Prost v. Association of Flight Attendants

• Decision Date: 27 March 2008
• Docket Number: No. 06 CV 606(NG)(VVP).,06 CV 606(NG)(VVP).
• Citation: 546 F.Supp.2d 14
• Parties: Laura PROPST, et al., Plaintiffs, v. ASSOCIATION OF FLIGHT ATTENDANTS, et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

546 F.Supp.2d 14

Laura PROPST, et al., Plaintiffs, v. ASSOCIATION OF FLIGHT ATTENDANTS, et al., Defendants.

No. 06 CV 606(NG)(VVP).

United States District Court, E.D. New York.

March 27, 2008.

COPYRIGHT MATERIAL OMITTED

Michael S. Haber, Law Office of Michael Haber, New York, NY, for Plaintiffs.

Carmen R. Parcelli, Jeffrey A. Bartos, Elizabeth A. Roma, Guerrieri, Edmond & Claymon, P.C., Washington, DC, for Defendants.

OPINION AND ORDER

GERSHON, District Judge.

Plaintiffs are U.S. Airways, Inc. ("US Airways" or "the mainline carrier") flight attendants who were hired in or after September 1999, and who agreed to work for MidAtlantic Airways ("MidAtlantic") while they were furloughed from U.S. Airways. Defendant Association of Flight Attendants ("AFA") is an unincorporated labor union that has served as plaintiffs' exclusive collective bargaining representative during all times relevant to this case. Defendant Patricia A. Friend is the AFA President and is named in her official capacity.

The claims presented here are nearly identical to those presented by U.S. Airways pilots in Naugler v. Air Line Pilots Ass'n, Int'l, No. 05-4751 (E.D.N.Y.), which is also decided today. Plaintiffs allege that defendants repeatedly misrepresented and concealed the fact that MidAtlantic was a division of U.S. Airways, and not a wholly-owned subsidiary, in order to "secretly recall" them into U.S. Airways' employ without entitling them to those employment rights provided for in their collective bargaining agreement with the mainline carrier. Plaintiffs accordingly challenge the terms of their MidAtlantic employment and claim that defendants' conduct breached their duty of fair representation to them under the Railway Labor Act, 45 U.S.C. §§ 151-188, and violated the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. §§ 1961-1968. Defendants now move to dismiss the complaint in its entirety under Rule 12(b)(6) of the Federal Rules of Civil Procedure.¹

FACTS

The following facts are alleged in the First Amended Complaint and are accepted as true for purposes of this motion:²

AFA is an unincorporated labor union that represents approximately 46,000 flight attendants at 22 different carriers throughout the United States. At each airline that it represents, AFA acts through a Master Executive Council ("MEC") that serves as the coordinating council for union membership and is comprised of flight attendants from the represented airline. At all relevant times, AFA served as the exclusive bargaining representative for plaintiffs and acted through the U.S. Airways MEC. Both AFA and the U.S. Airways MEC were authorized to act on behalf of the represented flight attendants and participate in collective bargaining activities with airline management. In its capacity as the exclusive bargaining representative, AFA, on behalf of plaintiffs and other represented members of the airline, entered into a collective bargaining agreement ("CBA") with U.S. Airways to govern the terms and conditions of plaintiffs' employment, including their rights related to compensation, seniority, furlough, and recall. The governing provisions included not only the content of the agreement at the time of its promulgation, but also any subsequent side letters, memoranda of understanding, and letters of agreement amending the original CBA.

As discussed in more detail in Naugler, U.S. Airways experienced significant financial difficulties in the period preceding and following the terrorist attacks of September 11, 2001. In addition to its two applications for bankruptcy protection, the airline furloughed more than 1,000 flight attendants between September 2001 and September 2003. US Airways also restructured its operations to incorporate more cost-effective regional jets to feed smaller passenger loads to and from the mainline carrier's hubs. To that end, in July 2002, AFA asked its membership to vote on a restructuring plan that would amend the terms of the CBA in light of the airline's financial crisis. The agreement provided in pertinent part that "US Airways is establishing a new whollyowned subsidiary, MidAtlantic Airways, which will operate as regional jets." Then on December 20, 2002, AFA presented its members for ratification a proposal amending the earlier restructuring plan. This proposal provided, "The Company may operate MDA as a separate division within mainline. ... Wages, benefits, and work rules will match the AA Eagle flight attendant agreement."

Beginning in or about 2002, after the spurt of furloughs had already begun, U.S. Airways widely publicized its plan to operate a separate airline, to be known as MidAtlantic Airways, that would employ regional jets to feed its mainline operation. Specifically, U.S. Airways announced that it intended to transfer the operating certificate for Potomac Air, a planned airline for which U.S. Airways had already applied for such a certificate, to MidAtlantic so that it would operate as an independent entity. US Airways also purchased, leased, and acquired options to purchase several smaller aircraft³ and, starting in or about March 2004, MidAtlantic began the process of hiring approximately 300 furloughed flight attendants. The costs associated with MidAtlantic's development were subsidized by pressuring mainline flight attendants during collective bargaining to agree to an array of concessions to their employment terms. For reasons unknown to plaintiffs, however, the initial plan to transfer the certificate never materialized, and U.S. Airways operated MidAtlantic as a division under its own operating certificate. Plaintiffs allege that neither U.S. Airways nor AFA informed them at any point that the airline had abandoned its initially announced plan.

In or about October 2003, the Federal Aviation Administration ("FAA") closed down MidAtlantic before it began its full operation on the grounds that U.S. Airways had been improperly operating MidAtlantic as if it were an independent airline when it was actually a division of the mainline carrier. US Airways responded by redesigning the MidAtlantic operation, including revamping the training manuals and portions of the flight operations manuals to conform exactly to U.S. Airways' own procedures. When dealing with the FAA, U.S. Airways officials also referred to MidAtlantic as the "MidAtlantic Division of U.S. Airways", and, as late as October 2004, U.S. Airways management personnel confirmed to the FAA in writing that the aircraft being flown under the name "MidAtlantic" was actually a fleet type at U.S. Airways. Plaintiffs allege that U.S. Airways employees always believed that the airline had acquired a separate operating certificate for MidAtlantic and that the airline "continued to present MidAtlantic as, putatively, a separate entity." Am. Compl. ¶¶ 188-89. When flight attendants were recruited for MidAtlantic employment, for instance, U.S. Airways claimed that their employment would be under MidAtlantic's operating certificate. US Airways also painted "US Airways Express" on MidAtlantic's aircraft, even though the label referred specifically to the airline's wholly-owned subsidiaries, and moved its MidAtlantic fleet to the U.S. Airways Express terminals. US Airways and AFA also announced at some point that a separate collective bargaining agreement would govern the terms of MidAtlantic employment and required hired flight attendants to sign a document indicating that there would be modifications to pay, benefits, and work rules. About a month before MidAtlantic commenced operations in April 2004, U.S. Airways officials announced that, while not all employee pay issues had been resolved, it had come to an agreement with AFA that MidAtlantic flight attendants would receive about $1,600 a month. The MEC knowingly approved the modification to flight attendants' pay rates without submitting the change for either balloting or ratification.

By the early part of 2004, U.S. Airways also announced that the terms of MidAtlantic employment would largely replicate the terms of a collective bargaining agreement negotiated on behalf of employees of American Eagle, the commuter line for American Airlines.⁴ These terms were ultimately codified by a Letter of Agreement modifying the CBA and providing that "[w]ages, benefits and work rules will match" the American Eagle agreement.⁵ Id. ¶ 250. MidAtlantic flight attendants learned thereafter that their pay would change from an hourly pay rate based on their U.S. Airways tenure to first-year pay on the American Eagle contract, which had already been successfully re-negotiated to give American Eagle employees substantially higher pay.

On or about February 20, 2004, the FAA certified MidAtlantic aircraft, and U.S. Airways took delivery of these aircraft the following month. MidAtlantic established several crew bases at U.S. Airways hubs in various cities and planned to start up operations in the first half of April 2004. Plaintiffs allege that "[i]n virtually every aspect of their professional lives," they were "reminded, in a variety of ways, that they were employed by`MidAtlantic'" Id. ¶ 214. Flight attendants eligible for MidAtlantic employment received pre-employment notification from "MidAtlantic Airways", as opposed to U.S. Airways. The aircraft they flew were emblazoned with the name "MidAtlantic, operated by U.S. Airways", paychecks indicated that payment was made by, or on behalf of, "MidAtlantic", and the actual pay and benefits were commensurate with what was offered by other regional carriers. Plaintiffs also allege that AFA formed a separate MidAtlantic MEC to negotiate a separate collective bargaining agreement on behalf of "MidAtlantic" flight attendants and to perpetuate the fiction that MidAtlantic was its own separate entity.

Plaintiffs allege that, because MidAtlantic was merely an appellation to "describe certain flying performed by U.S. Airways," flight attendants hired by...