HELENE N. WHITE, Circuit Judge.
This action under the Railway Labor Act (RLA) concerns the merger of two airlines — an acquiring airline with unionized pilots and an acquired airline with newly unionized pilots — and their efforts to bring both groups under a new, joint collective-bargaining agreement. The airlines and their pilots' union dispute whether the creation of an integrated seniority list (ISL) of pilots is exclusively committed to the union, or whether it is subject to collective bargaining with the airlines. The union asks us to find this disagreement to be a "major" dispute under the RLA and to affirm the district court's preliminary injunction ordering the airlines to accept the ISL proffered to them by the union. The airlines ask us to find this dispute to be "minor" and subject to exclusive arbitral jurisdiction, and to vacate the preliminary injunction. The airlines assert the right not to accept a union-proffered seniority list and instead to participate in the seniority-integration process through collective bargaining. Because this assertion is not arguably justified by the parties' existing collective-bargaining agreement, the dispute is major, leading us to
The International Brotherhood of Teamsters, Airline Division (Teamsters) and its Local 1108 (together, the Union) represent the pilots of Flight Options, LLC (Flight Options) and Flexjet, LLC (Flexjet, and together with Flight Options, the Carriers), two merged airlines that offer fractional ownership of jet aircraft. Flight Options and its pilots have had a collective-bargaining agreement since 2010 (the 2010 CBA), while Flexjet's pilots are newly unionized and are not yet party to a CBA.
Flight Options is based in Cleveland, Ohio, and is a "carrier" for purposes of the RLA. See 45 U.S.C. § 181. Michael Silvestro (Silvestro) is CEO of Flight Options and Kenneth Ricci (Ricci) is chairman of Flight Options and its parents. Fight Options has approximately 360 pilots who are represented by the Union and operate under the 2010 CBA.
Flexjet, another "carrier" under the RLA, has approximately 340 pilots and was acquired in December 2013 by a Flight Options parent. Prior to the acquisition, Flexjet's pilots were at-will employees. On September 30, 2015, the National Mediation Board (NMB) found that Flight Options and Flexjet were a single transportation system for purposes of labor representation under the RLA. 42 N.M.B. 174, 181 (2015). On December 15, 2015, the Union was certified after an election as the representative of the combined Flight Options and Flexjet pilot groups.
Although the Union was elected to represent the Flexjet pilots, these pilots are not yet parties to the 2010 CBA (or a successor joint CBA). Section 1.5 of the 2010 CBA governs the integration of pilots from an acquired airline; parent entities of Flight Options agreed to be bound by Section 1 of the 2010 CBA on behalf of themselves and their successors.
On appeal, the parties dispute whether the integration of the pilot groups' seniority lists
Section 1.5(c)(1) of the 2010 CBA governs the creation of the ISL when Flight Options acquires another carrier:
2010 CBA, R. 8-2, PID 89.
Under this provision, there are two mutually exclusive processes for creating an ISL depending on whether the Union represents both the Flight Options pilots and the acquired pilot group, or only the former. If both pilot groups are represented
Ricci summed up the process in a presentation he made to the pilots:
D. Ct. Tr., R. 43, PID 1063.
Soon after it was elected to represent the acquired pilot group, the Union appointed the Flight Options Merger Committee (FOMC) and the Flexjet Merger Committee (FXMC) — two autonomous committees each comprised of three pilots from their respective groups — and charged them with the task of creating an ISL. Laddie Hostalek, business agent for Local 1108 and a Flight Options pilot, testified that the members of the FOMC were appointed by the Flight Options Master Executive Council and the members of the FXMC were appointed by the Flexjet Pilots Leadership Council.
Adam Fine, a Flexjet pilot and chairman of the FXMC, testified regarding the work of the two merger committees. According to Fine, in order to create a fair and equitable ISL, the committees reviewed precedent airline mergers and considered draft lists based on different seniority-calculation methodologies; they also conducted statistical analyses of the impact of different methodologies on pilot subgroups. After evaluating the results, the committees determined that given the different founding dates of Flight Options and Flexjet, a date-of-hire methodology would place half the Flexjet pilots at the "extreme bottom" of the ISL. D. Ct. Tr., R. 43, PID 1159-60. They instead unanimously adopted an ISL based on longevity, which they believed would be fair and equitable to both groups.
The Union proffered the ISL to Silvestro on February 24, 2016, stating that it was unanimously adopted by the merger committees and requesting confirmation of its acceptance pursuant to Section 1.5(c)(1) of the 2010 CBA. Two days later, Silvestro rejected the ISL by letter, asserting that for the ISL process to comply with McCaskill-Bond, the Flexjet pilots must select their own negotiators and the Carriers "must be included to insure the process is fair and equitable."
The Union sent Silvestro a separate notice, also dated February 24, 2016, invoking Section 6 of the RLA to begin negotiations for a new, joint CBA.
The Union responded by filing a class-action grievance against the Carriers under Section 1.9 of the 2010 CBA,
The Carriers also sought a preliminary injunction to restrain the Union from attempting to enforce the ISL it created, and from further pursuing arbitration regarding the ISL, until it negotiates the list with the Carriers. The Carriers argued that under McCaskill-Bond, they are entitled and obligated to negotiate with the Union over the ISL to ensure the list is "fair and equitable." The Carriers specifically argued that the ISL proffered by the Union, with its longevity-based seniority calculation, is not "fair and equitable" to Flight Options pilots who took leaves of absence to fly for Flexjet, and further that
After first moving to dismiss based on Federal Rules of Civil Procedure 12(b)(1) and (6), the Union filed an answer disputing the district court's subject-matter jurisdiction on the basis that under the RLA, the Carriers' claims are "minor" disputes and thus subject to mandatory arbitration. It also asserted five counterclaims, including moving to compel arbitration under Ohio state law and the Federal Arbitration Act.
In April 2016, the Union filed a motion for preliminary injunction and temporary restraining order. After first characterizing the dispute over the ISL as minor, the Union changed its position by seeking relief ordering the Carriers to restore the status quo (i.e., to accept the ISL), a remedy available only in major disputes.
The district court first considered whether the ISL issue is a "major" or "minor" dispute under the RLA, concluding that it is a "major" dispute and that Section 1.5(c)(1) of the 2010 CBA obligates the Carriers to accept the Union's ISL. The court further concluded that the FOMC/FXMC process satisfied McCaskill-Bond, noting that the committees had to balance multiple issues, including different-aged companies, previous seniority integrations,
The district court noted that the Carriers presented no authority suggesting that they owe a representational duty to their pilots, who are all represented by the Union. Considering its assessment that the Union's ISL process and resulting list were objectively fair and equitable, the district court remarked that the Carriers' resistance to accepting the ISL was "curious" in light of the 2010 CBA's "clear mandate" that the "Company or other Successor, as appropriate, shall accept the integrated seniority list." D. Ct. Tr., R. 43, PID 944 (citing 2010 CBA § 1.5(c)(1)) (internal quotation marks omitted). The district court granted the Union's motion for preliminary injunction and ordered the Carriers to accept the proffered ISL.
We review the issue of subject-matter jurisdiction de novo. Watson v. Cartee, 817 F.3d 299, 302 (6th Cir. 2016) (citation omitted). RLA disputes fall into two jurisdictional categories, major and minor. Elgin, J. & E.R. Co. v. Burley, 325 U.S. 711, 723, 65 S.Ct. 1282, 89 S.Ct. 1886 (1945). Major disputes, predicated on Section 2, Seventh and Section 6 of the RLA, involve attempts to acquire future labor-agreement rights and carry the greatest risk for a strike. Minor disputes, predicated on Section 2, Sixth and Section 3, First (i) of the RLA, involve grievances less likely to result in a strike. See id. at 723-24, 65 S.Ct. 1282. The core distinction between these two types of disputes is that "major disputes seek to create contractual rights, minor disputes to enforce them." Consol. Rail Corp. v. Ry. Labor Execs.' Ass'n, 491 U.S. 299, 302, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989) (citing Burley, 325 U.S. at 723, 65 S.Ct. 1282).
"Major" disputes focus on "acquisition of rights for the future, not [the] assertion of rights claimed to have vested in the past," Wheeling & Lake Erie Ry. Co. v. Bhd. of Locomotive Engineers & Trainmen, 789 F.3d 681, 690 (6th Cir. 2015) (quoting Burley, 325 U.S. at 723, 65 S.Ct. 1282) (alteration in original), and are subject to federal-court jurisdiction. See Consol. Rail Corp., 491 U.S. at 307, 109 S.Ct. 2477 (1989). They require management and labor to "undergo a lengthy process of bargaining and mediation" under Sections 5 and 6 of the RLA before resorting to economic self-help, such as striking. Id. at 302-03, 109 S.Ct. 2477. The statutory requirements provide an "integrated, harmonious scheme for preserving the status quo from the beginning of the major dispute through the final 30-day `cooling-off' period."
"Minor" disputes, in contrast, involve "interpretation or application of particular provisions of existing collective bargaining agreements," United Transp. Union v. Cuyahoga Valley Ry. Co., 979 F.2d 431, 434 (6th Cir. 1992), and are committed to grievance arbitration. See Consol. Rail Corp., 491 U.S. at 307, 109 S.Ct. 2477. Such disputes "contemplate[] the existence of a collective agreement already concluded, or, at any rate, a situation in which no effort is made to bring about a formal change in terms or to create a new one." Burley, 325 U.S. at 723, 65 S.Ct. 1282.
A party to a dispute under the RLA bears a "relatively light burden" to demonstrate that a dispute is covered by an existing agreement, making it minor. Consol. Rail Corp., 491 U.S. at 307, 109 S.Ct. 2477 (citation and internal quotation marks omitted). "[I]f there is any doubt as to whether a dispute is major or minor a court will construe the dispute to be minor." Airline Prof'ls Ass'n, Teamster Local Union 1224 v. ABX Air, Inc., 400 F.3d 411, 414-15 (6th Cir. 2005) (ABX Air III) (quoting Ry. Labor Execs. Ass'n v. Norfolk & W. Ry. Co., 833 F.2d 700, 705 (7th Cir. 1987)). In assessing whether a dispute is major or minor, we "look[] to whether a claim has been made that the terms of an existing agreement either establish or refute the presence of a right to take the disputed action." Consol. Rail Corp., 491 U.S. at 305, 109 S.Ct. 2477. "Where an employer asserts a contractual right to take the contested action, the ensuing dispute is minor if the action is arguably justified by the terms of the parties' collective-bargaining agreement." Id. at 307, 109 S.Ct. 2477. This presumption does not apply, however, if the contractual claim is "obviously insubstantial or frivolous, []or made in bad faith." Id. at 310, 109 S.Ct. 2477. This follows because "[i]f a party asserts a contractual basis for a claim without sincerity or on insubstantial grounds, `honoring that party's characterization would ... undercut the [RLA's prohibition] against unilateral imposition of new contractual terms.'" Wheeling, 789 F.3d at 692 (first alteration in original, second alteration added) (quoting Consol. Rail Corp., 491 U.S. at 306, 109 S.Ct. 2477).
Whether to grant a preliminary injunction under the RLA is left to a district court's discretion. Adams v. Fed. Express Corp., 547 F.2d 319, 322 (6th Cir. 1976) (citing Virginia Ry. Co. v. Sys. Fed'n No. 40, 300 U.S. 515, 551, 57 S.Ct. 592, 81 S.Ct. 789 (1937)). The maintenance of the status quo may be "enforceable by whatever appropriate means might be developed on a case-by-case basis." Chicago & Nw. Ry. Co. v. United Transp. Union, 402 U.S. 570, 577, 91 S.Ct. 1731, 29 L.Ed.2d 187 (1971). We review a district court's decision whether to grant a preliminary injunction under the RLA for an abuse of discretion, such as the improper application of governing law, the use of erroneous legal standards, or the reliance on clearly erroneous findings of fact. See City of Pontiac Retired Emps. Ass'n v. Schimmel, 751 F.3d 427, 430 (6th Cir. 2014) (en banc) (citation omitted). In general, courts must examine four factors in deciding whether
Finally, as with any contract, we interpret a collective-bargaining agreement de novo. Salary Policy Emp. Panel v. Tennessee Valley Auth., 149 F.3d 485, 489 (6th Cir. 1998).
The Carriers invoked the district court's jurisdiction by asserting that they have a statutory obligation under McCaskill-Bond and the Allegheny-Mohawk provisions it codifies that is distinct from the 2010 CBA. They argue that they have an independent obligation under McCaskill-Bond to ensure that the pilot seniority integration is "fair and equitable." The Carriers correctly note that McCaskill-Bond applies when there is a "transaction for the combination of multiple air carriers into a single air carrier," 49 U.S.C. § 42112 n.(b)(4)(A), and that generally this means that Allegheny-Mohawk applies to the pilot seniority integration. Id. at § 4112 n.(a). They overlook, however, that the statute also provides that when, as here, the "same collective bargaining agent represents the combining crafts or classes at each of the covered air carriers, that collective bargaining agent's internal policies regarding integration, if any, will not be affected by and will supersede the requirements" of McCaskill-Bond. Id. at § 42112 n.(a)(1). Further, when, as here, a CBA applies to "the terms of integration involving covered employees of a covered air carrier," those terms "shall not be affected by the requirements of [McCaskill-Bond] as to the employees covered by that [CBA], so long as those provisions allow for the protections afforded by sections 3 and 13 of the Allegheny-Mohawk provisions." Id. at § 42112 n.(a)(2).
Thus, as the collective-bargaining agent for the pilots of both carriers, the Union's internal policies regarding integration supersede the requirements of McCaskill-Bond. Further, because the 2010 CBA applies to the terms of the integration, it controls. Nothing in the CBA denies the protections afforded by sections 3 and 13 of Allegheny-Mohawk. Those protections are that the seniority integration must be "fair and equitable" and either section 13 or an alternative agreed-upon dispute-resolution process must be provided. In this context, the protections are afforded for the benefit of the covered employees. The requirement that the integration be "fair and equitable" is an obligation imposed by the 2010 CBA on the Union, the party to whom the 2010 CBA commits the task of creating an ISL. Further, a dispute-resolution process is provided by the expedited-grievance provision of Section 1.9 of the 2010 CBA. Thus, because the 2010 CBA commits the integration process to the Union and continues to allow employees the protections of sections 3 and 13 of Allegheny-Mohawk, the district court properly concluded that the Carriers do not have a distinct McCaskill-Bond obligation.
In its counterclaim, the Union asserts that "[b]y failing to accept the [ISL], the Carrier[s] unilaterally changed the unambiguous Section 1.5(c)(1) obligation to accept the list...." Verified Counterclaim, R. 9, PID 463. The Carriers answer that this is a minor dispute over which the courts lack jurisdiction, that their actions are consistent with the 2010 CBA, and that they do not seek to unilaterally change its terms. As with the McCaskill-Bond issue, these disputes concern whether the creation of the ISL is committed solely to the Union, or whether the Carriers must be included in that process. The pilot-integration provision of the 2010 CBA squarely addresses this question, an important point considering that a dispute's amenability to resolution through contractual interpretation typically renders it a minor dispute, see Consol. Rail Corp., 491 U.S. at 305, 109 S.Ct. 2477, over which district courts have no jurisdiction. See Stephens v. Ret. Income Plan for Pilots of U.S. Air, Inc., 464 F.3d 606, 610 (6th Cir. 2006).
When a party claims that its actions are arguably justified by an existing labor agreement, we presume the dispute is minor "unless the [party's] claims of contractual justification are so frivolous or obviously insubstantial as to indicate that it is attempting to circumvent the § 6 RLA major disputes resolution procedure." See Chicago & N.W. Transp. Co. v. Ry. Labor Execs. Ass'n, 855 F.2d 1277, 1285 (7th Cir. 1988). Here, the express terms of the 2010 CBA and the record facts call into question our usual presumption that a dispute governed by the CBA is minor.
Our decision in Wheeling is instructive. In that case a railroad sought changes to its collective-bargaining agreement with the union representing its conductors and brakemen. The agreement provided that a train crew "shall consist of not less than one (1) conductor and one (1) brakeman...." Wheeling, 789 F.3d at 684 (quoting the agreement). On several occasions, despite the union's objections, the railroad ran trains without the required minimum complement of crew, and later substituted management employees for union employees. Id. at 685-87. The railroad claimed that this action was arguably justified by the CBA because the contract did not restrict it from "run[ning] trains without union employees." Id. at 688. The union countered that the CBA's crew provision had a single exception (which was inapplicable to the dispute) and that the carrier attempted to add a new one — the use of management employees to run trains — that the parties had not bargained for or agreed to. Id. at 689. We concluded that the dispute was major because the railroad's claim that "the [CBA] allows it to man trains without union conductors is frivolous or obviously insubstantial in light of the express language of the [CBA]." Id. at 693 (emphasis added) (citing Consol. Rail Corp., 491 U.S. at 307, 109 S.Ct. 2477). Although the parties' "practice, usage and custom is of significance in interpreting their agreement," Consol. Rail. Corp., 491 U.S. at 311, 109 S.Ct. 2477 (citation and internal quotation marks omitted), in Wheeling we found no support in the record that there was an historical practice of management exercising the kind of discretion over crew assignments it claimed the CBA justified. See Wheeling, 789 F.3d at 694.
Collective-bargaining agreements may "include implied, as well as express, terms." Consol. Rail Corp., 491 U.S. at 311, 109 S.Ct. 2477. Because the language of the Wheeling CBA was express, we concluded that "we need not consider any implied terms." 789 F.3d at 694. In ABX Air III, however, we found that an airline's CBA arguably permitted the carrier to require a medical examination before
A claim is "arguably justified" if any reasonable labor arbitrator, applying appropriate principles of contract interpretation and after reviewing relevant extrinsic evidence (such as evidence of past practice), could find that the contract does justify a party's claimed right to take, or to refrain from taking, an action. Cf. Wheeling, 789 F.3d at 692. When no reasonable contractual interpretation, express or implied, would justify a party's claim, the dispute is major and is subject to federal courts' jurisdiction to enjoin violations of the status quo.
Neither party relies on practice, usage, or custom to impart meaning to Section 1.5(c)(1) of the 2010 CBA. See Consol. Rail. Corp., 491 U.S. at 311, 109 S.Ct. 2477. Here, the Union invokes the pilot-integration provision as follows: the Union represents both pilot groups; the Teamsters merger policy is applicable; the Teamsters merger policy was followed; the Carriers violated the CBA by refusing to accept the Union-proffered ISL; the Union pursued expedited grievance arbitration against the Carriers, the contractual remedy for the Carriers' refusal to accept the proffered ISL; in bringing the instant action and attempting to enjoin the expedited grievance arbitration, the Carriers assert unilaterally a new right to participate in the creation of the ISL. The Carriers invoke the provision as follows: the Union represents both groups; the Teamsters merger policy should control the integration process; there is no Teamsters merger policy; because there is no Teamsters merger policy, the Allegheny-Mohawk process applies.
Before we characterize the ISL dispute as minor because controlled by the CBA, we must satisfy ourselves that the Carriers' assertion that the 2010 CBA requires that they be allowed to bargain collectively with the Union over the ISL is "arguably justified." If the Carriers in actuality seek to change an existing term in the 2010 CBA, the dispute is major without regard to their own characterization of it. See Consol. Rail Corp., 491 U.S. at 310, 109 S.Ct. 2477.
Section 1.5(c)(1) contemplates two mutually exclusive processes for pilot integration. If both pilot groups are represented by the Teamsters, the Teamsters merger policy applies; if not, then the parties follow the Allegheny-Mohawk provisions, which require a fair and equitable integration process that may (but need not necessarily) include collective bargaining. See 59 C.A.B. 20, 45 (1972). Regardless of which of these two processes applies, the 2010 CBA expressly provides
In his pilot presentation, shortly after the purchase, Ricci, the Carriers' chairman, accurately described the seniority-integration process: if the Flexjet pilots elected the Union to represent them, then it would be the Union, and not management, that would put together the ISL. Neither party disputes that the Teamsters represent both pilot groups. Any reasonable labor arbitrator would find that, based on the express language of the pilot-integration provision, the creation of the ISL is committed to the Union and the Carriers' sole function with regard to it is to accept what is proffered. Because the issue is controlled by express terms that leave no ambiguity or openness to interpretation, we need not consider implied terms. Cf. Wheeling, 789 F.3d at 694.
The Carriers argue, however, that this process does not apply because there is no "Teamsters Merger Policy," and the contract requires the integration to be conducted pursuant to such a policy.
Although the pilot-integration provision by its nature does not affect ordinary operations, it nonetheless represents the status quo because it is what Flight Options and the Union bargained for and agreed would govern in the extraordinary case of Flight Options acquiring another airline. The Union followed the 2010 CBA's express terms and proffered an ISL to the Carriers for acceptance; the Carriers refused to accept the list, instead asserting a new, unbargained-for right to be involved in the ISL process. The Carriers may seek such a right, but they must undergo the Section 6 bargaining process to do so, and, in the interim, must maintain the contract's status quo.
The district court did not err in finding that the 2010 CBA does not arguably justify the Carriers' assertion that they have a right to participate in the ISL process. The dispute is thus major. The district court properly enjoined the Carriers to honor the express terms of Section 1 of the 2010 CBA. However, these express terms provide that if the Carriers refuse to accept the Union's proffered ISL, the Union may invoke an expedited grievance-arbitration process, which uniquely applies to disputes under Section 1 of the 2010 CBA.
The Carriers raise three additional issues on appeal.
The first issue is whether the Norris-LaGuardia Act of 1932 (NLA), 29 U.S.C. § 101, bars the issuance of a preliminary injunction because it is not the "only practical, effective means" for enforcing the Union's rights under the RLA. District courts may issue labor injunctions "when such a remedy is the only practical, effective means of enforcing the duty to exert every reasonable effort to make and maintain agreements." See Chicago & Nw. Ry. Co., 402 U.S. at 583, 91 S.Ct. 1731 (discussing strike injunctions). The Carriers do not identify any other "practical, effective means" of dispute resolution, however. Indeed, it is they who first availed themselves of the federal courts in lieu of grievance arbitration, invoked by the Union, which would have directly addressed each parties' rights and obligations. Given this, the district court's grant of preliminary injunction is not inconsistent with the NLA.
The Carriers next argue that the district court misapplied the RLA by imposing its injunction on Flight Options Holdings I, Inc. and OneSky Flight, LLC, parent entities of Flight Options, as "carriers." Both of these companies are counter-defendants and indirect holding companies of Flight Options. Flight Options Holdings I, Inc. signed a side letter binding it, its affiliates (including subsidiaries and parents), and its successors to Section 1.5 of the 2010 CBA. OneSky Flight LLC's parent, Directional Aviation Capital, LLC, signed a similar letter. The district court did not erroneously classify these companies as "carriers" for RLA purposes; rather it referred to them by a collective party name based on their agreed status.
The final issue is whether the district court failed to address all four preliminary-injunction factors and failed to require the Union to post an injunction bond, and, if so, whether these failures were abuses of discretion. The Carriers argue that the district court's order should be reversed because it discusses only the movant's likelihood of success on the merits, and does not address the other preliminary-injunction factors: irreparable harm to the movant absent injunction, substantial harm to others, and the public interest. See Overstreet, 305 F.3d at 573 (6th Cir. 2002).
It is "generally useful for [district courts] to analyze all four of the preliminary injunction factors." Leary v. Daeschner, 228 F.3d 729, 739 n.3 (6th Cir. 2000). This is especially true because this court may analyze a factor differently than did the district court. Id. Weighing the preliminary-injunction factors is a matter of discretion, however, and here the district court did not abuse its discretion by not conducting an explicit four-factor analysis. See In re DeLorean Motor Co., 755 F.2d 1223, 1229 (6th Cir. 1985) ("[T]he four considerations applicable to preliminary injunction decisions are factors to be balanced, not prerequisites that must be met."). The preliminary-injunction order's analysis opened with a listing of the Overstreet factors. To the extent it did not explicitly address a factor, the court's order indirectly addresses it, or the record
The Carriers also argue that the preliminary injunction is jurisdictionally defective because the district court did not require the Union to post an injunction bond. See Fed. R. Civ. P. 65(c) (permitting preliminary injunction "only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained"); see also Mich. Am. Fed'n of State Cty. & Mun. Emps. Council, Local 1640 v. Matrix Human Servs., 589 F.3d 851, 860 (6th Cir. 2009) (holding that "a bond is an absolute precondition of a federal court's jurisdiction over labor injunctions."). This point is moot. During the pendency of this appeal the district court ordered, and the Union posted, a $125,000 bond.
For the reasons set forth above, we