EEOC v. Pan American World Airways, Inc.

• Decision Date: 22 October 1985
• Docket Number: No. C-81-3636 RFP.,C-81-3636 RFP.
• Citation: 622 F. Supp. 633
• Court: U.S. District Court — Northern District of California
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. PAN AMERICAN WORLD AIRWAYS, INC., et al., Defendants. And Related Cross and Third Party Actions.

622 F. Supp. 633

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. PAN AMERICAN WORLD AIRWAYS, INC., et al., Defendants And Related Cross and Third Party Actions.

No. C-81-3636 RFP.

United States District Court, N.D. California.

October 22, 1985.

Fritz Wollett, David T. Kelley, Oscar Williams, E.E.O.C., San Francisco, Cal., for plaintiff.

Scott A. Fink, Robert S. Venning, Heller, Ehrman, White & McAuliffe, San Francisco, Cal., for defendants.

Jay Levy-Warren, Cohen, Weiss & Simon, New York City, for Air Line Pilots Ass'n, International.

Lloyd B. Egenes, O'Gara, Friedman, Egenes & Burke, San Francisco, Cal., Asher W. Schwartz, O'Donnell & Schwartz, New York City, For FEIA.

Richard F. Watt, Cotton, Watt, Jones & King, Chicago, Ill., Kenneth N. Silbert, Beeson, Tayer & Silbert, San Francisco, Cal., Denis F. Gordon, Gordon & Barnett, Washington, D.C., for Caudle & Wynne and NAL Chapter FEIC.

James C. Sturdevant, Sanford Jay Rosen, San Francisco, Cal., for Russell & Baer et al.

Robert H. Wiggins, Wiggins & Wiggins, Miami, Fla., R. Michael Pipkin, Chapel Hill, N.C., Jay White, Redwood City, Cal., for Rankin, et al.

MEMORANDUM AND ORDER

PECKHAM, Chief Judge.

INTRODUCTION

On September 13, 1985, this court held a fairness hearing to consider objections to a proposed Consent Decree entered into between Pan Am and the EEOC. The Decree is designed to settle an action under the Age Discrimination in Employment Act of 1967 ("ADEA" or "Act"), 29 U.S.C. § 626 et seq., brought by the EEOC against Pan Am. Pan Am and the EEOC (referred to jointly as "applicants") argue that the proposed Consent Decree fairly reflects the risks of litigation that the parties face.

Several parties have filed objections to the consent Decree. Forty-five of the eighty-one former Pan Am pilots on whose behalf the EEOC brought this action object to the Decree as providing them with inadequate monetary relief. Most of the objectors (referred to collectively as "claimants") have filed declarations with the court. In addition, those Pan Am pilots and flight engineers who were employed by National Airlines before National and Pan Am merged in 1980 also object to the Decree. These engineers and pilots, in separate filings, argue that the Decree violates their rights as decided by an arbitrator after the merger. Finally, intervenor Rankin contends that the Decree violates the provisions of the Employee Retirement Income Security Act (ERISA).

FACTS

The following facts appear in the applicant's Joint Application for Entry of Consent Decree:

Pan Am's aircraft, with the exception of the Boeing 737, have a three person cockpit crew. The captain, or first seat, is in overall command of the aircraft. The first officer, also known as the second seat or copilot, is second in command and assumes the captain's responsibilities in case of his disablement. The flight engineer, or third seat, sits at his own instrument panel and primarily monitors the aircraft's operating systems. During normal operation, the engineer does not handle the flight controls. The Air Line Pilots Association (ALPA) represents the pilots, while the Flight Engineers International Association (FEIA) represents the flight engineers.

In 1962 and 1963, Pan Am and the ALPA and FEIA entered into "Crew Complement Agreements" in response to the recommendation of a Presidential Commission that all cockpit crew members be qualified as pilots. These agreements transformed the position of flight engineer into the entry level position for employment as a first officer or captain. Under these agreements, all newly hired flight engineers, called pilot/flight engineers, must possess pilot qualifications. Pilot/flight engineers were placed on the Pilot System Seniority List, entitling them to bid for first officer and pilot positions.

The agreements also protected employees then serving as flight engineers. Those employees, known as "Appendix A" or professional flight engineers, were given prior rights to all Pan Am engineer positions, as long as they obtained the necessary pilot qualifications. The agreements provided, however, that Appendix A flight engineers, unlike pilot/flight engineers, could not bid for pilot positions.

Pilots may also bid, or "downbid", for engineer positions. For example, pilots may bid for engineer vacancies that result from an overall increase in Pan Am's demand for engineers. In addition, pilots may displace, or "bump", engineers in lieu of furlough. In no instance, however, may a pilot displace an Appendix A engineer.

According to the applicants, these are the only circumstances under which the collective bargaining agreements permit a pilot to displace a flight engineer. Applicants admit that Pan Am, pursuant to an agreement with the ALPA and FEIA, permitted one pilot that lost his first-class medical certificate, required for all pilots by the Federal Aviation Administration (FAA), to continue to fly as a flight engineer after he obtained the second-class certificate required for flight engineers.

Treatment of Age 60 Airmen at Pan Am

Under the FAA's "Age 60 Rule", 14 C.F.R. § 121.383(c), pilots (including first officers) may not serve past the age of 60. This rule does not apply to flight engineers. Pan Am's pension plan, before 1978, provided for the retirement of both pilots and engineers at age 60.

In 1978, Congress amended the ADEA to provide that an employer could not retire its employees at a specified age based solely on a seniority system or pension plan. See 29 U.S.C. § 623(f)(2). In response to the amendments, and after a review of its policies, Pan Am permitted its Appendix A flight engineers to fly past the age of 60. More than 70 Appendix A flight engineers have taken advantage of this new policy. Pan Am did not, however, change its treatment of pilots approaching age 60.

From the effective date of the ADEA amendments, April 6, 1978, until September 28, 1979, there were no flight engineer vacancies for which pilots were eligible to bid. Twenty-eight of the eighty-one claimants turned 60 before the award of the first engineer vacancy. Pan Am, with no opposition from the ALPA, interpreted its collective bargaining agreement to provide for the retirement of these 28 claimants with loss of seniority. Only one claimant, Raymond Russell, filed a grievance concerning this action. The Pan Am-ALPA System Board of Adjustment unanimously upheld Pan AM's interpretation of the collective bargaining agreement. Pan Am and the ALPA later explicitly provided for retirement with loss of seniority at age 60. Pan Am and the EEOC disagree as to whether this provision changed the contract or codified existing practices.

Pan Am bulletined 10 flight engineer vacancies for which pilots were eligible to bid on September 28, 1979. Four pilots, two of whom are claimants here, bid for these positions. To Pan Am's knowledge, no captain had ever before bid for a flight engineer position. (Applicants do not state whether first officers had ever bid for a flight engineer position.) After awarding positions to the pilots, Pan Am notified them that they would be retired at age 60 despite their job change.

Later in the Fall of 1979, Pan Am awarded engineer positions to three more pilots, two of whom are claimants here. The third pilot, Otto Kiehl, is not a claimant in this action. His separate lawsuit against Pan Am, Kiehl v. Pan American World Airways, Inc., C-81-4274 (WAI), was consolidated with this case, but later settled separately. Pilot Joseph Hazelwood, who successfully bid for an engineer position bulletined in January, 1981, and was retired at age 60, joined in Kiehl's action. In January 1983, Pan Am agreed to reinstate both Kiehl and Hazelwood as flight engineers, provided they passed the required training. Both have served as flight engineers and may continue to do so until they reach the age of 70.

Applicants claim that they have located the bid forms of a total of 7 of the claimants, including those mentioned above. Applicants state that two other claimants maintain that they submitted bids. Therefore, according to applicants, only 9 claimants bid for engineer positions. Declarations submitted by the objecting claimants state that many other former pilots were deterred from applying because of Pan Am's well-known policy regarding the ability of 60 year old pilots to downbid.

On February 25, 1983, Pan Am changed its policy towards pilots approaching the age of 60. From that point forward, a pilot approaching 60 who was awarded a flight engineer vacancy and completed his training before the first of the month following his sixtieth birthday could remain as a flight engineer until the age of seventy. Pan Am has continued to retire pilots not meeting these criteria. According to the applicants, "a number of" pilots approaching the age of 60 have served as flight engineers.

The National-Pan Am Merger

The merger of National Airlines and Pan Am in January, 1980, complicates this matter. National Airlines, unlike Pan Am, did not permit pilots or engineers to bid for each other's positions. National kept these two job classifications entirely separate.

The two airlines submitted their dispute regarding the manner in which their seniority lists would be merged to arbitration. On March 12, 1981, Arbitrator Lewis Gill issued his resolution of this dispute. He held that former National airmen would continue not to have bidding rights for engineer positions; the arbitration award, therefore, preserved the differing labor structures of the two firms within Pan Am's overall labor structure.

Procedural Background

The EEOC filed this action against Pan Am in September 1981, alleging that Pan Am's policy towards its sixty year old pilots desiring to serve as flight engineers violated the ADEA. The EEOC sought back pay, liquidated damages, reinstatement, and injunctive and declaratory relief.

The EEOC asserted that Pan Am violated the ADEA by: (1) refusing to...