Transport Wkrs. U. of Amer. v. Amer. Airlines, Inc., 10119.

• Decision Date: 24 June 1969
• Docket Number: No. 10119.,10119.
• Citation: 413 F.2d 746
• Parties: TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, an unincorporated association, and Transport Workers Union of America, Local No. 514, AFL-CIO, Appellants, v. AMERICAN AIRLINES, INC., a corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

413 F.2d 746 (1969)

TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, an unincorporated association, and Transport Workers Union of America, Local No. 514, AFL-CIO, Appellants, v. AMERICAN AIRLINES, INC., a corporation, Appellee.

No. 10119.

United States Court of Appeals Tenth Circuit.

June 24, 1969.

Maynard I. Ungerman, Tulsa, Okl. (Irvine E. Ungerman, Manuel Grabel, and William Leiter, Tulsa, Okl., with him on the brief) for appellants.

Loyd Benefield, Oklahoma City, Okl., (Boone & Ellison & Smith, Tulsa, Okl., Arthur M. Wisehart and Vance Morgan, New York City, with him on the brief) for appellee.

Before MURRAH, Chief Judge, SETH, Circuit Judge and CHRISTENSEN, District Judge.

CHRISTENSEN, District Judge.

The appellant Unions, plaintiffs below, brought this action against American Airlines seeking injunctive and other relief on the contention that through mass disciplinary actions the Airlines had effectually destroyed the efficacy of the administrative system for the resolution of grievances and thereby violated that provision of the Railway Labor Act which requires carriers to exert all reasonable efforts to settle disputes in order to prevent the interruption of commerce. 45 U.S.C.A. § 152. From an order dismissing the action the appellants have prosecuted this appeal.

In 1936, Congress applied the Railway Labor Act to the air transportation industry. 49 Stat. 1189, 45 U.S.C.A. §§ 181-188. But instead of extending the jurisdiction of the National Railroad Adjustment Board, 45 U.S.C.A. § 153, to include airline disputes, Congress provided for separate boards of adjustment. Until a national board for the airlines industry was established, Congress required the parties to collective bargaining agreements in that industry to form and to utilize system, group or regional boards of adjustment for the purpose of adjusting and deciding disputes between them. 45 U.S.C. §§ 184, 185. See International Ass'n of Machinists v. Central Airlines, 372 U.S. 682, 83 S.Ct. 956, 10 L.Ed.2d 67 (1963). Such procedure as thus encouraged and structured became the subject of bargaining for future contracts. Under the Act as amended in 1966, 80 Stat. 208-209, 45 U.S.C.A. § 153 (Supp.1969), the orders of a System Board of Adjustment to which grievances have been submitted under a collective bargaining agreement are explicitly final and binding upon both parties to a dispute and are enforceable in district courts.

The intended function of the Systems Board of Adjustment is to resolve minor disputes, i.e., disputes over the interpretation and application of existing contracts, as opposed to major disputes, i.e., those involving a negotiation of contracts or an alteration in them. See Machinists v. Central Airlines, supra, at 686, 83 S.Ct. 956. Under ordinary circumstances, it is settled that at least in non-discharge cases without the exhaustion of administrative remedies before system boards of adjustment the courts have no jurisdiction to entertain suits for the settlement of "minor disputes" in the airline industry. Trans-continental & Western Air, Inc. v. Koppal, 345 U.S. 653, 73 S.Ct. 906, 97 L.Ed. 1325 (1953), in light of Machinists, supra; Crusen v. United Airlines, Inc., 239 F.2d 863 (10th Cir. 1956), affirming 141 F.Supp. 347 (D.Colo.1956); Arnold v. United Airlines, Inc., 296 F.2d 191 (7th Cir.1961); Bower v. Eastern Airlines, 214 F.2d 623 (3d Cir.), cert. denied, 348 U.S. 871, 75 S.Ct. 107, 99 L. Ed. 685 (1954); Dominguez v. National Airlines Inc., 279 F.Supp. 392 (S.D.N. Y.1968). Cf. Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965); Slocum v. Delaware, Lackawanna & Western R.R., 339 U.S. 239, 70 S.Ct. 577, 94 L.Ed. 795 (1954); Pennsylvania R.R. v. Day, 360 U.S. 548, 79 S.Ct. 1322, 3 L.Ed.2d 1422 (1959); Switchmen's Union v. Ogden Union Ry. & Depot Co., 209 F.2d 419 (10th Cir.), cert. denied, 347 U.S. 989, 74 S.Ct. 852, 98 L.Ed. 1123 (1954).

The trial court's somewhat precipitate application of this general rule to plaintiff's complaint confronts us with procedural and record obstacles to affirmance which almost but not quite obscure the essential rightness of the judgment under review.

The complaint asserts jurisdiction under 28 U.S.C.A. §§ 1331, 1332 and 1337, and 29 U.S.C.A. § 185 and, among other things, alleges in substance as follows: Plaintiff acts as bargaining agent and representative for the employees of the defendant. Two contracts are presently in force and effect, one covering the airline mechanic, plant maintenance, fleet service and ground service employees, and the other covering the stock clerks and lead stock clerks employees, both effective September 29, 1966. For a period of time in excess of one year defendant American has misused and arbitrarily refused to comply with the Act and the contracts between the parties, Article 33(a) of which states:

"(a) It is the intent of the parties to this agreement that the procedures set forth herein shall serve as a means of feasible settlement of all disputes that may arise between them * * *"

American has failed to resolve in good faith grievances presented to the company and has forced an excessive number of grievances to be processed through the System General Board of Adjustment. On or about January 4, 1968, the defendant American issued disciplinary action against more than 3,000 employees at the American Airlines Maintenance Depot in Tulsa, Oklahoma. This disciplinary action was discriminatory, improper and deliberately aimed at rendering the grievance and arbitration procedure a nullity, and was in no way consistent with the improper conduct alleged to have precipitated the disciplinary action. Defendant knew that the System General Board of Adjustment, which processes all grievances to a final conclusion, can only handle approximately 60 cases a year from the maintenance depot in Tulsa. By filing the disciplinary actions in a discriminatory and arbitrary manner, it forced the Union under the Act to file grievances. The company thereby will effectively preclude use of the grievance and arbitration machinery under the Act for a period exceeding six years. The complaint does not set out or further refer to the contract between the parties, but presumably the agreement provides for a resolution of grievances through the System General Board of Adjustment.

Upon the application of the Unions a summons issued forthwith, together with an order to show cause why a preliminary injunction should not be granted. On February 14, 1968, the Airlines filed with its verified answer a motion to dismiss the action. The grounds stated were lack of jurisdiction in that plaintiffs (appellants) had failed to exhaust their administrative remedies and that simultaneously with the filing of the action they had elected to submit their dispute through the established grievance procedures pursuant to Article 29(d) of the Collective Bargaining Agreement between the parties, and that such submission constituted a binding election of remedies. The motion was accompanied by copies of correspondence which allegedly documented the claimed submission of the grievances. It was further asserted as a ground for the motion that the same subject matter involved in plaintiffs' complaint was incorporated in an answer and response filed by the same plaintiffs in the case of American Airlines, Inc., a corporation v. Transport Workers Union of America, et al., case number 67-223 Civil in the United States District Court for the Northern District of Oklahoma, and thus constituted a compulsory counterclaim in that case under Rule 13(a) of the Federal Rules of Civil Procedure.

The meager record of the hearing on this motion is contained in a minute sheet covering proceedings before the court on February 15, 1968.

"February 15, 1968 Case called for hearing on order for defendant to show cause. Plaintiff represented by Maynard I. Ungerman. Defendant represented by Loyd Benefield. Statements made. It is ordered by the court that in regard to this order, court holds that this action pending shall be stayed until plaintiff\'s counsel has time, within 10 days, to file with permission of the court (Judge Daugherty) a counterclaim incorporating those matters of this action into a companion case with 67-C-223. (Judge Daughterty). The court finds under Rule 13E, 68-C-18 is properly a counterclaim. (Allen E. Barrow-Judge)."

The matter was presented to Judge Daugherty in the Northern District of Oklahoma who held that the Union's claim was not a compulsory counterclaim in the action before him and accordingly denied leave to plead it as such there. American Airlines, Inc. v. Transport Workers Union, 44 F.R.D. 236 (N.D. Okla.1968).

On March 26, 1968, the defendant filed an amended motion to dismiss. The grounds relied upon were precisely the same as stated in the initial motion except the contention that the complaint should have been pleaded as a compulsory counterclaim in the case before Judge Daugherty was eliminated and copies of supporting affidavits of Fred W. Frost, Director of Employee Relations-Ground for American Airlines, Inc., and John G. Deater, Chairman of the System Board of Adjustment were added. Mr. Frost's affidavit added little to what previously was before the court but did indicate contrary to the plaintiffs' allegations that the company had attempted and was attempting in good faith to amicably settle the difficulties with its employees and that "American Airlines has at all times stood ready to cooperate in expediting to the utmost the disposition of the grievances involved herein." Mr. Deater's affidavit asserted that under the Board's docket of cases the grievances in question could be scheduled for hearing within fifteen days, that it had been the Union's practice to file group grievances, that, in fact, the Union already had filed such a group grievance relating to the disciplinary action in question which could be brought on for hearing...