Airline Pilots Ass'n, Intern. v. Department of Transp.

• Decision Date: 24 August 1989
• Docket Number: No. 88-1593,88-1593
• Citation: 880 F.2d 491
• Parties: 131 L.R.R.M. (BNA) 3093, 279 U.S.App.D.C. 168 AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Petitioner, v. DEPARTMENT OF TRANSPORTATION, Respondent, Arthur N. Rogers and Michael J. Baker, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 491

880 F.2d 491

131 L.R.R.M. (BNA) 3093, 279 U.S.App.D.C. 168

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Petitioner, v. DEPARTMENT OF TRANSPORTATION, Respondent Arthur N. Rogers and Michael J. Baker, Intervenors.

No. 88-1593.

United States Court of Appeals District of Columbia Circuit.

Argued April 3, 1989.

Decided July 21, 1989.

As Amended Aug. 24, 1989.

Gary Green, with whom James W. Johnson was on the brief, for petitioner.

Clay Warner, Washington, D.C., also entered an appearance for petitioner.

Thomas L. Ray, Attorney, Dept. of Transp. with whom B. Wayne Vance, Diane E. Liff, Attys., Dept. of Transp., Washington, D.C., were on the brief, for respondent.

David M. Feldman, of the bar of Texas, Fifth Circuit, pro hac vice, by special leave of Court, with whom James R. Layton, Washington, D.C., was on the brief, for intervenors.

Before MIKVA, SILBERMAN and WILLIAMS, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

Opinion concurring in part and dissenting in part filed by Circuit Judge MIKVA.

SILBERMAN, Circuit Judge:

In the summer of 1981, the now-defunct Civil Aeronautics Board ("CAB") approved the merger of Texas International Airlines and Continental Air Lines. Pursuant to its authority to condition its approval upon "such terms and conditions as it shall find to be just and reasonable," 49 U.S.C. App. Sec. 1378(b)(1) (1982), the CAB required the merging airlines to consent to a series of labor protective provisions ("LPPs") which, in turn, obliged the carriers to insure a "fair and equitable" integration of the combining airlines' separate seniority lists. Disputes arising under the LPPs were to be settled by submission to an arbitrator selected from among a group designated by the National Mediation Board.

Two former Texas International pilots, claiming to have been placed unfairly low on the combined seniority list, petitioned the Department of Transportation ("DOT")--CAB's successor in the airline merger arena--to order arbitration of their claims. Finding the pilots' claims "within the scope of the LPPs." DOT directed arbitration. From this final order, the Air Line Pilots Association ("ALPA") petitions for review.

I.

Until very recently, section 408 of the Federal Aviation Act, 49 U.S.C. App. Sec. 1378 (1982), empowered DOT--and the CAB before it--to review proposed airline mergers and approve them unless it found that the consolidations would "not be consistent with the public interest." Id. Sec. 1378(b). ¹ The CAB routinely imposed LLPs on the merging carriers as a condition of Board approval. See Delta-Chicago and Southern Merger Case, 16 C.A.B. 647 (1952) (announcing standard LPPs). Although the passage of the Airline Deregulation Act of 1978, Pub.L. No. 95-504, 92 Stat. 1705 (1978), prompted the Board to curtail its practice of imposing LPPs, see National Airlines Acquisition, 84 C.A.B. 408, 475 (1979); see also Air Line Pilots Ass'n v. Dep't of Transp., 791 F.2d 172, 176-78 (D.C.Cir.1986) (upholding DOT's refusal to impose LPPs), the Board included its standard LPPs as a condition to approval of the 1981 Texas International-Continental merger. The LPPs imposed on the two carriers provide:

Section 3. Insofar as the acquisition affects the seniority rights of the carriers' employees, provisions shall be made for the integration of seniority lists in a fair and equitable manner, including, where applicable, agreement through collective bargaining between the carriers and the representatives of the employees affected. In the event of failure to agree, the dispute may be submitted by either party for adjustment in accordance with section 13.

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Section 13(a). In the event that any dispute or controversy (except as to matters arising under section 9) arises with respect to the protections provided herein, which cannot be settled by the parties within 20 days after the controversy arises, it may be referred by any party to an arbitrator selected from a panel of seven names furnished by the National Mediation Board for consideration and determination.

Texas International-Continental Acquisition Case, Order 81-10-66, App. A at 1, 8 (Aug. 14, 1981) (emphasis added).

At the time of the merger, the pilots employed by both Texas International and Continental were represented by ALPA. Accordingly, pursuant to section 3 of the LPPs, the two carriers and ALPA agreed to employ the union's internal consolidation procedures in order to integrate the pilots' seniority lists. This process eventually led to an internal ALPA arbitration (not the employer-union arbitration contemplated by section 3 of the LPPs) before a panel ("the ALPA panel") composed of two pilots employed by disinterested airlines and an independent labor arbitrator. Representative pilots from each of the merging carriers presented their integration proposals to the ALPA panel, and in July 1983 the panel announced a complex integration award that placed the approximately 1600 Continental and 400 Texas International pilots into nine seniority categories in accordance, variously, with the pilots' date of hire, length of service (computed from a merger cutoff date of November 25, 1981) and pre-merger expectations concerning equipment, routes, pay, and other conditions.

Michael J. Baker and Arthur N. Rogers, two of the least-senior Texas International pilots, were placed into the ninth or last category which included "recent [Texas International] new hires with [dates of hire] in 1980 or later and [lengths of service] of less than four months as of November 25, 1981." Baker and Rogers, claiming unfair treatment, complained to the union. The pilots argued that the ALPA panel had failed to give full effect to a collective bargaining arbitration decision pre-dating the merger that allegedly granted Baker and Rogers constructive length-of-service credit far in excess of the "less than four months" service assigned to them by the ALPA panel as of the merger cutoff date.

This earlier award grew out of bitter pre-merger contract negotiations between the union and Texas International in 1980 and 1981. Baker and Rogers were part of a group of twelve pilots hired in the midst of these negotiations--in October 1980--and placed immediately into an airline training program. ALPA members regarded these new hires suspiciously, believing the airline had retained them in order to operate in the event of a strike. Accordingly, the incumbent pilots refused to cooperate with the company in assimilating the new hires into their ranks. Although the new pilots completed their "ground training," a prerequisite to being placed on the pilots' seniority list, shortly before November 19, 1980, the refusal of the incumbent pilots to assist in the training of the so-called "Dirty Dozen" prevented the new hires from completing their required course of instruction. As a consequence, Baker, Rogers and the rest of the Dirty Dozen were essentially furloughed.

ALPA and Texas International subsequently settled their differences and reached a collective bargaining agreement in July 1981 incorporating new job protections for ALPA pilots, including a requirement that Texas International recall all pilots then on furlough. But the seniority list apparently agreed to at that time assigned Baker and Rogers a seniority date of July 30, 1981, which effectively deprived them of the agreement's new protections. When Baker and Rogers were recalled by Texas International (prior to completion of the merger) for a brief period in July 1982, they discovered their postdated seniority and soon thereafter instituted grievances under the collective bargaining agreement against the surviving airline. The matter went to arbitration and the union acted only as an observer.

An arbitrator selected pursuant to the collective agreement held that the two pilots were entitled to the earlier seniority date of November 19, 1980. The employer had attempted to defend its conduct before the arbitrator by claiming that ALPA itself had demanded the wholly artificial (and disadvantageous) seniority date for Baker and Rogers as a condition to entering into a collective agreement in July 1981. The arbitrator skirted the implication of the union's possible breach of its duty of fair representation. ² Whatever the union's position vis-a-vis the two pilots, concerning which he made no findings, the arbitrator determined that the airline was "still ... obligated to abide by the terms of its Agreement." He thus ordered correction of the pre-merger Texas International seniority list, awarded back pay "as if the Grievants had been in active service during the period[ ] ... November, 1980[ ] until December 1, 1981," and "declared that each Grievant would and should have been on active duty line status at least since June 24, 1982."

It is this alleged constructive period of "active service" that Baker and Rogers believe was improperly ignored by the internal ALPA integration panel. As noted, soon after the ALPA panel published its integration decision, the two pilots complained to the union. But shortly thereafter, in September 1983, Continental filed a petition under Chapter 11 of the Bankruptcy Code and rejected its collective agreement with ALPA; the ensuing strike and eventual withdrawal of recognition of ALPA by Continental prevented, according to the union, immediate resolution of the pilots' claims. Baker and Rogers subsequently petitioned DOT for an order compelling arbitration by the airline and ALPA. Simultaneously, the aggrieved pilots filed, in the United States District Court for the Southern District of Texas, a claim alleging that ALPA had breached its duty of fair representation by failing to give effect to the earlier arbitration award in integrating the Texas International and Continental seniority lists.

In a series of orders, DOT directed arbitration of the dispute. DOT purported to adopt the prior standards employed by the CAB in reviewing...