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RAKESTRAW v. UNITED AIRLINES

May 30, 1991

LEE RAKESTRAW, et al., Plaintiffs,
v.
UNITED AIRLINES, INC., and AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendants


Suzanne B. Conlon, United States District Judge.


The opinion of the court was delivered by: CONLON

SUZANNE B. CONLON, UNITED STATES DISTRICT JUDGE

 The issues presented in this action arise from a twenty-nine day strike in 1985 by defendant Air Line Pilots Association, International ("ALPA" or "the union") against defendant United Airlines, Inc. ("United"). Plaintiffs are 103 pilots who were hired by United to replace striking pilots. Plaintiffs seek to enjoin United and ALPA from implementing a provision of a new collective bargaining agreement that adversely affects plaintiffs' seniority rights. Plaintiffs allege that in negotiating the seniority provision of the new collective bargaining agreement, United and ALPA breached various sections of the Railway Labor Act ("the RLA"), 45 U.S.C. §§ 151-188. Plaintiffs also bring state law claims for breach of contract and tortious interference with contract against United and ALPA, respectively.

 Pursuant to Fed.R.Civ.P.65(a)(2), the parties stipulated to the consolidation of the preliminary injunction hearing with a trial on the merits. *fn1" The case was tried before the court on May 20, 1991. After hearing the testimony of the witnesses, considering the arguments of counsel and reviewing the trial exhibits, including affidavits and deposition transcripts, the court enters the following findings of fact and conclusions of law under Fed.R.Civ.P. 52(a).

 FINDINGS OF FACT

 The facts surrounding the 1985 ALPA strike against United are set forth in great detail in Air Line Pilots Ass'n, Int'l v. United Air Lines, Inc. (" ALPA v. United Air Lines "), 614 F. Supp. 1020, modified, 616 F. Supp. 849 (N.D.Ill. 1985) (Bua, J.), aff'd in part and rev'd in part, 802 F.2d 886 (7th Cir. 1986), cert. denied, 480 U.S. 946, 94 L. Ed. 2d 791, 107 S. Ct. 1605 (1987). Because the parties have adopted most or all of Judge Bua's factual findings, the court's factual findings shall refer to Judge Bua's opinion where appropriate.

 I. The Parties

 1. United is a Delaware corporation with its principal place of business in Elk Grove, Illinois. Stipulation of Uncontested Facts ("Stipulation") para. 2. United operates a commercial passenger airline system serving several hundred domestic and international destinations. Thus, United is a "carrier" as defined by the RLA, 45 U.S.C. § 181, and is subject to the RLA's provisions. Id.

 2. ALPA is the certified collective bargaining representative under the RLA for all pilots employed by United. Under ALPA's constitution and bylaws, ALPA may make policy decisions and enter into collective bargaining agreements only through the actions of the United-ALPA Master Executive Council ("the MEC"). The MEC is composed of representatives elected from each of United's pilot domiciles. Stipulation para. 3.

 3. Plaintiffs are 103 "fleet qualified" United pilots who were hired as replacement pilots beginning May 17, 1985, the first day of ALPA's strike against United. Plaintiffs are deemed "fleet qualified" because at the time United offered plaintiffs employment, plaintiffs were already qualified under FAA regulations to operate United's aircraft as either captains or first officers. Each plaintiff was hired pursuant to an individual employment agreement with United. Id. para. 4.

 II. Events Leading to the 1985 Strike

 A. The Group of 570

 4. In early 1984, United and ALPA commenced negotiations for a new collective bargaining agreement to replace the existing agreement, which was set to expire on April 1, 1984. Id. para. 5.

 5. At the time United and ALPA began their negotiations, United had not hired pilots since the period between 1977 and 1979. Krop Aff. para. 3. During the 1984 negotiations, however, United foresaw the need for additional pilots. Id. Thus, beginning in the fall of 1984, United selected approximately 570 individuals ("the 570") to participate in a pilot training program. Stipulation para. 6.

 6. Although United needed new pilots, it did not want to hire the 570 until after the completion of negotiations, because United hoped to take advantage of proposed lower wages for new employees. Krop Aff. para. 5. As a result, United established a new type of training program for the 570. The training program was intended to create a pool of trained pilot candidates for employment with United, if needed, within twelve months of graduation. See United Ex. 538. In exchange for advance training from United, each of the 570 signed a flight officer training agreement acknowledging that trainees were not United employees and would receive no compensation except $ 30 a day for expenses. Id.; Stipulation para. 7. The agreement also acknowledged that United could terminate the training without notice or liability. United Ex. 538.

 7. Prior to 1984, United's practice had been to offer employment to trainees as "student pilots" at the time they began training. On or about the first day of training, the student pilots were placed on the United payroll and were assigned a pilot seniority date and a corresponding tentative seniority number. The student pilots received a final seniority number after completing training and a short period of FAA-supervised flying. Krop Aff. para. 4; Smith Decl. para. 6.

 8. Thus, the training program for the 570 differed from past training programs in terms of salary and formal offers of employment. However, in terms of seniority, the 570 were treated like past student pilots; they received conditional seniority numbers based on their initial day of training. Smith Decl. para. 10; Krop Aff. para. 6.

 9. On April 15, 1985, the National Mediation Board ("the NMB") notified ALPA and United that the collective bargaining negotiations had reached an impasse and that its mediation efforts had failed. Pursuant to the RLA, the NMB proffered arbitration. Arbitration was not accepted. On April 16, 1985, the NMB released United and ALPA from mediation, permitting both ALPA and United to engage in lawful self-help under the RLA after a mandatory 30-day cooling off period expiring on May 17, 1985. Stipulation para. 8; 45 U.S.C. § 156.

 10. After the release, United formally offered the 570 employment beginning May 17, 1985, the scheduled date for commencement of the ALPA strike. The original offers were not conditioned on the 570 reporting to work on May 17. Stipulation para. 9; United Ex. 522. However, as the strike date drew near, United informed the 570 that they would not be employed as United pilots unless they reported to work on May 17. Stipulation para. 9.

 11. Meanwhile, ALPA urged the 570 to respect ALPA's picket lines and promised the 570 that ALPA would do everything it could to protect their employment rights at United. Smith Decl. para. 12.

 B. Fleet Qualified Pilots (Plaintiffs)

 12. United did not rely solely on the 570 to cross picket lines in the event of a strike. Prior to the strike, United also recruited fleet qualified pilots to work as permanent replacements for striking pilots beginning May 17, 1985. Stipulation para. 11. United solicited permanent replacements by advertising in various publications across the country. The advertisements stated, inter alia, that:

 
Flight Crew positions may become available should a threatened strike by our Pilots occur. In such event, those employed will be permanent replacements for striking Pilots.
 
Captains will be paid $ 75,000 per year, and First Officers will be paid $ 50,000 per year.

 United Ex. 519; Pl. Ex. 9.

 13. The advertisement invited qualified pilots to call a 900 number to receive additional information and to arrange an immediate interview. Id. The recorded message briefly explained United's position regarding the breakdown in collective bargaining negotiations. See United Ex. 520; Pl. Ex. 10. The message reiterated United's intention of hiring fleet qualified pilots to permanently replace striking pilots in captain and first officer positions at salaries of $ 75,000 and $ 50,000, respectively. The message assured candidates that "as a permanent replacement your employment as a Flight Officer will be secure regardless of any eventual settlement with ALPA." Id. The message stated that after the strike, replacement pilots would retain their salaries, but would not necessarily keep their positions as captains and first officers:

 
Post strike operations will require you to bid for a vacancy which shall be assigned on the basis of your hiring date seniority. However, your salary plus any general increases would remain in effect until your seniority allows you to move up in status or equipment in a higher pay bracket under the new hire pay scale. We would not decrease your salary even if a settlement is reached and even if your responsibilities are changed.

 Id. The guaranteed salary was a powerful inducement, because the salary offer of $ 75,000 or $ 50,000 was significantly higher than the salary other United pilots received for the same positions under the ALPA-United collective bargaining agreement. ALPA v. United Air Lines, 614 F. Supp. at 1047; Transcript of May 20, 1991 Hearing ("Hearing Tr.") at 49.

 14. Candidates who applied to United for employment as fleet qualified pilots and who appeared to meet the job criteria were asked to interview and undergo various examinations and employment processing at United's offices. Stipulation para. 13. During these interview sessions, the fleet qualified pilots were told that if hired, their pilot seniority date would be the date they commenced training (i.e. their hiring date), and that following the strike their seniority rights would be governed under the United-ALPA collective bargaining agreement. Krop Aff. para. 15. This meant that the permanent replacement pilots would be placed behind returning strikers on the seniority list. Id.

 15. A United pilot's seniority number measures his or her relative seniority position on the United pilot system seniority list for purposes of seniority-based competitive bidding for pilot vacancies, monthly flight schedules and vacations under the pilot collective bargaining agreement. Pilots with a lower seniority number may outbid other pilots with higher seniority numbers for a variety of employment benefits including: (1) higher-paying pilot positions on better aircraft, (2) more desirable monthly flight schedules, (3) more desirable vacation dates, and (4) more desirable bases of operations. Stipulation paras. 26-29.

 17. Following this interviewing process, United offered employment to some candidates. Stipulation para. 13. These candidates received a full or conditional offer in writing from United. See Pl. Ex. 6; United Ex. 523. These written offers were form letters explaining to each pilot the terms of employment and where to report to work.

 18. United's Exhibit 523 is an example of United's written offer of employment to fleet qualified pilots. *fn2" This particular offer was made to plaintiff George Spillman and dated May 16, 1985. The letter offers Spillman a captain's position at a salary of $ 75,000 a year, beginning May 17, 1985. The offer was conditioned upon an ALPA strike; in the event a strike did not occur, the offer was invalid. In terms of promised job security, the offer stated:

 
If your effective date of employment is after May 17 and should a settlement be reached with our Pilots' Union prior to your starting work, United will continue to honor its job offer commitment to you . . . . Your salary plus any general increases would remain in effect until your seniority allows you to move up in status or equipment in a higher pay bracket under the new hire pay scale. Your salary will not be decreased even if a settlement is reached and even if your responsibilities are changed.

 Id. The offer stressed that United management would fully support fleet qualified pilots should they encounter any difficulties during their employment. In closing, United's offer stated:

 
Richard Ferris, our Chairman and Chief Executive Officer, has given his assurance that any new hire pilot who comes to work for us during this strike will not be forsaken in any back to work agreement. We will live up to our commitment to you.

 Id.

 19. Plaintiff Lee Rakestraw received identical assurances of management's support and guaranteed pay in United's conditional offer of employment dated June 5, 1985. Pl. Ex. 6. Because the Spillman and Rakestraw offers contain identical promises of job security, guaranteed pay and management support, the court infers that each plaintiff who was hired as a fleet qualified permanent replacement pilot received a written offer of employment containing the same promises. *fn3"

 20. Notably, the Spillman and Rakestraw employment offers do not contain any specific promises that the replacement pilots would receive seniority rights superior to striking pilots.

 21. On April 24, 1985, prior to the strike, United's Senior Vice President-Flight Operations, Lloyd Barry, wrote to all United pilots explaining United's anticipated course of action in the event of a strike. United Ex. 521. The letter explained that United would be hiring permanent replacements for striking pilots. The letter stated that replacements hired as captains and first officers would receive annual salaries of $ 75,000 and $ 50,000, respectively. In terms of seniority, the letter provided:

 
Current United pilots who continue to work shall be allowed to exercise their seniority over new hire Captains and First Officers as soon as operations permit. New hire Captains and First Officers will be pay protected at the higher rate even though they may be later reassigned to lower positions.
 
I WANT IT CLEARLY UNDERSTOOD THAT WE WILL PROTECT THE RIGHTS OF THE PRESENT UNITED PILOTS WHO CONTINUE TO PERFORM THEIR FLYING DUTIES DURING A STRIKE. THIS COVERS BOTH PAY AND PERMANENT SENIORITY RIGHTS. WE WILL ALSO PROTECT THE PERMANENT EMPLOYMENT OF ANY NEWLY HIRED PILOTS. THIS COMPANY INTENDS TO REWARD THE LOYALTY OF THOSE PILOTS WHO HELP US KEEP THIS AIRLINE RUNNING.

 Id. (emphasis added) (capitalized letters in original).

 22. The Barry letter thus explained to all United pilots the terms of the offer to strike replacements: (1) they would receive a guaranteed salary of either $ 75,000 or $ 50,000, which would not be decreased after the strike; (2) they would not be fired after the strike; and (3) United would support those pilots who worked during the strike. Although the Barry letter promised current United pilots that their pay and seniority rights were protected, the letter made no representation about the seniority rights of the replacement pilots.

 23. The fact that replacement pilots were not offered special seniority rights as a term of employment is further evidenced by a letter to United's former manager of Employment and Placement Services, Eugene Krop, from Ray Boyle, a United employee who assisted in recruiting fleet qualified pilots. Pl. Ex. 81. In the letter dated May 8, 1985, Boyle explained to Krop that the fleet qualified pilots objected to the fact that they would be placed behind the 570 on the seniority list on May 17, 1985. Id. Boyle stated that he thought United would have to offer more than just an increased salary in order to attract fleet qualified pilots to replace striking pilots. Id. However, there is no evidence that United changed its formal offers of employment to include preferential seniority rights for replacement pilots.

 24. Indeed, Eugene Krop stated in his affidavit that before sending out the formal employment offers to fleet qualified pilots, United employment representatives were instructed to first telephone the candidate and to extend an oral employment offer limited to two specific terms: (1) permanent employment, and (2) guaranteed salary. Krop aff. para. 16. If the candidate accepted, United sent out the formal employment offer memorializing these terms of employment. Id. Seniority protection was not a part of the formal offer.

 III. The Strike

 25. On May 17, 1985, at 12:01 a.m., ALPA began a strike against United. Only 25 of the 570 reported for work on May 17, 1985, and approximately six others reported for work a few days thereafter. Stipulation para. 10.

 26. Plaintiff George Spillman was hired by United as a fleet qualified captain on May 17, 1985. Hearing Tr. at 23, 24-25. After reporting to work on May 17, Spillman spoke with Bill Traub, United's director of training. Id. at 24. Spillman asked Traub about the status of the 570. Traub replied that the 570 had been training for several months, but that they had not been considered United employees. Id. at 25-26. Traub also told Spillman that the 570 were supposed to report for work that day, and since they had failed to do so, they would not be United employees. Id. at 26.

 27. Spillman also had a conversation on May 17, 1985 with United president, James Hartigan. Id. This conversation took place in the hallway outside Traub's office. Hartigan told Spillman that the pre-hires who had not reported for work that day would never become United employees. Id. at 26-27. Spillman asked Hartigan what would happen if the 570 later returned to work. Hartigan replied that the 570 would be placed behind Spillman on the seniority list, because they would be coming to work after Spillman. Id. at 27.

 28. Later that day, Spillman received and accepted a formal offer of employment from United. Id. at 27.

 29. On June 5, 1985, plaintiff Richard Lussow went to United's Denver office to accept United's offer of employment as a permanent replacement pilot. Id. at 12-13. Lussow testified in his deposition that he and several other new hires asked United personnel officers how many of the 570 had come to work. Lussow was told that only a handful had reported for work; the rest of the 570 were not employees and therefore had no seniority. Lussow Dep. at 54-56.

 30. Plaintiffs Lee Rakestraw and Ralph Pate were given similar information when they reported for their first day of work on June 7, 1985 and June 10, 1985, respectively. See Rakestraw Aff. para. 6, and Pate Aff. paras. 3, 5, attached as Exs. C and A to plaintiffs' memorandum in support of a preliminary injunction.

 31. Over the course of the strike, approximately 219 fleet qualified pilots accepted employment. Stipulation para. 13. The pilot seniority dates of the fleet qualified pilots range from May 17, 1985 to June 28, 1985. Id.

 32. During the strike, United also offered employment as student pilots, and eventually as second officers, to candidates who were not yet fleet qualified to be pilots on United's aircraft. Stipulation para. 14. By the end of the strike, approximately 320 persons had accepted these offers. *fn4" Unlike the fleet qualified pilots, the 320 student pilots were not hired pursuant to individual employment agreements. Although the student pilots were hired during the strike, they did not actually begin to work for United until after the strike. Thus, they received seniority dates ranging from July 1, 1985 to July 22, 1985. Stipulation para. 14.

 33. A small number of applicants who were offered new hire positions during the strike refused to accept them because of the strike. Samolis Aff. para. 12. Approximately 15 of these pilots were eventually hired by United after the strike concluded. These pilots are called "the class of 1985." Id. The class of 1985 received seniority numbers based on the day they initially reported for work. Thus, the class of 1985 received seniority dates later than they would have received had they accepted United's earlier offer of employment. Id.

 34. During the strike, Lussow attended two different meetings for new hires and other pilots who had crossed the picket lines. Hearing Tr. at 13-15. At the first meeting, Lloyd Barry, United's Senior Vice President-Flight Operations, told the assembled group that the 570 were not United employees and had no seniority because they did not report for work on the first day of the strike. Id. at 14. At the second meeting, Richard Ferris, United's Chairman of the Board, said that the 570 prehire trainees who did not report to work on May 17: (1) were not employees; (2) had no seniority; and (3) would never have seniority above the permanent replacement pilots. Id. at 15.

 IV. 1985 Back to Work Agreement

 36. On July 15, 1985, United's Senior Vice President-Flight Operations, Lloyd Barry, sent a letter to all fleet qualified replacement pilots thanking them for their support during the strike. Pl.Ex. 84. Barry's letter states:

 
I know that the decision you made to join this company as a Fleet Qualified pilot was not an easy one, but was embraced with great professional career expectations. I respect the courage and loyalty demonstrated by your decision.

 Id. Barry went on to explain that United was vigorously defending its right to hire replacement pilots and the guaranteed salary package. Barry stated "we are optimistic that our actions will be upheld, thereby allowing us to honor our commitments to you." Id.

 V. Litigation Concerning the Strike

 A. Judge Bua's Order

 37. After the strike, ALPA sued United in federal court contending, among other things, that United violated the RLA by refusing to employ the 570 after the strike. After a ten-day bench trial, Judge Bua held that the 570 became United employees on May 17, 1985, and that United violated the RLA by refusing to recognize the status of the 570 as employees on that date. ALPA v. United Air Lines, 614 F. Supp. at 1043, 1051. Judge Bua ordered United to extend employee status to the 570 and to immediately assign the 570 who had completed training to line pilot service. Id. at 1051. Judge Bua directed United to grant the 570 seniority as of May 17, 1985. Id.

 38. Judge Bua later modified his order to require United to place the 570 on a preferential hiring list for all available positions in the future, instead of mandating immediate reinstatement of the 570. Air Line Pilots Ass'n Int'l v. United Air Lines, Inc., 616 F. Supp. 849, 851-52 (N.D.Ill. 1985).

 39. In compliance with the modified order, United placed the 570 on a preferential recall list, and recalled those who desired to continue employment with United, beginning on November 9, 1985. Stipulation para. 16. Each recalled pilot from the group of 570 received a seniority date of May 17, 1985. Seniority within the recall group was ordered according to each pilot's first day of training in 1984 or 1985. Id. para. 17. In other words, while the entire recall group received a seniority date of May 17, 1985, the recalled pilots were placed on the seniority list relative to each other based on each pilot's initial training date.

 40. On August 15, 1985, Lloyd Barry sent a letter to all pilots hired as replacements during the strike. The letter provided in relevant part:

 
We recognize that Judge Bua's decision has a profound impact on you. In that ruling, which we will also challenge on appeal, the Judge found that the [570] were in fact employees and were entitled to seniority dates of May 17, 1985. The obvious effect of this ruling, if not overturned on appeal, is to place those [570] pilots on the seniority list as of that date, ahead of the replacement pilots.
 
The appeal process can be a lengthy one. In the meantime, however, be assured that United will stand behind those pilots to whom it committed ...

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