Employment Law Daily Per CBA, Teamsters had sole right to integrate pilot seniority lists post-merger
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Wednesday, July 19, 2017

Per CBA, Teamsters had sole right to integrate pilot seniority lists post-merger

By Lisa Milam-Perez, J.D.

The Teamsters union had the exclusive right to integrate pilot seniority lists following the merger of two airlines, the Sixth Circuit held, affirming a district court’s holding in a Railway Labor Act case. The union was the bargaining representative for both groups of pilots, so under the applicable collective bargaining agreement between the union and the airline, the process of seniority integration was committed to the union in accordance with its internal policies—and the airline had no say in the matter. The airline claimed it had a stake because it had an independent obligation under McCaskill-Bond to ensure that the integration was “fair and equitable,” and it stood to get sued if the list was not compliant. However, the parties’ 2010 CBA superseded McCaskill-Bond—and the union had a similar “fairness” obligation anyway, so it would not run afoul of McCaskill-Bond to leave the process of integration solely in the union’s hands (Flight Options, LLC v. Teamsters Local 1108, July 17, 2017, White, H.).

Airline merger, integrated list. Flexjet and Flight Options provide fractional ownership of jet aircraft and luxury jet travel. OneSky, a holding company, owns Flight Options. Since 2010, OneSky has been a party to a collective bargaining agreement with the Teamsters Airline Division, which represents Flight Options’ approximately 360 unionized pilots. As part of the contract negotiations for the 2010 CBA, OneSky executed a letter of agreement consenting to the method used to merge pilot seniority listings for any subsequent airline acquisitions. The letter of agreement also required OneSky’s affiliated companies to comply with the CBA’s provisions for pilot seniority consolidation. Under the CBA, the union’s internal integration procedure would be used if the union represented both groups of pilots; if the union represented only one of the groups, though, the “Allegheny-Mohawk Labor Protective Provisions,” as incorporated by McCaskill-Bond, would apply.

OneSky acquired Flexjet in 2013 and announced a merger of Flight Options and Flexjet, adding Flexjet’s 340 pilots into the mix. In September 2015, the National Mediation Board concluded that the airlines were a single carrier under the RLA and, following a contested election, the Teamsters Airline Division was certified as the bargaining representative of the combined pilot groups. The newly unionized Flexjet pilots aren’t yet covered by the 2010 CBA (or any union contract, for that matter).

The union formed a merger committee comprised of both groups of pilots to undertake the integration of pilot seniority lists. It presented the integrated list to the airline, which promptly balked, claiming that the list didn’t comport with the McCaskill-Bond amendment to the Federal Aviation Act; that it was ad hoc; and that, substantively, it was unfair to pilots who had split their work between the two airlines. The airline sought a declaratory judgment to that effect. It also asked the court to declare that McCaskill-Bond required the union and the Flexjet pilot representatives—who were entitled to their own representative, the airline argued—to bargain with the airline over seniority integration.

Union list was legit. The district court held the dispute over the integrated seniority list was a major dispute under the RLA and therefore, it had jurisdiction over the matter (rejecting the airline’s contrary claim that it was a minor dispute and thus subject to arbitration). On the merits, the court found that the parties agreed to give the union responsibility to assemble the integrated seniority list, so the airline was required to accept the union’s list. There was no evidence the union’s integration procedure was not fair and equitable; also, although the union didn’t have a written merger policy, the union committee followed standard protocol in assembling the list. Further, the union owed a duty of fair representation to all of the pilots, since it represented both groups; the employer owed no such duty. As such, the airline lacked standing to challenge the list, the court held, and granted a preliminary injunction ordering the airline to accept it.

McCaskill-Bond. The Sixth Circuit agreed, finding the dispute was major in RLA terms and affirming in part. Rejecting the airlines’ claim that it had the right not to accept the union’s list and to demand the union bargain over the seniority integration, the appeals court found this position was “not arguably justified” by the applicable CBA. The McCaskill-Bond amendment clearly provides that when the same union represents both groups of employees, the union’s internal integration policies apply and will “supersede the requirements” of the amendment. It also states that if the CBA has an integration policy in place, those terms won’t be affected by McCaskill-Bond so long as they afford the necessary statutory protections—i.e., that the integration be “fair and equitable.” Such was the case here. And, while the airline insisted the union had no merger policy in place (not a formal written one, anyway), the appeals court found otherwise. The union’s merger policy may have been ad hoc, but it was sound, and the airline didn’t get to dictate what the union’s policy should look like.

Arbitration provision sidestepped. The union had filed a counterclaim; it wanted a preliminary injunction ordering the airlines to “restore the status quo” by accepting the integration list in accordance with the parties’ contractual agreement giving the union control over the process. The district court obliged. But what was “status quo” here? The circumstances in which the dispute arose were not “ordinary” airline operations, given the extraordinary nature of airline mergers. Still, the CBA’s pilot-integration provision was nonetheless the status quo, the appeals court agreed, since it is what the parties had bargained for and had agreed would govern in those rare occasions of a merger. On this point, the district court was correct: It did not err in finding that the 2010 CBA did not arguably justify the airline’s assertion that had a right to participate in the integration process. “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.”

However, in directing the parties to implement the terms of the CBA, the court only went halfway. It directed the airline to honor the CBA’s seniority integration provisions, but it neglected an additional contract provision stating that when the airline refuses to accept a union-proffered integration list, the union’s remedy is expedited grievance arbitration. This, too, was part of the parties’ status quo, and the lower court should have held the parties to this established remedy for noncompliance as well. Therefore, the appeals court directed the district court to modify the injunction accordingly: The airline must either accept the union’s integration list or submit to expedited arbitration.

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