbitral remedy before challenging the union's calculation in a federal-court action. Pp. ____-____.

(a) Section 2, Eleventh, of the RLA allows employers and unions to conclude agency shop agreements. Under such arrangements, nonmembers must pay their fair share of union expenditures necessarily or reasonably incurred in performing the duties of an exclusive employee representative dealing with the employer on labor-management issues. Ellis v. Railway Clerks, 466 U.S. 435, 448, 104 S.Ct. 1883, 1892, 80 L.Ed.2d 428. To avoid constitutional shoals, however, fee objectors cannot be compelled to pay costs unrelated to those representative duties. See, e.g., id., at 448-455, 104 S.Ct., at 1892-1896. In Hudson, a public-sector case in which limitations on the use of agency fees were prompted directly by the First Amendment, the Court held that unions and employers must provide three procedural protections for nonunion workers who object to the agency-fee calculation: sufficient information to gauge the fee's propriety, 475 U.S., at 306, 106 S.Ct., at 1075-1076; "a reasonably prompt opportunity to challenge the amount of the fee before an impartial decisionmaker,'' id., at 310, 106 S.Ct., at 1078; and the escrowing of any amount of the fee "reasonably in dispute'' while the challenge is pending. Ibid. Pp. ____-____.

(b) The parties have not challenged the Court of Appeals' determination that Hudson's safeguards transfer fully to employment relations governed by the RLA. Accordingly, the Court turns to the question whether agency-fee objectors must exhaust Hudson's "impartial decisionmaker'' procedure before pursuing their claims in federal court. The Court answers that question "no,'' and rejects ALPA's request to extend the discretionary exhaustion-of-remedies doctrine, see McCarthy v. Madigan, 503 U.S. 140, 144, 112 S.Ct. 1081, 1085-1086, 117 L.Ed.2d 291, to agency-fee arbitration. A principal purpose of that doctrine-allowing agencies, not courts, to have primary responsibility for the programs that Congress has charged them to administer, see id., at 145, 112 S.Ct., at 1086-1087-is not relevant here: ALPA seeks exhaustion of an arbitral remedy established by a private party, not of an administrative remedy established by Congress. As a rule, arbitration is a matter of contract, and a party ordinarily cannot be required to submit to arbitration any dispute which he has not agreed so to submit. E.g., Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1352-1353, 4 L.Ed.2d 1409. ALPA, it is true, acted to comply with Hudson rather than out of its own unconstrained choice. But the purpose of Hudson's "impartial decisionmaker'' requirement is to advance the swift, fair, and final settlement of objectors' rights, see 475 U.S., at 307, 106 S.Ct., at 1076, not to compel objectors to pursue arbitration. The Court resists reading Hudson in a manner that might frustrate its very purpose. ALPA's assertion of the efficiency served by requiring objectors to proceed first to arbitration, thereby gaining definition of the scope of the dispute, overstates the difficulties entailed in holding a federal-court hearing without a preparatory arbitration, and is answered by conscientious management of the pretrial process to guard against abuse, not by a judicially imposed exhaustion requirement. Genuine as the Union's interest in avoiding multiple proceedings may be, that interest does not overwhelm objectors' resistance to arbitration to which they did not consent, and their election to proceed immediately to court for adjudication of their federal rights. Pp. ____-____.

108 F.3d 1415, affirmed.

GINSBURG, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and O'CONNOR, SCALIA, KENNEDY, SOUTER, and THOMAS, JJ., joined. BREYER, J., filed a dissenting opinion, in which STEVENS, J., joined.

Jerry D. Anker, Washington, DC, for petitioner.

Raymond J. LaJeunesse, Fairfax, VA, for respondents.

Justice GINSBURG delivered the opinion of the Court.

An "agency shop'' arrangement permits a union, obliged to act on behalf of all employees in the bargaining unit, to charge nonunion workers their fair share of the costs of the representation. The purposes for which a union may spend the "agency fee'' paid by nonmembers, however, are circumscribed by the First Amendment (when public employers are involved) and the National Labor Relations Act (NLRA) or Railway Labor Act (RLA) (when private employers subject to their provisions are involved). In Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986), we held that the First Amendment requires public-employee unions to accord workers who object to the agency fee "a reasonably prompt opportunity to challenge the amount of the fee before an impartial decisionmaker.'' Id., at 310, 106 S.Ct., at 1078.

Petitioner Air Line Pilots Association (ALPA or Union), a private-sector labor organization covered by the RLA, acknowledges that it is bound by Hudson. ALPA endeavored to comply with Hudson's "impartial decisionmaker'' requirement by referring all fee disputes to a neutral arbitrator. In the action now before us, nonunion pilots challenged the agency fee collected by the Union in 1992. ALPA urged that the challengers must exhaust the arbitration process before pursuing judicial remedies. The Court of Appeals for the District of Columbia Circuit held that the pilots resisting the agency fee may proceed at once in federal court. We hold, in accord with the Court of Appeals, that employees need not submit fee disputes to arbitration when they have never agreed to do so.

I

ALPA represents, as exclusive bargaining agent, pilots employed by most United States commercial air carriers, including Delta Air Lines (Delta). In November 1991, ALPA and Delta amended their collective-bargaining agreement to include, inter alia, an "agency shop'' clause. That clause, similar to provisions in ALPA's agreements with other carriers, required each pilot who was not an ALPA member to pay the Union a monthly "service charge as a contribution for the administration of [the collective-bargaining agreement] and the representation of such employee.'' App. 31.

On December 12, 1991, five Delta pilots filed this action against ALPA and Delta in the District Court for the District of Columbia. Their complaint charged that the "agency shop'' clause was unlawful on its face. (Three of the original plaintiffs, plus 150 Delta pilots who subsequently intervened, are respondents here; the other two original plaintiffs were dismissed from the case for reasons unrelated to the issue we resolve. Delta was also dismissed from the case on grounds not pertinent here.) The pilots unsuccessfully moved for a preliminary injunction against implementation of the agency shop arrangement, and ALPA began collecting agency fees on January 1, 1992.

In 1992, ALPA charged its members monthly dues of 2.35 percent of each pilot's earnings. The Union ultimately determined, in its final, audited "Statement of Germane and Nongermane Expenses'' (SGNE) for 1992, that 19 percent of ALPA's expenses for that year were not germane to collective bargaining. Accordingly, the Union adjusted fees charged nonmembers to equal 81 percent of the amount members paid.

On October 8, 1992, some months after the Union had begun to...