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AIR LINE PILOTS ASS'N. INTERN. v. U.A.L.

August 1, 1985

AIR LINE PILOTS ASSOCIATION INTERNATIONAL, PLAINTIFF,
v.
UNITED AIR LINES, INC., DEFENDANT.



The opinion of the court was delivered by: Bua, District Judge.

  MEMORANDUM ORDER

The above-captioned matter came before the Court for trial on the merits of plaintiff's complaint. The Court, having heard testimony June 17 through June 28, 1985, and having reviewed deposition designations, exhibits and memoranda submitted by the parties, does hereby enter the following findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

I. FINDINGS OF FACT

2. On May 17, ALPA filed motions for preliminary injunction and for expedited discovery. The Court granted ALPA's discovery motion, also requiring that ALPA submit to expedited discovery by United. The Court scheduled a hearing on ALPA's motion for preliminary injunction for June 10, 1985. Subsequently, the hearing was rescheduled to June 17, 1985.

3. On May 28, 1985, United filed a motion to strike ALPA's claim for injunctive relief. United asserted that ALPA was not entitled to injunctive relief under section 8 of the Norris-LaGuardia Act, 29 U.S.C. § 108, because ALPA had failed to accept the proffer of arbitration by the National Mediation Board ("NMB") on April 16, 1985, after United had rejected the proffer. On June 7, 1985, the Court denied United's motion. See Memorandum Order, June 7, 1985, 610 F. Supp. 243.

4. On June 14, 1985, the United Air Lines Master Executive Council ("UAL-MEC") for the United pilots ratified a tentative agreement that had been reached between the negotiating committees for United and ALPA, thus ending the strike. The back-to-work agreement, which was ratified together with the basic economic agreement, provided in part:

  The Association and the Company agree that neither
  will engage in or condone any activities which might
  constitute reprisals or recriminations as a result of
  the ALPA strike. The Company will withdraw all
  Letters of Charge and all disciplinary actions taken
  against pilots for strike-related activities and will
  not take any further action against ALPA or pilots
  for strike-related activities. ALPA agrees not to
  level fines or take other disciplinary action against
  nonstriking pilots. ALPA's claims regarding the "500"
  pilots, system rebid and salaries for pilots hired as
  "fleet qualified" will continue to be pursued by ALPA
  in Federal Court. The parties agree to a plenary
  trial commencing June 13, 1985. Should there be any
  appeals both parties will agree to an expedited
  appeal. The parties will drop all other strike
  related litigation or arbitration.

Pl.Ex. 43 at ¶ 14 (emphasis added).

A. The Parties

5. ALPA is an unincorporated labor organization and is the duly certified exclusive collective bargaining representative under the RLA, for the air line pilots employed by United. Stipulation of Uncontested Facts ("Stipulation") at ¶ 1. Henry A. Duffy is the President of ALPA.

6. Representation of United pilots is controlled by the UAL-MEC which consists of three elected members from each of the nine pilot domiciles. Tr. 1253. Roger Hall is the Chief Executive Officer of UAL-MEC. UAL-MEC's chief negotiator is William C. Brashear, and the Chairman of ALPA's United Pilots Strike Committee is Frederick C. Dubinsky.

7. United is a corporation duly organized and existing under the laws of the State of Delaware, having an office and place of business in the Township of Elk Grove, Cook County, Illinois. United is an air carrier as defined in the Federal Aviation Act of 1958, as amended (49 U.S.C. § 1301-1542), holding certificates of public convenience and necessity issued pursuant to that Act, under which certificates it operates an airline system for the carriage by air of passengers, property and mail in domestic, overseas and foreign commerce. As such, United is a "carrier" as defined by 45 U.S.C. § 181, and is subject to the provisions thereof. Stipulation at ¶ 2.

8. United's Chairman and Chief Executive Officer is Richard J. Ferris and its President is James J. Hartigan. United's chief negotiator is David Pringle, and James Guyette is Chairman of United's Operations Adjustment Task Force. Lloyd W. Barry is Senior Vice President of Flight Operations.

9. United's airline system is the largest domestic carrier in the United States. United serves more than 150 cities in the United States, including Chicago, and approximately 10 cities in 5 foreign countries and territories, and has operating routes extending over approximately 500,000 route miles. United has a fleet of over 300 aircraft owned and leased. Stipulation at ¶ s 3-4.

10. In its air transport operation, United employs over 48,000 persons. Among these are some 9,000 persons employed in the craft or class of flight attendants represented for the purpose of collective bargaining under the RLA by the Association of Flight Attendants ("AFA") and approximately 15,000 persons employed in various crafts and classes represented by District 141, International Association of Machinists and Aerospace Workers ("IAM"). United, AFA and IAM are currently parties to existing collective bargaining agreements. Stipulation at ¶ 4.

B. Events Preceding the Strike

11. For many years ALPA and United have been parties to successive collective bargaining agreements. The agreement in effect prior to the strike had been in effect since October 1981 and contained the following duration clause:

  This Agreement shall continue in full force and
  effect until October 1, 1983 and shall renew itself
  without change each succeeding October 1 thereafter,
  unless written notice of intended change is served in
  accordance with Section 6, Title I, of the Railway
  Labor Act, as amended, by either party at least sixty
  (60) days prior to October 1, 1983 or any year
  thereafter upon written notice of either party
  thereto.

Pl.Ex. 1, Section 22 at ¶ C. The parties later extended the October 1, 1983 date to April 1, 1984 by agreement.

12. On January 30, 1984, United served an opening letter under Section 6 of the RLA upon ALPA. Tr. 948; Def.Ex. 146. In turn, ALPA served its own Section 6 Notice upon United stating its various proposals for modifications to the 1981 Agreement. Tr. 955; Def.Ex. 145. Issues signaled for negotiation included, inter alia, compensation for incumbents, new-hire rates and the method for assigning cockpit seats to pilots. Def.Exs. 145 and 146. These proposals are known as "Section 6 Openers" in that they commenced the process for amendment of the 1981 Agreement provided in Section 6 of the RLA, 45 U.S.C. § 156.

13. Prior to the Airline Deregulation Act, P.L. 95-504, 92 Stat. 1705, the commercial airline industry was regulated as to its route structure, rates it could charge passengers, and the like. During the regulated era, United (and other trunk carriers) had little economic incentive to seek to contain pilot labor costs.

14. As negotiations progressed during 1984, it became clear to the parties that the most difficult issue before them was United's request that ALPA agree to a new, reduced pay scale to apply to pilots hired during the term of the potential new agreement. This pay scale issue has been referred to as the "new-hire pay scale." United's objective in its negotiations with ALPA was to secure what was, in United's judgment, a "cost competitive" agreement with ALPA. Tr. 442-43. United was concerned that its competitors, especially American Air Lines, benefitted from lower pilot costs. Tr. 946; 1012. Although United made an operating profit of more than $500 million in 1984 (Tr. 508), it had incurred operating losses for the previous five years. Tr. 1015; Def.Ex. 146.

15. In August 1984, mediators from the NMB entered the collective bargaining negotiations. Tr. 962.

1. Task Force Created

16. In the fall of 1984, United began to plan for the possibility of a strike by the pilots. United created a task force to develop a plan to operate in the event of a pilots' strike. The flight operations aspect of the planning was committed to the direction of Captain Lloyd Barry, who had become Senior Vice President of Flight Operations in March 1984. Tr. 234, 299, 380. Barry was assisted by Rakesh Gangwald, a systems analyst who was brought in to aid Barry in developing administrative business processes for flight operations. Tr. 376.

17. United's flight operations strike plan was called the "operations adjustment plan." Pl.Ex. 22; Tr. 301. United was aware that its operations adjustment plan might not create enough pressure to force ALPA to settle on United's terms prior to May 17. United believed that, if a strike took place, the plan would break the strike, and thereby force ALPA to settle on terms preferred by United. Tr. 302-4. The breaking of the strike and forcing of a settlement was the objective of United's flight operations adjustment plan. Id.; Tr. 343. The elements of this plan were regarded by United as so "stern or unusual" (Tr. 534) that, if a strike occurred, there would be a "stampede" of pilots to the United side. Tr. 464. United believed that it could break the strike in two to four days. Tr. 302-3; Pl.Ex. 22. Ferris believed that United would secure its objective:

  You know what's going to happen, if we have this
  withdrawal of service, what's going to happen is
  eventually the membership is going to be fed up
  enough — it's the old story, throw the rascals out,
  put a new one in; we negotiate to come back on the
  property.

Tr. 470, Videotape of O'Hare Domicile Meeting, May 2, 1985.

2. The "Group of 500"

18. Also in the fall of 1984, United began to experience a shortage of pilots for its desired flight schedule. Tr. 41, 1011.

19. Prior to the fall of 1984, United last hired new pilots during the period between 1977-79. Stipulation at ¶ 33; Tr. 102. Approximately 800 pilots were hired in that time. Tr. 34. Those individuals were brought into United in order to serve in the entry-level position of second officers. Stipulation at ¶ 33; Tr. 34, 38, 41.

20. Prior to the fall of 1984, United's practice was to employ student pilots from the first day of training. Stipulation at ¶ 33; Tr. 40, 337-38. Training of student pilots was conducted in accordance with rules in the 1981 Agreement, whether or not the student pilots were being trained with incumbent pilots. Tr. 104, 143. Student pilots were paid at rates established in the 1981 Agreement. Tr. 339. Pursuant to the 1981 Agreement, the student pilots accrued pilot seniority from their first date of hire as student pilots. Pl.Ex. 1, Sec. 6(A)(1), p. 35.

21. During United's hiring of student pilots in the period 1977 to 1979, when Initial Operating Experience ("IOE") was a domicile activity, student flight officers were: (1) provided tentative pilot seniority numbers on their first or second day of training at Denver, conditioned upon the successful completion of training and receipt of an assignment to the line for second officer duty; (2) assigned to the line for second officer duty upon completion of the Denver training program; (3) provided final seniority numbers at the time of their completion of training and assignment to the line for second officer duty; and (4) had their IOE at their assigned domicile subsequent to the above stated events. Tr. 731. In 1978-79, individuals hired for student pilot positions became line pilots with final seniority numbers on the United pilot system seniority list upon the completion of training and prior to beginning IOE. Tr. 630-631, 646, 731; Pl.Ex. 47. Less than 1% of pilots who completed their training in 1977-79 failed to complete their IOE. Court Ex. 1 at ¶ 45.

23. Beginning in November of 1984, United interviewed and selected approximately 600 candidates for its training program. Tr. 45 ("the Group of 500" or "student pilots"). Approximately 8 applicants were screened for each of the student pilots selected. Tr. 113. A "considerable amount of money" was spent to conduct the selection, which included interviews, psychological testing, and evaluation at the controls of United's aircraft cockpit simulators in Denver. Tr. 43-44.

24. As the student pilots were selected for United training, they were required to execute a form described as a "Flight Officer Training Agreement." E.g. Def.Ex. 140. In the forms, the student pilot agreed that he or she would receive United flight officer training "without charge for tuition" and would receive "$30 per day for expenses for the duration of my training period." The student pilot further was required to agree that "[d]uring this training, I understand that I will not be an employee of United Airlines and will receive no compensation from United other than expense money." The agreement further provided:

  I understand that graduates of Flight Officer
  Training will constitute a pool of trained candidates
  for Flight Officer employment, which United Airlines
  may employ, if needed, within twelve months of
  graduation. I understand that in order to be offered
  such employment, that I must continue to meet the
  requirements and qualifications for the flight
  officer position.

It was also agreed that United could terminate the training or employment without notice or liability. Def.Ex. 140. The student pilots were expected to provide their own lodging and meals out of their expense money. Pl.Ex. 5 at p. 4. United informed the Group of 500 that they would be offered employment by class date (the date their initial training commenced). Tr. 155, 199.

25. The training consisted of initial training and four to five days of refresher training. Court Ex. 1 at ¶ 44. As they were selected, the student pilots entered a three-week second officer training program at United's Denver Training Center. They were trained on a schedule determined by United which resulted in a more condensed training period than was customary at United in the past. Tr. 136. During their initial training, the student pilots were measured for their uniforms, which were later ordered for them approximately a month before May 17, 1985. Tr. 109. United generated a list of tentative seniority numbers for the student pilots, ranked in order of their class dates, and, within the classes, their Social Security numbers. Court Ex. 1 at ¶ 43.2; Pl.Ex. 90. It was United's intent that the student pilots "accepting employment when offered will receive a short refresher course and IOE [initial operating experience]." Pl.Ex. 5 at p. 3. Training, however, would be complete upon conclusion of the refresher course, prior to IOE. Court Ex. 1 at ¶ 44. This break in training, resulting in use of a short refresher course, and the fact that the training course took less time than in the past, were additional differences from United's previous training program for new hires. Tr. 135, 137.

26. Only 2% of the total number of student pilots failed to complete initial training. Tr. 120. Upon completion of their initial training, the Group of 500 was provisionally qualified to serve as United second officers, lacking only their IOE to become fully qualified to engage in line flying. Pl.Ex. 42; Tr. 159.

27. On about April 20, 1985, United offered second officer employment to approximately 375 members of the Group of 500 who had successfully completed initial training. Tr. 48, 49; Pl.Ex. 8. The offers were effective May 17, 1985, whether or not there was a strike, at $1,800 per month for 81 hours, and stated that the four-day refresher course would start as early as May 3, 1985. Stipulation at ¶ 38; Tr. 48, 49; Pl.Ex. 8. In order to accept United's offer, the recipient was required to respond by telephone no later than April 24, 1985. Pl.Ex. 8. Approximately 325 of the recipients accepted and were scheduled for their refresher courses to commence at various dates commencing May 3, 1985. Tr. 50, 149; Pl.Ex. 9 (as modified by Def.Ex. 79A). The student pilots then received a mailing from United's Director of Flight Standards and Training, William Traub, stating that "I am sure you are looking forward to beginning your career as a United Airlines Second Officer as much as we are." Pl.Ex. 6. Traub enclosed with the letter a package of home study material to be completed prior to refresher training and several written tests. The letter advised the recipient that his change to "permanent status will occur on May 17, 1985 or on the day you enter training whichever is later." Id. at p. 2.

28. In addition to the Traub letter, the student pilots who accepted United's April 20 offer were sent a further confirming letter by the Manager of Flight Employment, Raymond Boyle. E.g., Pl.Ex. 12; Tr. 51-52. The letter confirmed that employment would be effective May 17, 1985, specified a date for resumption of training prior to May 17, and requested that the recipient report on the date training would resume. Pl.Ex. 12; Tr. 50-52. The recipient was also requested to complete a package of employment forms which were enclosed with the letter. Pl.Ex. 12; Tr. 52.

29. Most of the Group of 500 were given employment dates of May 17, 1985. Tr. 47. Some of the Group of 500 who were offered jobs in United's mailgrams (Pl.Ex. 8) were initially scheduled for refresher training to begin after May 17, 1985. Believing that the later starting dates might create seniority conflicts, United sent another mailgram on May 4 to the small group of student pilots whose refresher and training had been scheduled after May 17. Def.Ex. 76, This mailgram, unlike Pl.Ex. 8, specifically required that "[t]o accept our offer, you must be able to report to work in Denver on May 17." Def.Ex. 76.

30. As the strike deadline of May 17 approached, United addressed a letter to the Group of 500 specifically requesting that they report "at 0800 hours" to the Denver Flight Training Center on May 17. Def.Ex. 77. The letter, however, was mailed after prior offers had been accepted. Pl.Ex. 6, 12, 9. The letter was to "make it absolutely clear everybody got the same message and would be reporting at the same place." Tr. 92.

31. When United first offered employment to the Group of 500, it did not hire them to serve as "crossovers" in a pilot strike. Tr. 50. For example, Brent Barrett, one of the Group of 500, was told by United, when offered employment on April 20, that "it is up to you" whether he honored a picket line in the event of a strike. Tr. 204. Barrett was previously told that United did not want to put the new-hire pool on the line until it "had a contract" with ALPA. Tr. 231. Daniel Petrovich, another member of the Group, had been told by United that he would not be asked to "cross the picket line." Tr. 158.

32. As the May 17 strike deadline approached, however, United began to view the Group of 500 as a pool of trained replacements for striking pilots. Thus, United told the Group that if they did not work on May 17, they would not work for United in the future. Tr. 342, 170. United officials also told members of the Group that Ferris had already decided that they would "never work for United Air Lines if we didn't show up on the 17th" of May. Tr. 210. They were told that "if they don't cross the picket line and go to work on the 17th, you will never work for United Air Lines." Tr. 171. Some of the Group of 500 were told that if they did "take the job," complete their training and then join the strike, they "would not make it through their probation year" as pilots. Tr. 168-69. Prior to the strike, Ferris personally told United's TCAs in Denver,

  We have got 500 pre-hires, right? Those pre-hires are
  all going, they've been given notice, and come 0001
  May 17, they're employed, boom. If they don't show up
  to work, they will never, ever, work for this air
  line, ever, because they're not on the property, they
  won't have a number, they don't have anything.

Tr. 728.

33. As of May 17, 1985, under this training program, approximately 600 individuals were selected for training by United. Tr. 35, 135-36, 365. United issued seniority numbers, however, only to those of the Group of 500 who reported to work on May 17, 1985 and who were put on the company payroll at that time. Such seniority numbers did not become final until the student pilot received an assignment to a line position. Court Ex. 1, at ¶ 43(2).

34. Also as of May 17, 1985, approximately 150 of the Group of 500 had completed their refresher training and 10 to 12 had completed their IOE. Id. at ¶ 44. United did not assign any member of the Group of 500 to the line, or provide them with final seniority numbers prior to May 17, 1985, whether or not they completed their initial training, whether or not they completed their refresher training, or whether or not they completed their IOE. Id. at ¶ 43(3).

35. On May 17, with the strike in progress, few of the Group of 500 crossed the ALPA picket lines. The striking Group members testified that they physically approached the training facility on the morning of May 17, encountered the ALPA picket line, declined to cross, and signed a report form provided by ALPA which was subsequently supplied to United. Pl.Ex. 38; Tr. 175-76, 214, 1473.

36. At 0001 EDT May 17, 1985, some of the Group of 500 were undergoing United training in the Avia training facility in Long Beach, California. When these pilots learned from management that the strike had occurred and a picket line had been established, they departed the training facility. Tr. 174. Daniel Petrovich was told at that time by his Training Check Airman, John Jacobs, that United President James Hartigan had just told him that the strike was in progress and that if the trainees left the Avia facility "they would all be terminated." Tr. 173.

37. Paula Wenz, another member of the Group of 500 who refused to cross the picket line, testified that TCA Brown told her and others on May 6 that

  if on May 17th we didn't cross the picket line, that
  we would never work for United Air Lines again, and
  he said if by some reason we were included into a
  back-to-work agreement or whatever, he would
  personally see to it that we would never make it
  through our probationary year.

Tr. 1472. Wenz had never previously been told that she would have to cross a picket line in order to become a United pilot. Id.

38. Under the ALPA Constitution and By-Laws, a member may be expelled for "[p]erforming work for or assisting an airline during a period when the members of this Association are on strike against such airline." Def.Ex. 170, Art. VIII, Sec. 1(A)(5). Applicants who have been "involved in alleged strikebreaking shall not be accepted for membership" except in accordance with rigorous procedures. Id., Art. II, Sec. 10(B). Barry, as a former ALPA representative (Tr. 235), knew or should have known that requiring the Group of 500 to serve as crossovers could materially jeopardize their opportunity to become members of ALPA at United or elsewhere.

39. United's policy continues to be that the Group of 500 who did not report to work on May 17, 1985 will not become employees of United. Tr. 451, 1165-66.

       3. The Parties' Prestrike Communications to Pilots and Student
                                   Pilots

40. By April 16, 1985, United's planning for the flight operations aspect of a strike had been thoroughly developed, and United decided to engage in an extensive program to communicate certain aspects of the plan to the pilot group. The communications program was briefly summarized in a slide presentation that Barry gave to an assembly of United's corporate officers on April 23, 1985. Pl.Ex. 22. It included: "informational letters/bulletins as needed," "selective canvassing of influential pilots" and "road shows" conducted by Ferris and Barry. The road shows were meetings of pilots at the various domiciles, where Ferris and Barry would discuss United's position in the negotiations and United's plans for actions which would affect pilots in a strike. Barry testified that one purpose of these road shows was as follows:

  We hoped that might result in individual pilots that
  were informed and aware of the situation, would
  influence a settlement, if you will, to try to go
  back to the ALPA negotiating committee and the MEC
  and influence them to come to some sort of an
  agreement with the company.

Tr. 533. Barry further testified that another purpose of the road shows was:

  There was another purpose that we knew that if the
  pilots struck the company, we were going to have to
  do some things that were — I will say — rather stern
  or unusual, and we wanted to make absolutely sure
  that the pilots understood this and could perceive
  our resolve in going ahead and accomplishing what we
  had to do.

Tr. 534.

41. During the 30-day period immediately preceding the strike, United communicated its plans for the pilots through letters and road shows. Although the road shows were sparsely attended, United mailed to all pilots a videotape cassette of excerpts of the May 2, 1985 road show for pilots domiciled at O'Hare. United communicated the following points to the pilots as part of its effort to bring pressure to bear on the ALPA negotiators:

a. On April 24, Barry sent a letter to all pilots. Pl.Ex. 15. He stated, "if a pilot strike occurs, United will continue to operate. Flight operations will change and opportunities for bidding may open up dramatically." The letter offered pilots a chance to take training so that they could qualify to bid for captains' jobs in the event of a strike.

b. Barry's April 24 letter also stated that United would hire "permanent replacements for striking pilots." If already qualified to serve as captains or first officers, they would be paid $75,000 or $50,000 per year, respectively, and would be "pay protected" at those rates "even though they may be later reassigned to lower positions."

c. Barry's letter added, "THIS COMPANY INTENDS TO REWARD THE LOYALTY OF THOSE PILOTS WHO HELP US KEEP THIS AIRLINE RUNNING."

d. On May 3, Barry sent another letter to the pilots. Pl.Ex. 16. He stated that striking pilots who reach their retirement date would be ineligible to receive, during their retirement, nonpension retirement benefits such as passes and insurance; that striking pilots who wished to be covered by insurance would have to convert to an "expensive" policy which is "not nearly as comprehensive;" that "striking pilots do not accrue seniority during the period of the strike;" and that "[s]trikers will be ineligible to receive or continue to receive sick leave pay." Finally, Barry stated the following:

  BACK TO WORK AGREEMENT — We will not agree to a back
  to work agreement which adversely impacts nonstriking
  pilots or new hire pilots. In fact there is no legal
  obligation to agree to any back to work agreement.
  Contrary to what you may have heard, ALPA cannot
  guarantee that anything will be included in a back to
  work agreement. We want you to be aware of these
  policies so that you will recognize how your decision
  on a work stoppage will affect

  the benefits you and your family now enjoy. We will
  hire and train pilots to replace those who elect not
  to continue working. These new pilots will be given a
  seniority number and will be permanent replacements.
  When and if the strike ends, those who participate in
  the work stoppage will be able to return only to fill
  vacancies for which they are immediately qualified.
  Recall will be based on qualification to perform
  available work, not seniority, and it could be
  several years, if ever, before striking pilots are
  returned.

Pl.Ex. 16, pp. 4-5 (emphasis in original).

e. On May 9, 1985, Barry again wrote the pilots to discuss United's plan to "rebid" the airline if a strike occurs. Pl.Ex. 17. He stated in part:

  Only those pilots who accept and perform their first
  and subsequent duty assignments will be eligible to
  bid. The first round of bids will be closed as soon
  as each pilot who maintains continuous service has
  had an opportunity to bid. Any pilot who has been
  awarded a bid under this process who subsequently
  strikes will forfeit his bid.
  You will be eligible to be awarded any vacancy,
  notwithstanding any current freezes which may have
  been applicable under the 1981 Agreement. However, in
  order to be awarded a Captain bid you must have
  completed the written portion of the ATP.
  We will utilize you in your current assignment,
  unless you can be more productive to the recovery of
  the airline by being trained into another position.
  In some cases this may mean a PC in your old
  equipment. In others it may mean a rating or
  upgrading in the aircraft you now fly. Ultimately,
  unless the assignment (domicile, equipment and
  status) has ceased to exist, you will be trained and
  activated into your newly awarded assignment. In the
  meantime, you will be paid the greater of the
  following: (1) your current assignment, (2) any other
  position we have assigned you to, or (3) your newly
  awarded bid, if, on a one-for-one basis, a more
  ...

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