Int'l Bhd. of Teamsters v. Atlas Air, Inc., Case No. 19-cv-2723 (CRC)

• Citation: 435 F.Supp.3d 128
• Decision Date: 28 January 2020
• Docket Number: Case No. 19-cv-2723 (CRC)
• Parties: INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Airline Division, et al., Plaintiffs, v. ATLAS AIR, INC., Defendant.
• Court: United States District Courts. United States District Court (Columbia)

435 F.Supp.3d 128

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Airline Division, et al., Plaintiffs,

v.ATLAS AIR, INC., Defendant.

Case No. 19-cv-2723 (CRC)

United States District Court, District of Columbia.

Signed January 28, 2020

James Petroff, Barkan Meizlish Handelman Goodin DeRose Wentz, LLP, Columbus, OH, Edward M. Gleason, Jr., Law Office of Edward Gleason, PLLC, Washington, DC, for Plaintiffs.

Rachel S. Janger, Robert Alan Siegel, O'Melveny & Myers LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION

CHRISTOPHER R. COOPER, United States District Judge Two airlines, Southern Air and Atlas Air, have been in the midst of a merger since 2016. The union representing pilots from both carriers, the International Brotherhood of Teamsters, and the airlines disagree about the meaning of the merger provisions in each airlines' collective bargaining agreements. After the airlines successfully compelled the union to submit their disputes to arbitration, both the Southern and Atlas arbitration boards entered awards in favor of the airlines. The union filed separate petitions to vacate the awards. This case is before the Court on Atlas's motion to dismiss the union's petition to vacate the Atlas Board's award. Finding no plausible basis for vacating the award, the Court will grant the motion to dismiss.¹

I. Background

The International Brotherhood of Teamsters ("IBT" or the "Union") is the exclusive bargaining representative of pilots employed by and who fly aircraft for Atlas Air ("Atlas" or the "Company"), a world-wide air carrier.² Compl. ¶¶ 4-6. The operative collective bargaining agreement between the Union and Atlas was signed in 2011 (the "Atlas CBA") and covers the rates of pay, rules, and working conditions of IBT-represented pilots employed by Atlas. Id. ¶ 7; Def. Mot. Dis., ECF No. 7, Exh. A [hereinafter "Atlas CBA"]. In addition to establishing a standard grievance and arbitration procedure for disputes arising out of the contract, see Compl. ¶¶ 11-12; Atlas CBA §§ 20-21, the Atlas CBA provides an expedited grievance and arbitration procedure for certain disputes associated with a merger or acquisition, see Compl. ¶¶ 8-10; Atlas CBA §§ 1.F & .H.

In January 2016, Atlas Air Worldwide Holdings ("AAWW") announced that it had entered into an agreement to acquire Southern Air Holdings, Inc. ("SAHI"). The acquisition was approved by each company's shareholders in April 2019. Id. ¶ 15. SAHI is the parent company of Southern and another air carrier, Florida West International Airways. Id. AAWW is the parent company of Atlas Air and Polar Air. IBT also represents the Southern-employed pilots, and IBT and Southern are parties to a separate collective bargaining agreement (the "Southern CBA"). Id. ¶ 16.

Upon announcing its acquisition of SAHI, AAWW announced a plan to operationally merge Southern into Atlas. Id. ¶ 17. The Atlas CBA provides for certain seniority list integration and joint collective bargaining agreement negotiations procedures "(i) [i]n the event the Company acquires another air carrier and decides there will be a complete operational merger between the Company and such other air carrier," or "(ii) in the event the Company decides there will be a complete operational merger between the Company and an affiliated air carrier." Atlas CBA § 1.F.2. Should "a merged agreement ... not be[ ] executed within nine (9) months from the date that the Union presents to the Company a merged seniority list," the CBA mandates that the parties "submit the outstanding issues to binding interest arbitration" and creates an expedited arbitration procedure for resolving such disputes that permits either "the Company or Union" to submit grievances "directly before the [Board]." Id. §§ 1.F.2.b.iii & H.1.

Invoking the merger provisions in both the Atlas and Southern CBAs,³ AAWW demanded that the Southern and Atlas pilot groups begin negotiations to merge the two pre-existing CBAs into one and to integrate their seniority lists. Compl. ¶ 17. The Union and both pilot groups refused both demands. Id. ¶ 19.

In April 2016, Atlas filed a management grievance against the Union (the "Atlas Grievance") alleging that the Union had violated the Atlas CBA by refusing to present an integrated seniority list ("ISL") and to engage in joint collective bargaining agreement ("JCBA") negotiations. Id. ¶ 21. The Union responded that it was not required to arbitrate the grievance. Id. Southern purported to submit a similar grievance against the Union in January 2017 for refusing to engage in negotiations for a JCBA or submit an ISL (the "Southern Grievance"). Id. ¶ 22. The Union also refused to arbitrate the Southern Grievance. Id.

Southern and Atlas then brought suit against the Union in the United States District Court for the Southern District of New York to compel the Union to arbitrate their respective grievances. Id. ¶ 23. Judge Forrest granted the airlines' motion to compel arbitration of both grievances in March 2018, Atlas Air, Inc. v. Int'l Bhd. of Teamsters, 293 F. Supp. 3d 457 (S.D.N.Y. 2018), which was affirmed by the Second Circuit in November 2019, Atlas Air, Inc. v. Int'l Bhd. of Teamsters, 943 F.3d 568 (2d Cir. 2019).

The Atlas System Board of Arbitration (the "Board") heard the Atlas Grievance in October 2018. Compl. ¶ 27. In August 2019, Chairman George Nicolau entered a Decision and Award in Atlas's favor, concluding that the Union had violated Section 1.F.2.b.iii of the CBA by refusing to engage in ISL or JCBA negotiations following the announcement of a complete operational merger between Atlas and Southern. See Compl., Exh. A [hereinafter "Dec. & Aw."]. The Board thus directed the Union to submit an ISL to Atlas within 45 days and to engage in JCBA negotiations and, if necessary, submit outstanding issues to binding interest arbitration. Id. at 12.⁴

The Union then filed suit in this Court to vacate the Atlas Board's Decision and Award. The Union alleged that the Decision and Award failed to confine itself to matters within the scope of the Board's jurisdiction, failed to draw its essence from the Atlas CBA, and violated federal law and public policy. Compl. ¶¶ 43-45. Atlas filed a motion to dismiss. Finding no plausible ground to vacate the arbitrator's award, the Court will grant Atlas's motion in full.

II. Legal Standards

The Railway Labor Act ("RLA") "provide[s] for the prompt and orderly settlement of all disputes" between air carriers and their employees. Landers v. Nat'l R.R. Passengers Corp., 485 U.S. 652, 656, 108 S.Ct. 1440, 99 L.Ed.2d 745 (1988) (quoting 45 U.S.C. § 151a(5) ). To that end, it requires carriers and employees to form collective bargaining agreements and creates two types of dispute resolution procedures, which vary based on whether the dispute is "major" or "minor." See Consol. Rail Corp. v. Ry. Labor Exec. Ass'n, 491 U.S. 299, 302, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989).

"[M]ajor disputes are those over the formation of collective agreements" affecting employees' rates of pay, rules, or working conditions "or efforts to secure them." Union Pac. R. Co. v. Bhd. of Locomotive Engineers & Trainmen Gen. Comm. of Adjustment, Cent. Region, 558 U.S. 67, 72 n.1, 130 S.Ct. 584, 175 L.Ed.2d 428 (2009) (internal quotation marks omitted); 45 U.S.C. § 156. Given the magnitude of the issues at stake, the RLA establishes a "rather elaborate machinery for negotiation, mediation, voluntary arbitration, and conciliation" that governs the resolution of major disputes. Detroit & T. S. L. R. Co. v. United Transp. Union, 396 U.S. 142, 148-49, 90 S.Ct. 294, 24 L.Ed.2d 325 (1969) (citing Gen. Comm. of Adjustment v. Missouri-Kansas-Texas R.R. Co., 320 U.S. 323, 328-33, 64 S.Ct. 146, 88 L.Ed. 76 (1943) ). A central feature of this machinery is that "[u]ntil they have exhausted those procedures, the parties are obligated to maintain the status quo, and the employer may not implement the contested change in rates of pay, rules, or working conditions." Consol. Rail, 491 U.S. at 302-03, 109 S.Ct. 2477.

A minor dispute, by contrast, "involves a question about how to interpret an existing collective bargaining agreement, like the meaning of a term or whether the agreement permits a certain action." Atlas Air, Inc. v. Int'l Bhd. of Teamsters, 928 F.3d 1102, 1108 (D.C. Cir. 2019) (citing Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. 711, 723, 65 S.Ct. 1282, 89 L.Ed. 1886 (1945) ). The Second Circuit determined that the Atlas Grievance constituted a minor dispute, and the parties do not contest that characterization. The framework for resolving a minor dispute is considerably less involved: disputes are first to be handled according to the grievance procedure agreed upon in the CBA and, if unsuccessful, are submitted to mandatory arbitration before the National Railroad Adjustment Board or, as here, a special board of adjustment established by the carrier and the union. Norfolk S. Ry. Co. v. Solis, 915 F. Supp. 2d 32, 36 (D.D.C. 2013) ; see also 45 U.S.C. § 153 First (i).

"Congress considered it essential to keep these so-called ‘minor’ disputes within the Adjustment Board and out of the courts." Union Pac. R. Co. v. Sheehan, 439 U.S. 89, 94, 99 S.Ct. 399, 58 L.Ed.2d 354 (1978). The RLA thus makes the mandatory arbitration process exclusive of all other remedies and an award issued by the board "final and binding." 45 U.S.C. § 153 First (m); see Andrews v. Louisville & Nashville R.R. Co., 406 U.S. 320, 322-24, 92 S.Ct. 1562, 32 L.Ed.2d 95 (1972). Judicial review of such awards is available only on grounds of: (1) failure to comply with the requirements of the RLA; (2) failure to confine the decision to matters within the scope of the board's jurisdiction; (3) fraud or corruption; and (4) contravention of law and public policy. See 45 U.S.C. § 153 First (q); Sheehan, 439 U.S. at 93, 99 S.Ct. 399 ; Nat'l R.R. Passenger Corp. v. Fraternal Order of Police, Lodge 189 Labor Comm., 855 F.3d 335, 338 (D.C. Cir. 2017).

To withstand Atlas's motion to...