Filed: Feb. 03, 2004
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 2-3-2004 Intl Assn Machinists v. US Airways Inc Precedential or Non-Precedential: Precedential Docket No. 03-4169 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "Intl Assn Machinists v. US Airways Inc" (2004). 2004 Decisions. Paper 967. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/967 This decision is brought to you for free and ope
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 2-3-2004 Intl Assn Machinists v. US Airways Inc Precedential or Non-Precedential: Precedential Docket No. 03-4169 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "Intl Assn Machinists v. US Airways Inc" (2004). 2004 Decisions. Paper 967. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/967 This decision is brought to you for free and open..
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Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
2-3-2004
Intl Assn Machinists v. US Airways Inc
Precedential or Non-Precedential: Precedential
Docket No. 03-4169
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
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"Intl Assn Machinists v. US Airways Inc" (2004). 2004 Decisions. Paper 967.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/967
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PRECEDENTIAL Tom A. Jerman
Rachel A. Shapiro
UNITED STATES COURT OF Aparna B. Joshi
APPEALS O’Melveny & M eyers
FOR THE THIRD CIRCUIT 1625 Eye Street, N.W.
Washington, DC 20006
No. 03-4169
Robert A. Siegel (argued)
O’Melveny & M eyers
INTERNATIONAL ASSOCIATION OF 400 South Hope Street
MACHINISTS 15th Floor
AND AEROSPACE WORKERS; Los Angeles, CA 90071-2899
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE Sidney Zonn
WORKERS Littler Mendelson, P.C.
DISTRICT LODGE 141-M 625 Liberty Avenue
Dominion Tower, 26th Floor
v. Pittsburgh, PA 15222
US AIRWAYS, INC., Kristine G. Derewicz
Littler Mendelson, P.C.
Appellant 1601 Cherry Street
Three Parkway, Suite 1400
Philadelphia, PA 19102-1321
On Appeal from the United States
District Court Attorneys for Appellant
for the Western District of Pennsylvania
(D.C. Civ. No. 03-01496) Michael J. Healey
Honorable Robert J. Cindrich, Healey & Hornack
District Judge 429 Fourth Avenue
Law & Finance Building, 5th Floor
Pittsburgh, PA 15219
Argued January 12, 2004
Ira L. Gottlieb (argued)
BEFORE: BARRY, SMITH, and Robert A. Bush
GREENBERG, Circuit Judges Geffner & Bush
3500 West Olive Avenue
(Filed: February 3, 2004) Suite 1100
Burbank, CA 91505-4657
David Neigus the district court lacked jurisdiction to
9000 Machinists Place issue the preliminary injunction.
Upper Marlboro, MD 20772-2687
Attorneys for Appellees
I. BACKGROUND
A. Factual Background
OPINION OF THE COURT
The IAM is an unincorporated
labor organization that is the certified
GREENBERG, Circuit Judge. collective bargaining representative of
US Airways’ mechanics and related
This matter comes on on appeal personnel. District Lodge 141-M is the
from an order of the district court dated IAM’s negotiating arm. For more than
and entered on October 21, 2003, barring 50 years, the IAM and US Airways have
US Airways, Inc. (“US Airways” or the been parties to collective bargaining
“Company”) from using an outside agreements governing US Airways’
contractor to perform maintenance mechanics and related employees. On
overhauls called S-Checks, mandated by August 11, 2002, US Airways filed for
the Federal Aviation Administration Chapter 11 bankruptcy and implemented
(“FAA”), on the Company’s narrow body measures to reduce its operating costs.
Airbus aircraft. The district court These measures included renegotiating
concluded that the dispute between US the terms of its collective bargaining
Airways and the International agreements, rejecting certain aircraft
Association of Machinists and Aerospace leases, rejecting real property leases,
Workers (the “IAM”) over whether such reducing wages and benefits for its
subcontracting was permissible management and non-union employees,
constituted a major dispute under the and rejecting or renegotiating other
Railway Labor Act, 45 U.S.C. § 151 et agreements with its lessors, vendors, and
seq. (“RLA”). 1 For the reasons set forth suppliers.
below, we hold that the dispute is a
minor one under the RLA, and therefore 1. The S-Check Requirement
FAA guidelines require US
1 Airways to perform S-Checks on its
The Railway Labor Act has covered
narrow body Airbus aircraft every five
the airline industry since 1936. See
years. S-Checks are the most extensive
Independent Ass’n of Continental Pilots
type of scheduled maintenance checks,
v. Continental Airlines, 155 F.3d 685,
requiring a detailed inspection of the
689 (3d Cir. 1998).
2
aircraft and repair of any discrepancies described work,
on the airframe, components, and wherever performed, is
engines. US Airways’ first S-Check (on recognized as coming
an aircraft it acquired in 1998) became within the jurisdiction
due on October 15, 2003. US Airways of the [IAM], and is
had nine other S-Checks due by the end covered by this
of 2003 and seven others are due in Agreement: . . . all
September 2004. As of January 2005, S- work involved in
Checks will be required on an ongoing dismantling,
basis. overhauling, repairing,
fabricating, assembling,
US Airways emerged from welding, and erecting
bankruptcy on March 31, 2003. It claims all parts of airplanes,
that until that time it could not properly airplane engines,
arrange for the ten S-Checks that were avionics equipment,
due in 2003. At some point before electrical system,
October 6, 2003, US Airways told the heating system,
IAM that it may need to hire a vendor to hydraulic system, and
perform the S-Checks because it lacked machine tool work in
the necessary equipment and facilities to connection therewith . .
perform them itself. On October 6, 2003, ..
US Airways confirmed this need with the
IAM with regard to its first ten S- ....
Checks, but it said it would work with
the IAM to identify means by which the The duties of aircraft
remaining S-Checks could be performed cleaning, lavatory
in house. servicing, potable water
servicing, receipt and
2. The Collective Bargaining dispatch, ancillary
Agreement (“CBA”) duties associated with
receipt and dispatch,
a. The Scope Clause (Article and operation of ground
2(B)) power units may be
performed by
Article 2(B) of the CBA defines employees covered by
the scope of the work to be performed by this Agreement and/or
IAM-represented employees: other employees and
vendors as described in
The Company agrees Article 4 paragraphs J
that the following and N at those
3
locations/shifts where dispatch, including the
such covered ancillary duties
employees are not associated with receipt
staffed. Aircraft towing and dispatch, of
may be performed by Commuter Aircraft may
employees not covered be accomplished by
by this Agreement at employees not covered
those locations/shifts by the mechanic and
where such covered related agreement.
employees are not
staffed. It is not the JA 170; Appellees’ br. at 7.2 The parties
intent of this paragraph do not dispute that the scope language
to have non-Mechanical encompasses airframe heavy
and Related employees maintenance (“HMV”) work, which is
perform such work on the type of work an S-Check requires.
shifts where covered
employees are staffed There are two addenda to the
except as provided for CBA: (1) the “Letter of Clarification”
elsewhere in this (the “First Clarification”); and (2)
agreement. It is the “Clarification of Article 2(B)” (the
Company’s intent, “Second Clarification”).
however, to utilize all
its equipment and b. The First Clarification
facilities in performing
work in its own The First Clarification states that
organization. In the “Section (B) of said Article 2 is
event that a situation recognized by both parties as prohibiting
should develop the ‘farming out’ of the types of work
whereby the equipment specified in said Section (B).” JA 194.
and facility limitations
are not available or c. The Second Clarification
sufficient to perform
such work, the The Second Clarification states
Company will confer that:
with the Union in an
effort to reach an Relative to [the Scope
understanding with
respect to how the
problem is to be 2
References to “JA” refer to the joint
resolved. Receipt and
appendix filed in this court.
4
clause], it is agreed that, may subcontract the
within the limits major overhaul of
hereinafter specified, aircraft engines during
the following listed the life of this
exceptions to the Agreement.
coverage of Article 2
shall not be deemed in JA 195-96. The IAM notes that neither
violation thereof: HMV nor other maintenance work on
aircraft airframes is mentioned in the list
... of subcontracting “exceptions.” The
parties agree that HMV work is not the
(G) Types of work type of work that customarily has been
customarily contracted contracted out.
out, such as parts and
material which the 3. Bargaining History
Company could not be
expected to The IAM presents to the court
manufacture, such as past conduct on the part of US Airways
engine and airframe regarding the subcontracting of HMV
parts, castings, work on its Boeing fleet. Specifically,
cowlings, seats, wheels the IAM notes that during negotiations in
and other items which 1999 for a successor agreement (a major
are commonly dispute), US Airways sought to obtain
manufactured as the right to subcontract Q-Checks of its
standard items for the Boeing fleet, claiming that it lacked the
trade by vendors. Work facilities to perform the work. The IAM
subcontracted out to a rejected US Airways’ proposal, and thus,
vendor will be of the US Airways did not achieve the right to
type that cannot be subcontract the Q-Checks.
manufactured or
repaired in-house by 4. The Parties’ Practice
existing
skills/equipment or US Airways never has
facilities of the subcontracted HMV work in its 54-year
Company. relationship with the IAM. Rather, IAM-
represented employees always have
.... performed such work, regardless of the
model of the aircraft. The IAM claims
(I) Due to lack of that the Company acquired a hangar in
facilities, the Company Tampa, Florida, where it could have
5
performed the S-Checks, although it On August 4, 2003, the IAM
voluntarily closed the facility in notified US Airways that use of an
November 2002. outside vendor for the S-Checks would
violate the scope of the CBA and would
5. The Dunsford Arbitration create a major dispute. US Airways
countered on August 8, 2003, that
US Airways presents evidence because the parties differed as to the
of an arbitration between it and the IAM interpretation of the CBA regarding
in 1991-1992 before the US Airways- whether S-Checks could be
IAM System Board of subcontracted, the dispute was a minor
Adjustment/Arbitration (“System one. Thus, US Airways attempted to
Board”) which Professor John Dunsford submit the dispute to the System Board,
decided (the “Dunsford Arbitration”). but the IAM refused to arbitrate the
The issue before the System Board was dispute.
whether US Airways could outsource
engine overhaul work because it lacked On October 6, 2003, the IAM
the facilities to perform the work in moved in the district court for a
house. Professor Dunsford decided that temporary restraining order and
it could, noting that the IAM had not met preliminary injunction barring US
its burden of showing that there were Airways from using an outside vendor
facilities to do the work in house. While for the S-Checks. 3 The IAM argued that
the parties agree that this award has the CBA required US Airways to use
become part of the CBA, they dispute its IAM employees for its S-Checks and that
meaning. US Airways claims that use of an outside vendor constituted a
Professor Dunsford relied on the second
sentence of Section (G) of the Second
Clarification in holding that even though 3
The IAM included in its supporting
the engine overhaul work customarily
papers declarations explaining how US
had not been contracted out, US Airways
Airways could perform the Airbus HMV
could do so in that case because it lacked
work in house with existing facilities,
the facilities to do the work in house. In
equipment, and mechanics, both active
contrast, the IAM believes that Professor
and on layoff status. It also provided a
Dunsford relied solely on Section (I),
declaration from William Freiberger,
which creates a specific exception for
who was the IAM ’s chief negotiator in
aircraft engine overhauling where there
the 1999 negotiations, in which he stated
is a lack of facilities.
that during the course of the 1999
negotiations US Airways had negotiated
for the right to subcontract HMV work
on its Boeing fleet, but never attained
B. Procedural Background
that right.
6
major dispute, requiring maintenance of one. See General Comm. of Adjustment
the status quo. v. CSX R.R. Corp., 893 F.2d 584, 589
(3d Cir. 1990) (“CSX”). We review
After oral argument, the district factual findings under the clearly
court held on October 21, 2003, that the erroneous standard. See Shire US Inc. v.
dispute was a major one and it Barr Labs. Inc., 329 F.3d 348, 352 (3d
preliminarily enjoined US Airways from Cir. 2003).
using an outside vendor for the S-
Checks. It held that US Airways’
arguments under the CBA were
“obviously insubstantial” and that it was III. DISCUSSION
“attempting to remake or amend” the
CBA’s prohibition against HMV A. Major vs. Minor Disputes
subcontracting. JA 18.
1. The Guidelines
US Airways filed a notice of
appeal and a motion for stay pending “The Railway Labor Act is the
appeal. After a hearing, the district court product of a joint effort by labor and
denied US Airways’ request for a stay, management representatives to channel
but it modified its injunction to permit labor disputes into constructive
US Airways to complete work on one resolution procedures as a means of
partially disassembled aircraft. On avoiding interruptions to commerce and
October 27, 2003, US Airways moved in preventing strikes.” CSX, 893 F.2d at
this court for an emergency stay pending 589. The two types of disputes that can
appeal, which a motion panel denied on arise under the RLA are major disputes
November 5, 2003, though at the same and minor disputes. In Consolidated Rail
time it expedited the appeal. On January Corp. v. Railway Labor Executives’
12, 2004, we heard oral argument on US Ass’n, 491 U.S. 299,
109 S. Ct. 2477
Airways’ appeal. (1989) (“Conrail”), the Supreme Court
explained that “the formal demarcation
between major and minor disputes does
not turn on a case-by-case determination
II. JURISDICTION AND STANDARD of the importance of the issue presented
OF REVIEW or the likelihood that it would prompt the
exercise of economic self-help.” Id. at
Jurisdiction over the appeal of a
305, 109 S. Ct. at 2481. Rather, the
preliminary injunction is proper pursuant difference between the two types of
to 28 U.S.C. § 1292(a)(1). We exercise disputes is that major disputes seek to
plenary review over the question of create contractual rights, while minor
whether the dispute is a major or minor disputes seek to enforce them. See
id. at
7
302, 109 S. Ct. at 2480 (holding that the The district courts have
inclusion of drug testing as part of subject-matter
railroad’s physical examinations jurisdiction to enjoin a
arguably was justified by implied terms violation of the status
of collective bargaining agreement, and quo pending completion
therefore dispute was minor); see also of the required
Elgin, J. & E. Ry. v. Burley, 325 U.S. procedures, without the
711, 723,
65 S. Ct. 1282, 1290 (1945). customary showing of
irreparable injury.
Major disputes relate to the
formation of collective bargaining Id. at 302-03, 109 S.Ct. at 2480.
agreements or efforts to secure them.
They arise in the absence of such an In contrast, minor disputes arise
agreement or where a party seeks to out of grievances or out of the
change the terms of one, and therefore interpretation or application of existing
the issue is not whether an existing collective bargaining agreements. See
agreement controls the controversy.
id. at 303, 109 S.Ct. at 2481. “The
Major disputes look to the acquisition of dispute relates either to the meaning or
rights for the future, not to the assertion proper application of a particular
of rights claimed to have vested in the provision with reference to a specific
past. See
Conrail, 491 U.S. at 302, 109 situation or to an omitted case.”
Id.
S.Ct. at 2480. As the Supreme Court Where an employer asserts a contractual
stated in Conrail, right to take the contested action, the
ensuing dispute is a minor one if the
[i]n the event of a major action arguably is justified by the implied
dispute, the RLA or express terms of the parties’ collective
requires the parties to bargaining agreement. Where, by
undergo a lengthy contrast, the employer’s claimed
process of bargaining justification for the action is frivolous or
and mediation. . . . obviously insubstantial, the dispute is a
Until they have major one. See id. at 310, 109 S.Ct. at
exhausted those 2484; see also CSX, 893 F.2d at 593
procedures, the parties (noting that the court may not “consider
are obligated to the merits of the underlying dispute; its
maintain the status quo, role is limited to determining whether the
and the employer may dispute can be characterized as involving
not implement the the proper application or meaning of a
contested change in contract provision”).
rates of pay, rules, or
working conditions. A minor dispute is subject to a
8
compulsory and binding arbitration Clarification (which does not contain an
before an adjustment board established exception for HMV work); and (4) US
by the employer and the unions Airways’ past practice of performing all
representing the employees. That board, HMV work in house.
in this case the System Board, has
exclusive jurisdiction over the dispute. In US Airways’ view, the
There is no general statutory obligation dispute can be resolved by reference to
that the employer maintain the status quo the following: (1) the scope clause
pending the arbitrator’s decision. See (Article 2(B)) (which includes HMV
Conrail, 491 U.S. at 302, 109 S.Ct. at work); (2) the “facilities and equipment”
2481. Thus, in a minor dispute, “[e]ach clause of Article 2(B) (which contains a
side can act on its interpretation of the meet and confer obligation when the
existing agreements until the arbitration Company lacks adequate equipment or
panel rules otherwise.” CSX, 893 F.2d at facilities to perform the work); (3) the
594 (citations omitted). Second Clarification, Section (G),
second sentence (which states that US
2. The Instant Dispute Airways may contract out work for
which it lacks the skills, equipment or
We hold that the instant dispute facilities to perform the work in house);
is a minor one because both parties have (4) the Dunsford Award (upholding right
asserted rights existing under the CBA, to subcontract engine overhaul work
the dispute turns on the proper when in house facilities are lacking); (5)
interpretation or application of the CBA, the past practice of subcontracting
and US Airways’ argument is neither aircraft maintenance work when in house
frivolous nor obviously insubstantial. equipment or facilities are lacking; and
(6) the absence of any past practice of
a. Both Parties Assert Rights performing Airbus S-Checks.
Under the CBA
Thus, both parties contend that
Both parties contend that the terms of the CBA, as interpreted through
terms of the existing CBA either custom and past experience, determine
establish or refute the presence of the the result in this case.
right to subcontract S-Checks. The IAM
contends that the dispute can be resolved b. US Airways’ Argument is
by reference to the following: (1) the Neither Frivolous Nor
scope clause (Article 2(B)) (which Obviously Insubstantial
includes HMV work); (2) the First
Clarification (which prohibits the As described below, we hold
“farming out” of work included in the that the district court erred in finding US
scope clause); (3) the Second Airways’ position to be frivolous and
9
obviously insubstantial. may be contracted out to a vendor when
the Company lacks the skills, equipment
or facilities to perform the work in
house. In concluding that this sentence
“can only be read as a clarification of the
first sentence,” JA 16, the district court
1. US Airways’ Section (G) impermissibly interpreted the CBA.4 As
Argument
Section G of the Second 4
The district court based its decision
Clarification reads as follows:
on the following factors: (1) the
“longstanding and uninterrupted
(G) Types of work
practice” of performing “heavy
customarily contracted
maintenance types of work”; (2) the “fact
out, such as parts and
that such work has always been
material which the
considered within the exclusive province
Company could not be
of those employees . . . as evidenced by
expected to
the aforementioned history”; and (3) the
manufacture, such as
fact that US Airways in 1999 asked the
engine and airframe
IAM to allow it to subcontract Q-Checks
parts, castings,
on Boeing aircraft because of a backlog
cowlings, seats, wheels
of that work. JA 17. It further opined
and other items which
that under US Airways’ interpretation of
are commonly
Section (G), US Airways “could
manufactured as
unilaterally void the entire CBA based on
standard items for the
such interpretation simply by not
trade by vendors. Work
providing IAM-represented employees
subcontracted out to a
with adequate facilities or tools to
vendor will be of the
perform their work.” JA 17-18.
type that cannot be
manufactured or
With regard to the 1999 history,
repaired in-house by
US Airways argues that it did not have
existing
an adequate opportunity to respond to the
skills/equipment or
IAM’s factual allegations, but that in any
facilities of the
event this past negotiation is
Company.
distinguishable because there US
Airways was seeking permission to
JA 196. US Airways argues that the
subcontract work for which it had
second sentence of Section (G), read
adequate equipment and facilities. US
alone, supports its position that any work
Airways correctly notes that the district
10
US Airways correctly explains, the Section (G), by stating that “[a]lthough
district court’s analysis went beyond the IAM has argued that the Dunsford
determining whether the CBA resolved Award was based on Section (I) of the
the dispute; instead, it performed the task [Second Clarification], which applies
of the arbitrator in determining the only to engine maintenance, that could
proper construction of Section (G). Of not have been the basis for the decision
course, under US Airways’ view, the because Section (I) refers only to lack of
district court’s action was impermissible ‘facilities,’ and not lack of equipment or
even if it correctly interpreted the CBA. skills.” Appellant’s br. at 27.
2. US Airways’ Dunsford 3. US Airways’ Equipment and
Award Argument Facilities Clause Argument
US Airways argues that the US Airways also argues that the
Dunsford Award is indicative that the district court failed to acknowledge the
second sentence of Section (G) is free “equipment and facilities clause” of
standing. It claims that Professor Article 2(B), which states that “[i]n the
Dunsford concluded that engine overhaul event that a situation should develop
work customarily was not contracted out, whereby the equipment and facility
but nonetheless US Airways could limitations are not available or sufficient
contract it out because it did not have the to perform such work, the Company will
facilities and equipment needed to confer with the Union in an effort to
perform the work in house. Thus, US reach an understanding with respect to
Airways argues that the second sentence how the problem is to be resolved.” JA
of Section (G) gives it authority to 170. US Airways argues that this clause
contract out S-Checks where it lacks the creates at least an implied right to
facilities and equipment to perform them subcontract where the Company does not
in house, even though this is not the type have adequate equipment or facilities.
of work customarily contracted out. US US Airways further argues that under the
Airways also counters the IAM’s Dunsford Award, this clause applies
argument that the Dunsford Award was whenever work is covered by the
based solely on Section (I) 5 , and not on agreement (e.g. HMV work), and not
where the work is subject to an express
exception under the Second Clarification,
court’s reliance on this bargaining history such as Section (G). As such, it
is attenuated given that the court did not
review the bargaining history of Section
(G).
subcontract the major overhaul of aircraft
5
Section (I) states as follows: “Due to engines during the life of this
lack of facilities, the Company may Agreement.” JA 196.
11
concludes that even if the second SMITH, Circuit Judge, Dissenting:
sentence of Section (G) applied only to
work “customarily contracted out,” the
equipment and facilities clause of Article
2(B) “creates an independent basis for This case turns on whether the
the Company’s right to subcontract S- dispute between US Airways, Inc. (“US
Checks.” Appellant’s br. at 31. Airways” or “the Company”) and the
International Association of Machinists
Based on these arguments, we and Aerospace Workers (the “IAM ”) is
hold that US Airways has met its characterized as “major” or “minor” for
“relatively light” burden, see Conrail, purposes of the Railway Labor Act, 45
491 U.S. at 307,
109 S. Ct. 2482 (citation U.S.C. §§ 151 et seq. (“RLA”). The
omitted), of asserting rights under the majority holds that it is a minor one
CBA that are neither frivolous nor “because both parties have asserted
obviously insubstantial. But we do not rights existing under the [collective
go further and state a view as to whether bargaining agreement], the dispute turns
we ultimately agree with US Airways or on the proper interpretation or
the IAM as it is not our responsibility to application of the CBA, and US
make such a determination. Rather, we Airways’ argument is neither frivolous
leave the merits of the parties’ arguments nor obviously insubstantial.” Supra at
to the System Board, and merely will lift 13. I agree with the majority that the
the preliminary injunction because there parties’ dispute is resolved by application
is no requirement that the status quo be of the CBA and the interpretation of its
maintained in this minor dispute. terms. Where I part company with my
colleagues is in their conclusion that US
Airways’ position is not frivolous. I
agree, instead, with the District Court
IV. CONCLUSION that, “[u]nder the guise of a claimed
dispute about meaning of language in the
For the reasons stated above, the CBA, [US Airways] is attempting to
order of the district court dated and remake or amend the most elemental and
entered on October 21, 2003, will be consequential provisions of the CBA.”
reversed and this matter will be Because I believe that US Airways has
remanded to the district court for further not presented a construction of the
proceedings consistent with this opinion. contract that even arguably supports its
position, I respectfully dissent.
A genuine dispute over the
“‘meaning or proper application of a
particular provision’” in the parties’
12
collective bargaining agreement is contractual basis for its
“minor,” and subject to the exclusive claim is “insincere” in
jurisdiction of the System Board of doing so, or its
Adjustment. Consol. Rail Corp. v. Ry. “position [is] founded
Labor Executives’ Ass’n (“Conrail”), upon . . . insubstantial
491 U.S. 299, 303-04 (1989) (quoting grounds,” the result of
Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. honoring that party’s
711, 723 (1945)). A “major” dispute, on characterization would
the other hand, arises “where there is no be to undercut “the
such agreement or where it is sought to prohibitions of § 2,
change the terms of one.” Conrail, 491 Seventh, and § 6 of the
U.S. at 302 (quoting Burley, 325 U.S. at Act” against unilateral
723) (emphasis added). The RLA imposition of new
prescribes “a lengthy process of contractual terms. In
bargaining and mediation” for major such circumstances,
disputes, during which time the “parties protection of the proper
are obligated to maintain the status quo.” functioning of the
Conrail, 491 U.S. at 302-03. The district statutory scheme
courts have jurisdiction to enjoin a requires the court to
violation of the status quo pending substitute its
completion of the required procedures, characterization for that
without the customary showing of of the claimant.
irreparable injury.
Id. at 303.
The Supreme Court in Conrail
explicitly recognized that any capable Conrail, 491 U.S. at 306 (quoting
advocate can massage an attempt to Norfolk & Portsmouth Belt Line R.R. Co.
change the terms of an agreement into a v. Bhd. of R.R. Trainmen,
248 F.2d 34,
question of contract interpretation, and 43-44 n.4 (4th Cir. 1957)).6 Under
that deferring to every such argument as
a matter of course would undermine the
basic structure of the RLA: 6
See also Hawaiian Airlines, Inc. v.
Norris, 512 U.S. 246, 265-66 (1994)
[T]here is a danger in
(“Recognizing that accepting a party’s
leaving the
characterization of a dispute as ‘minor’
characterization of the
ran the risk of undercutting the RLA’s
dispute solely in the
prohibition ‘against unilateral imposition
hands of one party. In a
of new contractual terms,’ the Court [in
situation in which the
Conrail] held that a dispute would be
party asserting a
deemed minor only if there was a
13
Conrail, a dispute is minor only where arguably justified by the
the parties’ positions are “arguably terms of the parties’
justified” by the terms of their collective-bargaining
agreement: agreement. Where,
incontrast, the
Where an employer employer’s claims are
asserts a contractual frivolous or obviously
right to take the insubstantial, the
contested action, the dispute is a major one.
ensuing dispute is
minor if the action is
Conrail, 491 U.S. at 307.
sincere, nonfrivolous argument that it
In holding that the dispute
turned on the application of the existing
between the parties is minor rather than
agreement, that is, if it was ‘arguably
major, the majority concludes that the
justified’ by that agreement.”); S.E.
District Court “impermissibly interpreted
Penn. Transp. Auth. v. Bhd. of R.R.
the CBA.” Supra at 14. Of course, the
Signalmen, 882 F.2d 778, 783 (3rd Cir.
District Court had no choice but to
1989) (explaining that the Conrail
interpret the CBA in order to determine
standard should not “allow a party to
whether it arguably justifies US Airways’
utilize the minor dispute resolution
position. See Conrail, 491 U.S. at 306-
procedures by simply pleading that the
07; see also S.E. Penn. Transp. Auth.,
dispute is resolvable by reference to an
882 F.2d at 784-85 (discussing the
existing collective bargaining
sources to be considered when
agreement” and that “courts can exercise
interpreting a CBA to determine whether
some judicial control over the label to be
a party’s position is arguably justified).
affixed to the dispute”); Rutland Ry.
A court’s interpretation is impermissible
Corp. v. Bhd. of Locomotive Eng’rs, 307
under Conrail only if it elects among
F.2d 21, 33 (2d Cir. 1962) (“In [deciding
multiple, non-frivolous constructions of
if a dispute is major or minor] we must
the terms of the agreement. By stating
not place undue emphasis on the
that the District Court “impermissibly
contentions or the maneuvers of the
interpreted the CBA,” the majority, it
parties. M anagement will assert that its
seems to me, only invites the question: is
position, whether right or wrong, is only
US Airways’ position grounded on a
an interpretation or application of the
non-frivolous construction of the parties’
existing contract. Unions, on the other
hand, in their assertions about the dispute
at issue, will obviously talk in terms of
change.”).
14
agreement? 7 sentence of Section (G) hinges on a
logical fallacy. That sentence states:
The majority does not really “Work subcontracted out to a vendor will
answer this question, but rather repeats be of the type that cannot be
US Airways’ argument that “the second manufactured or repaired in-house by
sentence of Section (G), read alone, existing skills/equipment or facilities of
supports its position that any work may the Company.” From this, US Airways
be contracted out to a vendor when the argues: (1) S-Checks cannot be repaired
Company lacks the skills, equipment or in-house using existing equipment and
facilities to perform the work in house.” facilities; (2) therefore, S-Checks are
Supra at 14; compare Appellant’s Br. at work that can be subcontracted out. Yet
22. Yet two critical issues remain: (1) this argument is a classic non sequitur. It
whether the second sentence of Section is as if US Airways had argued: (1) All
(G), read alone, arguably supports US precedential opinions of the Third Circuit
Airways’ position, and (2) whether that will be of the type published in the
sentence can arguably be read alone? Federal Reporter; (2) Rutland Railway
Corp. v. Brotherhood of Locomotive
I believe that both issues must Engineers, 307 F.2d 21 (2d Cir. 1962), is
be resolved in the negative. US published in the Federal Reporter; (3)
Airways’ interpretation of the second therefore, Rutland is a precedential
opinion of the Third Circuit.
7 US Airways’ argument would be
I take issue with the majority’s
valid (and therefore arguable) if the
characterization that the District Court
second sentence of Section (G) actually
“based its decision” on the parties’ past
read: “Work of the type that cannot be
practice and bargaining history. Supra at
manufactured or repaired in-house by
14-15 n.4. The District Court simply
existing skills/equipment or facilities of
read the CBA and concluded— as I
the Company will be subcontracted out
do—that it lends no support to US
to a vendor.” 8 This is not the language of
Airways’ position. Having arrived at
the text, however, and US Airways offers
what it concluded was the only arguable
no argument or explanation why we
interpretation of the CBA, the District
Court went on to state that it had
“confidence” in its conclusion based on
8
the parties’ past practice and bargaining Likewise, the hypothetical
history. To the extent that these sources conclusion given above would be valid if
were considered by the District Court, the first premise stated: “All opinions of
they were used merely to confirm the the type published in the Federal
plain text of the CBA, not to interpret the Reporter will be precedential opinions of
CBA in the first instance. the Third Circuit.”
15
should reverse the subject and predicate Adjustment’s opinion in the Dunsford
of the second sentence of Section (G). Arbitration, which US Airways insists is
The Company simply presents the part of the CBA and binding on the
implicit and fallacious ipse dixit that this parties. See supra at 8. As the majority
is how the sentence should be read. Such points out, the issue before the System
argumentation is, in my view, obviously Board in the Dunsford Arbitration was
insubstantial. whether US Airways could outsource
certain engine overhaul work because it
Whether S-Checks can be lacked the facilities to perform the work
performed using existing in-house. US Airways attempted to
skills/equipment therefore tells the reader justify the outsourcing under Sections
little about whether S-Checks can be (G) and (I) of the Second Clarification.
outsourced. Indeed, the second sentence The Board held that Section (G) did not
of Section (G), standing alone, provides authorize outsourcing because US
no basis for determining what work may Airways had performed similar engine
be outsourced. Which leads to the overhaul work in-house:
second issue that I believe the majority
has left unresolved: can the second Although the Company
sentence of Section (G) arguably be read has never overhauled a
standing alone? In my view, the District CFM-56 engine in
Court was correct in concluding that it house, it has performed
cannot. That sentence states that overhaul work on [a
“[w]ork subcontracted out to a vendor different] series of
will be of” a certain type. It therefore engines since the early
has no practical meaning without a prior 1970s. Hence, the
definition of “[w]ork subcontracted out.” “type” of work which is
The second sentence of Section (G) thus in arbitration is the
can be read only as a clarification of the work of engine
first sentence, which, as an enumerated overhaul, no [sic] the
exception to Article 2(B)’s requirement overhaul of a particular
that work be performed in-house, engine. . . . If work on
provides such a definition. That is, the the new part is of a
second sentence clarifies the “[t]ypes of “type” that previously
work customarily contracted out” that was performed on other
will continue to be contracted out under parts, it does not come
the CBA. within the exception of
[Section] (G). . . .
All of this is apparent from the
plain language of the CBA. It is also
clear from the System Board of
16
. . . The quantity of Again, all of this is clear from
work [that US Airways] the CBA. More important for purposes
has done on [similar of the RLA, however, is the fact that US
engines] over many Airways offers no explanation for how
years is quite the second sentence of Section (G)
substantial, and clearly supports its position, or how its
establishes that this construction of that sentence can be
“type of work” is not harmonized with the rest of the contract.
customarily contracted Having adopted a logically invalid
out. conclusion from the text of the CBA;
having contradicted a dispositive
decision of the System Board; having
ignored the elementary canon that a
(Emphasis added). The System Board’s contract must be read as a whole, and
opinion reiterates the only arguable that individual provisions must be read in
reading of the CBA: the Section (G)
exception is limited to “[t]ypes of work
customarily contracted out.” 9
US Airways takes liberties with
the Dunsford Arbitration that are simply
unsupportable. The System Board
9
The Board did conclude that addressed US Airways’ arguments under
outsourcing was authorized under Sections (G) and (I) in succession. In its
Section (I), which provides: “Due to 33-page opinion, the Board disposed of
lack of facilities, the Company may US Airways’ Section (G) argument in
subcontract the major overhaul of aircraft just over a single page. The System
engines during the life of this Board devoted the remaining seven
Agreement.” US Airways’ argument that pages of its opinion to US Airways’
there is an inconsistency between the Section (I) argument (Section (G) is not
Board opinion and Section (I) is a red mentioned again in the opinion). It is in
herring. Because the Board explicitly this context that the Board stated: “the
found Section (G) inapplicable, any operative standard in the relationship of
inconsistency can only have relevance to the parties has been whether the
the meaning of Section (I). In other Company possessed the requisite skills,
words, Section (I) may very well apply equipment and facilities to do certain
due to lack of equipment and skills as engine overhaul work.” (Emphasis
well as “due to lack of facilities.” But added). Of course, US Airways in its
this is irrelevant to the dispute at hand, brief conveniently omits the italicized
because US Airways does not contend portion of this quote, which places the
that Section (I) justifies the outsourcing Board’s allegedly inconsistent statement
of S-Checks. squarely in the context of Section (I).
17
their context and not in a vacuum, see In intent, however, to
re New Valley Corp., 89 F.3d 143, 149 utilize all its equipment
(3d Cir. 1996); having abandoned the and facilities in
equally fundamental canon that a performing work in its
contract must be read so as to give effect own organization. In
to all of its parts, see New Wrinkle, Inc. the event that a
v. John L. Armitage & Co.,
238 F.2d 753, situation should
757 (3d Cir. 1956)10 ; US Airways was develop whereby the
obliged to offer some logical argument equipment and facility
why its interpretation makes sense. No limitations are not
such argument was attempted by US available or sufficient
Airways, and this failure should be fatal to perform such work,
under Conrail. the Company will
confer with the Union
Instead, US Airways puts forth in an effort to reach an
an alternative argument that the understanding with
“equipment and facilities” clause in respect to how the
Article 2(B) is actually an exception to problem is to be
Article 2(B)’s requirement that work be resolved.
performed in-house. Not only is this
alternative argument frivolous, it
confirms the absence of any justification
for US Airways’ Section (G) argument. This clause does not purport to allow US
The “equipment and facilities” clause Airways to take any unilateral action at
provides: all. Instead, it simply requires the parties
to “confer.” The System Board of
It is the Company’s Adjustment made this very point in the
Dunsford Arbitration, rejecting US
Airways’ reliance on the equipment and
10 facilities clause as outsourcing authority.
US Airways’ construction of the
US Airways thus attempts to revive two
CBA renders Section (I) of the Second
arguments explicitly rejected by the
Clarification superfluous. If, as US
System Board, while at the same time
Airways argues, the second sentence in
insisting that the Dunsford Arbitration is
Section (G) allows US Airways to
part of the CBA and binding on the
outsource all work that cannot be
parties. See supra at 8. Rather than
performed due to lack of facilities, there
support a broad right to outsource, the
would be no need for a separate Section
“equipment and facilities” clause
(I) specifically dealing with the
demonstrates that the parties
outsourcing of engine overhaul work
contemplated a variety of situations in
“[d]ue to lack of facilities.”
18
which “equipment and facility limitations distinction, but one that
are not available or sufficient,” but has no basis in the text.
restricted US Airways’ right to outsource We would hold the
to certain narrowly defined situations. railroads’ view
“frivolous or obviously
I see this situation as similar to insubstantial” and
that confronted by the Seventh Circuit in affirm the district
Brotherhood of Maintenance of Way court—if the act of
Employees v. Atchison, Topeka & Santa interpretation were to
Fe Railway Co., 138 F.3d 635 (7th Cir. stop at the four corners
1997). The dispute in that case was of the Agreement. 11
whether the parties’ collective bargaining
agreement required the railroads to
compensate maintenance workers for
travel expenses.
Id. at 638. According
Id. Unlike the railroads in Atchison, US
to the union, the CBA obligated the Airways has failed to show that its
railroads to compensate all traveling arguments are even theoretically
employees, whereas the railroads insisted plausible. Rather, its Section (G)
that their obligation was limited to
reimbursing “regional and system
gangs.”
Id. The CBA, however, simply 11
The court in Atchison nevertheless
referred to “employees.” Id. at 640. The
found support for the railroad’s argument
Seventh Circuit rejected the railroads’
in the parties’ bargaining history. Id. at
attempt to construe “employees”
640-43; see Conrail, 491 U.S. at 311
narrowly:
(stating that courts must consider both
implied and express terms of a CBA, as
Either [parties’] view is
well as the parties’ practice, usage, and
logically possible;
custom). US Airways states that it relies
neither is barred by the
on the parties’ past practice of
explicit terms of Article
subcontracting aircraft maintenance work
XIV. But while the
when in-house equipment or facilities are
term “employees” could
lacking. But the only “aircraft
refer solely to regional
maintenance work” that US Airways
and system gangs, there
claims to have outsourced is the engine
is no hint in Article
overhaul work that was the subject of the
XIV that “employees”
Dunsford Arbitration. US Airways
actually bears the
“past practice” of doing something
narrower meaning. . . .
explicitly authorized by Section (I)
The railroads propose a
provides no insight into the meaning of
theoretically plausible
Section (G) or Article 2(B).
19
argument is sophistry, condemned by US
Airways’ alternative—and equally
insubstantial— argument from Article
2(B).
Ultimately, my disagreement
with the majority reflects a different
assessment of the meaning and purpose
of the “arguably justified” standard set A True Copy:
forth by the Supreme Court in Conrail
for distinguishing between major and Teste: Clerk of the United States Court
minor disputes. Conrail, as I noted of Appeals for the Third Circuit
above, explicitly recognized that any
good lawyer can plead a major dispute as
a question of contract interpretation, but
that parties cannot circumvent the RLA’s
status quo requirement with “frivolous,”
or “obviously insubstantial” arguments.
Conrail, 491 U.S. at 306-07; see also
Detroit & Toledo Shore Line R.R. Co. v.
United Trans. Union,
396 U.S. 142, 150
(1969) (“The Act’s status quo
requirement is central to its design. . . .
[T]he power which the Act gives the
other party to preserve the status quo for
a prolonged period will frequently make
it worth-while for the moving party to
compromise with the interests of the
other side and thus reach agreement
without interruption to commerce.”).
Because I believe that the majority is
allowing the proffer of an argument, in
and of itself, to satisfy US Airways’
already “relatively light burden,”
Conrail, 491 U.S. at 307, I respectfully
dissent.
20
