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Cunningham v. Air Line Pilots Association, International

United States Court of Appeals, Seventh Circuit

October 8, 2014

SCOTT CUNNINGHAM and ANDREW HOLZMANN, Plaintiffs-Appellants,
v.
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendant-Appellee

Argued September 22, 2014

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 13 C 5522. -- James F. Holderman, Judge.

For SCOTT CUNNINGHAM, individually and on behalf of all others similarly situated, ANDREW HOLZMANN, Plaintiffs - Appellants: Joe David Jacobson, Attorney, Allen P. Press, GREEN JACOBSON PC, Clayton, MO.

For AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendant - Appellee: Michael E. Abram, Attorney, COHEN, WEISS & SIMON, New York, NY; Rami Naji Fakhouri, Attorney, GOLDMAN ISMAIL TOMASELLI BRENNAN & BAUM LLP, Chicago, IL; Matthew Babcock, Attorney, James K. Lobsenz, Attorney, AIR LINE PILOTS ASSOCIATION INTERNATIONAL, Herndon, VA.

Before WOOD, Chief Judge, and EASTERBROOK and SYKES, Circuit Judges.

OPINION

Page 540

Easterbrook, Circuit Judge.

After United Air Lines and Continental Airlines merged, forming a new United Airlines, they needed to produce unified seniority and longevity rosters for pilots. The process was contentious; any improvement in the position of one carrier's pilots meant a relative demotion for pilots coming from the other carrier. A single union, the Air Line Pilots Association, represents all of the pilots and had to work out many contests internally.

In December 2012 United and the Union reached a collective bargaining agreement that sets each pilot's pay based on three principal factors: a pilot's rank (captain vs. first officer), type of aircraft flown (more pay goes with larger planes, such as the Boeing 747), and longevity. The greater a pilot's longevity, other things equal, the higher the pay--though longevity exceeding 12 years does not add to compensation. Seniority and longevity are distinct under the agreement; this case concerns longevity, a term that the agreement defines as all time since the date a pilot was hired, including time spent on furlough. This is a change from the pre-merger situation, in which pilots on furlough accrued seniority but not longevity.

Along with this main agreement, United and the Union forged a number of ancillary agreements that specified pilots' starting positions when the main agreement went into force. This suit concerns what the parties call " Letter of Agreement 25" (" Agreement 25" for short). Paragraph 4 of this side agreement provides that any pilot whose longevity is less than that of other pilots hired on or before May 6, 2008, is entitled to longevity credit for furlough time " only to the extent that such credit does not provide a pay longevity date prior to May 7, 2008." In other words, furlough time for this group of pilots cannot be used to produce more than

Page 541

four years and seven months of longevity (as of December 2012) when added to time on the job. Pilots in active service longer than four years and seven months thus receive no credit for time on furlough (but full credit for time worked); pilots who had four years and six months on the job could benefit from only one month of furlough time; and so on. The two plaintiffs, who worked for the pre-merger United, contend that the effect of Agreement 25 is to slot approximately 475 former United pilots into the longevity table behind a group of former Continental pilots who were hired before May 6, 2008. Another part of Agreement 25 provides that, once an integrated seniority list has been established, the former United pilots may receive additional longevity credit for any furlough time not credited at the first stage, provided that the application of additional credit does not result in any former United pilot having more longevity than the next most senior former Continental pilot.

This suit began as a hybrid contract / duty-of-fair-representation claim against United and the Union. See Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). Plaintiffs accused United of not giving them longevity credit for all time they had spent on furlough, as they believe the main agreement requires, and accused the Union of not adequately representing their interests by letting United get away with this. United and the Union replied that the main agreement governs only the future, after Agreement 25 (and a host of other side agreements) determine the starting position for the post-merger seniority and longevity rosters. United asked the district judge to dismiss it as a party, observing that disputes about the meaning of a collective bargaining agreement in the airline industry are within the exclusive authority of an adjustment board under § 2 Sixth and § 204 of the Railway Labor Act, 45 U.S.C. § § 152 Sixth, 184. The judge agreed and dismissed the suit against United. Id. at *8-28 (N.D.Ill. Feb. 4, 2014).

That left plaintiffs up the creek, because success in a hybrid contract/DFR suit depends on showing both that the employer violated the contract and that the union did not represent the workers fairly. Vaca, 386 U.S. at 187; DelCostello v. Teamsters Union, 462 U.S. 151, 164-65, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). Without a favorable decision from an adjustment board, which has exclusive authority over a breach-of-contract claim, the standard of Vaca cannot be met. That led plaintiffs to contend that the Union violated its duty of fair representation not (necessarily) by letting United get away with a breach of contract, but by negotiating a bad contract (Agreement 25) that favored a group of pre-merger Continental pilots over a group of pre-merger United pilots. The Supreme Court held in Air Line Pilots Association, International v. O'Neill, 499 U.S. 65, 67, 77-78, 111 S.Ct. 1127, 113 L.Ed.2d 51 (1991), that a union can be held liable for negotiating an irrational agreement with an employer. But the district court concluded that Agreement 25 is not irrational, so the Union prevailed. Id. at ...


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