Nellis v. Air Line Pilots Ass'n

• Decision Date: 03 March 1993
• Docket Number: Civ. No. 92-771-A.
• Citation: 815 F. Supp. 1522
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Richard B. NELLIS, et al., Plaintiffs, v. AIR LINE PILOTS ASSOCIATION, et al., Defendants.

815 F. Supp. 1522

Richard B. NELLIS, et al., Plaintiffs, v. AIR LINE PILOTS ASSOCIATION, et al., Defendants.

Civ. No. 92-771-A.

United States District Court, E.D. Virginia, Alexandria Division.

March 3, 1993.

COPYRIGHT MATERIAL OMITTED

Graeme W. Bush, James Sottile, IV, Caplin & Drysdale, Chartered, Washington, DC, for plaintiffs.

James L. Linsey, Cohen, Weiss and Simon (Michael E. Abram, Stephen Presser, Russell Hollander, Joseph J. Vitale, Dominique T. Bravo, on brief), New York City, Harvey B. Cohen, Cohen, Gettings, Dunham & Harrison, Arlington, VA, for defendants.

MEMORANDUM OPINION

ELLIS, District Judge.

This class action labor dispute grew out of the widely-lamented demise of Eastern Airlines, Inc. ("Eastern"). More specifically, the case involves an allegation by former Eastern pilots that their union failed to represent their interests fairly during the breakup of Eastern and the subsequent sale of its assets to other airlines. Resolution of defendants' motion for summary judgment requires the Court to address novel questions concerning the scope of the federal duty of fair representation.

I.

The class action is brought by nine named plaintiffs on behalf of themselves and a class of over 2,400 former pilots of Eastern. The class consists of all pilots on the Eastern seniority list as of March 4, 1989, who went on strike on that date and remained on strike until the end of the strike on November 22, 1989. The defendants are the Air Line Pilots Association, International ("ALPA" or the "Union") and ten of its former and present officials.

ALPA was, at all times relevant to this action, the authorized bargaining representative of the plaintiffs. ALPA is a national labor organization which represents airline pilots at over thirty airlines. It is a unitary labor organization, with a single Constitution and By-Laws governing all subordinate bodies and members. At each of the operating airlines employing ALPA members, ALPA has a Master Executive Council ("MEC") composed of representatives elected from the airline's pilot employees. An MEC functions as the coordinating council for the ALPA-represented employees at each airline. At the national level, ALPA is governed by a Board of Directors, an Executive Board, and an Executive Committee, in descending order of authority.

On March 4, 1989, the Eastern pilots went on strike against Eastern. Plaintiffs allege that, prior to and at the time the Eastern pilots were considering whether to go on strike, ALPA promised that if the strike forced Eastern to curtail its operations and dispose of all or part of its assets, ALPA would strive to obtain jobs for the striking pilots, with no resulting loss in seniority, at whatever carrier or carriers eventually acquired the Eastern assets. Plaintiffs contend that ALPA later reneged on this obligation, and that ALPA's failure to negotiate on their behalf constituted a breach of the duty of fair representation imposed by federal law.

Five days after the commencement of the strike, Eastern filed a petition in the United States Bankruptcy Court for the Southern District of New York pursuant to Chapter 11 of the Bankruptcy Code. 11 U.S.C. § 1101, et seq. From that time until January 18, 1991, Eastern continued to operate under the supervision of the bankruptcy court. During this period, with the approval of the bankruptcy court, Eastern leased and sold various assets to several other carriers. In July 1989, the bankruptcy court approved Eastern's proposal to sublease fourteen B-727 aircraft to Pan American World Airways, Inc. ("Pan Am"). In October 1989, the court approved Eastern's plan to transfer sixteen DC-9 aircraft and several international routes to Midway Airlines, Inc. ("Midway"). In addition, in May 1989, USAir, Inc. ("USAir") made a written offer to purchase fifteen B-757 aircraft and several gates, takeoff/landing slots, and international routes from Eastern. This transaction was never consummated.¹

Meanwhile, the Eastern pilots ended their strike on November 22, 1989. On January 18, 1991, Eastern ceased all operations and has since been in the process of liquidating its remaining assets. In early February 1991, the Bankruptcy Court for the Southern District of New York held an auction to sell Eastern assets. At the auction, Delta Air Lines, Inc. ("Delta") purchased ten L-1011 aircraft, three international routes and several gates and takeoff/landing slots; United Air Lines, Inc. ("United") purchased 21 slots and three gates at Chicago's O'Hare International Airport; Northwest Airlines, Inc. ("Northwest") purchased sixty-seven slots and ten gates at Washington's National Airport; and USAir purchased six slots at Laguardia Airport and two of Eastern's Canadian routes.² Most of the Eastern estate was either sold to non-ALPA carriers such as Continental or American Airlines, or repossessed by Eastern's creditors. Eastern did not require any airline to hire Eastern pilots with lateral seniority as a condition of purchasing Eastern assets in the February 1991 auction.

In all of these transactions, both prior to and after Eastern ceased operations, plaintiffs contend that ALPA either failed to negotiate on their behalf for jobs with lateral seniority rights or worse, actively obstructed plans to hire plaintiffs to jobs with lateral seniority. Plaintiffs argue that there were two sources of ALPA's obligation to negotiate on their behalf for jobs with prehire seniority: (1) ALPA's "Merger Policies," a written set of principles ratified by the ALPA Board of Directors, and (2) various promises made by ALPA and its officers, prior and subsequent to the decision to strike, regarding ALPA's intent to implement the Merger Policies to protect the rights of striking Eastern pilots. The relevant part of the Merger Policies is a section entitled Fragmentation Policy which, in contrast to the more general provisions of the Merger Policies, contemplates transactions in which the seller of assets retains its own identity and does not merge completely with the acquiring entity. At the time of the strike, the Fragmentation Policy was applicable, by its own terms, "in cases of sales, transfers, purchase, acquisitions, reallocations, farm outs, abandonments, dismemberment or other similar fragmentation of existing operations or route systems or portions thereof...." ALPA's obligations in such situations were outlined in the same version of the Fragmentation Policy as follows:

ALPA shall take all appropriate actions necessary to protect the affected pilots including a request for adequate labor protective provisions from the appropriate government agency and/or the company or companies involved, the timely enforcement of all contractual provisions in existence, and also assist the affected MECs in opening and processing negotiations with their managements in accordance with Section 6 of the Railway Labor Act. The objective of these actions shall be to produce the desired crew member protection and to maintain a status quo situation until appropriate agreement can be reached with the carrier managements. ALPA must take all steps to establish ... the right of an appropriate number of pilots from the donor carrier to become employees of the carrier acquiring the operations or route.... Questions of number, eligibility, seniority equities and methods of selection of the flight deck operating crew members involved in said move shall be resolved in accordance with appropriate provisions of the Merger Policy and Procedures, i.e. Negotiations, Mediation and Arbitration.

Pl.Tr.Ex. 208.

ALPA altered its Fragmentation Policy on three occasions subsequent to the Eastern pilots' decision to strike. First, in December 1989, the ALPA Executive Board issued an "interpretation" of the Fragmentation Policy outlining guidelines on the Policy's implementation. The December 1989 interpretation required ALPA to request the "carrier management(s) involved for assurances that pilots will be allowed transfer of employment as determined under ALPA Merger Policy." If, on the basis of this request, carrier management did not give reasonable assurances, ALPA was directed to implement the Fragmentation Policy "through contractual provisions in existence (which cover transfer opportunities)," and to consider use of Section 6 negotiations. ALPA was also directed to request labor protective provisions from the appropriate government agency. Finally, the December 1989 interpretation stated that the ALPA "President or Executive Committee may recommend further action as appropriate to be taken to implement Merger Policy as interpreted herein."³ Pl.Tr.Ex. 41.

Next, in May 1990, ALPA amended the provision in the Fragmentation Policy which controlled applicability of the Policy. The new provision declared that an applicability determination would be made by the ALPA Executive Committee, based on such considerations as whether the relevant transaction reduced pilot staffing requirements at the carrier disposing of the assets or whether it increased staffing requirements at the acquiring carrier. Pl.Tr.Ex. 49.

Finally, in October 1991 ALPA again amended the provision defining applicability of the Fragmentation Policy, adding the following language:

Fragmentation Policy shall apply if the acquiring carrier declares an intent to acquire assets of another carrier, and the carrier agrees to employ any pilots in conjunction with the assets it acquires and to integrate transferring pilots in accordance with ALPA Merger Policy or an otherwise mutually satisfactory substitute. In the event a carrier does not intend to employ and integrate transferring pilots in accordance with ALPA Merger Policy, or an otherwise mutually satisfactory substitute, the president shall urge the acquiring carrier to do so.⁴

Pl.Dep.Ex. 99.

In addition to the formal Fragmentation Policy, plaintiffs argue that ALPA obligated itself to negotiate on their behalf for jobs with lateral...