Fell v. Independent Ass'n of Continental Pilots, 97-WY-1558-CB.

• Citation: 26 F.Supp.2d 1272
• Decision Date: 04 November 1998
• Docket Number: No. 97-WY-1558-CB.,97-WY-1558-CB.
• Parties: Richard T. FELL, Plaintiff, v. INDEPENDENT ASSOCIATION OF CONTINENTAL PILOTS, Defendant.
• Court: United States District Courts. 10th Circuit. United States District Court of Colorado

26 F.Supp.2d 1272

Richard T. FELL, Plaintiff, v. INDEPENDENT ASSOCIATION OF CONTINENTAL PILOTS, Defendant.

No. 97-WY-1558-CB.

United States District Court, D. Colorado.

November 4, 1998.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Richard L. Harring, Philip M. Quatrochi, Denver, CO, for plaintiff.

Roland P. Wilder, Jr., Christy Concannon, Washington, D.C., for defendant.

ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT^*

BRIMMER, District Judge.

I. Background

In 1993, the Independent Association of Continental Pilots ("IACP") labor organization was formed. On or about August 31, 1995, Continental and IACP entered into a collective bargaining agreement. This agreement was an "agency shop" arrangement that permitted IACP to charge nonunion pilots their fair share of the costs of representation. IACP charged 1.5% of the member-pilots' gross pay for union dues and an equivalent amount for the non-member pilots' "agency fee." IACP prepared its Policies and Procedures Applicable to Agency Fees ("Policies and Procedures") in September of 1995. The Policies and Procedures stated how agency fees were to be collected, the manner in which a pilot may object to agency fees, and the escrow and rebate procedures for that portion of an objector's agency fees which were disputed or which should not have been collected.

Plaintiff Richard T. Fell has been employed by Continental since December 16, 1966 and is not a member of IACP. Fell received a copy of IACP's Policies and Procedures sometime in the fall of 1995. Beginning in February of 1996, IACP and Continental sent Fell various notices that he was delinquent in the payment of his agency fees and would be terminated unless he paid promptly. On May 20, 1996, and again on July 8, 1996, Fell sent a letter to the Secretary/Treasurer of IACP objecting to the use of agency fees for "nongermane" purposes, requesting an accounting of IACP's expenditures, and inquiring about the amount of agency fee dues Fell subsequently owed. On May 23 and 24, IACP responded to Fell's objection letter advising that the non-germane expenses for 1995 would be accounted for at the end of 1996. Fell was also told that he owed IACP $559.86 for the period of November 1995 to January 1996.

In October 1996, Fell received IACP's 1995 Statement of Germane and Nongermane Expenditures (the "1995 SGNE") which designated 100% of its expenses as germane to collective bargaining. In November 1996, Fell, not believing that all expenses were germane, objected to the 100% agency fee amount. In December, IACP indicated that it refused to escrow any amount of Fell's agency fees because Fell did not object to specific items in the 1995 SGNE. By letter dated January 30, 1997, Fell again objected to paying agency fees for nongermane activities, requested that he be given an estimation of what percentage of 1997's agency fees would be germane, and again objected to the classification of 100% of the 1995 agency fees as germane. Mr. Fell never used the arbitration procedures under IACP's Policies and Procedures.

On June 19, 1997, IACP provided all nonunion pilots with its 1996 Statement of Germane and Nongermane Expenses ("1996 SGNE") and another copy of its Policies and Procedures. The 1996 SGNE attributed 5% of IACP's expenses to nongermane activities. By letter dated June 20, 1997, IACP provided a $103.23 rebate check to Fell for fees collected but which were nongermane to collective bargaining.

Fell brought the instant action against IACP on July 18, 1997, seeking a class action certification and damages that include all illegally assessed agency fees plus costs, interest and attorney's fees. In a prior order, this Court denied class certification. Now before the Court is Defendant's Motion for Summary Judgment and Plaintiff's Cross-Motion for Summary Judgment.

II. Standard

The specific standards for summary judgment are well recognized, and need only be briefly restated. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When applying this standard, the court must examine the factual record and reasonable inferences drawn therefrom in the light most favorable to the non-moving party. Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir.1996).

III. Discussion

Because Continental is a "common carrier by air engaged in interstate or foreign commerce," 45 U.S.C. § 181, the Railway Labor Act ("RLA") governs its bargaining relationship with IACP. Section 2, Eleventh, of the RLA allows employers and unions to use "agency shop" agreements and charge non-union employees an "agency fee" to resolve the problem of "free riders," employees who benefit from a union's representation but do not contribute to the costs of that representation. Ellis v. Railway Clerks, 466 U.S. 435, 447, 104 S.Ct. 1883, 80 L.Ed.2d 428 (1984). Under agency shop arrangements, nonmembers must pay their fair share of union expenditures "necessarily or reasonably incurred for the purpose of performing the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues." Id. at 448, 104 S.Ct. 1883.

The purposes for which IACP may spend the "agency fee" paid by nonmembers are circumscribed by the First Amendment and the RLA. Air Line Pilots Assoc. v. Miller, ___ U.S. ___, ___, 118 S.Ct. 1761, 1763, 140 L.Ed.2d 1070 (1998). Only "germane" costs, those related to the duties of acting as the employees' exclusive representative in executing and upholding the collective bargaining agreement, may be imposed on objecting employees. Id. 118 S.Ct. at 1766. For example, the Supreme Court has held that the RLA does not authorize a union to use agency fees from objecting employees to support political candidates or programs. International Assoc. of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961). However, there remains a grey area between clearly germane and clearly political expenses. In Ellis v. Railway Clerks, the Supreme Court established a framework for determining between germane and nongermane expenses:

[T]he test must be whether the challenged expenditures are necessarily or reasonably incurred for the purpose of performing the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues. Under this standard, objecting employees may be compelled to pay their fair share of not only the direct costs of negotiating and administering a collective-bargaining contract and of settling grievance and disputes, but also the expenses of activities or undertakings normally or reasonably employed to implement or effectuate the duties of the union as exclusive representative of the employees in the bargaining unit.

Ellis, 466 U.S. at 448, 104 S.Ct. 1883.

More recently, the Tenth Circuit cited the Supreme Court's decision in Lehnert v. Ferris Faculty Association, 500 U.S. 507, 111 S.Ct. 1950, 114 L.Ed.2d 572 (1991), as declaring chargeable activities must "(1) be `germane' to collective bargaining activity; (2) be justified by the government's vital policy interest in labor peace and avoiding `free riders'; and (3) not significantly add to the burdening of free speech that is inherent in the allowance of an agency or union shop." Pilots Against Illegal Dues (PAID) v. Air Line Pilots Assoc. (ALPA), 938 F.2d 1123, 1127 (10th Cir.1991).

Because agency shop arrangements present risks to employees' rights of free speech, unions must provide fee collecting schemes that are "carefully tailored to minimize the infringement" upon nonunion members' First Amendment rights. Chicago Teachers Local Union No. 1 v. Hudson, 475 U.S. 292, 303, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986). Hudson requires unions and employers to provide three procedural protections for nonunion workers who object to the calculation of the agency fee. A fee-collecting scheme must (1) include a "procedure which will avoid the risk that [nonmember] funds will be used even temporarily, to finance ideological activities unrelated to collective bargaining"; (2) provide nonmembers with adequate information about the basis for the proportionate share of the agency fee charged to them; and (3) "provide for a reasonably prompt decision by an impartial decision maker" when nonmembers object to the amount of the agency fee. Id. at 305-307, 106 S.Ct. 1066. In Hudson, the agency shop arrangement was with a public employer. Although the Supreme Court has not "expressly stated" whether the same procedures are required in an agency shop arrangement with a private employer like Continental, the Tenth Circuit has assumed that Hudson applies in cases like the present one. PAID, 938 F.2d at 1132.

It is within this framework that the Court reviews Plaintiff's three claims for relief and the Parties' cross-motions for summary judgment. Plaintiff first claims that Defendant's collection and notice procedures regarding Plaintiff's agency fees are constitutionally inadequate. Second, Plaintiff claims that Defendant has violated the Railway Labor Act ("RLA") and the First Amendment by assessing agency fees from Plaintiff for expenses that are not germane to collective bargaining activities. Finally, Plaintiff claims that the collective bargaining agreement provision authorizing collection of agency fees equivalent to union dues is facially unconstitutional. The defendant raises two affirmative defenses to Plaintiff's arguments. First, Defendant contends that because Plaintiff did not exhaust his arbitrable remedies under the collective bargaining agreement's Policies and Procedures, Plaintiff is barred from asserting his claims. Second, Defendant contends that Plaintiff's complaints regarding the 1995 SGNE are barred by the Statute of Limitations. The...