Pilots Against Illegal Dues (PAID) v. Air Line Pilots Ass'n (ALPA)

• Decision Date: 11 July 1991
• Docket Number: No. 89-1053,89-1053
• Citation: 938 F.2d 1123
• Parties: 137 L.R.R.M. (BNA) 2963, 60 USLW 2157, 119 Lab.Cas. P 10,832 PILOTS AGAINST ILLEGAL DUES (PAID), et al., Plaintiffs-Appellants, v. AIR LINE PILOTS ASSOCIATION (ALPA), Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1123

938 F.2d 1123

137 L.R.R.M. (BNA) 2963, 60 USLW 2157,

119 Lab.Cas. P 10,832

PILOTS AGAINST ILLEGAL DUES (PAID), et al., Plaintiffs-Appellants, v. AIR LINE PILOTS ASSOCIATION (ALPA), Defendant-Appellee.

No. 89-1053.

United States Court of Appeals Tenth Circuit.

July 11, 1991.

Franklin A. Nachman, Semple & Jackson, P.C., Denver, Colo. (Martin Semple and Dwight L. Pringle, of the same firm, with him on the brief), for plaintiffs-appellants.

Jerry D. Anker, Air Line Pilots Ass'n, Washington, D.C., (Felice Busto, ALPA, Washington, D.C., and Donald D'Antuono, Tallmadge, Tallmadge, Wallace & Hahn, P.C., Denver, Colo., with him on the brief), for defendant-appellee.

Before McKAY and ANDERSON, Circuit Judges, and BROWN, District Judge. ^*

WESLEY E. BROWN, District Judge.

Plaintiff-appellants are twenty-one nonunion pilots employed by United Airlines. The defendant-appellee Air Line Pilots Association (ALPA) is the exclusive bargaining representative of all United pilots. In 1983, United Airlines and ALPA entered into an "agency shop" arrangement, under which United pilots were required either to become ALPA members or to pay ALPA an agency fee for expenses incurred in representing the pilots. Such arrangements are authorized by Section 2, Eleventh of the Railway Labor Act (RLA), 45 U.S.C. Sec. 152.

The plaintiffs brought this action alleging that ALPA violated the RLA and plaintiffs' constitutional rights in 1983 and subsequent years by using agency shop fees for purposes not "germane to collective bargaining." Plaintiffs also alleged that ALPA was impermissibly charging them for expenses incurred in activities at other airlines. Furthermore, the plaintiffs sought relief for what they contended were inadequate procedures for challenging ALPA's determination of the agency fees owed by non-members. Judgment was entered for the defendants after a trial to the district court. The district court found that ALPA had rebated to the plaintiffs the portion of agency fees that were used for purposes not germane to collective bargaining. The district court also found that ALPA had established adequate procedures to allow challenges to agency fees. The court found the plaintiffs' claims concerning the rebate for 1983 to be barred by the applicable statute of limitations. Finally, the court dismissed plaintiffs' constitutional claims under 42 U.S.C. Sec. 1983. Appellants contended in arguments before this court that the district court committed several errors. We held our opinion in this matter in abeyance pending the Supreme Court's decision in Lehnert v. Ferris Faculty Association, --- U.S. ----, 111 S.Ct. 1950, 114 L.Ed.2d 572 (1991) because the Lehnert case raised several issues nearly identical to those raised by appellants.

a. Union Expenditures Generally Under Section 2, Eleventh.

We first examine the federal law concerning the authority of a union to charge expenditures to dissenting employees under the Railway Labor Act. The agency shop ¹ was first given a stamp of approval by Congress in 1951 when the RLA was amended to permit such arrangements. The 1951 amendment was an attempt to deal with "free riders"--employees who benefitted from a union's representation but did not contribute to the costs of that representation. The constitutionality of this amendment was upheld in Railway Employees' Department v. Hanson, 351 U.S. 225, 76 S.Ct. 714, 100 L.Ed. 1112 (1956), in which the Supreme Court rejected the contention that the amendment's effect of forcing contributions from unwilling persons was a violation of the First Amendment or the Due Process Clause of the Fifth Amendment. The Court found it was within Congress' power to require financial support for a collective bargaining agent from those who benefitted from the work of the agent. Hanson, 351 U.S. 225, 238, 76 S.Ct. 714, 721. The Court observed that "[t]he financial support required relates ... to the work of the union in the realm of collective bargaining." Id. at 235, 76 S.Ct. at 719. The Court noted, however, that "[i]f 'assessments' are in fact imposed for purposes not germane to collective bargaining, a different problem would be presented." Id. In International Association of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961), the Supreme Court held that the RLA did not authorize a union to use agency fees from objecting employees to support political candidates. The Court stated that Congress did not intend to vest the unions with unlimited power to spend exacted money. Although the Court did not set forth a standard to distinguish between proper and improper uses of agency fees, it stated:

Its use to support candidates for public office, and advance political programs, is not a use which helps defray the expenses of the negotiation or administration of collective agreements, or the expenses entailed in the adjustment of grievances and disputes. In other words, it is a use which falls clearly outside the reasons advanced by the unions and accepted by Congress why authority to make union-shop agreements was justified.

Street, 367 U.S. at 768, 81 S.Ct. at 1799. In Railway Clerks v. Allen, 373 U.S. 113, 83 S.Ct. 1158, 10 L.Ed.2d 235 (1963), the Court again distinguished between political expenditures and those expenditures that were "germane to collective bargaining."

More recently, in Ellis v. Railway Clerks, 466 U.S. 435, 104 S.Ct. 1883, 80 L.Ed.2d 428 (1984), the Court addressed the issue of whether a union could charge objecting employees for expenses that fell in the grey area between expenses clearly germane to collective bargaining and expenditures that are clearly political. The Court stated that:

[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 duties of the union as exclusive representative of the employees in the bargaining unit.

Ellis, 466 U.S. at 448, 104 S.Ct. at 1892.

In Lehnert v. Ferris Faculty Association, --- U.S. ----, 111 S.Ct. 1950, 114 L.Ed.2d 572 (1991), a case dealing with a public sector union, the Court declared that in determining what expenses a union may constitutionally charge dissenting members, Hanson and Street and their progeny teach that chargeable activities must (1) be "germane" to collective bargaining activity; (2) be justified by the government's vital policy interest in labor peace and avoiding "free riders"; and (3) not significantly add to the burdening of free speech that is inherent in the allowance of an agency or union shop. Id. at ----, 111 S.Ct. at 1951. These same characteristics presumably are required for chargeable expenses under the Railway Labor Act, since the Court has consistently interpreted the RLA to avoid serious doubt of the statute's constitutionality. Street, 367 U.S. at 749, 81 S.Ct. at 1789.

b. Expenditures by ALPA.

Appellants first contend that the district court applied an erroneous standard of law to determine which of ALPA's expenditures were germane to collective bargaining. Appellants believe that the district court gave the union's determination of what was germane and what was not germane "undue deference." We disagree. In findings made from the bench, the district court clearly cited the Ellis case and recognized that the governing standard was whether the union's expenditures were shown to be germane to collective bargaining. Tr. Vol. XIII at 13. The court recognized that the burden of proving that the expenditures were germane was on the defendant. Id. Appellant suggests that the court's remark at one point that "the court merely has to look at this to see whether the union used good judgment, ..." Id. at 15, shows that the court applied an erroneous standard of law. Perhaps this particular comment was intended to reflect that the nature of the free rider problem requires that the union "have a certain flexibility in its use of compelled funds." Ellis, 466 U.S. at 456, 104 S.Ct. at 1896. At any rate, the balance of the court's analysis shows that the court generally applied the proper standard and determined that the expenditures in question were germane to ALPA's duties as a collective bargaining agent. ² We cannot agree that the district court gave undue deference to ALPA's determination of what was germane and what was not germane.

In addition to challenging the standard applied by the district court, appellants challenge the court's findings that the various expenses incurred by the union were germane to collective bargaining. In particular, appellants object to the court's finding that ALPA could properly charge agency fee payers at United for expenses incurred by ALPA in representing other airlines. In calculating the amount of agency fee that each of the plaintiffs owed, ALPA did not attempt to determine what expenses it incurred on behalf of each airline. Instead, ALPA calculated the total amount of its chargeable expenses at all airlines and then divided that amount by the total number of employees at all of the airlines. Thus, the agency fee was determined by combining and averaging expenses from all bargaining units rather than by charging employees in each specific bargaining unit only for expenses incurred representing that unit. Appellants argue that the Supreme Court's decision in Ellis made clear that expenses incurred by a union outside of a particular bargaining unit are not considered germane to collective bargaining as far as the employees in that unit are concerned.

Whatever ambiguity Ellis created...