Duffer v. United Cont'l Holdings, Inc.

• Decision Date: 29 March 2016
• Docket Number: Case No. 13 C 3756
• Citation: 173 F.Supp.3d 689
• Parties: Mark Duffer, Plaintiff, v. United Continental Holdings, Inc., et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

173 F.Supp.3d 689

Mark Duffer, Plaintiff,

v.United Continental Holdings, Inc., et al., Defendants.

Case No. 13 C 3756

United States District Court, N.D. Illinois, Eastern Division.

Signed March 29, 2016

Gene J. Stonebarger, Elaine W. Yan, Richard D. Lambert, Stonebarger Law, APC, Folsom, CA, Brian J. Lawler, Pilot Law PC, San Diego, CA, Gregg M. Barbakoff, Maurice Wutscher LLP, Joseph J. Siprut, Siprut PC, Chicago, IL, for Plaintiff.

Brian William Barrett, Gary S. Kaplan, Samuel M. Schwartz-Fenwick, Seyfarth Shaw LLP, Andrew L. Goldman, Rami N. Fakhouri, Goldman Ismail Tomaselli Brennan & Baum LLP, Chicago, IL, Jonathan A. Cohen, Marcus C. Migliore, Air Line Pilots Association, International, Washington, DC, Joshua J. Ellison, Michael E. Abram, Michael L. Winston, Thomas N. Ciantra, Cohen, Weiss and Simon LLP, New York, NY, Matthew E. Babcock, Air Line Pilots Association, International, Herndon, VA, for Defendants.

MEMORANDUM OPINION AND ORDER

John Robert Blakey, United States District Judge

This is a putative class action brought under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), which protects service members in their civilian employment. Plaintiff Mark Duffer was a Continental pilot who also served as a Lieutenant Colonel in the United States Marines Corps Reserve. Plaintiff alleges that Defendants violated USERRA and related state laws in multiple ways, such as by underpaying him during military leave periods. Defendants are United Continental Holdings, Inc. (“UCH”), United Air Lines, Inc. (“United”), Continental Airlines, Inc. (“Continental”) (together with UCH and United, the “Company”) and the Air Line Pilots Association, International (“ALPA”). Defendants deny that they violated USERRA and related state laws in any way and move for partial summary judgment. For the following reasons, Defendants' summary judgment motion [161] is granted in part and denied in part.

I. Legal Standard

Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Spurling v. C & M Fine Pack, Inc. , 739 F.3d 1055, 1060 (7th Cir.2014). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In determining whether a genuine issue of material fact exists, this Court must construe all facts and reasonable inferences in the light most favorable to the nonmoving party, here, Plaintiff. See CTL ex rel. Trebatoski v. Ashland School District , 743 F.3d 524, 528 (7th Cir.2014).

II. Facts

A. Merger between United and Continental

In October 2010, pre-merger United (post-merger United is just referred to as “United”) and Continental merged, with UCH becoming their parent corporation. Joint Statement of Undisputed Material Facts (“SOF”) ¶ 2. Before the merger, ALPA had served as the collective bargaining representative for the pilots at both carriers. SOF ¶ 3. In that role, ALPA had negotiated separate collective bargaining agreements for each pilot group. SOF ¶ 3. The agreement between ALPA and Continental (the “ALPA-Continental CBA”) became amendable on January 1, 2009, while the agreement between ALPA and pre-merger United (the “ALPA-United CBA”) became amenable one year later, on January 1, 2010. SOF ¶ 4.

Plaintiff Mark Duffer was a Continental pilot before the merger. SOF ¶ 38. Though not included in the Joint Statement of Undisputed Material Facts, there is no apparent dispute that Plaintiff also served as a Lieutenant Colonel in the United States Marines Corps Reserve at all relevant times. Third Amended Complaint (“TAC”) ¶ 5. In that role, Plaintiff took periodic leaves of absence from Continental for military service. PSOF ¶ 43 (citing Plaintiff's Military Leave Verification at UNITED 002203-24).

Following the merger, United, Continental and ALPA (through a committee selected by the elected representatives of each pilot group, known as “Master Executive Councils”) began negotiating a joint collective bargaining agreement to cover the combined pilot group, comprising pre-merger Continental pilots (the “s-CAL pilots”), pre-merger United pilots (the “s-UAL pilots”) and pilots hired after the merger. SOF ¶¶ 5-6, 9-10. In the negotiations, ALPA sought retroactive payments for these pilots for the period from the amendable dates of their pre-merger collective bargaining agreements (that is, the ALPA-Continental CBA and the ALPA-United CBA) until the effective date of the new agreement. SOF ¶ 14. Continental pilots call this period the “Relevant Time Period.” Continental pilots had not had their contractual hourly rates of pay or pension plan contribution rates increased during the Relevant Time Period. SOF ¶¶ 14, 21.

On August 2, 2012, ALPA and the Company reached an Agreement in Principle resolving their dispute. SOF ¶ 12. As part of the Agreement in Principle, the Company agreed to the following:

• The Company would “make a substantial ($400 million) Lump Sum Payment” in response to ALPA's retroactive pay proposals.

• ALPA (through the United and Continental Master Executive Councils) would determine individual pilot allocations for the s-UAL and s-CAL pilot groups.

• The Company would disburse the $400 million payment directly to pilots pursuant to lists stating the dollar amount that each pilot would receive under the agreed upon allocation methodologies.

SOF ¶¶ 16-18, 22, 24, 32.

On November 5, 2012, Arbitrator Ira Jaffe issued a 26-page Decision and Award, resolving a dispute between the two pilot groups over allocating the $400 million payment between them. SOF ¶¶ 24-25. Jaffe awarded $175 million to the Continental pilot group and the remaining $225 million to the United pilot group. SOF ¶ 25.

On December 18, 2012, the Company entered into a new collective bargaining agreement with ALPA known as the “United Pilot Agreement,” which set forth the new terms and conditions of employment for the combined group. SOF ¶ 10. The United Pilot Agreement included 26 Letters of Agreement. SOF ¶ 11. As discussed below, the United and Continental Master Executive Councils developed allocation methodologies for disbursing their respective shares of the $400 million payment, and attached those methodologies to Letter of Agreement 24 (“LOA 24”). SOF ¶¶ 27-28.

Upon receiving the pilot specific payment information from ALPA, the Company began disbursing the $400 million to eligible pilots. SOF ¶ 32. The Company withheld federal and applicable state and local taxes on wages, and reported the disbursements as wages on each pilot's W-2 form. SOF ¶ 42.

B. Allocation Methodology

As memorialized in Exhibit C to LOA 24 (titled: “CAL Lump Sum Payment Distribution”), the Continental Master Executive Council allocated its $175 million share based on the earnings and availability of Continental pilots during the Relevant Time Period. SOF ¶¶ 29-31; LOA 24, Exhibit C ¶ A. The Council split the $175 million into two equal portions: the “Earnings Portion” and the “Availability Portion.” SOF ¶ 33; LOA 24, Exhibit C ¶ A. The Earnings Portion equals a pilot's wages during the Relevant Time Period relative to the wages earned by all pilots during that Period. SOF ¶ 33 (citing LOA 24, Exhibit C ¶ C(1)(a)). The Availability Portion equals the number of “Bid Periods” (which each approximates one calendar month) in the Relevant Time Period in which a pilot earned any wages relative to the total number of Bid Periods for all pilots in that Period. SOF ¶ 33 (citing LOA 24, Exhibit C ¶ C(1)(b)). A pilot who was on unpaid leave, including military leave, and who thus had no “Considered Earnings” in a Bid Period, did not receive credit for either the Earnings Portion or the Availability Portion with respect to that Bid Period. SOF ¶¶ 34-35.

Though summarized above, this Court quotes the relevant terms from Exhibit C to LOA 24 for completeness:

Availability Amount. Paragraph C(1)(b) of Exhibit C defines how to calculate a pilot's share of the Availability Portion:

Availability Amount. Each Eligible Pilot's share of the Availability Portion of each tranche of the Continental Pilot Amount will be equal to the ratio that the total number of the individual Eligible Pilot's Eligible Bid Periods bears to the aggregate Eligible Bid Periods of all Eligible Pilots. (For example, if an Eligible Pilot has a total of 40 Eligible Bid Periods and the aggregate Eligible Bid Periods of all Eligible Pilots are 200,000 then the individual Eligible Pilot will receive .02% (40/200,000) of the Availability Portion of each trance.)

SOF ¶ 33 (citing LOA 24, Exhibit C ¶ C(1)(b)).

Eligible Bid Period. The defined term “Eligible Bid Period,” which is used in Paragraph C(1)(b) of Exhibit C, means:

Eligible Bid Period: Any bid period during the Relevant Time Period in which the Pilot received any Considered Earnings.

LOA 24, Exhibit C ¶ B(10).

Considered Earnings. The defined term “Considered Earnings” means:

Considered Earnings: Considered Earnings includes base pay, sick pay, vacation pay, overrides, and premiums during the Relevant Time Period, but excludes expense reimbursement, per diem, profit sharing payments, on-time award payments, pension payments, imputed income, or other similar awards or allowances during the Relevant Time Period....

LOA 24, Exhibit C ¶ B(6).

Unpaid Leave of Absence. Excluded from Considered Earnings is a Continental pilot's unpaid leaves of absence, which includes military leave:

Unpaid Leave of Absence. Pilots on unpaid leaves of absence, including Voluntary Leaves, Military Leaves or other unpaid absence, at any point during the Relevant Time Period do not have Considered

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