JAMES S. GWIN, District Judge.
On April 22, 2016, Counter-Plaintiffs International Brotherhood of Teamsters et al. ("Pilots Union") filed a motion for preliminary injunction and temporary restraining order against Counter-Defendants Flight Options, et al. ("The Carriers").
This case concerns disputes between Pilots Union and the Carriers arising out of the merger of two luxury jet airline carriers: Flexjet and Flight Options. The Court decides whether the Carriers and the Pilots Union entered a contract that gave the Pilots Union the responsibility to establish a seniority ranking after the Carriers acquired control of a related flight company. The Court also decides whether the Carriers were required to bargain with the Pilots Union before the Carriers offered separation packages.
For the reasons below, this Court
Counterclaim-Defendants Flexjet and Flight Options provide fractional jet ownership and luxury jet travel. Flexjet employs approximately 320 pilots while Flight Options employs approximately 370 pilots.
The Pilots Union acts as the certified collective bargaining representative for Defendant Flight Options pilots.
The Pilots Union and Flight Options negotiated a collective bargaining agreement that became effective on March 31, 2010.
That letter agreement provides that "The Holding companies and Flight Options and their affiliates . . . shall be subject to all terms and conditions of Section 1 of the Flight Options/[Pilots Union] CBA (as it presently exists or as subsequently amended) as if all references to Flight Options and/or the Company expressly referred to the Holding Companies, any of them, or their affiliates."
The Letter of Agreement also requires affiliated companies comply with CBA pilot seniority consolidation provisions. The letter agreement states, "Upon acquisition by holdings I of a controlling interest in an air carrier . . . the acquired air carrier shall be consolidated utilizing the procedure for Successor Transactions set forth in Section 1.5 of the Flight Options/[Pilots Union] CBA."
In December 2013, OneSky acquired a controlling interest in Flexjet, and announced an operational merger between Flexjet and Flight Options.
After a contested representation election, on December 16, 2015, the National Mediation Board certified Counter-Plaintiffs Pilots Union as the bargaining representative of the combined unit of Counter-Defendants Flexjet and Flight Options pilots.
Section 1.5(c) of the Flight Options — Pilots Union collective bargaining agreement addresses pilot protections when Flight Options, or its parent company, acquires an air carrier.
After the merger announcement, the Pilots Union began seniority integration procedures with a committee comprised of three Flexjet pilots and three Flight Options pilots.
When assembling a combined seniority list, many policy decisions became involved. And these policy decisions mostly existed independent of the merged seniority lists. At both Flight Options and Flexjet, pilots had taken leave of absences, including leaves for military service. Flight Option pilots had been furloughed. Some pilots had flown for predecessor companies. How to treat these periods impacted individual pilot seniority but did not systemically advantage either Flight Option pilots or Flexjet pilots.
On February 24, 2016, the Pilots Union presented the integrated list to the Carriers Chief Executive Officer. On the same day, the Pilots Union also sent another letter to the Carriers Chief Executive "to serve as notice in accordance with Section 6, Title I of the Railway Labor Act (RLA). . . of the Union's intent to open and commence negotiations between the parties for the purposes of amending the CBA to apply to the entire combined craft or class of Flight Options and Flexjet Pilots . . ."
On February 26, 2016, the Carriers rejected the integrated list on the basis that it "does not comply with McCaskill-Bond." The letter also stated that "the company does not agree that these Section 1.5(c)(4) negotiations trigger the Section 6 status quo obligation."
On March 3, 2016, the Pilots Union responded and again demanded to bargain under Section 6 of the RLA as well as over whatever issues existed over the integrated list. The Carriers have refused to bargain with the Pilots Union as requested in the Pilots Union's March 3, 2016, letter.
On March 23, 2016, the Carriers filed a complaint in this Court seeking declaratory judgment "that the [Pilots Union's] actions violate McCaskill-Bond, that the [Pilots Union] and the representatives of the Flexjet pilots must collectively bargain with the Carriers for a fair and equitable seniority integration under McCaskill-Bond, that the Flexjet pilots are entitled to their own representative, and that the purported ISL presented to Flight Options by the [Pilots Union] on February 24, 2016 did not comply with McCaskill-Bond."
The Pilots Union claims the Carriers have not negotiated in good faith. After the Carriers buy a related flight business, the collective bargaining agreement requires fence bargaining to negotiate job responsibilities for current pilots and the pilots of the newly purchased flight company. On March 31, 2016, the Pilots Union met with the Carriers to negotiate over a Fence Agreement under Section 1.5(c) of the collective bargaining agreement.
The parties did not reach a fence agreement, and the Pilots Union characterized the Carriers' negotiations as "surface-level" and "regressive."
The Pilots Union also complains that the Carriers failed to bargain over a pilot separation program. On March 31, 2016, the Carriers presented the Pilots Union with a voluntary separation package ("VSP") for pilots at Flight Options and Flexjet. Counter-Plaintiffs Pilots Union say that the Carriers are required to bargain with the Pilots Union over the separation package and say the Carriers refused to meet face to face to bargain over the proposed VSP. Instead, on April 22, 2016, the Carriers offered the VSP to Flight Options pilots without giving the Pilots Union any chance to bargain.
On April 22, 2016, Counter-Plaintiffs Pilots Union filed a motion for preliminary injunction asking this Court to order the Carriers to bargain over rates of pay, rules and working condition and to rescind the VSP until bargaining has occurred. The Pilots Union also asks this Court to find that the integrated seniority list is "fair and equitable" or alternatively to order the Carriers to arbitrate the "fair and equitable" nature of the integrated seniority list.
A district court's decision to grant a preliminary injunction under the Railway Labor Act rests within that court's discretion.
However, in a RLA labor dispute, a district court may "enjoin a violation of the status quo pending completion of the required procedures, without the customary showing of irreparable injury."
The Railway Labor Act provides,
The RLA distinguishes between two categories of labor disputes: "disputes concerning the making of collective agreements," known as major disputes, and "disputes over grievances," known as minor disputes.
The Sixth Circuit recently described the difference between major and minor disputes. The Sixth Circuit said that a major dispute is one that arises "where a CBA does not exist or where one of the parties seeks to change the terms of an existing CBA. The issue in a major dispute `is not whether an existing agreement controls the controversy'; instead, the focus is on the `acquisition of rights for the future, not [the] assertion of rights claimed to have vested in the past.'"
The Pilots Union's preliminary injunction motion specifically involves two disputes: the integrated seniority list and the voluntary separation program. This Court examines each dispute in turn.
As an initial matter, the integrated seniority list dispute is a "major dispute" because its focus is on the "acquisition of rights for the future" rather than "rights claimed to have vested in the past."
As will be described, the Carriers and the Pilots Union agreed to a collective bargaining agreement that gave the Pilots Union responsibility to assemble the seniority list. Under its contract with the Pilots Union, the Counter-Defendants Carriers were required to accept the integrated seniority list when it was presented.
Even if the collective bargaining agreement had not given the union responsibility for merging the seniority lists, the Pilots Union used a "fair and equitable" process as required by Allegheny-Mohawk Sections 3 and 13.
Section 1.5(c)(1) of the Carriers — Pilots Union collective bargaining agreement gives the union, not the Carriers, the responsibility to create the seniority list. That section states
Because both groups were represented by the Pilots Union, the Teamsters Merger Policy controlled the integration process.
The Pilots Union did not have a written Teamsters Merger Policy, but they followed standard protocols when they assembled the Flight Options-Flexjets seniority list. Captain Dubinsky, a retired pilot with considerable pilot integration experience, oversaw the integrated seniority list process. With extensive experience, including having led a number of United Airlines seniority list integrations, Dubinsky testified the seniority integration process followed standard Airline Pilots Association (ALPA) Merger Policy.
The Flight Options — Flexjet pilot circumstances give support that the seniority merger process was fair and reasonable. Recall, both pilot groups were represented by the Pilots Union. And both pilot groups were roughly the same size. While any pilot seniority integration formula would advantage some pilots while disadvantaging others, the formula did not systemically benefit any subgroup of pilots. Somewhat counterintuitively, the incoming Flexjet pilots generally received higher seniority rankings than the Flight Option pilots.
The Carriers say that Allegheny-Mohawk Sections 3 and 13 control because the pilots of the acquired airline were not represented by the Pilots Union at the time of the acquisition. Even if this Court were to give credence to Counter-Defendants' argument, the integrated seniority list process was fair and equitable and thus met the Allegheny-Mohawk Sections 3 standard.
Section 3 of the Allegheny-Mohawk standard states,
Although the Pilots Union is the certified pilot representative, the Carriers say that they have an obligation to ensure that the integrated seniority list process is fair and equitable. Against the backdrop of adversarial national labor policy, the Carriers do not show case or statutory authority that the Carriers owed a representational duty to the pilots. The Pilots Union owed fair representation to the pilots it represents. The Carriers do not.
Pilots can enforce the fair representation duty and can sue the union for breach of this duty of fair representation. But it is nowhere clear that the Carriers have any duty or standing to challenge the Pilots Union's pilot representation.
The Pilots Union gave the integrated seniority list ("ISL") to the Carriers. At the time the list was given to the Carriers, the Pilots Union represented both Flexjet and Flight Options pilots.
The Pilots Union ISL methodology was based on pilots' "modified longevity date." Two equal-size merger committees—Flexjets Pilots Merger Committee and Flight Options Pilots Merger Committee—worked together to devise the methodology.
Pilots had longevity dates going as far back as 1995, with over 370 of the 670 pilots having a longevity date dating to the year 2000 or before. Under the consolidated seniority list, all Flexjet pilots kept their relative seniority to other Flexjet pilots. All Flight Options pilots kept their relative seniority to other Flight Option pilots.
The integration committees decided that because "Flexjet is the older company when compared to all combined companies . . . a Flexjet pilot would be integrated above an adjacent Flight Options pilot having a later Longevity Date, notwithstanding the Longevity Date of subsequent Flight Options pilots may be earlier." Captain Adam Fine, a Flexjet pilot who served on the merger committee testified that the longevity method was selected over the date-of-hire method because the "date-of-hire method would put half the entire Flexjet pilot group at the extreme bottom of the seniority list."
On February 24, 2016, the two committees sent a detailed letter to all pilots that explained the committees' seniority integration decision. In the letter, the committees explained the various factors the committees considered in deciding on the modified longevity methodology. Among other factors, the Committee said its integration formula considered: different aged companies, previous merged seniority list at Flight Options resulting in scrambled Date of Hire, different sized companies, furloughs, personal leaves of absence, large disparities in hiring bubbles at both companies during different years, different Captain/First Officer ratios at each company, inaccurate or incomplete employment data, and pilots hired on the same date at each company. The Committees addressed each of these factors and then explained the various methods it considered and why it ultimately chose the one it did.
This Court finds it difficult to argue that the Carriers have any standing to challenge the integration committee's decision. Moreover, the union representation background does not suggest why the Pilots Union would, or has, favored any subgroup of union members. The process was sanctioned by representative employees of both Flexjet and Flight Options. And even accepting the Carriers' curious resistance to the integrated seniority list, the CBA provides a clear mandate that the "Company or other Successor, as appropriate, shall accept the integrated seniority list."
Counter-Defendants Carriers seem to misunderstand their primary duty in relation to the ISL—it is not a duty to ensure the process is fair and reasonable, but rather a duty to accept the ISL list presented. Counter-Plaintiffs Pilots Union, as the representatives of both Flexjet and Flight Options pilots, hold the duty to ensure a fair and equitable ISL process for the pilots they represent.
The Carriers' own Chairman made a statement on October 15, 2014, that acknowledged that it was the union's job to integrate the seniority lists. The Chairman said, "once the union were to request a single system and thereby start to a merging of seniority lists. . . then the union's first job will be to integrate the seniority lists. That's—that's what they do."
This Court finds that the integrated seniority list was fair and equitable and
Applying the Sixth Circuit's Wheeling guidance, the voluntary separation package ("VSP") is a major dispute because it relates to "acquisition of rights for the future." The dispute is also a major one because the Carriers' claim that it had the right to present the VSP to pilots without bargaining is a "claim that is "frivolous or obviously insubstantial in light of the express language" of the collective bargaining agreement, as demonstrated below.
When parties are engaged in a major dispute under the Railway Labor Act, they must maintain the status quo until they exhaust the major dispute process.
If either side unilaterally alters the status quo:
Offering voluntary separation packages to Flight Options pilots without any meaningful bargaining with Pilots Union violates the status quo.
The Carriers have a collective bargaining agreement with the Pilots Union. After the representation election and the resulting certification, the Pilots Union represents both Flight Options pilots and Flexjet pilots.
The Flight Options — Pilots Union collective bargaining agreement requires negotiations to resolve issues coming from the merger or acquisition. The same provision requires interest arbitration if the parties are unable to resolve issues coming from the Flexjet acquisition:
Further, the collective bargaining agreement requires that seniority govern any "reduction in force"
Thus, the voluntary separation package seems to run counter to the collective bargaining agreement. The Carriers state in their briefing, "because Flight Options pilots faced possible furlough due to overstaffing Flight Options decided to offer a very generous voluntary separation program ("VSP") to see if enough pilots will take the offer to avoid a potential furlough."
Independent of how any separation program plays out, the Carriers were required to meet, confer and negotiate with the pilot certified representative before offering the separation proposal.
As the Supreme Court has explained, the RLA,
The Supreme Court has further explained that the RLA's duty to bargain in good faith is similar to the National Labor Relations Act duty to bargain in good faith and that "the duty of management to bargain in good faith is essentially a corollary of its duty to recognize the union."
Counter-Defendants Carriers must rescind the VSP offers made and bargain in good faith with Pilots Union.
For the reasons above, this Court
IT IS SO ORDERED.
