INTERNATIONAL ASS'N OF M. & AW v. Northeast Airlines, Inc., No. 72-1038.

• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)
• Writing for the Court: ALDRICH, , and McENTEE and COFFIN, Circuit
• Citation: 473 F.2d 549
• Decision Date: 20 April 1972
• Docket Number: No. 72-1038.
• Parties: INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS and District 147 of the International Association of Machinists and Aerospace Workers, Plaintiffs-Appellants, v. NORTHEAST AIRLINES, INC., Defendant-Appellee.

473 F.2d 549 (1972)

INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS and District 147 of the International Association of Machinists and Aerospace Workers, Plaintiffs-Appellants,
v.
NORTHEAST AIRLINES, INC., Defendant-Appellee.

No. 72-1038.

United States Court of Appeals, First Circuit.

Heard March 8, 1972.

Decided April 20, 1972.

473 F.2d 550

COPYRIGHT MATERIAL OMITTED

473 F.2d 551

Robert M. Segal, Boston, Mass., and Plato Papps, Washington, D. C., with whom Segal, Roitman & Coleman, Boston, Mass., was on brief, for plaintiffs-appellants

Loyd M. Starrett, Boston, Mass., with whom Henry E. Foley, David B. Ellis, and Foley, Hoag & Eliot, Boston, Mass., were on brief, for defendant-appellee.

Before ALDRICH, Chief Judge, and McENTEE and COFFIN, Circuit Judges.

ALDRICH, Chief Judge.

On May 12, 1971, Northeast Airlines, Inc., (NE) entered into a provisional agreement to merge into Delta Air Lines, Inc. (Delta). This was the fifth attempt by NE to merge with another line. Whatever may have motivated the others, all of which failed for one reason or another, NE's substantial and continuing deficits seem clearly to have impelled this one. Indeed, it asserts without contradiction that this is its last chance for survival.¹ The agreement has not yet become final. Either party may terminate unless both CAB and stockholder approval is secured prior to the designated consummation date of June 30, 1972. Permission was sought of the CAB by filing on May 12, 1971. Following pretrial procedures, a trial examiner conducted hearings in July, and on October 26 rendered a report to the Board recommending approval. The Board, as yet, has made no decision. The NE stockholders voted to approve on January 31, 1972. It does not appear from the record whether the Delta shareholders have yet done so.

NE has collective bargaining agreements, one with its mechanics, which expired December 31, 1971 subject to being continued in force by virtue of section 6 of the Railway Labor Act, 45 U.S.C. § 156, and one with its supervisors, which will expire on June 1, 1972. In both instances the union involved is the International Ass'n of Machinists and Aerospace Workers and its District 147, plaintiffs appellants, hereinafter, collectively, the Union. Both of these agreements and their predecessors going back to 1949, have contained what is now Article 3(B), as follows.

"It is further understood and agreed that all provisions of this Agreement shall be binding upon the successors or assigns of the Company for the duration of this Agreement. In case of a consolidation or merger, representatives of the Company and Union will meet without delay and negotiate for proper provisions for the protection of employee\'s seniority and other rights."

473 F.2d 552

No question has hitherto arisen under this clause, although one previous merger progressed even further than the present one before it aborted.

Since the agreement provided for automatic renewal and no change in the contract terms could be made without notice served on or before October 31, 1971, NE on October 28 sent the Union an appropriate section 6 notice of intended termination of the Mechanics' agreement, proposing that the agreement be extended only for "a few months." On October 31 the Union sent its own notice, saying that it wanted the agreement to run a full term, and enclosing a list of further proposals. The enclosure, some six pages long, requested, inter alia, changes in Article 3(B), to provide procedures for premerger negotiations. On November 11, the first meeting resulting from this correspondence, the Union announced that its first request was not for the contract changes it had proposed, but for negotiations for specific postmerger protective provisions, relating to seniority, employment, and other conditions. The company asked time to consider this request. After several further meetings, at which the position of the parties might be said to have hardened, on December 31, the Union stated that this subject was all it would negotiate, and the company said it was willing to "discuss," and go to the National Mediation Board or System Board of Adjustment, but that the matter was one which it had no obligation to negotiate.² On the basis that the company offered only discussion, with no recognition of a duty to bargain, the Union left the meeting, and on January 24 brought the present suit. Jurisdiction derives from the Railway Labor Act, 45 U.S.C. § 151 et seq.

The Union seeks to compel the company to negotiate, and to include in the merger agreement whatever should be the product of the negotiations. It requested a preliminary injunction, in alternative terms.³

"(a) Consummating any merger with the Delta Air Lines, Inc. until the Company has negotiated and bargained in good faith with the Plaintiffs about the proper provisions for the seniority, employment and other rights of the employees of Northeast Air Lines Inc. sic represented by Plaintiffs."

"(b) In any manner refusing to negotiate or bargain in good faith with the Plaintiffs about the seniority, employment and other rights of the employees represented by the Plaintiffs."

This question was heard on the pleadings and affidavits by the district court which, on February 3, with a comprehensive opinion, denied relief. D.C., 337 F.Supp. 499. The union appealed, unsuccessfully sought interim relief, and now argues the merits of its appeal.

The district court rested its decision upon a finding that the right of NE's management to decide the company's future outweighed whatever interest plaintiff had in protecting its members. It left unclear to what extent it was relying on particular facts to justify a finding that it would be inequitable to grant the injunction, and to what extent on a broader conclusion that because of the general interests of management and labor the statutory duty did not require bargaining. While we agree that it is appropriate, especially when both parties face irreparable injury, to weigh the competing interests, we find it useful to speak in terms of the traditional tests of

473 F.2d 553

irreparable injury and probability of success on the merits. See Automatic Radio Mfg. Co. v. Ford Motor Co., 1 Cir., 1968, 390 F.2d 113, 115-116, cert. denied 391 U.S. 914, 88 S.Ct. 1807, 20 L.Ed.2d 653. In reviewing the district court's opinion, therefore, we shall first examine what we interpret as its finding that the balance of hardship favors denying relief, deferring for the moment the question of whether such relief must be granted nevertheless because an overwhelming case in plaintiff's favor is present on the merits and the equities of the case. See Dorfmann v. Boozer, 1969, 134 U.S.App.D.C. 272, 414 F.2d 1168, 1173

The district court regarded with seriousness, as do we, the possible plight of the Union's membership if their employer is taken over and merged into another whose employees outnumber them twenty to one, which might well discontinue certain NE services, either absolutely, or as duplicative, and which does not, according to the Union, promise certain seniority and other rights that would accrue to its members had NE continued its operations. However, a court of equity must be concerned not only with possible injury to the plaintiff but also with whether an injunction would cause irreparable harm to the defendant, for it is obliged to choose the course likely to cause the least injury. See Eutectic Welding Alloys Corp. v. Zeisel, D.N.J., 1950, 11 F.R.D. 78, noted in Developments in the Law — Injunctions, 78 Harv.L.Rev. 994, 1056-59 (1965). It would be unrealistic not to view the possible ramifications of an injunction, the most obvious of which is the possible collapse of the merger, and the consequence, which on the record seem inevitable, of the demise of the company.⁴ As against this, the consequences to the employees of the merger's accomplishment in accordance with the present plan do not appear drastic. Extensive labor protective provisions are contained in the order proposed by the CAB examiner. Delta further assumes NE's obligations, which on their face include the obligation imposed by Article 3(B), ante. We cannot at this time measure the cloud that may be cast upon this obligation by the case of William J. Burns Int'l Detective Agency, Inc. v. NLRB, 2 Cir., 1971, 441 F.2d 911, cert. granted 404 U.S. 822, 92 S.Ct. 99, 30 L.Ed.2d 49, except to say that presently a cloud is all it is.⁵ In any event, the employees will fare far better if the merger goes through without the desired negotiations

473 F.2d 554

than will the company, not to mention the employees themselves,⁶ if it does not go through at all

With these preliminaries we turn to consider the likelihood that an injunction would interfere with the merger. We note first that the Union's conduct has itself enhanced the danger. Its demand to negotiate did not take place until November 11, although the merger agreement was executed in May, and was known to be in the making for some time before then. In July the agreement had been presented to the Board examiner; the Union, we understood in oral argument, had presented its own views, and the examiner had filed a report recommending certain provisions for the protection of the merged employees. For the Union now to seek to negotiate is not only late in the game, but would, if productive from Union's standpoint to the extent of requiring changes in the terms of the merger agreement, require going back to the Board. The merger cannot go through unless the Board decides that its terms, including the provisions for the employees, are in the public interest. 49 U.S.C. § 1378. See Kent v. CAB, 2 Cir., 1953, 204 F.2d 263, cert. denied 346 U.S. 826, 74 S.Ct. 46, 98 L.Ed. 351. The likelihood of this producing difficulties is only too apparent. Since the United-Capitol Merger Case, 1961, 33 C.A.B. 306, 342-47, the Board has uniformly applied the same labor protective...