Rakestraw v. United Airlines, Inc.
| Citation | 981 F.2d 1524 |
| Decision Date | 28 December 1992 |
| Docket Number | 91-2417,91-2502,Nos. 91-2285,91-2503,91-2535 and 91-2957,91-2416,s. 91-2285 |
| Parties | 142 L.R.R.M. (BNA) 2054, 61 USLW 2451, 124 Lab.Cas. P 10,511 Lee RAKESTRAW, et al., Plaintiffs-Appellees, Cross-Appellants, v. UNITED AIRLINES, INC., Defendant-Appellee, v. AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendant-Appellant, Cross-Appellee. David A. HAMMOND, et al., Plaintiffs-Appellants, v. AIR LINE PILOTS ASSOCIATION and Trans World Airlines, Inc., Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Thomas R. Meites, Michael M. Mulder (argued), Paul W. Mollica, Laurie A. Wardell, Meites, Frackman, Mulder & Burger, Chicago, IL, Walter H. Fleischer, DC, for plaintiff-appellees.
Michael B. Erp, Katz, Friedman, Schur & Eagle, Chicago, IL, Michael E. Abram (argued), in Nos. 91-2535 and 91-2285, Stephen Presser, Peter Herman, Tamir W. Rosenblum, Joseph J. Vitale, Cohen, Weiss & Simon, New York City, for Air Line Pilots Ass'n, Intern. in Nos. 91-2535, 91-2503, 91-2502, 91-2416 and 91-2285.
Duane M. Kelley, Robert W. Tarun, Winston & Strawn, Chicago, IL, Michael E. Abram (argued), New York City, Cohen, Weiss & Simon, New York City, Robert A. Siegel (argued), Victoria D. Stratman, Tom A. Jerman, O'Melveny & Myers, Los Angeles, CA, for United Air Lines, Inc. in Nos. 91-2503 and 91-2416.
Michael B. Erp, Katz, Friedman, Schur & Eagle, Chicago, IL, Stephen Presser, Peter Herman, Tamir W. Rosenblum, Joseph J. Vitale, Cohen, Weiss & Simon, New York City for Air Line Pilots Association, Intern. in No. 91-2417.
Duane M. Kelley, Robert W. Tarun, Winston & Strawn, Chicago, IL, Michael E. Abram (argued), Cohen, Weiss & Simon, New York City, Robert A. Siegel (argued), Tom A. Jerman, O'Melveny & Myers, Los Angeles, CA, for United Air Lines in Nos. 91-2417 and 91-2502.
Eugene J. Schiltz, Kenneth Philip Ross, Robert F. Coleman (argued), Coleman & Associates, Chicago, IL, for David A. Hammond, Terry D. Atkins, Kenneth N. Baldwin, Gregory N. Dohin, K. Richard Kloeppel and H.M. Smith.
Patricia J. Hruby, Thomas J. Piskorski (argued), Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, Michael A. Katz, Trans World Airlines, Legal Dept., Mt. Kisco, NY, for Trans World Airlines, Inc.
Irving M. Friedman, Michael B. Erp, Stanley Eisenstein, Katz, Friedman, Schur & Eagle, Chicago, IL, Stephen B. Moldof (argued), Michael L. Winston, Cohen, Weiss & Simon, New York City, for Air Line Pilots Ass'n, Intern. in No. 91-2957.
Before BAUER, Chief Judge, and CUMMINGS and EASTERBROOK, Circuit Judges.
Two cases present a common question: does a union's duty of fair representation under the Railway Labor Act block the union from adjusting seniority in a way known to favor some employees over others? Both of these cases arise out of trauma at an airline: in one case its acquisition by a larger carrier, and in the other a strike followed by the hiring of replacement pilots.
In each case the union (the Air Line Pilots Association, or ALPA) negotiated with management an agreement providing every pilot with seniority from the date of hire. In the first case, the pilots of the smaller carrier contend that they should have received bonus seniority or equivalent protection (such as denying TWA's pilots seniority credit for time on furlough) to offset the fact that dovetailing the seniority lists worked to the advantage of the larger carrier's pilots, who on average had longer service. In the second case, the pilots hired during the strike contend that another group of pilots should have received seniority from the day they went to work in the cockpit rather than the day they reported for training, in order to protect the positions that they assumed in the face of animosity from the striking pilots.
Judge Lindberg found in the first case that by melding the seniority lists without a bonus for the pilots from the smaller airline the union did not violate its duty of fair representation. Judge Conlon found in the second case that by creating a uniform rule of seniority for all pilots the union violated its duty to the replacements, who acquired vested rights in an earlier agreement. To obtain the seniority rule, the union had given $200 million in concessions to the carrier. The judge's ruling let the airline keep these concessions while restoring an earlier seniority table--one management strongly favored, as it rewarded pilots who had been loyal to it during the strike.
We simplify the facts. Details are irrelevant on the view we take of the union's obligations. Interested persons may glean additional particulars from the district court's opinions, our own prior opinion in the second case, and an opinion of the Supreme Court of Colorado addressing some state-law issues that are not salient here. Hammond v. Air Line Pilots Ass'n, 141 L.R.R.M. 2063, 1991 WL 202638, 1991 U.S.Dist. LEXIS 13558 (N.D.Ill.); Rakestraw v. United Airlines, Inc., 765 F.Supp. 474 (N.D.Ill.1991). See also Air Line Pilots Ass'n, Int'l v. United Air Lines, Inc., 802 F.2d 886 (7th Cir.1986); DeJean v. United Airlines, Inc., 839 P.2d 1153 (Colo.1992).
In 1985 Trans World Airlines was in financial distress. Texas Air Corporation made overtures to acquire TWA. Terrified by the reputation that Texas Air's honcho Frank Lorenzo had acquired for slicing wages, TWA's unions made overtures of their own to other potential acquirers. Eventually the unions cut a deal with Carl Icahn, head of an investment group that acquired TWA. The pilots made sizable concessions, in exchange for which Icahn agreed not to reduce the size of the airline. This agreement, called the "wraparound agreement" because it wraps around the gap between old and new corporate shells, provides among other things that there shall be "no full or partial merger undertaken of the pilot seniority lists of the airline operated by TWA or New TWA ... and any such other [acquired airline] ... without prior consent of ALPA".
In 1986 TWA acquired the stock of Ozark Airlines. The pilots at TWA, having made concessions the prior year, wanted job security. They preferred having Ozark's pilots added at the end of TWA's seniority list, as if they had been hired on the date of the merger, but were willing to dovetail the seniority lists, giving each pilot seniority from the date hired by either airline. TWA was an old, shrinking carrier; the pilots still working there had long seniority, while Ozark, a growing regional carrier, had a younger labor force. A merger by date of hire would leave TWA's pilots with the pick of the assignments. The pilots at Ozark understood this. Seeing that melding the seniority list by date of hire would leave them near the bottom, the first to go if TWA continued shrinking, they demanded protection. One common bulwark is slots: for example, if TWA had three times as many pilots as Ozark, then the three most-senior pilots at TWA would be numbers 1 to 3 on the seniority list, the most senior pilot at Ozark would be number 4, positions 5-7 would go to TWA's pilots, position 8 to Ozark, and so on. That method would boost Ozark's senior pilots, hired during a period when TWA was laying off pilots, from puddle jumpers to 747s and demote some of TWA's captains. Deadlock ensued. TWA's pilots would not yield more than merger by date of hire, and Ozark's pilots stood on their demand for protection.
ALPA has a merger policy providing for arbitration if the two carriers' pilots cannot agree how to merge seniority lists. On behalf of all pilots, ALPA then asks the employer to implement the arbitral award. Ozark's pilots demanded arbitration. Hank Duffy, the president of ALPA, deferred convening the arbitral panel, seeking to mediate the dispute. Meanwhile ALPA did not consent to merger of the seniority lists. TWA then announced that it would operate Ozark's planes with TWA's pilots. TWA wanted Ozark's assets--planes, gates, and landing slots--rather than its labor force. The wraparound agreement barred shrinkage at TWA but not a transfer of planes into TWA. Staring unemployment in the face, Ozark's pilots accepted a merger of the seniority lists by date of hire, approving the agreement by a vote of 329 to 35. Eventually Ozark's pilots got a slight bonus: ALPA convened an arbitral panel, which established seniority "cells" protecting Ozark's pilots from losing some of the positions they had in the cockpits of Ozark's former aircraft. TWA's pilots received some protective cells in exchange, and these too aggrieve Ozark's pilots. ALPA sought more shelter for Ozark's pilots by lobbying (Congress let the merger proceed) and asking federal regulators for terms that would protect Ozark's pilots as conditions of the acquisition (it lost, Air Line Pilots Ass'n, Int'l v. Department of Transportation, 838 F.2d 563, 567 (D.C.Cir.1988)).
In this litigation a class of Ozark's former pilots accuses ALPA of violating its duty of fair representation under the Railway Labor Act as well as committing offenses under the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 411(a). The pilots contend, too, that both ALPA and TWA dishonored their obligations under the wraparound agreement, which would violate the Railway Labor Act. 45 U.S.C. § 152 Seventh. Most of plaintiffs' claims emphasize ALPA's departure from its usual "merger policy" and Duffy's supposed toadying to the more numerous TWA pilots, who threatened to secede from ALPA unless they got their way.
After holding the case under advisement for 19 months, the district judge granted summary judgment to ALPA and TWA, adopting the defendants' briefs as his statement of reasons. Judges must give their own reasons and may not adopt parties' briefs. DiLeo v. Ernst & Young, 901 F.2d 624, 626 (7th Cir.1990). We remanded the case so that the judge could comply with Circuit Rule 50. The court promptly issued a new opinion explaining that dovetailing is a non-arbitrary...
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