LAUREL BEELER, Magistrate Judge.
The court amends its March 7, 2014 order at ECF No. 68 as follows. Footnote 10 omitted the word "not" as shown by the bolded area below. The amended footnote is set forth in its entirety here and is corrected below in the text of the amended order.
Plaintiff Mario De Vera, who is representing himself, sued his former employer, United Airlines, Inc., alleging breach of contract and breach of fiduciary duty after United modified the travel benefits it provided him under the terms of an "early out" employee buyout program and because United failed to disclose the fact that he would not be considered a retiree if he accepted the buyout. See Complaint, ECF No. 1 at 9; Opp'n, ECF No. 63. United moved for summary judgment. See Motion, ECF No. 52. For the reasons discussed below, the court GRANTS United's summary judgment motion.
Mr. De Vera worked as a mechanic for United from April 2, 1990 to October 1, 2008. JSOF #1; see De Vera Decl. ¶ 1, ECF No. 64. Mr. De Vera was a member of and represented by a union throughout his employment with United. See JSOF #2.
During Mr. De Vera's employment, United maintained a travel pass program under which it provided free or reduced cost travel on a space available basis to employees and retirees. JSOF #19. According to Mr. De Vera, when he was hired, he was advised that when he retired he would receive unlimited "BP8A passes"
Beginning in the mid-1990's, United distributed its travel pass policy to employees in hard copy in a manual known as "Series 10," which contained United's "regulations," as follows:
See JSOF #20; Agenbroad Decl. Ex. I (United Airlines Series 10 "Purpose and Scope" dated September 1, 1996).
According to United, in 2004 and 2006, it distributed a series of brochures to employees summarizing its travel pass policies. JSOF #22; Agenbroad Decl. Exs. J-L.
During the course of Mr. De Vera's employment, United changed the cost of space available travel passes from time to time, and he did not question its right to do that. JSOF #23. Mr. De Vera explains that his experience was that United changed pass travel fees after the September 11, 2001 terrorist attacks, which was consistent with the force majeure clause in the "Company Regulations 10-3 Pass Travel." Id.
When he became a Union member, Mr. De Vera received a copy of the collective bargaining agreement ("CBA") between United and the Union. JSOF #2. Mr. De Vera received copies of subsequent CBAs as they were negotiated. JSOF #3.
The CBA between the Union and United that was in effect from 2005 to 2009 (the "CBA") contains several provisions relevant to the instant dispute. See CBA, Agenbroad Decl. Ex. D, ECF No. 55-3. Article XVI of the CBA governs United's travel pass program for employees and retirees. See JSOF #4. In relevant part, Article XVI provides the following:
See JSOF #4; CBA, Art. XVI, Agenbroad Decl. Ex. D, ECF No. 55-3 at 72. Mr. De Vera claims that he was not aware of this provision. See JSOF #4.
The CBA also contains provisions regarding retirement benefits. See JSOF #5. Article XXIV.E, entitled "Retiree Medical Benefits applicable to employees who retire on or after July 1, 2003," provides in relevant part that "[a]n employee (and his eligible dependents and survivors) will be eligible for retiree medical benefits if the employee, at retirement" is:
See id.; CBA, Art. XXIV.E.(1). Similarly, Article XXIV.F., entitled "Retiree Life Benefits applicable to employees who retire on or after July 1, 2003" provides that "[a]n employee (and his eligible dependents and survivors) will be eligible for retiree life benefits if the employee, at retirement" is "[a]ge 55 or older with ten (10) or more years of service, and . . . [r]etires from active status of illness leave of absence." CBA, Art. XXIV.F.(1).
Around July 2008, United offered eligible employees, including Mr. De Vera, the opportunity to participate in an "Early Out Program." JSOF #6. Under the terms of the Early Out Program, eligible employees could separate voluntarily from United in exchange for severance payments and full retiree pass travel benefits. JSOF #6-7.
According to Mr. De Vera, United offered an "Early Out Program" when it needed to downsize its workforce. De Vera Decl. ¶ 2. He decided to help out when the company offered benefits and severance pay in exchange for his leaving his job. Id. Mr. De Vera states that when he "took the early out in 2008, there were rumors that we were going to be bridged into retirement at age fifty [five]
Mr. De Vera testified at his deposition that in or around July or August 2008, he received at least three documents regarding the terms and conditions of the Early Out Program. JSOF #6.
First, Mr. De Vera testified that he received a document entitled "Early Out Program for Mechanics and Related Employees." Id. This document begins as follows: "United Airlines has been in discussions with the Union concerning viable furlough mitigation programs. The Company is offering IBT-represented mechanics and related employees the Early Out Program described below." Agenbroad Decl. Ex. G, ECF No. 55-5 at 7. Under the heading "Benefits of the Early Out Program," the document states:
Id.; JSOF #7-8.
Second, Mr. De Vera testified that he received a document entitled "Mechanic and Related Employee (IBT Represented) Early Out Program." JSOF #6. This document consists entirely of a chart that summarizes eligibility and benefits for two categories of Early Out Program participants: "Retirement Eligible with Early Out" and "Early Out Only." JSOF #10. The contents of the chart are reproduced below:
Complaint, ECF No. 1 at 11; Agenbroad Decl. Ex. F.
Third, Mr. De Vera stated that he received a document entitled "Mechanic and Related Employees Early Out Program, Frequently Asked Questions" with "Rev 07/2008" in the footer (the "July FAQ"). JSOF #6; see De Vera Dep. 30:23-31:17, Agenbroad Decl. Ex. C, ECF No. 55-2 at 17-18 (marking identified document as De Vera Depo. Ex. 6); Agenbroad Decl. ¶ 11, Ex. H (attaching De Vera Depo. Ex. 6, which bears the "Rev 07/2008" footer). The July FAQ provides answers to a number of questions, including the following:
Agenbroad Decl. Ex. H, ECF No. 55-5 at 10-13. The July FAQ also provided telephone numbers for a "Reduction in Force Helpline" that could provide additional information on the Early Out Program. Id. at 13.
Mr. De Vera attaches another version of the Early Out Program FAQ that appears to be dated "10/2008" (the "October FAQ"). Opp'n Ex. C, ECF No. 63 at 15. The July and October FAQs are substantially similar, though the following questions differ from those quoted above:
Id. at 17. In addition, the October FAQ included the following, which was not in the July FAQ:
Id. at 18.
In or about July 2008, Mr. De Vera applied to participate in the Early Out program. JSOF #13. Mr. De Vera rescinded his initial application but later reapplied and was accepted to participate in the Early Out Program, effective October 2008. JSOF #14. Mr. De Vera was 47 years old at the time. JSOF #15. Mr. De Vera accepted $9,250 in severance pay from United. JSOF #16.
With regard to travel passes, Mr. De Vera understood that he "would continue to have the same benefits as the [active employees]. In regards to the companion passes, [he] would receive an allotment of 24 passes per year to delegate to companions." De Vera Decl. ¶ 6.
With regard to other retirement benefits, when Mr. De Vera accepted the Early Out offer, there were rumors that those in the Early Out Program "were going to be bridged into retirement at age fifty [five] and that seem to be the case after [he] left the company as [he] was called an early out/retiree." De Vera Decl. ¶ 3. Mr. De Vera testified that he understands that his "pension plan was taken over by the PBGC" and that he has no "dispute over the retirement benefit to which [he] will be entitled under his pension plan." JSOF #17. "The company never denied when [Mr. De Vera] inquired by phone if [he] was going to be a retiree at 55 and asked for documents to that effect." De Vera Decl. ¶ 4. Nor did the company indicate that he would be an employee receiving retiree pass travel only. Id. ¶ 7.
On October 1, 2010, as a result of the merger between United and Continental airlines, United created a uniform pass travel policy for employees and retirees of both airlines. JSOF #24. Under the new combined program, United retirees receive vacation passes that provide them and their designated family members or friends traveling with them the highest boarding priority based on years of service for eight flights each year. JSOF #25. Mr. De Vera states that before his flight benefits were changed, he had unlimited passes that were equivalent to the vacation passes. See JSOF #25.
Mr. De Vera testified at his deposition that he has attempted to book flights using his travel pass benefits with United fewer than five times since the program was changed in March 2012. JSOF #28. Mr. De Vera was unable to travel on his preferred flight option, allegedly due to his lower boarding priority on only one occasion. JSOF #29. In that case, Mr. De Vera was able to board an alternative flight the next day. Id. Mr. De Vera also testified that on one occasion, he used a vacation pass, which gave him the highest boarding priority, to travel to Hawaii and he has not used all of his vacation passes for the prior year. JSOF #30. On occasions when Mr. De Vera's daughter was unable to board a flight to or from LAX allegedly due to Mr. De Vera's lower boarding priority, she was able to board another flight the same or the next day. JSOF #31.
Mr. De Vera never would have "taken the early out had [United] made [him] aware of material facts that told [him] they could amend, modify or delete pass travel at any time, which they have after merging with Continental by lowering [his] boarding priority and deleting [his] companion passes." De Vera Decl. ¶ 9.
On or after March 2012, Mr. De Vera was denied entry to the United facility where he formerly worked because of his status as a non-retiree. JSOF #33. Prior to March 2012, Mr. De Vera occasionally made social visits to the facility after he accepted the Early Out Program offer. JSOF #33. "After the merger, [Mr. De Vera] was told by [United] that he is not a retiree and that he was a retiree when it comes to flight benefits only. Prior to the merger, he was told he was an Early Out/Retiree. Recently, he found out he is considered a retiree per the company. It is this back and forth you are a retiree and you are not a retiree that's confusing the plaintiff." JSOF #33.
Mr. De Vera filed his complaint in state court on September 28, 2012, and served United on October 3, 2012. See Complaint, ECF No. 1 at 6, 9; Notice of Removal ¶ 2, ECF No. 1 at 2. United filed its answer on November 1, 2012, and removed the action to this court the next day on the basis of diversity jurisdiction. See ECF No. 1 at 19; Notice of Removal ¶¶ 7-11. The initial case management here was on February 28, 2013, see ECF No. 20, and the court issued its pretrial order on March 4, 2013 with deadlines that included a fact discovery completion of December 16, 2013 (later extended by the court pursuant to the parties' stipulation to December 23, 2013) and March 6, 2014 as the last hearing date for dispositive motions. See ECF No. 21 at 2; ECF No. 51. On April 22, 2013, the court issued a notice to Mr. De Vera regarding legal resources available to assist him. See ECF No. 25. The notice explained the legal standards applicable on summary judgment motions, provided access to the Northern District of California's Handbook for Litigants Without a Lawyer, and included information about the Bar Association of San Francisco Volunteer Legal Services Program's Legal Help Center. Id. The court had several case management and discovery conferences with the parties. See, e.g., ECF Nos. 26, 32, 43.
United filed its summary judgment motion on December 30, 2013. See ECF Nos. 52-58. On January 6, 2014, the court issued another notice informing Mr. De Vera about the legal help desk and the legal standards for summary judgment motions. See ECF No. 59. The notice included a hyperlink to the district court's Handbook for Litigants Without a Lawyer. Id. The court also e-mailed a copy of the notice and order to Mr. De Vera. See ECF No. 60. On January 14, 2014, the court granted Mr. De Vera's motion for an extension of time to file his summary judgment opposition papers. See ECF No. 62. Mr. De Vera filed his opposition on January 21, 2014 and United filed a timely reply on January 28. See Opp'n, ECF No. 63; Reply, ECF No. 65.
The court held a hearing on the summary judgment motion on March 6, 2014. See 3/6/14 Minute Order, ECF No. 67.
United moves for summary judgment on Mr. De Vera claims for breach of contract and breach of fiduciary duty. See Motion, ECF No. 52.
A court should grant a motion for judgment if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Material facts are those that may affect the outcome of the case. Anderson, 477 U.S. at 248. A dispute about a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Id. at 248-49.
The party moving for summary judgment has the initial burden of informing the court of the basis for the motion and identifying those portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To meet its burden, "the moving party must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Companies, Inc., 210 F.3d 1099, 1102 (9th Cir. 2000); see Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) ("When the nonmoving party has the burden of proof at trial, the moving party need only point out `that there is an absence of evidence to support the nonmoving party's case.'") (quoting Celotex, 477 U.S. at 325).
If the moving party meets its initial burden, the burden shifts to the non-moving party, which must go beyond the pleadings and submit admissible evidence supporting its claims or defenses and showing a genuine issue for trial. See Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 324; Nissan Fire, 210 F.3d at 1103; Devereaux, 263 F.3d at 1076. If the non-moving party does not produce evidence to show a genuine issue of material fact, the moving party is entitled to summary judgment. See Celotex, 477 U.S. at 323.
In ruling on a motion for summary judgment, inferences drawn from the underlying facts are viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
United argues that Mr. De Vera's claims are preempted by the Railway Labor Act ("RLA"), 44 Stat. 577, as amended, 45 U.S.C. § 151 et seq., because they would require the court to interpret the CBA. Motion at 16. As the party asserting preemption, United must show that the RLA applies. See Jimeno v. Mobil Oil Corp., 66 F.3d 1514, 1526 n.6 (9th Cir. 1995) (party asserting preemption defense bears the burden of proof).
The Railway Labor Act governs labor-management relations in the railroad and airline industries. See 45 U.S.C. §§ 181-88. The RLA also applies to claims brought by a covered carrier's retirees and former employees so long as their claims arise from a right that accrued during their employment with the carrier. See Air Line Pilots Ass'n, Intern. v. Alaska Airlines, Inc., 735 F.2d 328, 328-29 (9th Cir. 1984). Congress's purpose in passing the RLA was "to promote stability in labor-management relations by providing a comprehensive framework for resolving labor disputes." Hawaiian Airlines v. Norris, 512 U.S. 246, 252 (1994). To this end, the RLA created a "mandatory arbitral mechanism for `prompt and orderly settlement' of two classes of disputes [-]" major and minor. Id. (quoting 45 U.S.C. § 151a).
"Major" disputes relate to the formation of collective bargaining agreements, or efforts to obtain them. Id. at 256 (citing Consol. Rail Corp. (Conrail) v. Ry. Labor Executives' Ass'n, 491 U.S. 299, 305 (1989)). "Major disputes must be settled through an extended bargaining process," though federal district courts have jurisdiction to issue injunctions in aid of the bargaining process. Ass'n of Flight Attendants v. Mesa Air Grp., Inc., 567 F.3d 1043, 1047 (9th Cir. 2009).
"Minor disputes, on the other hand, generally result from attempts to enforce existing contractual obligations and rights," id., and involve "interpretation or application of existing labor agreements." Norris, 512 U.S. at 256. A minor dispute cannot be filed initially in federal court. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1245 (9th Cir. 2009). "[T]he RLA instead requires submission of such disputes to internal dispute-resolution processes and then to a division of the National Adjustment Board or an arbitration board selected by the parties." Id. (citing 45 U.S.C. §§ 153, 184). "Only after the grievance has been heard by the adjustment board does exclusive jurisdiction rest with the federal court." Id. (quoting Schroeder v. Trans World Airlines, Inc., 702 F.2d 189, 192 (9th Cir. 1983) (alterations omitted).
That said, the RLA does not preempt "causes of action to enforce rights that are independent of the CBA." Hawaiian Airlines, 512 U.S. at 256. When "the meaning of contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished." Id. at 261, n. 8 (quoting Livadas v. Bradshaw, 512 U.S. 107, 124 (1994)). As the Court explained:
Id. at 262 (quoting and adopting standard of Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 408-10 (1988)). In such cases, the employees are free to bring their state law claims in the appropriate court. Id. at 266.
Mr. De Vera alleges a breach of contract in his complaint. See ECF No. 1 at 9. He now categories it as a breach of an implied contract, claiming that he and United entered into an implied contract under which he would accept the terms of the early out program, and United would provide Mr. De Vera "the same boarding priority, upon his separation from United, as active employees." JSOF #27. This implied contract came from the documents he received relating to the "early out" program. Id. Mr. De Vera confirmed this at his deposition:
De Vera Dep. 88:5-89:15, ECF No. 55-2 at 49-50. As set forth in the Statement, these documents stated that "participants in the Early Out Program are entitled to retiree pass travel benefits on the same terms and subject to the same conditions, present and future, as retirees." See JSOF #7-8; Agenbroad Decl. Ex. G, ECF No. 55-5 at 7. Mr. De Vera also states that the travel benefits never changed during his entire career with United so he never expected it to be changed to his disadvantage in the future. See JSOF #8.
United argues that the contract claim is preempted because it is a minor dispute that would require the court to interpret the CBA. Motion at 18. Mr. De Vera counters that the contract at issue is his early out agreement with United, the flight benefit in that agreement is not part of the collective bargaining agreement, and it thus is not preempted. See Opp'n at 9. The court concludes that his contract claims are preempted because they would require the court to evaluate the provisions in the CBA regarding eligibility for the travel benefits. Mr. De Vera's argument about his eligibility for retirement travel benefits is premised on his argument that United improperly changed benefits for retirees, which thus affected his rights to the same travel benefit as part of the "Early Out" program. Resolution of that issue would turn on whether the CBA permitted the changes for retirees and the CBA provisions regarding travel pass benefits. See JSOF #4.
Ertle v. Contintental Airlines, Inc., 136 F.3d 690, 694 (10th Cir. 1998) supports this conclusion. There, former union-represented Continental Airlines flight attendants sued for breach of their early-out agreements that included flight benefits after Contintental subsequently cut back flight service to Denver significantly. Id. Continental's alleged promise under the agreements was that it would "maintain a `roughly constant' level of service to and from Denver." Id. The alleged breach was that the service cutbacks deprived them of the benefit of their bargains. Id. The court suggested that a contract that could be resolved without interpretation or application of the CBA would not be preempted by the RLA. Id. It concluded ultimately that the early out agreements were ambiguous about the level of service Continental promised to provide and that the RLA did preempt the contract claims because the court would have to interpret CBA provisions addressing Continental's right to alter the level of service provided. Id.
Thus, the RLA preempts the dispute here, which must be submitted through the CBA's grievance procedures and adjudicated under the RLA's mechanisms, meaning, before the System Board.
Even if the parties' interaction here was not subject to the RLA, the court would not find any breach of a contract or an implied contract that the travel benefits could not be changed.
Mr. De Vera makes the argument that United "was sued and lost the verdict of pass travel benefit in lawsuit that began in 1996. In that verdict, the jury awarded $3.3 million in compensation for losing the flight benefit to six former employees." Opp'n at 8 (citation omitted). The case he cites is Osband v. United Airlines, Inc., 981 P.2d 616 (Colo. App. 1998), which addresses preemption only in the context of the Federal Aviation Administration Authorization Act, 49 U.S.C. § 41713(b)(1) (1994), and concerns "substantial changes" to employee travel benefits programs in 1994.
Mr. De Vera also claims that United failed to disclose material facts concerning the 2008 Early Out program, specifically, its right to amend the flight benefits and how he would be treated as an "early out" as opposed to a retiree. Opposition at 6.
Under California law, "[t]he elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach." Knox v. Dean, 205 Cal.App.4th 417, 432 (2012) (quoting City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 68 Cal.App.4th 445, 483 (1988)). California recognizes a similar tort of constructive fraud, which permits a plaintiff to recover for "any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of anyone claiming under him." Cal. Civ. Code § 1573.
"[B]efore a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law." City of Hope Nat. Med. Ctr. v. Genentech, Inc., 43 Cal.4th 375, 386 (2008); see Committee on Children's Television, Inc. v. General Foods Corp., 35 Cal.3d 197, 221 (1983) (refusing to recognize fiduciary relationship between commercial sellers and retail purchasers of breakfast cereals despite sellers' superior bargaining power and better access to information).
Mr. De Vera does not show the existence of a fiduciary or confidential relationship between him and United. For that reason, his claim fails.
For the reasons discussed, the court
This disposes of ECF No. 52.
