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Barnes v. Air Line Pilots Ass'n

United States District Court, N.D. Illinois, Eastern Division

November 6, 2015

JAMES BARNES, WALTER CLARK, and PHILIP WHITEHEAD, individually and on behalf of all others similarly situated, Plaintiffs,
v.
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendant

          For James Barnes, Philip Whitehead, Plaintiffs: Myron Milton Cherry, LEAD ATTORNEY, Alexandra Leigh Nickow, Jacie C Zolna, Myron M. Cherry & Associates, Chicago, IL.

         For Walter Clark, David Bishop, Eric Lish, Individually and on behalf of all others similarly situated, Plaintiffs: Myron Milton Cherry, LEAD ATTORNEY, Alexandra Leigh Nickow, Myron M. Cherry & Associates, Chicago, IL.

         For Air Line Pilots Association, International, Defendant: Michael E. Abram, LEAD ATTORNEY, Thomas N. Ciantra, Cohen, Weiss and Simon, New York, NY; Andrew L. Goldman, Rami N Fakhouri, Goldman Ismail Tomaselli Brennan & Baum LLP, Chicago, IL; Jonathan A Cohen, Marcus C. Migliore, Matthew E. Babcock, PRO HAC VICE, Air Line Pilots Association, International, Washington, DC; Joshua J. Ellison, PRO HAC VICE, Cohen, Weiss and Simon LLP, New York, NY; Michael L. Winston, PRO HAC VICE, Cohen, Weiss and Simon, New York, NY.

         Memorandum Opinion and Order

         Gary Feinerman, United States District Judge.

         United Airlines pilots James Barnes, Philip Whitehead, and Walter Clark, on behalf of themselves and a class of United management pilots, allege that Air Line Pilots Association, International (" ALPA" ) unlawfully discriminated against them in its allocation of $225 million of retroactive pay (" retro pay" ) provided to United pilots after ALPA and United entered into a collective bargaining agreement in late 2012. Doc. 29. The management pilots claim that ALPA breached its duty of fair representation to them under the Railway Labor Act (" RLA" ), 45 U.S.C. § 151 et seq., and, in the alternative, that ALPA unjustly enriched itself in violation of Illinois law by accepting their payment of dues and fees. Ibid. Earlier in the litigation, the court denied ALPA's motion to dismiss and/or for summary judgment, ruling that Plaintiffs were entitled to limited discovery on the question whether ALPA, consistent with Air Wisconsin Pilots Protection Committee v. Sanderson, 909 F.2d 213, 215-16 (7th Cir. 1990), complied with its fair representation duty by providing a fair process for arbitrating disputes over the retro pay allocation. Docs. 83-84 (reported at 2014 WL 4057419 (N.D. Ill. Aug. 14, 2014)). The court then denied ALPA's motion for judgment on the pleadings as to the management pilots' claims, Docs. 188-189 (reported at F.Supp.3d, 2015 WL 5821577 (N.D. Ill. Sept. 30, 2015)), and certified the management pilot class, Docs. 190-191 (reported at F.R.D., 2015 WL 5822436 (N.D. Ill. Nov. 6, 2015)). Familiarity with the court's prior opinions is assumed.

         Now before the court is ALPA's summary judgment motion, which argues under Sanderson that the RLA fair representation claim fails because ALPA provided a fair process for arbitrating disputes over the retro pay allocation. Doc. 160. The motion is denied.

         Background

         The following facts are stated as favorably to Plaintiffs, the non-movants, as the record and Local Rule 56.1 allow. See Hanners v. Trent, 674 F.3d 683, 691 (7th Cir. 2012). In considering ALPA's summary judgment motion, the court must assume the truth of those facts, but does not vouch for them. See Smith v. Bray, 681 F.3d 888, 892 (7th Cir. 2012).

         The general background of this case is set forth in the court's prior opinions. To summarize, United and ALPA in late 2012 entered into a collective bargaining agreement, the 2012 United Pilot Agreement (" 2012 UPA" ), which provided retro pay to compensate pilots for working at depressed pay rates during the nearly three years of negotiations over the new agreement. Doc. 29 at ¶ ¶ 14-16. The retro pay did not fully compensate United pilots for what they would have earned during the negotiating period had the 2012 UPA pay rates taken effect upon the expiration of the predecessor CBA in 2010. Id. at ¶ 17. As a result, ALPA had to allocate the retro pay among its various pilot groups. Ibid.

         ALPA's administrative manual sets forth the procedures under which ALPA's Master Executive Councils (" MECs" ), the bodies that manage bargaining and other decisions for ALPA members at different airlines, allocate lump sums among members. Doc. 170 at ¶ 5. Section 40.3.J of the manual allows an MEC to negotiate an allocation formula as part of a collective bargaining agreement, which the United MEC did in this case. Id. at ¶ ¶ 6, 9. Section 40.3.J establishes a dispute resolution procedure that pilots dissatisfied with an MEC's allocation may invoke with the consent of the ALPA President or MEC Chairperson. Id. at ¶ ¶ 5, 10.

         The dispute resolution process works as follows. First, ALPA's Executive Council, which consists of ALPA officers and Executive Vice Presidents elected by pilot representatives from all ALPA-represented carriers, reviews the challenged allocation in as " expeditious a manner as is appropriate," and either upholds the allocation or orders it modified. Id. at ¶ ¶ 11-12. A pilot seeking to challenge an Executive Council decision may invoke arbitration, subject to the Executive Council's approval. Id. at ¶ 13. The ALPA President determines the process for selecting an arbitrator. Id. at ¶ 14. The arbitrator, who has authority to decide procedural issues, must consider the Executive Council's decision but is not bound to follow it. Id. at ¶ 15. ALPA bears the costs incurred by the Executive Council and the arbitration proceeding, while the pilots bringing the appeal bear their own costs. Id. at ¶ 16.

         United's merger with Continental and the December 2012 ratification of the 2012 UPA left ALPA with $225 million of retro pay to allocate among legacy United pilots. Id. at ¶ ¶ 17-20. In mid-January 2013, the United MEC Chairperson notified the pilots of the MEC's allocation and of the Section 40.3.J dispute resolution process. Id. at ¶ 23. Shortly thereafter, numerous management pilots, including Barnes and Whitehead, challenged the allocation before the ALPA Executive Council. Id. at ¶ 25; Doc. 176 at ¶ 3. Following a hearing, the Executive Council upheld the allocation. Doc. 170 at ¶ 31.

         On March 6, 2013, ALPA informed United pilots of their right to appeal via arbitration the Executive Council's decision, and some management pilots, including Barnes and Whitehead, appealed. Id. at ¶ ¶ 36, 44. ALPA's President selected Richard Bloch, an experienced labor arbitrator and past president of the National Academy of Arbitrators, as the arbitrator. Id. at ¶ ¶ 33-34. Citing alleged unfairness about certain of the arbitration procedures, several pilots, including Barnes and Whitehead, declined to participate. See id. at ¶ ¶ 37, 40-42, 46; Doc. 176 at ¶ ¶ ...


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