Cooper v. Twa Airlines, LLC
| Decision Date | 30 June 2003 |
| Docket Number | No. 02-CV-3477 (CBA).,02-CV-3477 (CBA). |
| Parties | Sherry COOPER, Cynthia Jones, Pamela Jackson, Paige Verducci, Wilson Aviles, Kristine Wolanske, Cathy Whittington, on behalf of themselves and all others similarly situated, and William O'Driscoll as representative of the International Association of Machinists and Aerospace Workers, Plaintiffs, v. TWA AIRLINES, LLC, American Airlines, Inc., John Ward as representative of the Association of Professional Flight Attendants, and Donald J. Carty, individually and as Chief Executive Officer of American Airlines, Inc., Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Martin R. Gold, Robert J. Lanza, Sonnenschein, Nath & Rosenthal, New York City, Jeffrey J. Wild, Lowenstein Sandler P.C., New York City, David M. Wissert, Lowenstein Sandler PC, Roseland, NJ, for The International Association of Machinists and Aerospace Workers, Cathy Whittington, Cynthia Jones, Kristine Wolanske, Paige Verducci, Pamela Jackson, Sherry Cooper, Wilson Aviles, The International Association of Machinists and Aerospace Workers, Cathy Whittington, Cynthia Jones, Kristine Wolanske, Paige Verducci, Pamela Jackson, Sherry Cooper, Wilson Aviles.
James N. Blair, Wolman, Babitt & King, LLP, New York City, Daniel M. Katz, Katz & Ranzman, P.C., Washington, DC, for The Association of Professional Flight Attendants.
Thomas E. Reinert, Jr., Morgan, Lewis & Bockius, LLP, New York City, Samuel S. Shaulson, Morgan, Lewis & Bockius, LLP, New York City, for American Airlines, Inc., TWA Airlines, LLC.
Plaintiffs represent a class of flight attendants, formerly employed by Trans World Airlines, Inc. ("TWA"), who joined American Airlines, Inc. ("AA" or "American") when AA acquired TWA following TWA's bankruptcy and who are currently scheduled to be furloughed from their jobs on July 2, 2003 as a result of a Restructuring Agreement between AA and the Association of Professional Flight Attendants ("APFA" or "the union"). Plaintiffs move for a preliminary injunction and ask this Court to enjoin AA from implementing the Restructuring Agreement and from effecting their furlough. In order to address adequately the issues raised in this request for preliminary relief, this Court conditionally certifies as a sub-class all former TWA flight attendants who will be furloughed as a result of the implementation of the Restructuring Agreement on July 2, 2003.1
For the reasons set forth below, however, the plaintiffs' motion for preliminary relief is denied.
Plaintiffs filed their original complaint in this action on June 14, 2002. On March 3, 2003, plaintiffs filed an amended complaint asserting nine causes of action based on the events that transpired during the acquisition of TWA by American: (1) violation of § 152, Seventh and § 156 of the Railway Labor Act, 45 U.S.C. § 151, et seq.; (2) breach of contract; (3) fraud; (4) negligent misrepresentation; (5) fraudulent inducement; (6) breach of the implied covenant of good faith and fair dealing; (7) promissory estoppel; (8) unjust enrichment; and (9) breach of the duty of fair representation.
On June 20, 2003, plaintiffs filed a supplemental complaint ("Supplemental Complaint"), which asserts the three causes of action upon which their application for preliminary relief is based: APFA breached its duty of fair representation by discriminating against the former TWA flight attendants in negotiating labor concessions in response to AA's threatened bankruptcy and by colluding with AA to extend the voting period after a negative vote on the resulting Restructuring Agreement and subsequently approving the Restructuring Agreement (Claim 10); AA aided and abetted APFA's breach of its duty of fair representation (Claim 11); AA and its Chief Executive Officer Donald J. Carty ("CEO Carty") committed fraud by failing to disclose in the negotiating process material information about executive retention bonuses and pension funds that had been approved by AA in October 2002 (Claim 12).
Oral argument was held in this matter on June 20, 2003. Shortly thereafter the Court conducted an evidentiary hearing on June 25-26, 2003, and the parties made closing statements on June 27, 2003. At the evidentiary hearing, the Court heard testimony from Sherry Cooper, the lead plaintiff in this case, Lorraine Mase-Hecker, Director of Employee Policy and Relations for AA, John Ward, President of APFA, John Nikides, a member of the APFA Board of Directors, and Laura Glading, a member of the APFA Negotiating Committee.2
In 2001, AA acquired the assets of TWA through a pre-packaged deal in Bankruptcy Court, pursuant to which TWA's assets were transferred to TWA, LLC, an entity created by AA. On December 17, 2001, AA concluded an "Agreement on Seniority Integration" ("the Seniority Agreement") with APFA. By the terms of the Seniority Agreement, the former TWA flight attendants were not given seniority credit for their years of TWA service; rather, they were placed at the bottom of AA's seniority list.
Plaintiff Sherry Cooper is a former TWA flight attendant who became an AA flight attendant as a result of the events described above. She is a member of APFA's Board of Directors and was elected to that position by flight attendants at the St. Louis, Missouri hub, TWA's original home base and home base to all of he former TWA flight attendants presently with AA. Ms. Cooper testified that she believes the class she seeks to represent was treated differently from the other AA flight attendants since the time when AA first acquired TWA. Although she indicated that AA's discrimination took the form of a host of little matters, Ms. Cooper only identified two examples that occurred prior to the March 2003 negotiations on a Restructuring Agreement: (1) lack of a computer at her base to bid online and (2) use of the term "furlough cushion" by other flight attendants on the AA website, a term which Cooper understood to refer to the former TWA flight attendants. She also referred to conversations with John Ward, President of APFA, in which he commented on the short time the former TWA flight attendants had been a part of AA and referred to them as "you people."
It is undisputed that in late December 2001 and in early 2002, AA had grave financial problems, which remains the case today. Indeed, the time frame relevant to these events represents one of the worst economic downturns in the history of the airline industry. Since September 11, 2001, over 100,000 airline industry employees have lost their jobs, and since acquiring TWA in April 2001, AA reports that it has lost approximately $6 billion. Its economic situation forced AA to seek concessions from all three of its unions (pilots, transport workers, and flight attendants) in an effort to stave off bankruptcy.
In February 2003, AA informed APFA that it was seeking a concession of $340 million from the flight attendants. In early March 2003, AA offered APFA a proposal which valued certain suggested concessions and set forth the reduction in personnel AA believed would result from those concessions. The concessions represented a head-count reduction of 2,550 flight attendants. See Pls.' Ex. 1. This proposal was presented to the APFA Board, which included Ms. Cooper. She made various recommendations which focused on concessions that did not result in the reduction of flight attendants.
On March 10, 2003, at the annual APFA convention, Ms. Cooper, as a Board member, voted in favor of a resolution which recognized that the Board of Directors had been presented with information regarding AA's financial situation and understood that it was in the best interests of the membership to take "all steps to expeditiously address the company's financial situation." (Declaration of John Ward ("Ward Decl."), Ex. B.) The Board further authorized the President and the standing negotiating team to consider changes to the collective bargaining agreement and to take "any and all action needed to reach a negotiated consensual agreement with American Airlines, Inc., in order to avoid bankruptcy." (Id.)
Thereafter, APFA's Negotiating Committee and AA officials met to work out the details of the concessions. The APFA members of the negotiating team included John Ward and Laura Glading. Lorraine Mase-Hecker participated in these sessions on AA's behalf. Among the Negotiating Committee's concerns was its desire to preserve as much of its contract as possible.
On March 31, 2003, APFA's Negotiating Committee met with the Board of Directors and advised them of the labor concessions agreed to with AA. A concession sheet was handed out which, without accounting for possible double counting, reflected a reduction of 2,391 flight attendants and a salary cut of 15.8%. (See Pls.' Ex. 2.) Among the cost savings was the elimination of severance pay for furloughed flight attendants.
A Restructuring Agreement was put before the union membership for ratification by a telephonic voting process, a process which Ms. Cooper, as a Board member, voted to approve. However, as the APFA Board of Directors noted in a resolution dated April 15, there were "difficulties in the balloting process" and "a number of flight attendants reported that they were unable to cast votes and/or extensive difficulties and confusion encountered with the voting process." (Ward Decl., Ex. B.) It was also noted that changes were made to the Restructuring Agreement while balloting proceeded. (Id.) Because of these difficulties, APFA sought to extend the time for voting to permit "flight attendants a further opportunity to vote and/or to change their votes if they so desire." (Id.) On the morning of April 15, 2003, before the results of the vote were known, and before the above-referenced resolution was issued, AA agreed with APFA...
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