Lancaster v. Air Line Pilots Ass'n Intern., 94-1467

• Decision Date: 21 February 1996
• Docket Number: No. 94-1467,94-1467
• Parties: 151 L.R.R.M. (BNA) 2559, 131 Lab.Cas. P 11,503 John L. LANCASTER, Plaintiff-Appellant, v. AIR LINE PILOTS ASSOCIATION INTERNATIONAL; United Airlines, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1509

76 F.3d 1509

151 L.R.R.M. (BNA) 2559, 131 Lab.Cas. P 11,503

John L. LANCASTER, Plaintiff-Appellant, v. AIR LINE PILOTS ASSOCIATION INTERNATIONAL; United Airlines, Inc., Defendants-Appellees.

No. 94-1467.

United States Court of Appeals, Tenth Circuit.

Feb. 21, 1996.

Robert F. Gore (Jerre W. Dixon of Dixon & Snow, Denver, Colorado, with him on the briefs), National Right to Work Legal Defense Foundation, Inc., Springfield, Virginia, for Plaintiff-Appellant.

James K. Lobsenz (Gary Green, with him on the brief), Air Line Pilots Association, International, Washington, D.C., for Defendant-Appellee Air Line Pilots Association, International.

Chris A. Hollinger (Robert A. Siegel of O'Melveny & Myers, Los Angeles, California; Paul F. Lewis and Jerry N. Jones of Moye, Giles, O'Keefe, Vermeire & Gorrell, Denver, Colorado, with him on the brief), O'Melveny & Myers, Los Angeles, California, for Defendant-Appellee United Air Lines, Inc.

Before BALDOCK, BRORBY and SETH, Circuit Judges.

BRORBY, Circuit Judge.

Plaintiff John L. Lancaster appeals the district court's order granting summary judgment in favor of defendants United Airlines, Inc. (hereafter "United") and the Air Line Pilots Association (hereafter "ALPA") on his claims ALPA and United violated § 2, Eleventh, of the Railway Labor Act, 45 U.S.C. § 152, Eleventh, and the First and Fifth Amendments by requiring, as a condition of employment, that he pay an assessment to support ALPA members working at Eastern Airlines (hereafter "Eastern") while they were striking in sympathy with members of the International Association of Machinists and Aerospace Workers Union (hereafter "the Machinists") at Eastern, and by terminating him for failing to pay the assessments within the time allowed. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and reverse.

I

The collective bargaining agreement between ALPA and United creates an agency shop. "An 'agency shop' agreement generally provides that while employees are not required to join the union, they are required to pay the union an amount equal to union dues." Pilots Against Illegal Dues v. Air Line Pilots Ass'n., 938 F.2d 1123, 1126 & n. 1 (10th Cir.1991). Mr. Lancaster joined ALPA shortly after he began working for United in the 1960's, but later resigned his membership. Throughout the period relevant to this litigation, he continued to pay the agency fees required under the collective bargaining agreement.

In 1989, members of the Machinists Union and its subordinate unions at Eastern went on strike. ALPA authorized its members at Eastern to strike in sympathy with the Machinists. From May 1989 to March 1990, ALPA levied a monthly strike assessment on all its members, including those working at United. ALPA also required Mr. Lancaster and the other nonunion pilots at United to pay strike assessments pursuant to the collective bargaining agreement with United. Mr. Lancaster continued to pay his other obligations to ALPA, but did not pay the strike assessment.

In January 1993, ALPA asked United to terminate Mr. Lancaster for failing to pay the strike assessment. Mr. Lancaster learned of ALPA's request and delivered a check for the full amount due. ALPA refused to accept the check because it was untimely and returned it to Mr. Lancaster. United then informed Mr. Lancaster he was to be terminated "pursuant to United's contractual obligations" under the collective bargaining agreement. Mr. Lancaster filed a timely grievance with United's Senior Vice President of Human Resources, pursuant to the collective bargaining agreement. Mr. Lancaster did not contend in his grievance that the Eastern sympathy strike assessment violated the Railway Labor Act or the First and Fifth Amendments. United rejected Mr. Lancaster's grievance. Mr. Lancaster timely appealed the matter to arbitration before a neutral referee, again pursuant to the collective bargaining agreement. He again failed to raise his Railway Labor Act and constitutional challenges to the Eastern sympathy strike assessment. After a hearing, the referee denied Mr. Lancaster's appeal, and shortly thereafter, United terminated Mr. Lancaster's employment.

Mr. Lancaster then filed a complaint in district court alleging (1) ALPA breached its duty of fair representation, (2) United breached his employment contract, (3) ALPA and United violated § 2, Eleventh, of the Railway Labor Act, 45 U.S.C. § 152, Eleventh, by requiring him to pay the strike assessment and terminating him for failing to do so, and (4) ALPA and United violated his First Amendment right to freedom of speech and association and his Fifth Amendment right to due process by requiring him to pay the strike assessment and terminating him for failing to do so within the time allowed. The district court granted summary judgment in favor of ALPA and United. This appeal followed.

II

Mr. Lancaster contends the district court erred in granting summary judgment in favor of ALPA and United on his claim they violated § 2, Eleventh, of the Railway Labor Act, 45 U.S.C. § 152, Eleventh, and the First and Fifth Amendments by terminating him for failing to pay the Eastern sympathy strike assessment. ¹ Congress added § 2, Eleventh, to the Railway Labor Act in 1951. Pub.L. No. 81-914, 64 Stat. 1238. The purpose of the amendment was to

permit a carrier and a labor organization ... to enter into an agreement requiring, as a condition of continued employment, that within 60 days following the beginning of such employment, or the effective date of such agreement, whichever is the later, all employees shall become members of the labor organization representing the craft or class of such employees.

S.Rep. No. 2262, 81st Cong., 2d Sess. 2 (1950) U.S.Code Cong. & Admin.News 1950 pp. 4319, 4320. This arrangement is commonly referred to as a "union shop." Id. Since 1951, § 2, Eleventh, has been interpreted as allowing "agency shop" arrangements as well. See, e.g., Brotherhood of Ry. & S.S. Clerks v. Allen, 373 U.S. 113, 116 & n. 2, 83 S.Ct. 1158, 1160 & n. 2, 10 L.Ed.2d 235 (1963); Pilots Against Illegal Dues, 938 F.2d at 1126 & n. 1 (10th Cir.1991).

By its terms, § 2, Eleventh, gives unions broad authority to exact "periodic dues, initiation fees, and assessments" from involuntary members, in the case of a union shop, or nonmembers, in the case of an agency shop, and prohibits only "fines and penalties." 45 U.S.C. § 152, Eleventh(b). As Senator Hill, one of the sponsors of the 1951 amendment, explained during the debates before the full Senate, the limitation on "fines and penalties" was included so that "if an individual member is fined for some infraction of the union bylaws or constitution, the union cannot obtain his discharge under a union shop agreement in the event that the member refuses or fails to pay the fine imposed." 96 Cong.Rec. 15736 (1950). The legislative history of § 2, Eleventh, also suggests no other limitation was intended. "Indeed, several witnesses appearing before the congressional Committees objected to the absence of any explicit limitation on the scope or amount of fees and dues that could be compelled. That Congress enacted the provision over these objections arguably indicates that it was willing to tolerate broad exactions from objecting employees." Ellis v. Brotherhood of Ry., Airline & S.S. Clerks, 466 U.S. 435, 445-446, 104 S.Ct. 1883, 1890-1891, 80 L.Ed.2d 428 (1984) (footnote omitted).

Nevertheless, the Supreme Court has held both § 2, Eleventh, and the First and Fifth Amendments prohibit certain assessments from objecting nonmember employees. It first suggested § 2, Eleventh, limited more than exaction of "fines and penalties" in Railway Employes' Dept. v. Hanson, 351 U.S. 225, 76 S.Ct. 714, 100 L.Ed. 1112 (1956). In that decision, the Supreme Court rejected a facial constitutional challenge to § 2, Eleventh, but stated in dictum that "[i]f 'assessments' are in fact imposed for purposes not germane to collective bargaining, a different problem would be presented" under the Due Process Clause of the Fifth Amendment, because the assessment might unduly interfere with the objecting employee's "liberty" interest in earning a living. Hanson, 351 U.S. at 235, 76 S.Ct. at 720 (footnote omitted). The Court also stated in dictum that "if the exaction of dues, initiation fees, or assessments is used as a cover for forcing ideological conformity or other action in contravention of the First Amendment," those assessments might be unconstitutional under that Amendment. Id. at 238, 76 S.Ct. at 721. The high court bore out the dicta in Hanson a short time later in International Ass'n. of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961), and Allen, 373 U.S. 113, 83 S.Ct. 1158, 10 L.Ed.2d 235. In these cases, the Supreme Court held § 2, Eleventh, bars unions from using funds exacted from objecting nonmember employees to support political causes which the employee opposes. Allen, 373 U.S. at 118-19, 83 S.Ct. at 1161-1162; Street, 367 U.S. at 769-70, 81 S.Ct. at 1800-1801. The Court read the Railway Labor Act in this way because "[f]ederal statutes are to be so construed as to avoid serious doubt of their constitutionality." Street, 367 U.S. at 749, 81 S.Ct. at 1790. For the first time, in Ellis, the Supreme Court devised a test for determining whether a particular assessment violates § 2, Eleventh. It held:

[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 grievances and disputes, but also the expenses of activities or undertakings normally or reasonably employed to implement or effectuate the...