Air Line Pilots v. Guilford Transp. Industries

• Decision Date: 28 February 2005
• Docket Number: No. 04-2409.,04-2409.
• Citation: 399 F.3d 89
• Parties: AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Plaintiff, Appellee, v. GUILFORD TRANSPORTATION INDUSTRIES, INC., et al., Defendants, Appellants.
• Court: U.S. Court of Appeals — First Circuit

399 F.3d 89

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Plaintiff, Appellee, v. GUILFORD TRANSPORTATION INDUSTRIES, INC., et al., Defendants, Appellants.

No. 04-2409.

United States Court of Appeals, First Circuit.

Heard December 7, 2004.

Decided February 28, 2005.

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William G. Miossi, with whom Joseph E. Schuler, Eric L. Hirschhorn, Winston & Strawn, R. Matthew Cairns, and Ransmeier & Spellman were on brief, for appellants.

Marcus C. Migliore, with whom Julie P. Glass was on brief, for appellee.

Before BOUDIN, Chief Judge, SELYA, Circuit Judge, and CYR, Senior Circuit Judge.

SELYA, Circuit Judge.

Plaintiff-appellee Air Line Pilots Association (ALPA) brought this action under the Railway Labor Act (RLA), 45 U.S.C. §§ 151-188, seeking to enjoin the defendants from engaging in what ALPA described as "a brazen and apparently successful effort to destroy a union," Appellee's Br. at 3, by transferring work from a unionized firm to its non-unionized corporate sibling. A magistrate judge found that a major dispute existed as that term is used in the jurisprudence of the RLA and further found that the defendants had engaged in prohibited conduct. He therefore recommended the imposition of a preliminary injunction. The district court concurred and issued the requested injunction. Concluding, as we do, that the court did not apply the correct legal standards, we vacate the injunction and remand for further proceedings consistent with this opinion.

I. THE STATUTORY SCHEME

When Congress envisioned a need to create a separate labor regime for railroads in order to mitigate the potential for disruption of interstate travel and transportation of goods, it conceived the RLA. See Detroit & Toledo Shore Line R.R. Co. v. United Transp. Union, 396 U.S. 142, 148-49, 90 S.Ct. 294, 24 L.Ed.2d 325 (1969). It subsequently extended this regime to the airline industry. See Act of April 10, 1936, 49 Stat. 1189. The RLA now regulates the relationship between labor and management in both industries.

The RLA evinces a strong preference for alternative dispute resolution and sharply limits judicial involvement in labor disputes. See Tex. & New Orleans R.R. Co. v. Bhd. of Ry. & S.S. Clerks, 281 U.S. 548, 562-65, 50 S.Ct. 427, 74 L.Ed. 1034 (1930). One manifestation of this bias is that, to the extent any such dispute involves the interpretation of an existing collective bargaining agreement (CBA), it must be submitted to binding arbitration. See 45 U.S.C. § 184; see also Consol. Rail Corp. v. Ry. Labor Execs.' Ass'n, 491 U.S. 299, 303-04, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989) (Conrail). Even when a dispute goes beyond the parameters of the CBA, the RLA requires union and management to engage in an elaborate set of mediation procedures. See 45 U.S.C. §§ 155, 183. While this pavane is in progress, both parties must maintain the status quo ante concerning rates of pay, working conditions and the like. Conrail, 491 U.S. at 302-03, 109 S.Ct. 2477. Only at the conclusion of the mediation process may the parties resort to self-help. Id. at 303, 109 S.Ct. 2477.

The Supreme Court has denominated disputes that touch upon the proper interpretation of a CBA as "minor," and has made it pellucid that courts have no jurisdiction in such cases. Elgin, Joliet & E. Ry. Co. v. Burley, 325 U.S. 711, 723-24, 65 S.Ct. 1282, 89 L.Ed. 1886 (1945). A dispute is considered minor whenever the challenged conduct is "arguably justified" either by the text and negotiating history of the CBA or by the past practices of the parties. Conrail, 491 U.S. at 307, 109 S.Ct. 2477. Disputes falling outside the purview of the CBA are termed "major." Burley, 325 U.S. at 723-24, 65 S.Ct. 1282. In such cases, a federal court may enjoin the parties to maintain the status quo while the RLA's mediation process is ongoing. Conrail, 491 U.S. at 303, 109 S.Ct. 2477. Once the mediation procedures have concluded, the court must vacate any injunction. See id.

The RLA contemplates the existence of two other types of disputes. A representational dispute involves a union's claim to be the lawful representative of certain employees. Air Line Pilots Ass'n, Int'l v. Tex. Int'l Airlines, Inc., 656 F.2d 16, 19 (2d Cir.1981). In those cases, decisional authority is vested in the National Mediation Board. 45 U.S.C. § 152, Ninth. Courts have no jurisdiction to adjudicate representational disputes involving railroads or airlines. See Tex. Int'l, 656 F.2d at 19.

Another type of dispute concerns allegations that an employer's conduct interferes with employees' rights to organize and designate an exclusive bargaining agent. Such organizational disputes implicate 45 U.S.C. § 152, Third and Fourth. Those provisions bar covered employers from meddling in, coercing, or unduly influencing employees' representational choices and from interfering with the right to unionize. Atlas Air, Inc. v. Air Line Pilots Ass'n, 232 F.3d 218, 224 (D.C.Cir.2000). In contrast to other species of RLA cases, the courts have jurisdiction to decide certain questions concerning these statutory rights. See, e.g., Ry. Labor Execs.' Ass'n v. Boston & Me. Corp., 808 F.2d 150, 157 (1st Cir.1986). If a court finds a statutory violation, it may issue injunctive relief. See, e.g., id. at 158-59. Such relief is appropriate primarily in precertification disputes regarding employees' choice of union representatives and participation in the collective bargaining process. See TWA, Inc. v. Indep. Fed'n of Flight Attendants, 489 U.S. 426, 440-41, 109 S.Ct. 1225, 103 L.Ed.2d 456 (1989). We have, however, contemplated that postcertification relief may be appropriate in extremely limited circumstances. See Wightman v. Springfield Terminal Ry. Co., 100 F.3d 228, 234 (1st Cir.1996) (dictum).

II. THE CASE AT BAR

In 1999, Guilford Transportation Industries, Inc. (Guilford) formed a wholly-owned subsidiary, Pan American Airlines, Inc. (PAA), as a repository for the acquired assets of a bankrupt airline. PAA placed those assets in a wholly-owned subsidiary, Pan American Airways Corp. (Pan Am), which began offering commercial airline service aboard a fleet of leased Boeing 727 jet aircraft. Over time, Pan Am's service graduated from charter flights to scheduled flights originating at airports on the East Coast and in the Caribbean.

From the beginning, Pan Am's airplanes were flown by the pilot force of its bankrupt predecessor. Pan Am and the pilots' union — ALPA — entered into a CBA on November 15, 1999. At its high point, Pan Am employed approximately ninety pilots. The skies were not friendly, however, and by August of 2004 that number had shrunk to thirty.

Finances explain this reduction in force. The record shows that Pan Am lost tens of millions of dollars over approximately five years. These losses took a toll, and Pan Am informed federal regulators in June of 2004 that it would cease all flight operations on October 31, 2004. Pan Am hewed to that line and is now in the process of winding up its affairs.

There is, however, more to the story. In 1999, PAA formed a second wholly-owned subsidiary, Boston-Maine Airways Corp. (Boston-Maine). Boston-Maine, a commercial airline, employs only non-union pilots. Initially, it operated a fleet of small aircraft that included two CASA-212 turboprop cargo planes and ten Jetstream 3100 nineteen-seat passenger aircraft.

Boston-Maine had higher aspirations and, in 2002, it applied to the United States Department of Transportation and the Federal Aviation Administration (FAA) for permission to fly Boeing 727 aircraft. Despite ALPA's vigorous opposition, the federal regulators approved the application. Boston-Maine began operating 727s in commercial service in the summer of 2004 and Pan Am thereafter contracted with Boston-Maine to fly certain Pan Am routes. That move triggered the commencement of the instant action. In its complaint, filed on September 1, 2004,¹ ALPA alleged that Boston-Maine's development of the capacity to fly 727s, coupled with its subsequent contracting with Pan Am (resulting in the transfer of certain work from Pan Am to Boston-Maine), contravened both the CBA and the unionized pilots' statutory rights.

Simultaneous with the filing of its complaint, ALPA moved for temporary and preliminary injunctive relief seeking, inter alia, to prohibit Boston-Maine from operating large aircraft (including 727s) in commercial service while ALPA and Pan Am negotiated changes to the CBA. The district court referred the motion to a magistrate judge. See 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b). Following a two-day evidentiary hearing, the magistrate judge recommended that the court characterize the dispute as major, reasoning that Pan Am and Boston-Maine should be treated as a single entity and that the CBA could not plausibly be interpreted to justify Pan Am's use of Boston-Maine to operate flights that otherwise would be flown by ALPA-represented pilots. The magistrate judge also recommended a finding that Pan Am and Boston-Maine had violated the unionized pilots' statutory rights because the attempted creation of a parallel 727 operation constituted an effort to interfere with the statutorily protected right to union representation. See Air Line Pilots Ass'n, Int'l v. Guilford Transp. Indus., Inc., No. 04-331, 2004 WL 2203570 (D.N.H. Sept. 17, 2004).

The district court spurned the defendants' timely objections and adopted the magistrate judge's report "in its entirety."² Air Line Pilots Ass'n, Int'l v. Guilford Transp. Indus., Inc., No. 04-331, 360 F.Supp.2d 248, 262, 2004 WL 2318478, at *12 (D.N.H. Oct. 13, 2004). On the same date, the court issued a preliminary injunction ordering the defendants 1. To restore to the status quo rates of pay, rules and working conditions of the Pan Am flight crew members as they existed on July 15, 2004, including but not limited to, all those embodied in the collective bargaining agreement...