Bensel v. Allied Pilots Ass'n
| Decision Date | 26 October 2004 |
| Docket Number | No. 03-3176.,03-3176. |
| Citation | 387 F.3d 298 |
| Parties | Leroy BENSEL, individually and as representative of a class consisting of former Trans World Airlines, Inc., pilots employed by TWA Airlines LLC as of April 2001, Appellant v. ALLIED PILOTS ASSOCIATION; TWA Airlines, LLC; Air Line Pilots Association; American Airlines, Inc. |
| Court | U.S. Court of Appeals — Third Circuit |
Appeal from the United States District Court for the District of New Jersey, Irenas, J.
COPYRIGHT MATERIAL OMITTED
Jerald R. Cureton, (Argued), H. Thomas Hunt, III, Anthony Valenti, Tara Ann Mosier Cureton Caplan, Delran, NJ, for Appellant.
Steven K. Hoffman, (Argued), Edgar N. James, James & Hoffman, Washington, DC, James Katz, Jennings Sigmond, Cherry Hill, NJ, for Appellee Allied Pilots Association.
Donald L. Havermann, (Argued), Harry Rissetto, Morgan, Lewis & Bockius, Washington, DC, Alfred J. Lechner, Jr., Joseph A. Piesco, Jr., Morgan, Lewis & Bockius, Princeton, NJ, for Appellees TWA Airlines, LLC and American Airlines, Inc.
Daniel M. Katz, (Argued), Katz & Ranzman, Washington, DC, for Appellee Air Line Pilots Association.
Before RENDELL, FISHER and VAN ANTWERPEN, Circuit Judges.
In this appeal of summary judgment, Appellants challenge the order of the District Court which granted summary judgment as to all Defendants-Appellees and dismissed all counts of Appellants' Second Amended Restated Complaint. Plaintiffs-Appellants (the "Class") are a group of airline pilots formerly employed by Trans World Airlines, Inc. ("TWA"). The gravamen of the Class' complaints, which arise under the Railway Labor Act ("RLA"), 45 U.S.C. §§ 151 et seq., concern the imposition of a seniority integration agreement resulting from American Airlines, Inc.'s ("American") purchase of TWA's assets and the hiring of the Class by American's subsidiary, TWA Airlines, LLC ("TWA-LLC"). For the reasons explicated below, we reverse-in-part and affirm-in-part the Order of the District Court, and remand to provide the Class and the Air Line Pilots Association ("ALPA") an opportunity to conduct discovery on the claims asserted in Count I of the Second Amended Restated Complaint.
As the material facts are generally not in dispute, the facts presented below are taken in large part verbatim from the District Court's opinion in this case. Additional facts are incorporated from the parties' submissions and appendices.
After several years of failing to make a profit, on January 9, 2001, TWA entered into an agreement with Defendant-Appellee American whereby American agreed to purchase the majority of TWA's assets following TWA's filing for Chapter 11 bankruptcy protection. TWA made such a filing the following day, January 10, 2001. As a condition of the purchase agreement, American agreed to hire almost all of TWA's unionized employees provided that certain labor protective provisions in their various contracts were eliminated.
One of those provisions concerned the right of TWA's pilots to bring to arbitration issues of seniority integration in the event of a purchase of TWA or merger of TWA with another airline. American indicated that it would not proceed with its purchase of TWA unless this labor protective provision, known as Allegheny-Mohawk rights, was eliminated. TWA's pilots were represented by Defendant-Appellee ALPA through its TWA Master Executive Council ("TWA MEC") unit.1 Under American's collective bargaining agreement with its pilots, represented by Defendant-Appellee Allied Pilots Association ("APA"), the seniority of any new pilots who began working for American, as a result of an acquisition by American, would begin to accrue only at the moment that the pilots began working for American.
The TWA MEC resisted waiving its seniority protection provisions, and on March 15, 2001, TWA filed a motion under 11 U.S.C. § 1113 with the Bankruptcy Court seeking to abrogate the provisions in its collective bargaining agreement with ALPA. In response, on April 2, 2001, the TWA MEC passed a resolution waiving its seniority protection provisions in exchange for a letter from American in which American promised to "use its reasonable best efforts" with APA to "secure a fair and equitable process for the integration of seniority" and to adopt the procedures that result from facilitated meetings between APA and ALPA. Significantly, any seniority integration agreement reached between APA and ALPA was to be presented to American as a proposed modification of the collective bargaining agreement between American and APA. On April 6, 2001, the Bankruptcy Court entered a stipulation and order withdrawing the section 1113 motion and formalizing the waiver agreement.2
On April 9, 2001, ALPA and the TWA MEC entered into a transition agreement with TWA-LLC. Upon completion of the asset purchase by American, TWA-LLC would become a wholly owned subsidiary of American. Under that transition agreement, the majority of the provisions of the collective bargaining agreement between ALPA and TWA would remain in effect until such time as the National Mediation Board ("NMB") adjudicated TWA-LLC and American as a "single carrier" and extended APA's certification to cover the TWA-LLC pilots (comprising the Class). The transition agreement incorporated by reference American's promise to use its reasonable best efforts to ensure a fair seniority integration process. In addition, ALPA would continue to remain the exclusive representative of the TWA-LLC pilots until the NMB made the appropriate declarations. The next day, on April 10, 2001, American's purchase of TWA's assets was finalized and TWA-LLC began operations as a separate air carrier. At that point, almost all TWA pilots became employees of TWA-LLC.
Between at least February and August of 2001, the TWA MEC and APA negotiated with each other over seniority integration under the auspices of a facilitator provided by American. No agreement was reached between the parties. On November 8, 2001, APA and American reached an independent agreement on seniority integration of the former TWA pilots, known as Supplement CC. Under Supplement CC, some TWA pilots did receive credit for their seniority, and certain captains and first officer positions were guaranteed for former TWA pilots at the remaining pilot base for TWA-LLC pilots, in St. Louis, Missouri. Supplement CC was not to become effective until the NMB declared American and TWA-LLC to be a single carrier and extended the APA's certification. TWA MEC refused to sign Supplement CC.
On November 9, 2001, APA filed a petition with the NMB seeking the declaration of "single carrier" status. ALPA opposed this petition, but on March 5, 2002, the NMB declared that TWA-LLC and American were a "single carrier" for RLA purposes. On April 3, 2002, after ALPA declined to submit an application to become the bargaining representative for the combined pilot group, and despite the objection to APA certification submitted by TWA MEC, the NMB certified APA as the sole bargaining agent for all American pilots. As a result, the April 9, 2001 TWA-LLC/ALPA transition agreement expired (by its own terms), ALPA's certification as the collective bargaining agent for the TWA-LLC pilots terminated, and Supplement CC became effective.
Following execution of Supplement CC, ALPA pursued a grievance against American and arbitrated before a System Board of Adjustment, alleging that American violated the promise it made to ALPA in the letter it wrote concurrently with the April 2, 2001 waiver agreement. The grievance alleged that American did not use its "reasonable best efforts" to protect the TWA-LLC pilots' seniority protections, as it had agreed to do in its letter. Through the arbitration, ALPA sought the nullification of Supplement CC. The arbitrator, in a decision dated April 18, 2002, rejected the grievance and found for American.
For purposes of clarity, the dates mentioned in the foregoing discussion may be summarized as follows:
January 9, 2001: TWA enters into Asset
Purchase Agreement with
American
April 2, 2001: TWA MEC passes a resolution
waiving its seniority
protection provisions in
exchange for American's
"reasonable best efforts"
promise
April 9, 2001: ALPA and TWA MEC
enter into transition
agreement with TWA-LLC
April 10, 2001: American's purchase of
TWA's assets finalized
TWA-LLC begins
operations as a separate
air carrier
November 8, 2001: American and APA
execute Supplement CC
an agreement governing
the seniority integration
of the former TWA pilots.
Supplement CC is subject
to two conditions subsequent.
March 5, 2002: NMB declares that American
and TWA-LLC are a
"single carrier" for RLA
purposes.
April 3, 2002: NMB certifies APA as
the sole bargaining agent
for all pilots, making Supplement
CC effective;
transition agreement
between TWA-LLC
and ALPA expires.
April 18, 2002: Arbitrator rejects
ALPA's allegation that
American did not use its
"reasonable best efforts"
to protect the TWA-LLC
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