MARCIA S. KRIEGER, District Judge.
This is a labor dispute arising under the Railway Labor Act, 45 U.S.C. §§ 151 et seq. ("RLA"), which governs labor relations in the airline industry. The provisions of the RLA are extended to the airline industry by virtue of 45 U.S.C. § 181, which covers "every common carrier by air engaged in interstate or foreign commerce, and every carrier by air transporting mail for or under contract with the United States Government, and every air pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers."
According to the Complaint (#
In 2009, RAH acquired Frontier and another airline, Lynx Aviation, Inc. At the time of acquisition and thereafter, pilots at Frontier were represented by the Frontier Airline Pilots Association ("FAPA"). In 2009, RAH also acquired Midwest Airlines, Inc. ("Midwest").
On October 10, 2010, IBT applied to the National Mediation Board ("NMB") for a finding that the Republic subsidiaries, Midwest, Frontier, and Lynx comprised a "single transportation system" for RLA representation purposes. FAPA was a party to the proceeding and opposed IBT's application, contending that Frontier was a separate carrier, not part of a larger transportation system.
On April 7, 2011, the NMB determined that a single transportation system existed for a pilots employed by the Republic subsidiaries, Midwest, Frontier and Lynx-i.e., that all of these pilots together comprised a single bargaining unit.
On May 2, 2011, the NMB authorized an election to select an exclusive bargaining representative for the newly designated bargaining unit (the pilots of the Republic subsidiaries, Frontier, Midwest and Lynx combined). IBT was the only labor organization that appeared on the ballot. The NMB scheduled a June 1-27, 2011 voting period with a ballot tally on June 27, 2011.
Unhappy with NMB's determination, during the voting period FAPA and Frontier executed a Letter of Agreement 67 ("LOA 67"), that was ratified by FAPA-represented Frontier pilots. LOA 67 purported to amend the Frontier pilots' collective bargaining agreement with Frontier by including a grant of wage and benefit concessions to Frontier, equity ownership in Frontier for FAPA-represented pilots, and establishment of a Frontier profit-sharing plan for FAPA-represented pilots.
In addition, Frontier and RAH separately agreed to reduce RAH's equity position in Frontier to forty-nine percent (49%) or less, and to make other changes that impacted the facts upon which the NMB relied in making its determination that there was a single bargaining unit and scheduling the voting period. The agreement required Frontier to "immediately" redevelop a "unique" Frontier website for all sales, operational, and recruitment purposes. It also required the parties to take various steps to separate Frontier's management structure from that of the other RAH subsidiaries — for example, Frontier was to have a separate COO and Director of Labor Relations who would report to the Frontier COO. Frontier's human resources and payroll functions were to be separated from those of RAH, and Frontier was to develop and use a separate employee handbook for Frontier employees. These changes were to be implemented no later than December 31, 2011.
Based on the agreements reflected in LOA 67, on June 22, 2011 a letter
On June 24, 2011, FAPA and Frontier entered into a revised LOA 67. The revision contained many of the same terms, but the earlier equity and profit-sharing provisions and the provisions regarding organizational restructuring were conspicuously absent. Such terms were placed in a separate "Commercial Agreement," which expressly stated that it was not part of the collective bargaining agreement nor subject to collective bargaining.
The Commercial Agreement was executed on June 24, 2011 by Frontier, RAH, and an entity called FAPAInvest, LLC. In the Commercial Agreement, FAPAInvest was described as the entity "acting on behalf of those persons employed by [Frontier] as of the date of Letter of Agreement 67 [i.e., the Frontier pilots represented, at the time, by FAPA]. ..." According to the Commercial Agreement, final plans and agreements with regard to equity and profit sharing would be developed, and "FAPAInvest or its designee(s), successor(s) or assigns have the sole authority to represent the interest of the Participating Pilots in any matter related to this Agreement." Commercial Agreement,
On June 27, 2011, IBT was elected and certified as the exclusive bargaining representative of the pilots employed by all of the RAH airline subsidiaries. Thereafter, IBT commenced this lawsuit alleging violations of the RLA for which it requests that the LOA 67 and Commercial Agreement be invalidated.
Generally IBT contends that by entering into LOA 67 and the Commercial Agreement, RAH and Frontier violated various provisions of 45 U.S.C. § 152. Although the Complaint states separate claims, these can be grouped into several general categories: (1) the Defendants interfered with the representation election and the pilots' choice of representative in violation of 45 U.S.C. § 152, Third and Fourth (Claims 1, 2, and 4); (2) the Defendants violated 45 U.S.C. § 152, Ninth by preventing IBT from negotiating regarding profit sharing and equity participation (Claims 3 and 6); and (3) the Defendants' conduct breached an existing collective bargaining agreement prohibiting maintaining or operating Frontier as a separate carrier for representation purposes, in violation of 45 U.S.C. § 152, First, and 45 U.S.C. § 156.
In Motion to Dismiss, the Defendants assert a variety of legal challenges based on limits to this Court's jurisdiction over claims arising under the RLA. In addition, they contend that because IBT has suffered no injury, it lacks standing, to bring a claim under the RLA, and that the conduct complained of does not violate any provision of the RLA.
A plaintiff who sues in federal court has the burden of establishing federal jurisdiction to hear the claim. See Marcus v. Dep't of Revenue, 170 F.3d 1305, 1309 (10th Cir.1999). Indeed, because the jurisdiction of federal courts is limited and there is a presumption against the jurisdiction of a federal court to hear the claim, the party invoking federal jurisdiction bears the burden of demonstrating that the exercise of jurisdiction is proper. See id. Motions to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) can be in one of two forms. Maestas v. Lujan, 351 F.3d 1001, 1013 (10th Cir.2003). First, the moving party may bring a facial attack as to the sufficiency of the complaint's allegations regarding the existence of subject matter jurisdiction. In reviewing facial attack on the complaint, a district court accepts the allegations in the complaint as true. See Holt v. United States, 46 F.3d 1000, 1002 (10th Cir.1995). Alternatively, the moving party may go beyond allegations in the complaint and attack the factual basis upon which the plaintiff bases subject matter jurisdiction. See Maestas, 351 F.3d at 1013.
Here, the Defendants' challenge to the Court's subject matter jurisdiction generally amounts to a facial attack and so no factual determinations are necessary to resolve the motion. The specific limitations of the RLA on this Court's jurisdiction are discussed below.
Article III of the Constitution limits the jurisdiction of federal courts to actual cases or controversies. Summers v. Earth Island Inst., 555 U.S. 488 (2009). To satisfy the standing requirement of Article III, a plaintiff must demonstrate: (1) he has suffered an injury in fact, (2) there is a causal connection between the injury and the conduct complained of, and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (1992).
Because many of IBT's allegations concern potential future injury and IBT seeks prospective relief to prevent such harm, to establish an actual case or controversy, IBT must show that the "threatened injury is real, immediate, and direct," Davis v. FEC, 554 U.S. 724 (2008) (citation omitted), or the existence of a continuing injury, Dias v. City and County of Denver, 567 F.3d 1169, 1177 (10th Cir. 2009).
IBT relies primarily on 45 U.S.C. § 152 for its claims. The pertinent sections are set forth as follows:
45 U.S.C. § 152.
IBT also asserts that the Defendants violated 45 U.S.C. § 156, which sets forth notice and waiting periods when carriers and employee representatives wish to make changes to agreements regarding rates of pay, rules, or working conditions.
Pertinent to consideration of the proper role for this Court is recognition of the role of various labor agencies under federal law. "The RLA evinces a strong preference for alternative dispute resolution and sharply limits judicial involvement in labor issues." Air Line Pilots Ass'n, Int'l v. Guilford Trans. Indus., Inc., 399 F.3d 89, 92 (1st Cir. 2005).
With this admonition in mind, the Court notes that the characterization of a dispute affects the role that the Court should play. In general, disputes relating to collective bargaining agreements are characterized as "major" or "minor" under the RLA. Major disputes generally concern the formation of or negotiated changes to an agreement; minor disputes, in contrast, seek to enforce existing contractual rights and arise out interpretation or application of existing collective bargaining agreements. Bhd. of Maint. of Way Emps. Div. v. Burlington Northern Santa Fe Ry. Co., 596 F.3d 1217, 1222 (10th Cir. 2010).
A minor dispute must be submitted to binding arbitration. 45 U.S.C. § 184. A major dispute can be heard in federal court, but only upon completion of certain mediation procedures. 45 U.S.C. §§ 155, 156, 183. The parties must maintain the status quo pending exhaustion of mediation procedures; a federal court may enjoin a party from unilaterally taking steps to alter the status quo. Consol. Rail Corp. v. Ry. Labor Execs.' Ass'n, 491 U.S. 299, 302-04 (1989).
In addition, disputes concerning the definition of the bargaining unit and the representative for collective bargaining are considered to fall within the exclusive jurisdiction of the NMB. 45 U.S.C. § 152, Ninth; Minjares v. Indep. Ass'n of Continental Pilots, 293 F.3d 895, 898 (5th Cir. 2002) ("Disputes which involve the determination of the certified representative of airline employees in collective bargaining and contract administration are classified by the RLA as `representation disputes'" and must be heard by the NMB, not a federal court).
Federal courts have jurisdiction to hear certain kinds of statutory claims, particularly disputes involving an employer's alleged interference with employees' rights to organize and designate an exclusive bargaining agent, as guaranteed by 45 U.S.C. § Third and Fourth. These provisions "bar covered employers from meddling in, coercing, or unduly influencing employee's representational choices and from interfering with the right to unionize." Guilford, 399 F.3d at 93. Although these provisions generally concern the pre-certification rights and freedoms of unorganized employees,
IBT contends that the Defendants have interfered and otherwise attempted to influence the pilots' choice of representation in three distinct ways: (1) by interfering with the election and IBT's role as representative by attempting to reverse the single transportation system finding of the NMB while the balloting was ongoing and postponing the vote tally (Claim 1); (2) by proposing to make structural changes that would ultimately allow Frontier to be considered a carrier separate from the other subsidiary airlines, which would assist FAPA in returning to its former role as the exclusive bargaining representative of Frontier's pilots (Claim 2); and (3) by removing aspects of the contemplated profit-sharing plan and changes to the ownership structure from the collective bargaining agreement and making them contingent on the success of the organizational changes to Frontier, thereby limiting IBT's ability to bargain on these issues and impairing its effectiveness as a representative (Claim 4). The Defendants seek dismissal of these claims arguing, inter alia, that IBT suffered no injury in fact and/or its alleged future injury is too speculative to show any real harm. In the absence of an injury, IBT has have no standing to assert the interference claims, and there is no case or controversy to determine.
According to IBT's own allegations, Defendants' alleged attempt to postpone the election was unsuccessful, and IBT won the election. Under these facts, IBT suffered no injury and there is no claim or controversy to be resolved. Accordingly, Claim 1 of the Complaint is dismissed, with prejudice.
With respect to Claims 2 and 4, the alleged harm is prospective harm. IBT claims that two agreements will impact its standing to bargain for the Frontier pilots and to bargain effectively for the entire collection of pilots for which it was elected to be a representative. Defendants note, that before any injury would occur regarding a future election, the NMB would first have to reverse its finding that there was a single bargaining unit, hold another representation election, and IBT would have to lose in that election. IBT does not dispute that this is the case as to its official authority, but it suggests that its practical influence is diminished.
On this record, the Court cannot determine whether there is any practical impairment of IBT's rights, and the chain of events necessary to affect its official authority is too attenuated and remote to amount to a real injury for the purposes of standing. Therefore, at this point, the possibility of harm is simply to speculative to state a claim.
These claims (Claims 2 and 4) will be dismissed without prejudice. Should IBT come forward with alleged facts sufficient to demonstrate a concrete and particularized injury, it may seek to amend within the deadline set in the Scheduling Order (or extension thereof).
Claims Three and Six allege that by entering into an agreement separate from the collective bargaining agreement, by which only FAPAInvest can represent the Frontier pilots, the Defendants have violated section 152, Ninth. This provision requires that once an exclusive bargaining representative is certified by the NMB, "the carrier shall treat with the representative so certified as the representative of the class."
The parties do not dispute that this Court has jurisdiction to address this type of violation, but the Defendants contend that the allegations of the Complaint are insufficient to state a cognizable claim, for several reasons including that (1) RAH is not a "carrier" subject to section 152, Ninth; (2) the conduct occurred before IBT was certified, and so there was no obligation to treat with IBT at the time; (3) the Defendants have no duty to treat with IBT with respect to the Commercial Agreement.
As noted, section 152 Ninth requires that a "carrier" treat with the certified representative. RAH is a holding company that owns the various airline subsidiaries, including Frontier. The Defendants argue that RAH, therefore, is not a carrier and is not subject to this provision.
Although other provisions of section 152 apply to a "carrier, its officers, or agents," the Ninth provision only addresses carriers, indicating clear intent to limit application of this provision. IBT has not identified any legal authority that includes RAH in the definition of "carrier" as this term is used. Accordingly, dismissal of these claims as to RAH is appropriate.
Section 152, Ninth imposes an obligation to treat with a bargaining representative
The Defendants argue that because they executed the agreements before they had an obligation to treat with IBT, there is no legal cause of action. Similarly, they contend that the Commercial Agreement does not violate Frontier's duty to treat exclusively with IBT on matters relating to wages, rules, and working conditions because "IBT remains free to bargain on behalf of the Frontier pilots for equity and/or profit sharing above and beyond that granted to the LOA 67 pilots; it simply cannot undo the guaranteed benefits those pilots received for their past concessions." Def.'s Brief in Support of Mo. to Dismiss,
Defendants' argument, however, ignores the effect of these agreements. Although the Defendants had no obligation to treat with IBT before it was certified, it is another question whether the Defendants could preemptively preclude IBT from being able to negotiate on behalf of members of the bargaining unit after its certification. As noted above, LOA 67 made modifications to the collective bargaining agreement regarding pay adjustments and other matters but tied them to equity participation and profit sharing benefits placed outside the scope of the collective bargaining agreement in the Commercial Agreement. The Commercial Agreement contemplates further negotiations but provides that only FAPAInvest may represent the covered employees. In other words, even though IBT is now the certified representative of the pilots covered by this agreement, only FAPAInvest is permitted to negotiate the final terms of any plans or agreements governing such benefits. This plausibly suggests a violation of section 152, Ninth.
Defendants similarly contend that preventing IBT from negotiating on these matters is analogous to providing guaranteed benefits to one class of pilots in the bargaining unit, but not for others, which has been held to be permissible in Renneisen v. Am. Airlines, Inc., 990 F.2d 918, 924 (7th Cir. 1993). Renneisen is distinguishable in numerous respects from the issues presented here. In that case, as a concession, a union negotiated an agreement with an airline which divided pilots hired before a certain date, who were given certain wage and benefit guarantees (the "A-scale pilots"), from those hired thereafter, who were not given such guarantees ("B-scale pilots"). The agreement further provided that the guarantees would not be rebargained unless a majority of the A-scale pilots voted to do so. Legal challenge was brought by several B-scale pilots, who argued that the agreement amounted to a restraint on collective bargaining under the RLA. The Seventh Circuit, however, held that section 152 "was not designed to give minority groups within a union a cause of action against their employer when they cannot persuade their own union to take actions they deem to be in the union's best interest." 990 F.2d at 924. As both the union and the employer were abiding by the agreement, the court held that there was no cause of action under the RLA when an employer "honors the terms of an agreement with a union that the union itself has not challenged."
The issue here is not whether some pilots can be guaranteed certain benefits while other employees in the same bargaining group are not given the same guarantees. Rather, the matter presented is whether an about-to-be ousted union and an employer can create an agreement whereby the successor union would be prevented from negotiating profit-sharing and equity participation matters for a portion of its bargaining unit. Renneisen does not address or answer this question.
Giving IBT the benefit of all favorable inferences, the alleged facts are adequate to allege that the Defendants' entered into an agreement that had terms that could be contrary to law — an arrangement whereby the employer would not have to negotiate with IBT over a significant matter affecting wages and benefits of Frontier pilots. Without determining the merits of the claim, it is sufficiently pled as to the Defendants other than RAH (as noted above.)
Finally, the Defendants contend that bargaining obligations do not apply in the context of the Commercial Agreement because FAPAInvest is no more than a trust holding the investment of the covered pilots. This elevates form over substance.
Giving IBT the benefit of all favorable inferences, the Commercial Agreement concerns financial benefits to the covered employees, which is an area to which a duty to bargain attaches. In addition, as noted above, this does not involve a completed plan that will simply be administered by FAPAInvest. Rather, pursuant to the Commercial Agreement, FAPAInvest will act as a negotiating representative with respect to the creation of the final profit-sharing and equity sharing plans, the details of which have yet to be worked out. This plausibly states a claim that the Defendants (excluding RAH), by setting up this arrangement, are treating with an entity other than the exclusive bargaining representative for these employees with respect to subject matter covered by the RLA.
Claim 5 asserts that the two agreements at issue amount to a unilateral modification to a separate collective bargaining agreement in violation of 45 U.S.C. § 152, First and 45 U.S.C. § 156, which requires certain notice and waiting periods before changes can be made to the contract. According to the Complaint, IBT's collective bargaining agreement with RAH and the Republic subsidiaries ("IBT CBA") contains a term providing that the airlines "shall not establish any new airline (alter ego or otherwise) or acquire a controlling interest in any carrier ... and maintain it as a separate carrier." The parties are currently engaged in major dispute resolution proceedings regarding changes to the IBT CBA. Frontier, however, is not involved in those proceedings because it is not a party to the IBT CBA. IBT contends that pursuant to LOA 67 and the Commercial Agreement, RAH and Frontier intend to operate Frontier as a separate carrier in violation of the IBT CBA. IBT contends that the execution of these agreements amounts to a unilateral change to the IBT CBA, and therefore a major dispute within this Court's jurisdiction. The Defendants argue that this is minor dispute regarding construction of the IBT CBA such that it must be settled by arbitration.
The Court need not resolve the issue whether the dispute is major or minor, however, for the purposes of the motion to dismiss. Regardless of the type of dispute, the Court would have jurisdiction to issue an appropriate preliminary injunction to maintain the status quo pending the completion of administrative procedures or to enforce administrative remedies. Frontier, 628 F.3d at 405-406; see also Brotherhood of Maintenance of Way Employes Div./IBT v. Union Pacific Railroad Co., 460 F.3d 1277, 1283 (10th Cir. 2006) (federal district court has jurisdiction to enjoin strike during resolution of parties' minor dispute and to place conditions on the granting of that injunctive relief). Because some aspect of Claim Five may yet be justiciable in this Court, the Court declines to dismiss the claim at this point.
