U.S. Airline Pilots Ass'n v. U.S. Airways, Inc.

• Decision Date: 12 June 2014
• Docket Number: Civil Action No. 2:14–cv–7.
• Citation: 25 F.Supp.3d 758
• Parties: US AIRLINE PILOTS ASSOCIATION, Plaintiff, v. U.S. AIRWAYS, INC., Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

25 F.Supp.3d 758

US AIRLINE PILOTS ASSOCIATION, Plaintiff

v.U.S. AIRWAYS, INC., Defendant.

Civil Action No. 2:14–cv–7.

United States District Court, W.D. Pennsylvania.

Signed June 12, 2014.

Steven Petrikis, Kenneth S. Kornacki, Metz Lewis Brodman Must O'Keefe, Pittsburgh, PA, Plaintiff.

Jeffrey Ivan Pasek, Cozen & O'Connor, Philadelphia, PA, Mark W. Robertson, Natasha L. Waglow, O'Melveny & Myers LLP, New York, NY, Robert A. Siegel, O'Melveny & Myers LLP, Los Angeles, CA, for Defendant.

MEMORANDUM AND ORDER

ROBERT C. MITCHELL, United States Magistrate Judge.

Presently before the Court is a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), filed by the Defendant, U.S. Airways, Inc. (“US Airways”). For the reasons that follow, the motion will be granted.

Plaintiff, U.S. Airline Pilots Association (“USAPA”), brings this action seeking to vacate an arbitration award issued pursuant to the Railway Labor Act, 45 U.S.C. §§ 151 –88 (“RLA”) on the grounds that the arbitrator ignored the clear and unambiguous language in the parties' agreements and also on the grounds that the arbitrator did not comply with the procedural requirements of the RLA. Defendant contends that neither allegation states a claim upon which relief may be granted.

Facts

US Airways and the Air Line Pilots Association, International (“ALPA”), the certified collective bargaining representative of U.S. Airways Pilots (“the Pilots”), signed a Collective Bargaining Agreement (the “CBA”) with an effective date of January 1, 1998, that related to rates of pay, rules, and working conditions. (Compl. ¶ 7.)¹ Specifically, Section 3 of the CBA controlled the Pilots' hourly rates of pay. (Id. )

The Bargaining History Behind the 3% Pay Raise

In 2002, U.S. Airways implemented a restructuring program to decrease operating costs, including cuts to the Pilots' pay rates. ALPA and the Pilots negotiated in good faith over U.S. Airways' request for concessions, and the parties signed a Restructuring Agreement with an effective date of July 1, 2002. (Compl. ¶ 9 & Ex. A.) Regarding the Pilots' rates of pay, the Restructuring Agreement stated, in pertinent part:

Revisions to Hourly Pay Rates: The hourly pay rates contained in Section 3 of the [CBA] will be revised as follows:

• The hourly pay rates in effect on June 30, 2002 will be known as the Book Rates. The actual rates will each be reduced on the Effective Date to the rates that were in effect on April 30, 2001. The parity review scheduled for May 1, 2003, and Letter of Agreement 47, as amended, will be canceled.

• Eliminate the LOA # 61 1% lump sum increase scheduled for 2003.

• Hourly pay rates will be increased by a compounded 1% effective on May 1, 2003, May 1, 2004, May 1, 2005, and May 1, 2006, and further increased by a compounded 2% effective on May 1, 2007 and May 1, 2008, and 3% on May 1 of the succeeding status quo period (i.e., the period past the Agreement amendable date).

(Compl. ¶ 11 & Ex. A at 1.) The Restructuring Agreement extended the amendable date of the CBA (i.e., the date the CBA would next be subject to further negotiations) to December 31, 2008. (Compl. ¶ 10.)

This agreement reduced the then current pilot pay rates to rates that were in effect one year prior, cancelled a scheduled parity review, and eliminated a 1% lump sum increase due to the Pilots. In exchange, U.S. Airways agreed to a series of annual compounded percentage rate increases effective May 1, 2003, through the succeeding status quo period. (Compl. ¶ 12.) The negotiated increases expressly included a 3% increase to pilot pay rates effective May 1 of the succeeding year past the amendable date, which at the time was December 31, 2008. (Compl. ¶ 13.)

On August 11, 2002, U.S. Airways filed for voluntary Chapter 11 bankruptcy. (Compl. ¶ 14.) Plaintiff alleges that U.S. Airways used the bankruptcy to extract severe financial concessions from the Pilots in the form of a Letter of Agreement titled “Supplementary Cost Reductions” (“LOA 84”). (Compl. ¶¶ 14–15 & Ex. B.) LOA 84 amended the Restructuring Agreement effective January 1, 2003, and reduced the Pilots' rate of pay, yet again, as follows:

HOURLY RATES OF PAY: The actual hourly rates of pay to be paid to all pilots under the [CBA as amended by the Restructuring Agreement] will in each year be less than or greater than the actual hourly rates of pay specified under the Restructuring Agreement (i.e., the actual hourly rates as increased each May 1) by the following percentage amounts. These percentages are not cumulative but are in each instance an adjustment of the hourly rate of pay that would otherwise have been paid under the Restructuring Agreement in the applicable pay period. Hence, in each year there will be two actual hourly rates of pay applicable to each position: the rate in effect from January 1 through April 30 and the rate in effect from May 1 through December 31.

YEAR	PERCENTAGE CHANGE TO APPLICABLE RESTRUCTURING AGREEMENT RATES OF PAY
2003	(8.0%)
2004	(6.5%)
2005	(5.0%)
2006	(0.0%) No reduction
2007	2.0%
2008	2.0%
2009 & beyond	As per Restructuring Agreement

(Compl. ¶ 16 & Ex. B at 1–2.)

LOA 84 required U.S. Airways to increase Pilot pay rates by 2.0% for the years 2007 and 2008. For the years “2009 & beyond,” U.S. Airways agreed that the percentage change to Pilots' rates of pay would be “as per Restructuring Agreement.” Plaintiff maintains that the Restructuring Agreement expressly included a 3% increase to pilot pay rates effective May 1 of the succeeding year past the CBA's amendable date, and that LOA 84 preserved that scheduled increase. (Compl. ¶ 18.) It notes that LOA 84 provides that “[o]ther than as specifically modified in these documents all terms and conditions of the ALPA–US Airways Collective Bargaining Agreement effective January 1, 1998 as amended by the Restructuring Agreement ... shall remain in full force and effect.” (Compl. ¶ 19 & Ex. B at L84–2.)

On September 9, 2004, U.S. Airways filed for Chapter 11 bankruptcy for the second time in two years, through which it extracted, yet again, additional financial concessions from the Pilots, including more concessions to pay rates. (Compl. ¶ 20.) On October 21, 2004, U.S. Airways and ALPA signed a Letter of Agreement titled “Transformation Plan” (“LOA 93”). (Compl. ¶ 21 & Ex. C.) LOA 93 extended the CBA's amendable date from December 31, 2008, to December 31, 2009, and again amended the Pilots' rate of pay as follows:

Revisions to Hourly Pay Rates: The rates of pay specified in Section 3 of the [CBA], as modified by the Restructuring Agreement, will be revised as follows:

1. Freeze current rates effective 5/01/04 through 12/31/09.

2. Reduce rates as frozen by 18.0%

3. Reduce International pay override, as stated in Section 3(F) and Section 18(C), by 18% for transoceanic trips; eliminate international override for non-transoceanic trips.

4. Pay all flying at day rate.

(Compl. ¶¶ 22–23 & Ex. C at 4.) LOA 93 froze Pilots' pay rates only through December, 31, 2009. (Compl. ¶ 24.) Plaintiff maintains that LOA 93 did not state in any manner, or even suggest, that the scheduled 3% raise was removed from the CBA. Despite these additional concessions, LOA 93 made clear that reductions in pay rates were limited to those terms expressly included in LOA 93, and that all other terms of the CBA as amended remained in full force and effect. LOA 93 provides:

NOW THEREFORE the parties mutually agree to amend the [CBA], Restructuring Agreement and the subsequent Letters of Agreement as stated in the Transformation Plan Term Sheet, below. Other than as specifically modified in these documents, all terms and conditions of the ALPA–US AIRWAYS Collective Bargaining Agreement effective January 1, 1998 as amended shall remain in full force and effect.

(Compl. ¶ 25 & Ex. C at 2.) Plaintiff asserts that the words could not be clearer in meaning. It further contends that the parties reiterated this point in the section immediately preceding the revisions to hourly pay rates, as LOA 93 provides that:

Other terms of 1998 Agreement, as amended: Other than as specifically modified in these documents, all terms and conditions of the ALPA–US AIRWAYS Collective Bargaining Agreement effective January 1, 1998 as amended shall remain in full force and effect.

(Compl. Ex. C at 4.) Plaintiff argues that LOA 93 did not amend or even address the 3% increase to pilot pay rates effective May 1 of the succeeding year past the CBA's amendable date, making that scheduled raise one of the many “other terms” of the CBA, as amended, that “remain[ed] in full force and effect.” (Compl. ¶ 28.) Plaintiff argues that the parties set forth their agreement in the language of the agreements themselves.

Arbitration of the Restoration Issue

Through a letter dated February 27, 2009, U.S. Airways notified USAPA² of its position that the pay rates in effect as of December 31, 2009, would remain in effect for Pilots as of January 1, 2010. (Compl. ¶ 30.) On June 16, 2009, USAPA filed Grievance No. BPR 09–06–02 (the “Grievance”) whereby USAPA claimed that the CBA as amended required the Pilots' pay rates to revert to what the rates would have been effective January 1, 2010, and not the then current significantly reduced rates then in effect (the “Restoration Issue”). (Compl. ¶ 31.)

USAPA ultimately submitted the Grievance to a System Board of Adjustment (“SBA”) on September 9, 2009.³ (Compl. ¶ 34.) USAPA defined the issue before the SBA as:

Whether [US Airways] misinterpreted and misapplied Section 3 of [the CBA], Letters of Agreement 84 and 93, the July 2002 Restructuring Agreement and all other related sections of the Agreement and Letters of Agreement, as well as past practice, when they stated that they do not intend to revert East rates of pay back to the status quo (as provided in the Restructuring Agreement of 2002 and LOA 84) after the last pay modification provided for in LOA 93 ceases to have effect after 12/31/09.

(Compl. ¶ 34 & Ex. E.)

Thus, Plaintiff indicates that the submitted...