Gvozdenovic v. United Air Lines, Inc.
| Decision Date | 22 May 1991 |
| Docket Number | No. 1092,D,AFL-CIO,1092 |
| Citation | 933 F.2d 1100 |
| Parties | 137 L.R.R.M. (BNA) 2534, 118 Lab.Cas. P 10,750 Zlatko GVOZDENOVIC; Margarita Walinski; Patricia Cargould; Frank Perea, Individually and on behalf of that class of 1202 former Pan Am Flight Attendants now Employed by United Airlines, Inc., and as members of the Pan Am Seniority Arbitration Committee, Plaintiffs-Appellants, v. UNITED AIR LINES, INC.; Stephen Wolf, its President; The Association of Flight Attendants,, and its President; Susan Bianchi-Sand; Au Rodney; Pamela Greenleaf, As members of the United Airlines Seniority Arbitration Committee; Patricia Friend, Chairperson of the United Airlines Master Executive Council; United Preacquisition Flight Attendants, Defendants-Appellees. ocket 90-7886. |
| Court | U.S. Court of Appeals — Second Circuit |
John F. Henning, Jr., San Francisco, Cal. (Henning, Walsh & King, San Francisco, Cal., Scott H. Robb, Robb & Henning, New York City, of counsel), for plaintiffs-appellants.
Stephen B. Moldof, New York City (Michael L. Winston, Cohen, Weiss & Simon, New York City, of counsel), for defendants-appellees Ass'n of Flight Attendants, Susan Bianchi-Sand, Patricia Friend, and the "Pre-Acquistion United Airlines Flight Attendants".
Eric Rosenfeld, New York City (Maurice L. Miller, Seyfarth, Shaw, Fairweather & Geraldson, New York City, of counsel), for defendants-appellees United Airlines, Inc. and Stephen Wolf.
Before FEINBERG, MINER and MAHONEY, Circuit Judges.
Plaintiffs-appellants appeal from a judgment entered on August 29, 1990 in the United States District Court for the Southern District of New York (Griesa, J.), dismissing a class action suit brought against defendants-appellees United Airlines, Inc. ("United") and the Association of Flight Attendants ("AFA"), asserted under the Railway Labor Act ("RLA"), 45 U.S.C. Secs. 151 et seq. (1988), the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. Secs. 411, 412 (1988) and provisions of the Federal Arbitration Act ("FAA"), 9 U.S.C. Secs. 10, 11 (1988). In the complaint, appellants sought to vacate an arbitral award and sought damages, based on alleged breach of the statutory duty of fair representation, enforcement of compulsory union membership, improper dues assessment and breach of contract by appellees.
Appellants are 1202 former flight attendants of Pan American World Airways, Inc. ("Pan Am"), who began working for United after United purchased Pan Am's Pacific Division, in which they had been employed. On appeal, they contend that the district court improperly dismissed their petition for vacatur of the arbitration award because they were not parties to the agreement providing for the arbitration and because certain conduct of the AFA during the arbitration violated its duty to represent all its members fairly. Appellants also argue that the district court improperly dismissed on statute of limitations grounds their claims that the AFA ran an illegal "closed shop" and unlawfully raised their union dues, and that United improperly had given financial assistance to incumbent United employees to engage in the arbitration.
We hold that, because appellants participated voluntarily and actively in the arbitration process, they are bound by its outcome and the district court therefore properly dismissed their petition to vacate the award. We also hold that appellants' claims of breach of the AFA's duty of fair representation, impermissible enforcement of compulsory union membership and improper financial assistance by United are time-barred. With regard to the unlawful dues increase claim, we hold that, under Reed v. United Transp. Union, 488 U.S. 319, 109 S.Ct. 621, 102 L.Ed.2d 665 (1989), appellants are not barred by the applicable statute of limitations from presenting this claim, but that it fails on its merits. Accordingly, we affirm the judgment of the district court.
On April 22, 1985, United entered into an agreement with Pan Am under which it would acquire the routes and related assets of Pan Am's Pacific Division. As part of the acquisition agreement, United promised to hire at least 1202 of the Pan Am Pacific Division flight attendants and, "[s]ubject to agreement ... with the collective bargaining representatives of Buyer's employees, ... [to] give [the incoming flight attendants] full recognition to all periods of service with" Pan Am.
On August 1, 1985, United and the AFA, the collective bargaining representative for United employees, began negotiations over a new collective bargaining agreement. An important issue to be resolved in the negotiations was the method of determining the seniority status of the 1202 incoming flight attendants in relation to that of United's pre-acquisition flight attendants. On December 6, 1985, representatives of United and the AFA entered into a Letter of Agreement setting out the terms and conditions of employment for the incoming flight attendants. The Letter of Agreement, ultimately incorporated into the collective bargaining agreement, was ratified by the AFA's members on March 14, 1986. The Letter of Agreement provided that the new employees would become AFA members on the date they commenced work with United and that the issue of their seniority status would be determined through arbitration in which the incoming flight attendants and the incumbent United flight attendants would be the only participants. The arbitration was to be financed largely by United. The Letter of Agreement also provided that
On three successive dates, December 6, 1985, January 8 and 24, 1986, Pan Am Pacific Division flight attendants were notified in conditional offers of employment sent to them by United that their seniority rights were to be determined through this process. Pan Am's Pacific Division employees were guaranteed continued employment under their collective bargaining agreement with Pan Am and were under no compulsion to transfer to United. On February 11, 1986, the 1202 Pan Am flight attendants who had accepted United's offer of employment became flight attendants for United.
On March 7, 1986, United deposited $132,700 into each of the bank accounts it had opened for the 1202 incoming flight attendants and the incumbent United employees to cover their costs of arbitration. Both sides drew on their respective accounts for this purpose. The Independent Union of Flight Attendants ("IUFA"), which had represented the incoming flight attendants during their employment at Pan Am, selected a committee of five to represent the former Pan Am attendants in the arbitration. Similarly, the United Master Executive Council ("UMEC"), the AFA's representative body at United, created a five-member committee to represent the incumbent United flight attendants. Each committee chose legal counsel, who in turn selected Arthur Stark to act as arbitrator.
The first arbitration hearing was held on June 27, 1986. The incumbent flight attendants argued that the seniority of the 1202 incoming flight attendants should be based on their date of hire by United, while the incoming flight attendants contended that they should receive full credit for their entire term of employment with Pan Am. In an interim decision issued on September 8, 1986, Arbitrator Stark decided that the new flight attendants would be integrated into the United seniority list. After additional hearings, he established in a final decision issued on September 26, 1987 an integration formula entitling them to partial credit for their service at Pan Am. Specifically, under Stark's formula, the first 1500 most senior employees on the integrated seniority list would be the first 1500 on the existing United list; thereafter, one Pan Am transferring flight attendant would be inserted on the list of United flight attendants on the basis of a ratio of 1:7.47. United revised the seniority list accordingly.
On December 28, 1987, the four appellants named individually as plaintiffs in this suit commenced the action, seeking relief against the AFA only, and, on May 5, 1988, amended their complaint to add several causes of action and United as a defendant. In the amended complaint, appellants alleged six causes of action: two claims of breach by the AFA of its statutory duty of fair representation, as implied under RLA Sec. 2, 45 U.S.C. Sec. 152; the unlawful imposition of union membership in violation of RLA Sec. 2 (Eleventh)(b), 45 U.S.C. Sec. 152 (Eleventh)(b); the denial of equal rights under the AFA constitution in violation of LMRDA Sec. 101(a)(1), 29 U.S.C. Sec. 411(a)(1); and breach of the contract between the AFA and its members established by the union's constitution, and breach of the acquisition contract between United and Pan Am, in violation of New York contract law. In the amended complaint, appellants also moved to certify their suit under Fed.R.Civ.P. 23(b)(1)(A) and (B) as a class action, in which the interests of all 1202 former Pan Am flight attendants would be represented. Later, in briefs submitted to the district court, appellants raised the additional claim of improper financial assistance by United, in violation of RLA Sec. 2 (Fourth), 45 U.S.C. Sec. 152 (Fourth).
After discovery, each side moved for summary judgment or judgment on the pleadings. At a hearing on January 17, 1990, the district court denied the motions and directed trial on the claim of breach of duty of fair representation which, it believed, also was dispositive of the petition to vacate the arbitral award, the denial of equal rights claim and the breach of contract claim. A bench trial was held before Judge Griesa on March 29 and 30, 1990. On the latter...
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