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Hoover v. United States Aircrew Officers Association

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

August 5, 2019

MIKE R. HOOVER, Plaintiff,
v.
UNITED STATES AIRCREW OFFICERS ASSOCIATION and CATHAY PACIFIC AIRWAYS LIMITED, Defendants.

          MEMORANDUM OPINION AND ORDER

          Virginia M. Kendall, United States District Judge.

         Captain Mike R. Hoover sued his employer, Cathay Pacific Airways Limited, and his union, the United States Aircrew Officers Association (“USAOA”) under the Railway Labor Act (“RLA”). Hoover brings a claim against Cathay for breach of the Collective Bargaining Agreement (“CBA”) that governs Cathay's relationship with USAOA and a claim against USAOA for breach of the duty of fair representation. Both defendants now move to dismiss the complaint. For the reasons stated here, both motions (Dkt. 33, 36) are granted.

         BACKGROUND

         In considering the motions to dismiss, the Court assumes the truth of the complaint's factual allegations, but not its legal conclusions. See Munson v. Gaetz, 673 F.3d 630, 632 (7th Cir. 2012). The court must also consider “documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice, ” along with additional facts set forth in Hoover's briefs opposing dismissal, so long as those facts “are consistent with the pleadings.” Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). The following facts are set forth as favorably to Hoover as those materials allow. See Gomez v. Randle, 680 F.3d 859, 864 (7th Cir. 2012).

         I. The Parties

         Hoover is a pilot. He began working for Cathay as a First Officer in April 2005. (Dkt. 29 ¶ 27.) Hoover is a Freighter pilot and flies 747 Freighter aircraft. (Id. ¶ 30.) He was promoted from First Officer to Captain in December 2009. (Id.) His permanent home base, where he starts and finishes his trips, is Chicago, Illinois. (Id. ¶¶ 30, 57.)

         Cathay is a Hong Kong-based international airline that offers passenger and cargo services to its customers. (Id. ¶¶ 12, 21.) It employs pilots in the United States who operate Passenger and Freighter aircraft. (Id. ¶ 23.) U.S.-based Passenger pilots fly 777 aircraft and U.S.-based Freighter pilots fly 747 aircraft. (Id.) Cathay retired its last 747 Passenger aircraft from its Passenger fleet in October 2016. (Id. ¶ 24.)

         USAOA is a trade union and is the sole and exclusive bargaining representative for all U.S.-based pilots employed by Cathay. (Id. ¶ 36.) USAOA is controlled by its Executive Committee. (Id. ¶ 39.) The Executive Committee participates in the deliberations and decisions of the Disciplinary and Grievance Committee, including those relating to grievances. (Id.)

         II. History of Employment, Representation, and Agreements

         From April 2005 through December 2015, Hoover was employed by USA Basing Limited, a Cathay subsidiary. (Id. ¶¶ 22, 29.) On January 1, 2016, Cathay became the employer of all pilots based in the United States who had previously been employed by USA Basing Limited. (Id. ¶ 22.) To secure employment with Cathay, all U.S.-based pilots, including Hoover, had to resign from USA Basing Limited. (Id. ¶ 25.) While employed by USA Basing Limited, many U.S.-based pilots joined the Hong Kong Aircrew Officer's Association (“HKAOA”), a Hong Kong-based trade union. (Id. ¶ 31.) HKAOA represents the interests of pilots who reside in Hong Kong and work for Cathay and its foreign subsidiaries. (Id. ¶ 32.)

         In August 2015, USAOA was certified as the sole and exclusive bargaining representative for U.S.-based pilots employed by Cathay. (Id. ¶ 36.) In September 2016, USAOA and Cathay entered into their first collective bargaining agreement (the “CBA”), which provides the conditions of service for Cathay's U.S.-based pilots. (Id. ¶¶ 41-42.) The CBA was entered for the benefit of members of the USAOA, including Hoover. (Id. ¶ 43.)

         Schedule 1 of the CBA contains pilot pay scales. (Id. ¶ 47.) There are three pay scales titled “Unified FO and Passenger Captain Scale, ” effective on September 1, 2016, 2017, and 2018, respectively. (Dkt. 29-1 at 78-80.) They include salary figures grouped by “First Officer, ” “Senior First Officer, ” “Captain, ” and “Senior Captain.” (Id.) Salaries increase based on rank and year. (Id.) There are three additional scales titled “Freighter Salary Scale, ” effective on the same dates. (Id. at 81-83.) For the Freighter scales, salary figures are listed only for one rank, “Captain, ” and increase based on year. (Id.) Section Five of the CBA defines the seniority of Cathay pilots based on the date they joined the organization. (Dkt. 29 ¶ 48.)

         Letter of Understanding 1 (“LOU 1”) between Cathay and USAOA incorporates into the CBA a previous agreement known as the Permanent Basings Policy Agreement 2006 (“PBPA 06”). (Id. ¶ 53, Dkt. 29-1 at 98.) PBPA 06 is a policy agreement entered into between USA Basing Limited, Cathay, three other foreign-based Cathay subsidiaries, and HKAOA. (Dkt. 29 ¶ 55.) PBPA 06 applies to pilots who operate or are eligible to operate Passenger aircraft and provides the process to allocate permanent bases for pilots when a base vacancy is open for bidding on Passenger aircraft. (Id. ¶¶ 57-59.) Under PBPA 06, new base vacancies are awarded to pilots who bid on them in order of seniority. (Id. ¶ 60.)

         III. The Notice to Crew and Q&A Process

         On December 2, 2016, Cathay issued a Notice to Crew (the “NTC”) announcing new permanent base vacancies in Anchorage, Chicago, Los Angeles, Miami, and New York, available to all U.S.-based pilots. (Id. ¶ 49.) The NTC stated that all First Officer vacancies would be compensated on the Unified pay scale, and all Captain vacancies would be compensated on the Passenger Captain pay scale. (Id. ¶ 51.) It also stated that all vacancies would be for the 747 Freighter aircraft. (Id. ¶ 52.)

         Cathay held a question and answer session with USAOA and worked with the union to clarify questions raised by U.S.-based pilots about the PBPA 06 and the new base vacancies. (Id. ¶¶ 62-63.) Afterward, on December 23, 2016, Cathay released the “Q&A Process.” (Id.) The Q&A Process provided that the new base vacancies would “be undertaken in accordance with” PBPA 06. (Id. ¶ 64.) Like the NTC, the Q&A Process provided that all available First Officer vacancies would be compensated on the Unified pay scale, while all available Captain vacancies would be compensated on the Passenger Captain pay scale. (Id.)

         The Q&A Process also provided that the 747 Freighter Captains who were awarded one of the new base vacancies would have their 747 Freighter aircraft “treated as” 747 Passenger aircraft for pay purposes-i.e., those Freighter Captains would be moved to the Passenger Captain pay scale, even though they would be flying 747 Freighter aircraft. (Id. ¶¶ 65, 67.) Meanwhile, 747 Freighter Captains who were not awarded one of the new base vacancies, like Hoover, would continue to fly the same 747 Freighter aircraft as the successful bidders, but they would still be “treated as” 747 Freighter aircraft for pay purposes and would remain on the Freighter Captain pay scale. (Id. ¶¶ 66, 68.) For some pilots, the difference in pay between the Freighter Captain and Passenger Captain pay scales is about $5, 100 per month or $62, 000 per year. (Id. ¶ 79.)

         Two 747 Freighter Captains with less seniority than Hoover successfully bid on and were awarded new base vacancies in Anchorage. (Id. ¶¶ 71-72.) The two junior Captains fly the same aircraft and the same routes as Hoover, they undergo the same training and they have the same flight plans, but they are now paid on the Passenger Captain scale, while Hoover remains on the Freighter Captain pay scale. (Id. ¶¶ 73-75.) Hoover did not bid on Anchorage. (Id. ¶ 71.)

         IV. USAOA Grievance Process

         USAOA did not object to the NTC or the Q&A Process issued by Cathay. (Id. ¶ 69.) On October 12, 2017, Hoover protested the pay change for some 747 Freighter Captains, and “how that affected his seniority for pay purposes, ” by emailing Cathay's then-Director of Flight Operations. (Id. ¶ 78.) He sent a demand letter on January 2, 2018. (Id.) Cathay's then-Head of Employee Relations informed Hoover that the Q&A Process was “agreed” with USAOA, that Hoover could have been moved to the Passenger Captain pay scale by bidding on one of the new base vacancies in Anchorage, and directed him to USAOA's grievance procedure in Section 23 of the CBA. (Id. ¶ 80.)

         On February 26, 2018, Hoover formally asked the USAOA Discipline and Grievance Committee (“the Committee”) to file a grievance on his behalf alleging Cathay's breach of the CBA terms covering rates of pay and seniority. (Id. ¶ 81.) The CBA provides for a two-stage process to address violations by Cathay: a grievance hearing and a grievance appeal hearing. (Id. ΒΆ 82.) Once the grievance process has been exhausted, a claim can proceed to the System Board ...


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