Air Line Pilots Ass'n Intern. v. Eastern Air Lines
| Decision Date | 30 August 1988 |
| Docket Number | Civ. A. No. 87-2002,88-0870 and 88-0364. |
| Citation | 703 F. Supp. 962 |
| Parties | AIR LINE PILOTS ASSOCIATION INTERNATIONAL, Plaintiff, v. EASTERN AIR LINES, INC., Defendant. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AFL-CIO, et al., Plaintiffs, v. EASTERN AIR LINES, INC., et al., Defendants. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, et al., Plaintiffs, v. EASTERN AIR LINES, INC., Defendant. |
| Court | U.S. District Court — District of Columbia |
James L. Linsey, Cohen, Weiss & Simon, New York City, Jonathan A. Cohen, Air Line Pilots Ass'n, Intern., Washington, D.C., for Air Line Pilots Ass'n.
Arthur M. Luby, O'Donnell, Schwartz & Anderson, Washington, D.C., David Rosen, Catherine Minuse, O'Donnell & Schwartz, New York City, for Transport Workers Union of America.
Joseph Guerrieri, Jr., Samuel Issacharoff, Guerrieri, Edmond & James, Robert Burka, David Brown, Knopf & Burka, Washington, D.C., for Intern. Ass'n of Machinists & Aerospace Workers.
Michael J. Madigan, John J. Gallagher, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C., David Boies, Cravath, Swaine & Moore, New York City, for Eastern Air Lines, Inc.
I.
In this proceeding, brought under the Railway Labor Act ("RLA" or "Act"), 45 U.S.C. § 151, et seq. (1981), plaintiffs Air Line Pilots Association, International ("ALPA"), International Association of Machinists & Aerospace Workers ("IAM") and Transport Workers Union of America ("TWU") seek declaratory, injunctive, monetary and other appropriate relief against defendant Eastern Air Lines, Inc. ("Eastern"). The three unions charge in separate verified complaints that Eastern has violated various provisions of the Railway Labor Act. Since filing their original complaints,1 plaintiffs claim that Eastern, by engaging in a recently announced proposed course of action and conduct, violated several independent obligations of the Railway Labor Act: (1) the obligation to maintain the status quo during Section 6 bargaining concerning the changes in question; (2) the obligation to maintain agreements and to initiate and exhaust Section 6 bargaining before altering those agreements and the status quo; and (3) the obligation to refrain from action interfering with and undermining its bargaining representatives.
The proposed action triggering plaintiffs' present application for preliminary injunctive relief emerged from Eastern's July 22, 1988 public announcement of its intent to effect significant operational "downsizing" and "restructuring." "We're going back to our roots ..." explained Eastern's President and Chief Executive Officer, Phil Bakes. The proposal includes reducing Eastern's work force by nearly 12 percent through furloughing 4,000 employees, including 1,000 flight attendants, 1,000 machinists, and 500 pilots. It also calls for eliminating and reducing two major hub services, terminating all services to 14 designated cities, terminating point-to-point service in several northeast United States cities, closing a pilot domicile center, and disposing of 33 to 41 aircraft.
Eastern claims that the proposed changes are a reasonable response to the company's worsening financial condition. They are calculated to eliminate service on unprofitable routes and to permit the sale of assets which cannot be used on a reasonable economic basis. According to Eastern, such changes are not only permitted under existing labor contracts but also are consistent with past practices under its bargaining agreements. Eastern denies that the proposals are part of an ongoing program of transferring assets or work to Continental Air Lines ("Continental").
Defendant Eastern argues that plaintiffs had advance notice of the proposed changes. While it appears that plaintiffs had some prior knowledge of Eastern's planned cuts, they only became fully aware of the precise nature and scope of the downsizing and restructuring once these changes were announced on July 22, 1988. Before the airline held its press conference on that day, plaintiffs were only able to speculate and surmise as to the extent of flight reductions and possible furloughs.
Not surprisingly, plaintiffs claim that Eastern's proposals are tainted by a strong anti-union bias. They argue that the contemplated move repudiates obligations arising under existing collective bargaining agreements and under the Railway Labor Act, and only serves to promote defendant's blatant efforts to transfer Eastern's operations, assets, work, and work opportunities to Continental, which is predominantly non-union.
After a hearing on plaintiffs' motions for a temporary restraining order, Eastern was temporarily restrained on August 4, 1988, from furloughing the 4,000 employees and with counsels' consent, the order was extended to August 26, 1988.2
Extensive hearings were held on plaintiffs' several motions for a preliminary injunction. For seven days the Court considered the testimony and assessed the credibility of the witnesses presented by the parties, and reviewed the declarations and exhibits proffered in support of their claims and defenses. The supporting legal memoranda and the final arguments of counsel have all been fully considered.
For the reasons discussed herein, the Court determines that plaintiffs have shown by abundant and credible testimony and reliable documentation that Eastern Air Lines' proposed furloughing of 4,000 employees is illegal and they should be enjoined preliminarily from pursuing such a proposal.
In accordance with Rule 52(a), Fed.R. Civ.P., the Court's Findings of Fact and Conclusions of Law are submitted.
II.
1. Plaintiffs ALPA, IAM and TWU are, respectively, the authorized collective bargaining representatives for Eastern's pilots, Eastern's aircraft mechanics and ground services personnel (airline servicers, flight dispatchers, baggage and cargo handlers); and for all Eastern flight attendants.
As of December 31, 1987, 60 percent of Eastern's 32,500 full-time employees were covered by agreements with ALPA, IAM and TWU.
2. Defendant Eastern is a common air carrier, subject to the provisions of the RLA and is engaged in both interstate and foreign commerce. As the nation's sixth largest air carrier, it provides substantial passenger and cargo service throughout the East Coast, a limited amount of east-west service, and a profitable air shuttle service serving New York City, Washington, D.C., and Boston.
3. ALPA and Eastern have been parties to successive collective bargaining agreements for more than 45 years. Their most recent agreement became amendable on July 1, 1988, and the parties are currently engaged in contract negotiations pursuant to Section 6 of the RLA, 45 U.S.C. § 156 (1981).
IAM and Eastern have been parties to successive collective bargaining agreements for more than 40 years. Their most recent agreement became amendable on October 2, 1987. The parties have been engaged in bargaining negotiations since October 1987. In January 1988, they began negotiations under a mediator appointed by the National Mediation Board pursuant to Section 5, First of the RLA, 45 U.S.C. § 155, First (1981).
TWU and Eastern have also been parties to successive agreements for many years. Their current agreement does not expire until December 31, 1988, when it becomes amendable.
4. Texas Air Corporation ("Texas Air") is a successor to Texas International Airlines. Texas Air is a holding company with investments in airlines and related businesses. It owns all of the common stock of Eastern and Continental. Eastern was acquired by Texas Air in November 1986; Continental was acquired in 1982.
Texas Air is controlled by a closely held company, Jet Capital Corporation ("Jet Capital"). With few exceptions, almost all of Jet Capital's activities are controlled and directed entirely by Texas Air. Frank Lorenzo and a few other Texas Air officers and outside investors own Jet Capital, which has a controlling 34 percent interest in Texas Air.
5. The Texas Air family includes the following airline support companies: SystemOne (providing a computer reservation system and data processing support); TAC Fuel Management (providing central fuel purchasing services); Continental Eastern Sales (a marketing company jointly owned by Continental and Eastern); and a number of aircraft holding companies that lease equipment to other subsidiaries.
6. Through personal control and ownership of 50.7 percent of Texas Air voting stock, Mr. Lorenzo dominates all operations. He is President, Chief Executive Officer, and Chairman of Texas Air Corporation. He also serves as board chairman of Eastern, Continental and SystemOne.
7. The Eastern-Texas Air 1986 sale was prompted by Eastern's sagging financial condition and profitability. Eastern blamed its failure to secure labor concessions that could have restored it to financial health. Others pointed to poor management decisions. Nevertheless, Eastern was considered an attractive investment when Texas Air acquired the airline. Texas Air not only believed that reducing labor costs would be critical to Eastern's future viability but also that it could be achieved. After the 1986 acquisition, Eastern's initial objectives were directed toward reducing overhead, increasing market share, improving financial performance, and lowering costs—particularly labor costs.
To accomplish this, Eastern has concentrated on building liquidity to improve its bargaining position, and, if necessary, selling assets to build up cash. Labor representatives believe that Eastern's management is interested only in short-term profits and not in the long-term viability of the company.
8. Since acquisition by Texas Air in 1982, Continental has operated predominantly as a non-union air carrier. Only 20 percent of its 33,500 employees were unionized as of December 31, 1987. Before 1982, Continental...
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Air Line Pilots Ass'n, Intern. v. Eastern Air Lines
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