Petition for Writ of Certiorari — Flight Options, LLC, et al., Petitioners v. International Brotherhood of Teamsters, Local 1108, et al.

APPENDIX

1a

_____________________

APPENDIX A

______________________

No. 16-3606

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

FILED

July 17, 2017

DEBORAH S. HUNT, Clerk

FLIGHT OPTIONS,

)

LLC; FLEXJET, LLC;

)

ONESKY

)

FLIGHT, LLC; FLIGHT

)

OPTIONS HOLDING I,

)

INC.,

)

) ON APPEAL FROM

Plaintiffs/Counter) THE UNITED

Defendants) STATES DISTRICT

Appellants,

) COURT FOR THE

) NORTHERN

v.

) DISTRICT OF OHIO

)

INTERNATIONAL

)

BROTHERHOOD OF

)

TEAMSTERS, LOCAL

)

1108; INTERNATIONAL )

BROTHERHOOD OF

)

TEAMSTERS,

)

AIRLINE DIVISION,

)

)

Defendants/CounterClaimants-Appellees

2a

OPINION

Before: COLE, Chief Judge; COOK and WHITE,

Circuit Judges.

This action under the Railway Labor Act (RLA)

concerns the merger of two airlines – an acquiring

airline with unionized pilots and an acquired airline

with newly unionized pilots – and their efforts to

bring both groups under a new, joint collectivebargaining agreement. The airlines and their pilots’

union dispute whether the creation of an integrated

seniority list (ISL) of pilots is exclusively committed

to the union, or whether it is subject to collective

bargaining with the airlines. The union asks us to

find this disagreement to be a “major” dispute under

the RLA and to affirm the district court’s preliminary

injunction ordering the airlines to accept the ISL

proffered to them by the union. The airlines ask us to

find this dispute to be “minor” and subject to

exclusive arbitral jurisdiction, and to vacate the

preliminary injunction. The airlines assert the right

not to accept a union-proffered seniority list and

instead to participate in the seniority-integration

process through collective bargaining. Because this

assertion is not arguably justified by the parties’

existing collective-bargaining agreement, the dispute

is major, leading us to AFFIRM in part and

VACATE in part.1

1 The parties’ dispute over voluntary-separation programs

(VSPs) was initially an issue on appeal. After oral argument,

the parties settled the issue and stipulated to an order

dismissing with prejudice the claims related to it. Because this

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I

The International Brotherhood of Teamsters,

Airline Division (Teamsters) and its Local 1108

(together, the Union) represent the pilots of Flight

Options, LLC (Flight Options) and Flexjet, LLC

(Flexjet, and together with Flight Options, the

Carriers), two merged airlines that offer fractional

ownership of jet aircraft. Flight Options and its pilots

have had a collective-bargaining agreement since

2010 (the 2010 CBA), while Flexjet’s pilots are newly

unionized and are not yet party to a CBA.

Flight Options is based in Cleveland, Ohio, and

is a “carrier” for purposes of the RLA. See 45 U.S.C. §

181. Michael Silvestro (Silvestro) is CEO of Flight

Options and Kenneth Ricci (Ricci) is chairman of

Flight Options and its parents. Fight Options has

approximately 360 pilots who are represented by the

Union and operate under the 2010 CBA.

Flexjet, another “carrier” under the RLA, has

approximately 340 pilots and was acquired in

December 2013 by a Flight Options parent. Prior to

the acquisition, Flexjet’s pilots were at-will

employees. On September 30, 2015, the National

Mediation Board (NMB) found that Flight Options

and Flexjet were a single transportation system for

issue is now moot, we will not discuss it further. See Int’l Union,

United Auto., Aerospace, Agr. & Implement Workers of America

v. Dana Corp., 697 F.2d 718, 721 (6th Cir. 1983) (“We cannot

reach the merits of this appeal unless we find that the parties’

Settlement Agreement did not render the case moot. Generally,

the settlement of a dispute between the parties does render the

case moot.”).

4a

purposes of labor representation under the RLA. 42

N.M.B. 174, 181 (2015). On December 15, 2015, the

Union was certified after an election as the

representative of the combined Flight Options and

Flexjet pilot groups.2 Silvestro and Ricci serve as

CEO and chairman at Flexjet, too.

Although the Union was elected to represent the

Flexjet pilots, these pilots are not yet parties to the

2010 CBA (or a successor joint CBA). Section 1.5 of

the 2010 CBA governs the integration of pilots from

an acquired airline; parent entities of Flight Options

agreed to be bound by Section 1 of the 2010 CBA on

behalf of themselves and their successors.

On appeal, the parties dispute whether the

integration of the pilot groups’ seniority lists3 is

solely a Union matter (in which case, the Carriers

must accept the list the Union proffers) or whether

the Carriers should have been allowed to participate

in negotiating the list.

Section 1.5(c)(1) of the 2010 CBA governs the

2 Flight Options pilots elect a master executive council

within Local 1108. Flexjet pilots are not yet eligible to elect

their own master executive council because a majority of them

are not yet members in good standing of the Union. Until the

Flexjet pilots achieve this threshold, they are represented by

the Flexjet Pilots Leadership Council, which is appointed by

the Local 1108 executive board as an analog of a master

executive council.

3 A pilot’s seniority determines his or her “promotion and

demotion, retention in case of reduction in force, recall after

furlough, choice of vacancies, choice of vacation and schedule

bidding....” 2010 CBA § 5.1, R. 8–2, PID 108.

5a

creation of the ISL when Flight Options acquires

another carrier:

If Pilots of the acquired carrier are hired by

the Company, the seniority lists of the

respective Pilot groups shall be integrated

pursuant to Teamsters Merger Policy if both

groups are represented by the [Teamsters],

or if the Pilots of the acquired airline are

not represented by the [Teamsters], then

pursuant to Sections 3 and 13 of the

Allegheny–Mohawk

Labor

Protective

Provisions. Seniority integration procedures

shall be promptly initiated following

announcement of an operational merger

affecting the seniority of the pilot groups.

The Company or other Successor, as

appropriate, shall accept the integrated

seniority list. There shall be no system flush

or removal of Pilots from their positions as a

result of seniority list integration.

2010 CBA, R. 8–2, PID 89.4

4 The McCaskill–Bond Amendment (McCaskill–Bond) to

the Federal Aviation Act of 1958 regarding craft or class

integration between two air carriers, 49 U.S.C. § 42112 n.(a),

incorporates by reference the Allegheny–Mohawk Labor

Protective Provisions (Allegheny–Mohawk), 59 C.A.B. 20 (1972):

Section 3. Insofar as the merger affects the seniority

rights of the carriers’ employees, provisions shall be made for

the integration of seniority lists in a fair and equitable

manner, including, where applicable, agreement through

collective bargaining between the carriers and the

representatives of the employees affected. In the event of

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Under this provision, there are two mutually

exclusive processes for creating an ISL depending on

whether the Union represents both the Flight

Options pilots and the acquired pilot group, or only

the former. If both pilot groups are represented by

the Union, the ISL is created “pursuant to Teamsters

Merger Policy,” and the Carriers “shall accept the

[ISL].” Id. Otherwise, the ISL is created “pursuant to

Section 3 and 13 of the Allegheny–Mohawk Labor

Protective Provisions,” and again, the Carriers “shall

accept the [ISL]” that results from that process. Id.

Ricci summed up the process in a presentation he

made to the pilots:

failure to agree, the dispute may be submitted by either party

for adjustment in accordance with section 13. Id. at 45.

.... Section 13. (a) In the event that any dispute or

controversy (except as to matters arising under section 9)

arises with respect to the protections provided herein which

cannot be settled by the parties within 20 days after the

controversy arises, it may be referred by any party to an

arbitrator selected from a panel of seven names furnished by

the National Mediation Board for consideration and

determination.... The decision of the arbitrator shall be final

and binding on the parties.

(b) The above condition shall not apply if the parties by

mutual agreement determine that an alternative method for

dispute settlement or an alternative procedure for selection of

an arbitrator is appropriate in their particular dispute. No

party shall be excused from complying with the above

condition by reason of having suggested an alternative method

or procedure unless and until that alternative method or

procedure shall have been agreed to by all the parties. Id. at

49.

7a

If [the Flexjet pilots vote to be represented by

the Union], then the Union’s first job will be to

integrate the seniority lists. That’s – that’s what

they do.

If there is no Union, then it will fall upon

management to integrate the seniority lists. So I

understand why many people want to know when it

is going to happen, but I’m the last guy that gets to

do it.

D. Ct. Tr., R. 43, PID 1063.

Soon after it was elected to represent the

acquired pilot group, the Union appointed the Flight

Options Merger Committee (FOMC) and the Flexjet

Merger Committee (FXMC) – two autonomous

committees each comprised of three pilots from their

respective groups – and charged them with the task

of creating an ISL. Laddie Hostalek, business agent

for Local 1108 and a Flight Options pilot, testified

that the members of the FOMC were appointed by

the Flight Options Master Executive Council and the

members of the FXMC were appointed by the Flexjet

Pilots Leadership Council.

Adam Fine, a Flexjet pilot and chairman of the

FXMC, testified regarding the work of the two

merger committees. According to Fine, in order to

create a fair and equitable ISL, the committees

reviewed precedent airline mergers and considered

draft lists based on different seniority-calculation

methodologies; they also conducted statistical

analyses of the impact of different methodologies on

pilot subgroups. After evaluating the results, the

committees determined that given the different

founding dates of Flight Options and Flexjet, a date-

8a

of-hire methodology would place half the Flexjet

pilots at the “extreme bottom” of the ISL. D. Ct. Tr.,

R. 43, PID 1159–60. They instead unanimously

adopted an ISL based on longevity, which they

believed would be fair and equitable to both groups.5

The Union proffered the ISL to Silvestro on

February 24, 2016, stating that it was unanimously

adopted by the merger committees and requesting

confirmation of its acceptance pursuant to Section

1.5(c)(1) of the 2010 CBA. Two days later, Silvestro

rejected the ISL by letter, asserting that for the ISL

process to comply with McCaskill–Bond, the Flexjet

pilots must select their own negotiators and the

Carriers “must be included to insure the process is

fair and equitable.”6 Verified Counterclaim, R. 6, PID

5 They defined longevity as the time spent working for the

individual airline, excluding time on furlough or personal

leave-of-absence status. The ISL maintained absolute

seniority within the two pilot groups, i.e., if the ISL were

again split between Flight Options and Flexjet pilots, the

pilots would all fall in the same order of seniority as before

the integration. Thus, the practical effect of the longevity

approach was that pilots who worked for both airlines and

had accrued seniority with both were not permitted to add

their service together to move ahead of other pilots within

their group. All of the top thirty positions on the ISL were

held by Flexjet pilots.

6 Silvestro’s February 26 letter was not the first time the

Union heard that the Carriers desired to be involved in the

ISL process. Prior to the election, the Carriers wrote to the

Union stating that after its certification as representative of

both pilot groups, the ISL process would need to include

negotiations with the Carriers in order for the outcome to

comply with Section 1.5(c)(1) of the 2010 CBA and McCaskill–

9a

446-47. Silvestro’s letter further justified the

rejection by arguing that the ISL appeared to be

“quickly put together,” that the Union lacked a

Teamsters merger policy to govern the process, and

that pilots who had taken leaves of absence from

Flight Options to fly for Flexjet appeared to be

adversely targeted by the longevity-based calculation

method.7 Id. at PID 447.

The Union sent Silvestro a separate notice, also

dated February 24, 2016, invoking Section 6 of the

RLA to begin negotiations for a new, joint CBA.8

Bond. After the certification and the formation of the FOMC

and FXMC, the Carriers twice complained, to no avail, about

being excluded from the Union’s ISL process, warning that

they would not “sit by and accept whatever list is given to

them by the [Union]....” Undated Lett., R. 13–7, PID 705.

7 These pilots were allowed to choose between being

treated as a Flight Options or a Flexjet pilot for purposes of

seniority calculation, but they did not receive credit for both.

8 Section 6 of the RLA establishes a procedure to cause

carriers and their unions to make and maintain agreements and

to avoid disruptions to interstate commerce. It provides:

Carriers and representatives of the employees shall give

at least thirty days’ written notice of an intended change in

agreements affecting rates of pay, rules, or working

conditions, and the time and place for the beginning of

conference between the representatives of the parties

interested in such intended changes shall be agreed upon

within ten days after the receipt of said notice, and said time

shall be within the thirty days provided in the notice. In every

case where such notice of intended change has been given, or

conferences are being held with reference thereto, or the

services of the Mediation Board have been requested by either

party, or said Board has proffered its services, rates of pay,

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Silvestro’s February 26 response rejecting the ISL

proffered by the Union also stated that, in accordance

with Section 1.5(c)(4) of the 2010 CBA, joint CBA

negotiations would not begin until an ISL is finalized.

The Union responded by filing a class-action

grievance against the Carriers under Section 1.9 of

the 2010 CBA,9 and by invoking arbitration under

McCaskill–Bond10 to resolve the ISL dispute. A week

and a half after the Union filed its grievance, the

Carriers filed the instant action seeking a declaratory

judgment that the Union’s ISL process violated

McCaskill–Bond because the Union must collectively

bargain with the Carriers for a fair and equitable

ISL, and because Flexjet pilots are “entitled to their

own representative.” Verified Complaint, R. 1, PID

13.

The Carriers also sought a preliminary

injunction to restrain the Union from attempting to

rules, or working conditions shall not be altered by the carrier

until the controversy has been finally acted upon, as required

by section 155 of this title, by the Mediation Board, unless a

period of ten days has elapsed after termination of conferences

without request for or proffer of the services of the Mediation

Board. 45 U.S.C § 156 (emphases added).

9 Section 1.9 provides in relevant part:

The parties agree to arbitrate any grievance filed by the

Union ... alleging a violation of Section 1 on an expedited

basis. Any such grievance shall proceed directly to the System

Board of Adjustment sitting with a neutral arbitrator

acceptable to both parties.... 2010 CBA § 1.9(a), R. 8–2, PID

93.

10 See note 4 and accompanying text.

11a

enforce the ISL it created, and from further pursuing

arbitration regarding the ISL, until it negotiates the

list with the Carriers. The Carriers argued that

under McCaskill-Bond, they are entitled and

obligated to negotiate with the Union over the ISL to

ensure the list is “fair and equitable.” The Carriers

specifically argued that the ISL proffered by the

Union, with its longevity-based seniority calculation,

is not “fair and equitable” to Flight Options pilots

who took leaves of absence to fly for Flexjet, and

further that the Flexjet pilots were inadequately

represented because the FXMC was comprised of

Flexjet pilots who were not chosen by the Flexjet

pilots, but rather by the Flexjet Pilots Leadership

Council, which was appointed by the Local 1108

executive board instead of being popularly chosen.

After first moving to dismiss based on Federal

Rules of Civil Procedure 12(b)(1) and (6), the Union

filed an answer disputing the district court’s subjectmatter jurisdiction on the basis that under the RLA,

the Carriers’ claims are “minor” disputes and thus

subject to mandatory arbitration. It also asserted five

counterclaims,

including

moving

to

compel

arbitration under Ohio state law and the Federal

Arbitration Act.

In April 2016, the Union filed a motion for

preliminary injunction and temporary restraining

order. After first characterizing the dispute over the

ISL as minor, the Union changed its position by

seeking relief ordering the Carriers to restore the

status quo (i.e., to accept the ISL), a remedy available

12a

only in major disputes.11 It also sought an order to

arbitrate, a right provided by the 2010 CBA.12 At the

motion hearing, the district court pressed the

Carriers on why they believe they must participate in

the seniority-integration process; they responded that

they could be sued if the ISL is not “fair and

equitable” as required by McCaskill–Bond. They

asserted that the Union’s process was ad hoc and its

longevity method was unfair to the pilots who split

their time between the two carriers, taking leaves

from Flight Options to fly for Flexjet. After the

Carriers asserted that they have an obligation under

McCaskill–Bond to ensure a “fair and equitable”

integration, the district court asked counsel why that

would be when it is the Union – whose autonomous

merger committees negotiated the ISL – that owes a

duty of fair representation to its members,13 while

the Carriers do not. In response, the Carriers again

argued that they have an obligation under

McCaskill–Bond to ensure a “fair and equitable”

integration, and that they could be sued by pilots for

11 At varying points in this matter, both parties have

taken inconsistent positions on the major/minor question.

12 See note 9 and accompanying text.

13 See Steele v. Louisville & N.R. Co., 323 U.S. 192, 199,

65 S.Ct. 226, 89 L.Ed. 173 (1944) (establishing duty of fair

representation under the RLA). This duty applies in all

contexts of union activity, including contract negotiations.

Williams v. Molpus, 171 F.3d 360, 364–65 (6th Cir. 1999)

(citation omitted), overruled on other grounds by Chapman v.

United Auto. Workers Local 1005, 670 F.3d 677 (6th Cir. 2012)

(en banc).

13a

failing to uphold this statutory obligation. They did

not allege, however, that any pilot complained that

the Union-created ISL was unfair or inequitable, or

that any pilot threatened suit. The Carriers also

argued that the Union lacked a “Teamsters Merger

Policy,” and that accordingly, under Section 1.5(c) of

the 2010 CBA, the pilot seniority integration would

be conducted pursuant to Allegheny–Mohawk. The

Union responded that it followed its unwritten

internal merger policy in creating the ISL, including

appointing the two merger committees pursuant to

the Teamsters and Local 1108 bylaws.

The district court first considered whether the

ISL issue is a “major” or “minor” dispute under the

RLA, concluding that it is a “major” dispute and that

Section 1.5(c)(1) of the 2010 CBA obligates the

Carriers to accept the Union’s ISL. The court further

concluded that the FOMC/FXMC process satisfied

McCaskill–Bond, noting that the committees had to

balance multiple issues, including different-aged

companies, previous seniority integrations, furloughs,

personal leaves of absence, disparities in hiring

bubbles, captain/first-officer ratios, inaccurate or

incomplete data, and pilots hired on the same date.

Although

any

given

seniority-calculation

methodology might advantage or disadvantage

individual pilots, the district court explained, neither

group was systemically favored, although Flexjet

pilots – who the Carriers claim received inadequate

representation – generally received the higher

seniority rankings.

The district court noted that the Carriers

presented no authority suggesting that they owe a

14a

representational duty to their pilots, who are all

represented by the Union. Considering its

assessment that the Union’s ISL process and

resulting list were objectively fair and equitable, the

district court remarked that the Carriers’ resistance

to accepting the ISL was “curious” in light of the 2010

CBA’s “clear mandate” that the “Company or other

Successor, as appropriate, shall accept the integrated

seniority list.” D. Ct. Tr., R. 43, PID 944 (citing 2010

CBA § 1.5(c)(1)) (internal quotation marks omitted).

The district court granted the Union’s motion for

preliminary injunction and ordered the Carriers to

accept the proffered ISL.

II

We review the issue of subject-matter

jurisdiction de novo. Watson v. Cartee, 817 F.3d 299,

302 (6th Cir. 2016) (citation omitted). RLA disputes

fall into two jurisdictional categories, major and

minor. Elgin, J. & E.R. Co. v. Burley, 325 U.S. 711,

723, 65 S.Ct. 1282, 89 L.Ed. 1886 (1945). Major

disputes, predicated on Section 2, Seventh and

Section 6 of the RLA, involve attempts to acquire

future labor-agreement rights and carry the greatest

risk for a strike. Minor disputes, predicated on

Section 2, Sixth and Section 3, First (i) of the RLA,

involve grievances less likely to result in a strike. See

id. at 723–24, 65 S.Ct. 1282. The core distinction

between these two types of disputes is that “major

disputes seek to create contractual rights, minor

disputes to enforce them.” Consol. Rail Corp. v. Ry.

Labor Execs.’ Ass’n, 491 U.S. 299, 302, 109 S.Ct.

2477, 105 L.Ed.2d 250 (1989) (citing Burley, 325 U.S.

at 723, 65 S.Ct. 1282).

15a

“Major” disputes focus on “acquisition of rights

for the future, not [the] assertion of rights claimed to

have vested in the past,” Wheeling & Lake Erie Ry.

Co. v. Bhd. of Locomotive Engineers & Trainmen, 789

F.3d 681, 690 (6th Cir. 2015) (quoting Burley, 325

U.S. at 723, 65 S.Ct. 1282) (alteration in original),

and are subject to federal-court jurisdiction. See

Consol. Rail Corp., 491 U.S. at 307, 109 S.Ct. 2477

(1989). They require management and labor to

“undergo a lengthy process of bargaining and

mediation” under Sections 5 and 6 of the RLA before

resorting to economic self-help, such as striking. Id.

at 302–03, 109 S.Ct. 2477. The statutory

requirements provide an “integrated, harmonious

scheme for preserving the status quo from the

beginning of the major dispute through the final 30–

day ‘cooling-off’ period.”14 Detroit & Toledo Shore

Line R. Co. v. United Transp. Union, 396 U.S. 142,

152, 90 S.Ct. 294, 24 L.Ed.2d 325 (1969). The

“immediate effect” of this status quo requirement is

“to prevent the union from striking and management

from doing anything that would justify a strike.” Id.

at 150, 90 S.Ct. 294. This means that labor and

management must maintain not only the status quo

under existing CBAs, but also “those actual, objective

working conditions and practices, broadly conceived,

which were in effect prior to the time the pending

dispute arose and which are involved in or related to

14 The process begins once a party serves the other with a

written “Section 6” notice setting a time and place for

negotiations, the first step in obtaining a new CBA or

changing an existing one.

16a

that dispute.” Id. at 153, 90 S.Ct. 294. Federal courts’

major-dispute jurisdiction proceeds from their

equitable power to enforce the status quo. When

courts exercise jurisdiction over major disputes, they

enjoin the parties to “make and maintain

agreements” and in so doing help thwart disruptions

to interstate commerce. See 45 U.S.C. § 152, First.

“Minor”

disputes,

in

contrast,

involve

“interpretation or application of particular provisions

of existing collective bargaining agreements,” United

Transp. Union v. Cuyahoga Valley Ry. Co., 979 F.2d

431, 434 (6th Cir. 1992), and are committed to

grievance arbitration. See Consol. Rail Corp., 491

U.S. at 307, 109 S.Ct. 2477. Such disputes

“contemplate[ ] the existence of a collective

agreement already concluded, or, at any rate, a

situation in which no effort is made to bring about a

formal change in terms or to create a new one.”

Burley, 325 U.S. at 723, 65 S.Ct. 1282.

A party to a dispute under the RLA bears a

“relatively light burden” to demonstrate that a

dispute is covered by an existing agreement, making

it minor. Consol. Rail Corp., 491 U.S. at 307, 109

S.Ct. 2477 (citation and internal quotation marks

omitted). “[I]f there is any doubt as to whether a

dispute is major or minor a court will construe the

dispute to be minor.” Airline Prof’ls Ass’n, Teamster

Local Union 1224 v. ABX Air, Inc., 400 F.3d 411,

414–15 (6th Cir. 2005) (ABX Air III ) (quoting Ry.

Labor Execs. Ass’n v. Norfolk & W. Ry. Co., 833 F.2d

700, 705 (7th Cir. 1987)). In assessing whether a

dispute is major or minor, we “look[ ] to whether a

claim has been made that the terms of an existing

17a

agreement either establish or refute the presence of a

right to take the disputed action.” Consol. Rail Corp.,

491 U.S. at 305, 109 S.Ct. 2477. “Where an employer

asserts a contractual right to take the contested

action, the ensuing dispute is minor if the action is

arguably justified by the terms of the parties’

collective-bargaining agreement.” Id. at 307, 109

S.Ct. 2477. This presumption does not apply,

however, if the contractual claim is “obviously

insubstantial or frivolous, [ ]or made in bad faith.” Id.

at 310, 109 S.Ct. 2477. This follows because “[i]f a

party asserts a contractual basis for a claim without

sincerity or on insubstantial grounds, ‘honoring that

party’s characterization would ... undercut the [RLA’s

prohibition] against unilateral imposition of new

contractual terms.’ ” Wheeling, 789 F.3d at 692 (first

alteration in original, second alteration added)

(quoting Consol. Rail Corp., 491 U.S. at 306, 109

S.Ct. 2477).

Whether to grant a preliminary injunction under

the RLA is left to a district court’s discretion. Adams

v. Fed. Express Corp., 547 F.2d 319, 322 (6th Cir.

1976) (citing Virginia Ry. Co. v. Sys. Fed’n No. 40,

300 U.S. 515, 551, 57 S.Ct. 592, 81 L.Ed. 789 (1937)).

The maintenance of the status quo may be

“enforceable by whatever appropriate means might

be developed on a case-by-case basis.” Chicago & Nw.

Ry. Co. v. United Transp. Union, 402 U.S. 570, 577,

91 S.Ct. 1731, 29 L.Ed.2d 187 (1971). We review a

district court’s decision whether to grant a

preliminary injunction under the RLA for an abuse of

discretion, such as the improper application of

governing law, the use of erroneous legal standards,

or the reliance on clearly erroneous findings of fact.

18a

See City of Pontiac Retired Emps. Ass’n v. Schimmel,

751 F.3d 427, 430 (6th Cir. 2014) (en banc) (citation

omitted). In general, courts must examine four

factors in deciding whether to grant a preliminary

injunction: (1) whether the movant has demonstrated

a substantial likelihood of success on the merits, (2)

whether the movant will suffer irreparable injury

absent injunction, (3) whether a preliminary

injunction would cause substantial harm to others,

and (4) whether the public interest will be served by

an injunction. Overstreet v. Lexington–Fayette Urban

Cty. Gov’t, 305 F.3d 566, 573 (6th Cir. 2002). “These

factors are not prerequisites, but are factors that are

to be balanced against each other.” Id. The second

factor is inapplicable in the context of an RLA

dispute, because courts may “enjoin a violation of the

status quo pending completion of the required

[Section 6] procedures, without the customary

showing of irreparable injury.” Consol. Rail Corp.,

491 U.S. at 303, 109 S.Ct. 2477.

Finally, as with any contract, we interpret a

collective-bargaining agreement de novo. Salary

Policy Emp. Panel v. Tennessee Valley Auth., 149

F.3d 485, 489 (6th Cir. 1998).

III

A. The Carriers’ Complaint

The Carriers invoked the district court’s

jurisdiction by asserting that they have a statutory

obligation under McCaskill–Bond and the Allegheny–

Mohawk provisions it codifies that is distinct from

the 2010 CBA. They argue that they have an

independent obligation under McCaskill–Bond to

19a

ensure that the pilot seniority integration is “fair and

equitable.” The Carriers correctly note that

McCaskill–Bond applies when there is a “transaction

for the combination of multiple air carriers into a

single air carrier,” 49 U.S.C. § 42112 n.(b)(4)(A), and

that generally this means that Allegheny–Mohawk

applies to the pilot seniority integration. Id. at § 4112

n.(a). They overlook, however, that the statute also

provides that when, as here, the “same collective

bargaining agent represents the combining crafts or

classes at each of the covered air carriers, that

collective bargaining agent’s internal policies

regarding integration, if any, will not be affected by

and will supersede the requirements” of McCaskill–

Bond. Id. at § 42112 n.(a)(1). Further, when, as here,

a CBA applies to “the terms of integration involving

covered employees of a covered air carrier,” those

terms “shall not be affected by the requirements of

[McCaskill–Bond] as to the employees covered by

that [CBA], so long as those provisions allow for the

protections afforded by sections 3 and 13 of the

Allegheny–Mohawk provisions.” Id. at § 42112 n.

(a)(2).

Thus, as the collective-bargaining agent for the

pilots of both carriers, the Union’s internal policies

regarding integration supersede the requirements of

McCaskill–Bond. Further, because the 2010 CBA

applies to the terms of the integration, it controls.

Nothing in the CBA denies the protections afforded

by sections 3 and 13 of Allegheny–Mohawk. Those

protections are that the seniority integration must be

“fair and equitable” and either section 13 or an

alternative agreed-upon dispute-resolution process

must be provided. In this context, the protections are

20a

afforded for the benefit of the covered employees. The

requirement that the integration be “fair and

equitable” is an obligation imposed by the 2010 CBA

on the Union, the party to whom the 2010 CBA

commits the task of creating an ISL. Further, a

dispute-resolution process is provided by the

expedited-grievance provision of Section 1.9 of the

2010 CBA. Thus, because the 2010 CBA commits the

integration process to the Union and continues to

allow employees the protections of sections 3 and 13

of Allegheny–Mohawk, the district court properly

concluded that the Carriers do not have a distinct

McCaskill–Bond obligation.

B. The Union’s Counterclaim

In its counterclaim, the Union asserts that “[b]y

failing to accept the [ISL], the Carrier[s] unilaterally

changed the unambiguous Section 1.5(c)(1) obligation

to accept the list....” Verified Counterclaim, R. 9, PID

463. The Carriers answer that this is a minor dispute

over which the courts lack jurisdiction, that their

actions are consistent with the 2010 CBA, and that

they do not seek to unilaterally change its terms. As

with the McCaskill–Bond issue, these disputes

concern whether the creation of the ISL is committed

solely to the Union, or whether the Carriers must be

included in that process. The pilot-integration

provision of the 2010 CBA squarely addresses this

question, an important point considering that a

dispute’s

amenability

to

resolution through

contractual interpretation typically renders it a

minor dispute, see Consol. Rail Corp., 491 U.S. at

305, 109 S.Ct. 2477, over which district courts have

no jurisdiction. See Stephens v. Ret. Income Plan for

21a

Pilots of U.S. Air, Inc., 464 F.3d 606, 610 (6th Cir.

2006).

When a party claims that its actions are

arguably justified by an existing labor agreement, we

presume the dispute is minor “unless the [party’s]

claims of contractual justification are so frivolous or

obviously insubstantial as to indicate that it is

attempting to circumvent the § 6 RLA major disputes

resolution procedure.” See Chicago & N.W. Transp.

Co. v. Ry. Labor Execs. Ass’n, 855 F.2d 1277, 1285

(7th Cir. 1988). Here, the express terms of the 2010

CBA and the record facts call into question our usual

presumption that a dispute governed by the CBA is

minor.

Our decision in Wheeling is instructive. In that

case a railroad sought changes to its collectivebargaining agreement with the union representing

its conductors and brakemen. The agreement

provided that a train crew “shall consist of not less

than one (1) conductor and one (1) brakeman....”

Wheeling, 789 F.3d at 684 (quoting the agreement).

On several occasions, despite the union’s objections,

the railroad ran trains without the required

minimum complement of crew, and later substituted

management employees for union employees. Id. at

685–87. The railroad claimed that this action was

arguably justified by the CBA because the contract

did not restrict it from “run[ning] trains without

union employees.” Id. at 688. The union countered

that the CBA’s crew provision had a single exception

(which was inapplicable to the dispute) and that the

carrier attempted to add a new one – the use of

management employees to run trains – that the

parties had not bargained for or agreed to. Id. at 689.

22a

We concluded that the dispute was major because the

railroad’s claim that “the [CBA] allows it to man

trains without union conductors is frivolous or

obviously insubstantial in light of the express

language of the [CBA].” Id. at 693 (emphasis added)

(citing Consol. Rail Corp., 491 U.S. at 307, 109 S.Ct.

2477). Although the parties’ “practice, usage and

custom is of significance in interpreting their

agreement,” Consol. Rail. Corp., 491 U.S. at 311, 109

S.Ct. 2477 (citation and internal quotation marks

omitted), in Wheeling we found no support in the

record that there was an historical practice of

management exercising the kind of discretion over

crew assignments it claimed the CBA justified. See

Wheeling, 789 F.3d at 694.

Collective-bargaining agreements may “include

implied, as well as express, terms.” Consol. Rail

Corp., 491 U.S. at 311, 109 S.Ct. 2477. Because the

language of the Wheeling CBA was express, we

concluded that “we need not consider any implied

terms.” 789 F.3d at 694. In ABX Air III, however, we

found that an airline’s CBA arguably permitted the

carrier to require a medical examination before

allowing a pilot to return to work after a period of

disability. 400 F.3d at 415. There, although the CBA

did not expressly permit the carrier to require the

examination, we found it meaningful that under the

CBA the carrier retained “discretion with respect to

the hiring, firing, promoting, supervising, planning,

and other management functions, except as limited

by the [CBA] and public law.” Id. at 415–16 (citation

and internal quotation marks omitted). We also

viewed the history of the parties’ prior collective

bargaining, including that they considered (but did

23a

not adopt) express terms related to medical

examinations, as supporting the carrier’s argument

that at the least its medical-examination

requirement was an open question. Id. at 416.

Because the carrier’s action was not inconsistent with

the CBA’s express terms and given the carrier’s

retention of management discretion, we concluded

that its claim that its action was arguably justified

under the CBA was not insubstantial, obviously

frivolous, or made in bad faith, and that, as a result,

the dispute was minor. Id. at 417 (citing Consol. Rail

Corp., 491 U.S. at 310, 109 S.Ct. 2477).

A claim is “arguably justified” if any reasonable

labor arbitrator, applying appropriate principles of

contract interpretation and after reviewing relevant

extrinsic evidence (such as evidence of past practice),

could find that the contract does justify a party’s

claimed right to take, or to refrain from taking, an

action. Cf. Wheeling, 789 F.3d at 692. When no

reasonable contractual interpretation, express or

implied, would justify a party’s claim, the dispute is

major and is subject to federal courts’ jurisdiction to

enjoin violations of the status quo.

Neither party relies on practice, usage, or custom

to impart meaning to Section 1.5(c)(1) of the 2010

CBA. See Consol. Rail. Corp., 491 U.S. at 311, 109

S.Ct. 2477. Here, the Union invokes the pilotintegration provision as follows: the Union represents

both pilot groups; the Teamsters merger policy is

applicable; the Teamsters merger policy was

followed; the Carriers violated the CBA by refusing to

accept the Union-proffered ISL; the Union pursued

expedited grievance arbitration against the Carriers,

24a

the contractual remedy for the Carriers’ refusal to

accept the proffered ISL; in bringing the instant

action and attempting to enjoin the expedited

grievance arbitration, the Carriers assert unilaterally

a new right to participate in the creation of the ISL.

The Carriers invoke the provision as follows: the

Union represents both groups; the Teamsters merger

policy should control the integration process; there is

no Teamsters merger policy; because there is no

Teamsters merger policy, the Allegheny–Mohawk

process applies.

Before we characterize the ISL dispute as minor

because controlled by the CBA, we must satisfy

ourselves that the Carriers’ assertion that the 2010

CBA requires that they be allowed to bargain

collectively with the Union over the ISL is “arguably

justified.” If the Carriers in actuality seek to change

an existing term in the 2010 CBA, the dispute is

major without regard to their own characterization of

it. See Consol. Rail Corp., 491 U.S. at 310, 109 S.Ct.

2477.

Section 1.5(c)(1) contemplates two mutually

exclusive processes for pilot integration. If both pilot

groups are represented by the Teamsters, the

Teamsters merger policy applies; if not, then the

parties follow the Allegheny–Mohawk provisions,

which require a fair and equitable integration process

that may (but need not necessarily) include collective

bargaining. See 59 C.A.B. 20, 45 (1972). Regardless of

which of these two processes applies, the 2010 CBA

expressly provides that the Carriers “shall accept”

the resulting ISL. 2010 CBA § 1.5(c)(1), R. 8–2, PID

89.

25a

In his pilot presentation, shortly after the

purchase, Ricci, the Carriers’ chairman, accurately

described the seniority-integration process: if the

Flexjet pilots elected the Union to represent them,

then it would be the Union, and not management,

that would put together the ISL. Neither party

disputes that the Teamsters represent both pilot

groups. Any reasonable labor arbitrator would find

that, based on the express language of the pilotintegration provision, the creation of the ISL is

committed to the Union and the Carriers’ sole

function with regard to it is to accept what is

proffered. Because the issue is controlled by express

terms that leave no ambiguity or openness to

interpretation, we need not consider implied terms.

Cf. Wheeling, 789 F.3d at 694.

The Carriers argue, however, that this process

does not apply because there is no “Teamsters

Merger Policy,” and the contract requires the

integration to be conducted pursuant to such a

policy.15 It is true that the Teamsters do not have a

standalone, written document directing how pilotseniority integrations are to be done; the Carriers

rely on this fact in asserting that no merger policy

exists. However, the record rebuts this assertion. The

Union explained that it followed an unwritten

internal merger policy, which included appointing the

FOMC and FXMC pursuant to its national and local

15 Although Section 1.5(c)(1) of the 2010 CBA capitalizes

“Teamsters Merger Policy,” suggesting it is a defined term, it

does not appear elsewhere in the contract.

26a

bylaws. Although the Carriers may find this policy

unsatisfactory, it is not for them to say what the

“Teamsters Merger Policy” should look like or

provide; it is the Teamsters’ merger policy. In any

case, appointing autonomous merger committees

pursuant to Union rules, and entrusting the creation

of the ISL to those committees, effected a merger

policy.

Although the pilot-integration provision by its

nature does not affect ordinary operations, it

nonetheless represents the status quo because it is

what Flight Options and the Union bargained for and

agreed would govern in the extraordinary case of

Flight Options acquiring another airline. The Union

followed the 2010 CBA’s express terms and proffered

an ISL to the Carriers for acceptance; the Carriers

refused to accept the list, instead asserting a new,

unbargained-for right to be involved in the ISL

process. The Carriers may seek such a right, but they

must undergo the Section 6 bargaining process to do

so, and, in the interim, must maintain the contract’s

status quo.

The district court did not err in finding that the

2010 CBA does not arguably justify the Carriers’

assertion that they have a right to participate in the

ISL process. The dispute is thus major. The district

court properly enjoined the Carriers to honor the

express terms of Section 1 of the 2010 CBA. However,

these express terms provide that if the Carriers

refuse to accept the Union’s proffered ISL, the Union

may invoke an expedited grievance-arbitration

27a

process, which uniquely applies to disputes under

Section 1 of the 2010 CBA.16 Compare 2010 CBA §

1.9(a) (Expedited Arbitration) with § 20 (Grievance

Procedures). This process is equally part of the

contractual status quo, and it is the process that the

Union sought to pursue when the Carriers started

this action. The district court’s contractual

interpretation stopped short, finding that the

contract required the Carriers to accept the proffered

ISL. Although that is true, the 2010 CBA’s

established remedy for non-compliance is that the

Carriers submit to expedited arbitration brought by

the Union. Accordingly, the district court shall

modify the injunction to require the Carriers to either

accept the Union’s proffered ISL or to submit to

expedited grievance arbitration under Section 1.9 of

the 2010 CBA.

IV

The Carriers raise three additional issues on

appeal.

The first issue is whether the Norris–LaGuardia

Act of 1932 (NLA), 29 U.S.C. § 101, bars the issuance

of a preliminary injunction because it is not the “only

practical, effective means” for enforcing the Union’s

rights under the RLA. District courts may issue labor

injunctions “when such a remedy is the only

practical, effective means of enforcing the duty to

exert every reasonable effort to make and maintain

agreements.” See Chicago & Nw. Ry. Co., 402 U.S. at

16 See note 9 and accompanying text.

28a

583, 91 S.Ct. 1731 (discussing strike injunctions).

The Carriers do not identify any other “practical,

effective means” of dispute resolution, however.

Indeed, it is they who first availed themselves of the

federal courts in lieu of grievance arbitration,

invoked by the Union, which would have directly

addressed each parties’ rights and obligations. Given

this, the district court’s grant of preliminary

injunction is not inconsistent with the NLA.

The Carriers next argue that the district court

misapplied the RLA by imposing its injunction on

Flight Options Holdings I, Inc. and OneSky Flight,

LLC, parent entities of Flight Options, as “carriers.”

Both of these companies are counter-defendants and

indirect holding companies of Flight Options. Flight

Options Holdings I, Inc. signed a side letter binding

it, its affiliates (including subsidiaries and parents),

and its successors to Section 1.5 of the 2010 CBA.

OneSky Flight LLC’s parent, Directional Aviation

Capital, LLC, signed a similar letter. The district

court did not erroneously classify these companies as

“carriers” for RLA purposes; rather it referred to

them by a collective party name based on their

agreed status.

The final issue is whether the district court failed

to address all four preliminary-injunction factors and

failed to require the Union to post an injunction

bond, and, if so, whether these failures were abuses

of discretion. The Carriers argue that the district

court’s order should be reversed because it discusses

only the movant’s likelihood of success on the merits,

and does not address the other preliminaryinjunction factors: irreparable harm to the movant

29a

absent injunction, substantial harm to others, and

the public interest. See Overstreet, 305 F.3d at 573

(6th Cir. 2002).

It is “generally useful for [district courts] to

analyze all four of the preliminary injunction

factors.” Leary v. Daeschner, 228 F.3d 729, 739 n.3

(6th Cir. 2000). This is especially true because this

court may analyze a factor differently than did the

district court. Id. Weighing the preliminaryinjunction factors is a matter of discretion, however,

and here the district court did not abuse its discretion

by not conducting an explicit four-factor analysis. See

In re DeLorean Motor Co., 755 F.2d 1223, 1229 (6th

Cir. 1985) (“[T]he four considerations applicable to

preliminary injunction decisions are factors to be

balanced, not prerequisites that must be met.”). The

preliminary-injunction order’s analysis opened with a

listing of the Overstreet factors. To the extent it did

not explicitly address a factor, the court’s order

indirectly addresses it, or the record otherwise

supports its presence. First, courts may “enjoin a

violation of the status quo pending completion of the

required [Section 6] procedures, without the

customary showing of irreparable injury.” Consol.

Rail Corp., 491 U.S. at 303, 109 S.Ct. 2477. Second,

the Carriers are unlikely to suffer substantial harm

from being required to preserve the status quo: not

only are they obliged by statute to do so, but their

opposition to accepting the proffered ISL is, as the

district court noted, “curious” given the express

language of the 2010 CBA and their lack of a

discernible interest in what the final ISL looks like.

See Op. & Order, R.33, PID 940. Further, the pilots

are unlikely to be harmed by an injunction that

30a

vindicates their own union’s ISL process, whose

result the district court reasonably concluded was

fair and equitable. Third, the public’s interest in

uninterrupted service from the Carriers – at least

that segment of the public that relies on or benefits

from their services – is protected by the maintenance

of the status quo. See Int’l Ass’n of Machinists &

Aerospace Workers v. Transportes Aereos Mercantiles

Pan Americandos, S.A., 924 F.2d 1005, 1007 (11th

Cir. 1991) (explaining that the RLA is designed to

prevent disruptions to interstate commerce).

The Carriers also argue that the preliminary

injunction is jurisdictionally defective because the

district court did not require the Union to post an

injunction bond. See Fed. R. Civ. P. 65(c) (permitting

preliminary injunction “only if the movant gives

security in an amount that the court considers proper

to pay the costs and damages sustained by any party

found to have been wrongfully enjoined or

restrained”); see also Mich. Am. Fed’n of State Cty. &

Mun. Emps. Council, Local 1640 v. Matrix Human

Servs., 589 F.3d 851, 860 (6th Cir. 2009) (holding that

“a bond is an absolute precondition of a federal

court’s jurisdiction over labor injunctions.”). This

point is moot. During the pendency of this appeal the

district court ordered, and the Union posted, a

$125,000 bond.

V

For the reasons set forth above, we AFFIRM the

district court’s determination that the CBA pilotintegration provision is not in conflict with

McCaskill–Bond; AFFIRM its determination that it

had jurisdiction to order the Carriers to act in

31a

conformity with the CBA, which requires that they

either accept the ISL or submit to expedited

grievance arbitration; VACATE the preliminary

injunction to the extent it permits the Carriers to do

the former and removes the option to do the latter;

and REMAND this matter to the district court for

further proceedings consistent with this opinion.

32a

____________________

APPENDIX B

____________________

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

FLIGHT OPTIONS,

LLC; FLEXJET, LLC;

ONESKY

FLIGHT, LLC; FLIGHT

OPTIONS HOLDING I,

INC.,

Plaintiffs/CounterDefendants,

v.

INTERNATIONAL

BROTHERHOOD OF

TEAMSTERS, LOCAL

1108; INTERNATIONAL

BROTHERHOOD OF

TEAMSTERS,

AIRLINE DIVISION,

Defendants/CounterClaimants

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

No. 1:16-CV00732

ORDER & ORDER

On April 22, 2016, Counter-Plaintiffs International

33a

Brotherhood of Teamsters et al. (“Pilots Union”) filed a

motion for preliminary injunction and temporary

restraining order against Counter-Defendants Flight

Options, et al. (“The Carriers”).1 On May 11, 2016, the

Court held a hearing that consolidated the temporary

restraining order hearing with the preliminary

injunction hearing.2

This case concerns disputes between Pilots

Union and the Carriers arising out of the merger of

two luxury jet airline carriers: Flexjet and Flight

Options. The Court decides whether the Carriers and

the Pilots Union entered a contract that gave the

Pilots Union the responsibility to establish a

seniority ranking after the Carriers acquired control

of a related flight company. The Court also decides

whether the Carriers were required to bargain with

the Pilots Union before the Carriers offered

separation packages.

For the reasons below, this Court GRANTS the

motion for preliminary injunction and ORDERS the

Counter-Defendants Carriers to accept the integrated

seniority list, rescind the voluntary separation

package and bargain in good faith with CounterPlaintiffs Pilots Union.

Counterclaim-Defendants Flexjet and Flight

Options provide fractional jet ownership and luxury

jet travel. Flexjet employs approximately 320 pilots

while Flight Options employs approximately 370

1 Doc. 10. Counter-Defendants Opposed Doc. 13. CounterPlaintiffs Replied Doc. 18.

2 See Docket Order dated May 2, 2016.

34a

pilots.3 Counterclaim-Defendant OneSky owns both

Flexjet and Flight Options.

The Pilots Union acts as the certified collective

bargaining representative for Defendant Flight Options

pilots.

The Pilots Union and Flight Options negotiated a

collective bargaining agreement that became effective

on March 31, 2010.4 As part of the negotiations,

Flight Options’ parent holding companies executed a

2010 letter of agreement with the Pilots Union. That

holding company letter of agreement required the

holding companies to follow certain Flight Options

collective bargaining agreement provisions. In the

letter agreement, the OneSky holding company

agreed to the method it would use to merge seniority

listings in any later similar acquisition.

That letter agreement provides that “The

Holding companies and Flight Options and their

affiliates . . . shall be subject to all terms and

conditions of Section 1 of the Flight Options/[Pilots

Union] CBA (as it presently exists or as subsequently

amended) as if all references to Flight Options and/or

the Company expressly referred to the Holding

Companies, any of them, or their affiliates.”5 The

Letter of Agreement then goes on to explain that the

agreement “shall be binding on any Successor to

Flight Options, the holding companies, any of them,

3 Doc. 10-1 at 2.

4 Doc. 8-2.

5 Id.

35a

or any Successor thereto.”6

The Letter of Agreement also requires affiliated

companies comply with CBA pilot seniority

consolidation provisions. The letter agreement states,

“Upon acquisition by holdings I of a controlling

interest in an air carrier . . . the acquired air carrier

shall be consolidated utilizing the procedure for

Successor Transactions set forth in Section 1.5 of the

Flight Options/[Pilots Union] CBA.”7

In December 2013, OneSky acquired a

controlling interest in Flexjet, and announced an

operational merger between Flexjet and Flight

Options.

After a contested representation election, on

December 16, 2015, the National Mediation Board

certified Counter-Plaintiffs Pilots Union as the

bargaining representative of the combined unit of

Counter-Defendants Flexjet and Flight Options

pilots.8

Section 1.5(c) of the Flight Options – Pilots

Union collective bargaining agreement addresses

pilot protections when Flight Options, or its parent

company, acquires an air carrier.9 When one union

6 Id.

7 Id.

8 Doc. 9 at ¶4.

9 1.5(c)(1) If Pilots of the acquired carrier are hired by the

Company, the seniority lists of the respective Pilot groups

shall be integrated pursuant to Teamsters Merger Policy if

both groups are represented by the [Pilots Union], or if the

Pilots of the acquired airline are not represented by the

36a

[Pilots Union], then pursuant to Sections 3 and 13 of the

Allegheny-Mohawk Labor Protective Provisions. Seniority

integration procedures shall be promptly initiated following

announcement of an operational merger affecting the

seniority of the pilot groups. The Company or other Successor,

as appropriate, shall accept the integrated seniority list.

There shall be no system flush or removal of Pilots from their

positions as a result of seniority list integration.

1.5(c)(2) Prior to integration of Seniority Lists in

accordance with paragraph 1.5(c)(1), above, the parties shall

negotiate a mutually agreeable fence agreement. The fences

shall remain in effect for the period of time the acquired

carrier continues as a separate transportation system. Until

the fences are removed, all aircraft (including orders and

options to purchase aircraft) and the operations of each pretransaction carrier shall remain separated. If the fence

agreement cannot be reached within 60 days of a request by

either party to begin negotiations, all unresolved issues shall

be submitted to interest arbitration. The arbitrator’s

resolution of the disputed issues shall be on an issue-by-issue

basis, rather than a “total package” basis, and shall be

binding on the parties with respect to the particular dispute,

but shall have no precedential or binding effect on other or

future disputes arising under this subparagraph.

1.5(c)(3) Unless and until an operational merger is finally

effectuated, the Union shall continue to be recognized as the

representative of the premerger Pilot craft or class to the

extent provided by law. In the event of an operational merger,

the representative of the post-merger craft or class shall be

established pursuant to Section 2, Ninth of the Railway Labor

Act, as amended.

1.5(c)(4) If Pilots of the acquired carrier are hired by the

Company, the Agreement shall be modified in those respects

necessary to permit the integration through negotiations

between the surviving air carrier and the representative of

the consolidated, post-merger Pilot craft or class. If a modified

agreement is not executed within nine months from the date a

37a

represents both merging bargaining units, the CBA

agrees that the Pilots Union will use internal union

procedure to prepare a combined seniority list.

After the merger announcement, the Pilots

Union began seniority integration procedures with a

committee comprised of three Flexjet pilots and three

Flight Options pilots.10 The Pilots Union says it chose

these representatives to fairly represent pilots in

their respective units.

When assembling a combined seniority list,

many policy decisions became involved. And these

policy decisions mostly existed independent of the

merged seniority lists. At both Flight Options and

Flexjet, pilots had taken leave of absences, including

leaves for military service. Flight Option pilots had

been furloughed. Some pilots had flown for

predecessor companies. How to treat these periods

impacted individual pilot seniority but did not

final and binding integrated Pilot Seniority List is issued, the

parties shall submit outstanding issues to binding interest

arbitration. The arbitrator’s resolution of the disputed issues

shall be on an issue-by-issue basis, rather than a “total

package” basis, and shall be binding on the parties with

respect to the particular dispute, but shall have no

precedential or binding effect on other or future disputes

arising under this subparagraph. Until such time as a fully

merged agreement is reached, either through bargaining or

arbitration, the surviving air carrier may continue to operate

the two carriers separately.

1.5(c)(5) The Company may operate the acquired carrier

under the parties’ fence agreement for a reasonable period

following acquisition.

10 Doc. 31 at 128.

38a

systemically advantage either Flight Option pilots or

Flexjet pilots.

On February 24, 2016, the Pilots Union

presented the integrated list to the Carriers Chief

Executive Officer. On the same day, the Pilots Union

also sent another letter to the Carriers Chief

Executive “to serve as notice in accordance with

Section 6, Title I of the Railway Labor Act (RLA) . . .

of the Union’s intent to open and commence

negotiations between the parties for the purposes of

amending the CBA to apply to the entire combined

craft or class of Flight Options and Flexjet Pilots . .

.”11

On February 26, 2016, the Carriers rejected the

integrated list on the basis that it “does not comply

11 Doc. 9 at ¶ 20. Section 6 of the RLA, 45 U.S.C. § 156,

provides that: “[Carriers] and representatives of the

employees shall give at least thirty days’ written notice of an

intended change in agreements affecting rates of pay, rules or

working conditions, and the time and place for the beginning

of conference between the representatives of the parties

interested in such intended changes shall be agreed upon

within ten days after the receipt of said notice, and said time

shall be within the thirty days provided in the notice. In every

case where such notice of intended changes has been given, or

conferences are being held with reference thereto, or the

services of the Mediation Board have been requested by either

party, or said Board has proffered its services, rates of pay,

rules or working conditions shall not be altered by the carrier

until the controversy has been fully acted upon, as required

by section 155 of this title, by the Mediation Board, unless a

period of ten days has elapsed after termination of

conferences without request for or proffer of the services of

the Mediation Board.”

39a

with McCaskill-Bond.” The letter also stated that

“the company does not agree that these Section

1.5(c)(4) negotiations trigger the Section 6 status quo

obligation.”12

On March 3, 2016, the Pilots Union responded

and again demanded to bargain under Section 6 of

the RLA as well as over whatever issues existed over

the integrated list. The Carriers have refused to

bargain with the Pilots Union as requested in the

Pilots Union’s March 3, 2016, letter.

On March 23, 2016, the Carriers filed a

complaint in this Court seeking declaratory judgment

“that the [Pilots Union’s] actions violate McCaskillBond, that the [Pilots Union] and the representatives

of the Flexjet pilots must collectively bargain with

the Carriers for a fair and equitable seniority

integration under McCaskill-Bond, that the Flexjet

pilots are entitled to their own representative, and

that the purported ISL presented to Flight Options

by the [Pilots Union] on February 24, 2016 did not

comply with McCaskill-Bond.”13

The Pilots Union claims the Carriers have not

negotiated in good faith. After the Carriers buy a

related flight business, the collective bargaining

agreement requires fence bargaining to negotiate job

responsibilities for current pilots and the pilots of the

newly purchased flight company. On March 31, 2016,

the Pilots Union met with the Carriers to negotiate

12 Doc. 10-1 at 9.

13 Doc. 1.

40a

over a Fence Agreement under Section 1.5(c) of the

collective bargaining agreement.

The parties did not reach a fence agreement, and

the Pilots Union characterized the Carriers’

negotiations as “surface-level” and “regressive.”14 At

the preliminary injunction hearing, Flight Options

pilot and Pilots Union local 1108 business agent

Laddie Hostalek testified that fence negotiations

began in December 2013 and Pilots Union had been

meeting with the Carriers every month or every other

month to negotiate the fence agreement.15 Hostalek

testified that the Carriers offered minimal, and

widely spaced, available bargaining dates.16 The

parties are now scheduled to meet again regarding

the Fence Agreement in June 2016.

The Pilots Union also complains that the

Carriers failed to bargain over a pilot separation

program. On March 31, 2016, the Carriers presented

the Pilots Union with a voluntary separation package

(“VSP”) for pilots at Flight Options and Flexjet.

Counter-Plaintiffs Pilots Union say that the Carriers

are required to bargain with the Pilots Union over

the separation package and say the Carriers refused

to meet face to face to bargain over the proposed VSP.

Instead, on April 22, 2016, the Carriers offered the

VSP to Flight Options pilots without giving the Pilots

14 Doc. 10-1 at 28-29.

15 Doc. 31 at 69.

16 Id. at 93.

41a

Union any chance to bargain .17

On April 22, 2016, Counter-Plaintiffs Pilots

Union filed a motion for preliminary injunction

asking this Court to order the Carriers to bargain

over rates of pay, rules and working condition and to

rescind the VSP until bargaining has occurred. The

Pilots Union also asks this Court to find that the

integrated seniority list is “fair and equitable” or

alternatively to order the Carriers to arbitrate the

“fair and equitable” nature of the integrated seniority

list.18

Law and Discussion

A district court’s decision to grant a preliminary

injunction under the Railway Labor Act rests within

that court’s discretion.19 In considering whether to

use a preliminary injunction, courts weigh: “(1)

whether the movant has demonstrated a substantial

likelihood of success on the merits; (2) whether the

movant will suffer irreparable injury without the

injunction; (3) would the preliminary injunction

cause substantial harm to others; and (4) will the

public interest be served if the injunction issues.”20

However, in a RLA labor dispute, a district court

may “enjoin a violation of the status quo pending

17 Id. at 15-17.

18 Doc. 10.

19 Adams v. Fed. Express Corp., 547 F.2d 319, 322 (6th

Cir. 1976) (citing other cases).

20 Overstreet v. Lexington-Fayette Urban Cty. Gov’t, 305

F.3d 566, 573 (6th Cir. 2002).

42a

completion of the required procedures, without the

customary showing of irreparable injury.”21

The Railway Labor Act provides,

It shall be the duty of all carriers, their

officers, agents, and employees to exert

every reasonable effort to make and

maintain agreements concerning rates of

pay, rules, and working conditions, and to

settle all disputes, whether arising out of

the application of such agreements or

otherwise, in order to avoid any

interruption to commerce or to the

operation of any carrier growing out of

any dispute between the carrier and the

employees thereof.22

The RLA distinguishes between two categories of

labor disputes: “disputes concerning the making of

collective agreements,” known as major disputes, and

“disputes over grievances,” known as minor

disputes.23 Major disputes give federal courts

jurisdiction; minor disputes must be submitted to

binding arbitration.

The Sixth Circuit recently described the

difference between major and minor disputes. The

Sixth Circuit said that a major dispute is one that

21 Consol. Rail Corp. v. Ry. Labor Executives’ Ass’n, 491

U.S. 299, 303 (1989).

22 45 U.S.C. § 152.

23 Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. 711, 722

(1945).

43a

arises “where a CBA does not exist or where one of

the parties seeks to change the terms of an existing

CBA. The issue in a major dispute ‘is not whether an

existing agreement controls the controversy’; instead,

the focus is on the ‘acquisition of rights for the future,

not [the] assertion of rights claimed to have vested in

the past.’”24 The Sixth Circuit also found that major

disputes arise when a party makes a claim that is

“frivolous or obviously insubstantial in light of the

express language” of the underlying agreement.25

The Pilots Union’s preliminary injunction motion

specifically involves two disputes: the integrated

seniority list and the voluntary separation program.

This Court examines each dispute in turn.

Integrated Seniority List

As an initial matter, the integrated seniority list

dispute is a “major dispute” because its focus is on

the “acquisition of rights for the future” rather than

“rights claimed to have vested in the past.”26 This

Court enjoys jurisdiction over the integrated seniority

list dispute.

As will be described, the Carriers and the Pilots

Union agreed to a collective bargaining agreement

that gave the Pilots Union responsibility to assemble

the seniority list. Under its contract with the Pilots

24 Wheeling & Lake Erie Ry. Co. v. Bhd. of Locomotive

Engineers & Trainmen, 789 F.3d 681, 690 (6th Cir. 2015)

(quoting Burley, 325 U.S. at 725).

25 Id. at 692.

26 Id.

44a

Union, the Counter-Defendants Carriers were

required to accept the integrated seniority list when

it was presented.

Even if the collective bargaining agreement had

not given the union responsibility for merging the

seniority lists, the Pilots Union used a “fair and

equitable” process as required by Allegheny-Mohawk

Sections 3 and 13.27 Nothing shows that the Pilots

Union’s process was not fair and equitable.

Section 1.5(c)(1) of the Carriers – Pilots Union

collective bargaining agreement gives the union, not

the Carriers, the responsibility to create the seniority

list. That section states

1.5(c) Pilot Protections in the Event of

an Acquisition of an Air Carrier

1.5(c)(1) If Pilots of the acquired carrier

are hired by the Company, the seniority

lists of the respective Pilot groups shall be

integrated pursuant to Teamsters Merger

Policy if both groups are represented by

the [Pilots Union], or if the Pilots of the

acquired airline are not represented by the

[Pilots Union], then pursuant to Sections 3

and 13 of the Allegheny-Mohawk Labor

Protective

Provisions.

Seniority

integration procedures shall be promptly

initiated following announcement of an

27 Section 3 and 13 of the Allegheny-Mohawk Labor

Protective Provisions were incorporated into the McCaskillBond Amendment to the Federal Aviation Act, 40 U.S.C.

§42112, Note § 117(a).

45a

operational merger affecting the seniority

of the pilot groups. The Company or other

Successor, as appropriate, shall accept the

integrated seniority list. There shall be no

system flush or removal of Pilots from

their positions as a result of seniority list

integration. (Emphasis added.)

Because both groups were represented by the

Pilots Union, the Teamsters Merger Policy controlled

the integration process.

The Pilots Union did not have a written

Teamsters Merger Policy, but they followed standard

protocols when they assembled the Flight OptionsFlexjets seniority list. Captain Dubinsky, a retired

pilot with considerable pilot integration experience,

oversaw the integrated seniority list process. With

extensive experience, including having led a number

of United Airlines seniority list integrations,

Dubinsky testified the seniority integration process

followed standard Airline Pilots Association (ALPA)

Merger Policy.28 Dubinsky further testified that the

integration process emulated the ALPA process to

make sure the integration process was “fair and

equitable.”

The Flight Options – Flexjet pilot circumstances

give support that the seniority merger process was

fair and reasonable. Recall, both pilot groups were

represented by the Pilots Union. And both pilot

groups were roughly the same size. While any pilot

seniority integration formula would advantage some

28 Doc. 31 at 103.

46a

pilots while disadvantaging others, the formula did

not systemically benefit any subgroup of pilots.

Somewhat counterintuitively, the incoming Flexjet

pilots generally received higher seniority rankings

than the Flight Option pilots.

The Carriers say that Allegheny-Mohawk

Sections 3 and 13 control because the pilots of the

acquired airline were not represented by the Pilots

Union at the time of the acquisition. Even if this

Court were to give credence to Counter-Defendants’

argument, the integrated seniority list process was

fair and equitable and thus met the AlleghenyMohawk Sections 3 standard.29 Section 3 of the

Allegheny-Mohawk standard states,

Section 3

Insofar as the merger affects the seniority

rights of the carriers’ employees, provisions

shall be made for the integration of

seniority lists in a fair and equitable

manner, including, where applicable,

agreement through collective bargaining

between

the

carriers

and

the

representatives of the employees affected.

In the event of failure to agree, the dispute

may be submitted by either party for

adjustment in accordance with section 13.

Section 13

(a) In the event that any dispute or

controversy (except as to matters arising

29 [omitted in original]

47a

under section 9) arises with respect to the

protections provided herein which cannot

be settle by the parties within 20 days after

the controversy arises, it may be referred

by any party to an arbitrator selected from

a panel of seven names furnished by the

National Mediation Board for consideration

and determination. The parties shall select

the arbitrator from such panel by

alternatively striking names until only one

remains, and he shall serve as arbitrator.

Expedited hearings and decisions will be

expected, and a decision shall be rendered

within 90 days after the controversy arises,

unless an extension of time is mutually

agreeable to all parties. The salary and

expenses of the arbitrator shall be borne

equally by the carrier and (i) the

organization or organizations representing

employee or employees or (ii) if

unrepresented, the employee or employees

or group or groups of employees. The

decision of the arbitrator shall be final and

binding on the parties.

(b.) The above condition shall not apply if

the parties by mutual agreement determine

that an alternative method for dispute

settlement or an alternative procedure for

selection of an arbitrator is appropriate in

their particular dispute. No party shall be

excused from complying with the above

condition by reason of having suggested an

alternative method or procedure unless and

until that alternative method or procedure

48a

shall have been agreed to by all parties.

Although the Pilots Union is the certified pilot

representative, the Carriers say that they have an

obligation to ensure that the integrated seniority list

process is fair and equitable. Against the backdrop of

adversarial national labor policy, the Carriers do not

show case or statutory authority that the Carriers

owed a representational duty to the pilots. The Pilots

Union owed fair representation to the pilots it

represents. The Carriers do not.

Pilots can enforce the fair representation duty

and can sue the union for breach of this duty of fair

representation. But it is nowhere clear that the

Carriers have any duty or standing to challenge the

Pilots Union’s pilot representation.

The Pilots Union gave the integrated seniority

list (“ISL”) to the Carriers. At the time the list was

given to the Carriers, the Pilots Union represented

both Flexjet and Flight Options pilots.

The Pilots Union ISL methodology was based on

pilots’ “modified longevity date.” Two equal-size

merger

committees—Flexjets

Pilots

Merger

Committee and Flight Options Pilots Merger

Committee—worked

together

to

devise

the

methodology.

Pilots had longevity dates going as far back as

1995, with over 370 of the 670 pilots having a

longevity date dating to the year 2000 or before.

Under the consolidated seniority list, all Flexjet

pilots kept their relative seniority to other Flexjet

49a

pilots. All Flight Options pilots kept their relative

seniority to other Flight Option pilots.30

The integration committees decided that because

“Flexjet is the older company when compared to all

combined companies . . . a Flexjet pilot would be

integrated above an adjacent Flight Options pilot

having a later Longevity Date, notwithstanding the

Longevity Date of subsequent Flight Options pilots

may be earlier.” Captain Adam Fine, a Flexjet pilot

who served on the merger committee testified that

the longevity method was selected over the date-ofhire method because the “date-of-hire method would

put half the entire Flexjet pilot group at the extreme

bottom of the seniority list.”31 This methodology

resulted in the first thirty-three pilots on the

seniority list all being Flexjet pilots.32 Captain Fine

also testified that the 80 transfer pilots were allowed

to choose whether they wanted to be integrated based

on their position at Flexjet or their position at Flight

Options.33

On February 24, 2016, the two committees sent a

detailed letter to all pilots that explained the

committees’ seniority integration decision. In the

letter, the committees explained the various factors

the committees considered in deciding on the

modified longevity methodology. Among other factors,

30 Doc. 31 at 133.

31 Doc. 31 at 131.

32 See Doc. 19-1.

33 Doc. 31 at 136.

50a

the Committee said its integration formula

considered: different aged companies, previous

merged seniority list at Flight Options resulting in

scrambled Date of Hire, different sized companies,

furloughs, personal leaves of absence, large

disparities in hiring bubbles at both companies

during different years, different Captain/First Officer

ratios at each company, inaccurate or incomplete

employment data, and pilots hired on the same date

at each company. The Committees addressed each of

these factors and then explained the various methods

it considered and why it ultimately chose the one it

did.34

This Court finds it difficult to argue that the

Carriers have any standing to challenge the

integration committee’s decision. Moreover, the union

representation background does not suggest why the

Pilots Union would, or has, favored any subgroup of

union members. The process was sanctioned by

representative employees of both Flexjet and Flight

Options. And even accepting the Carriers’ curious

resistance to the integrated seniority list, the CBA

provides a clear mandate that the “Company or other

Successor, as appropriate, shall accept the integrated

seniority list.”35

Counter-Defendants

Carriers

seem

to

misunderstand their primary duty in relation to the

ISL—it is not a duty to ensure the process is fair and

reasonable, but rather a duty to accept the ISL list

34 Doc. 19-2.

35 Doc. 8-2.

51a

presented. Counter-Plaintiffs Pilots Union, as the

representatives of both Flexjet and Flight Options

pilots, hold the duty to ensure a fair and equitable

ISL process for the pilots they represent.

The Carriers’ own Chairman made a statement

on October 15, 2014, that acknowledged that it was

the union’s job to integrate the seniority lists. The

Chairman said, “once the union were to request a

single system and thereby start to a merging of

seniority lists . . . then the union’s first job will be to

integrate the seniority lists. That’s—that’s what they

do.”36

This Court finds that the integrated seniority list

was fair and equitable and ORDERS the CounterDefendants Carriers to accept the ISL.

Voluntary Separation Program

Applying the Sixth Circuit’s Wheeling guidance,

the voluntary separation package (“VSP”) is a major

dispute because it relates to “acquisition of rights for

the future.” The dispute is also a major one because

the Carriers’ claim that it had the right to present

the VSP to pilots without bargaining is a “claim that

is “frivolous or obviously insubstantial in light of the

express language” of the collective bargaining

agreement, as demonstrated below.

When parties are engaged in a major dispute

under the Railway Labor Act, they must maintain

the status quo until they exhaust the major dispute

36 Doc. 31 at 40.

52a

process.37 Influenced by a goal to avoid disruption of

the transportation system, the Railway Labor Act

sets forth a detailed sequence of steps that carriers

and their employees’ representatives must follow in

negotiating CBAs. The Seventh Circuit has

summarized that sequence of steps as follows:

First, the party seeking a change in rates of

pay, rules or working conditions must give

notice and confer with the other party. If

the parties remain unable to resolve their

dispute after this conference, either or both

of them may seek mediation by the

National Mediation Board. If the mediation

fails to produce agreement, the National

Mediation Board must attempt to persuade

the parties to submit to binding

arbitration. If either or both of the parties

rejects the offer of arbitration and the

dispute

threatens

‘substantially

to

interrupt interstate commerce to a degree

such as to deprive any section of the

country or substantial transportation

service,’ the NMB must contact the

President who may then create an

emergency board to ‘investigate and report

respecting such dispute.’ If the NMB

releases the parties from mediation before

an agreement has been reached, the RLA

37 See Consol. Rail Corp., 491 U.S. at 302–03 ; United

Transp. Union v. Cuyahoga Valley Ry. Co., 979 F.2d 431, 435

(6th Cir.1992). In (sic) Detroit & Toledo Shore Line Railroad

Co. v. United Transportation Union, 396 U.S. 142, 143 (1969).

53a

imposes a 30-day “cooling-off” period upon

the parties. Throughout this entire lengthy

negotiation process, carriers and unions are

required to maintain the status quo with

respect to rates of pay, rules, and working

conditions.38

If either side unilaterally alters the status quo:

A court may issue an injunction to put a

stop to that party’s illegal self-help and to

restore the status-quo, and it may do so

even without the traditional showing of

irreparable injury to either party.39

Offering voluntary separation packages to Flight

Options pilots without any meaningful bargaining

with Pilots Union violates the status quo.

The Carriers have a collective bargaining

agreement with the Pilots Union. After the

representation

election

and

the

resulting

certification, the Pilots Union represents both Flight

Options pilots and Flexjet pilots.

The Flight Options – Pilots Union collective

bargaining agreement requires negotiations to

resolve issues coming from the merger or acquisition.

The same provision requires interest arbitration if

the parties are unable to resolve issues coming from

38 United Air Lines, Inc. v. Int’l Ass’n of Machinist &

Aerospace Workers, AFL-CIO, 243 F.3d 349, 361 (7th Cir.

2001).

39 Id.; see also, Wheeling & Lake Erie Ry. Co. v. Bhd. of

Locomotive Engineers & Trainmen, 789 F.3d 681, 691 (6th

Cir. 2015).

54a

the Flexjet acquisition:

The Flight

Agreement says:

Option

Collective

Bargaining

1.5(c)(4) If Pilots of the acquired carrier

are hired by the Company, the Agreement

shall be modified in those respects

necessary to permit the integration

through negotiations between the surviving

air carrier and the representative of the

consolidated, post-merger Pilot craft or

class. If a modified agreement is not

executed within nine months from the date

a final and binding integrated Pilot

Seniority List is issued, the parties shall

submit outstanding issues to binding

interest arbitration.40

Further, the collective bargaining agreement

requires that seniority govern any “reduction in

force”

5.1 Application of Seniority

Except as may be provided otherwise in

this Agreement, seniority shall govern all

pilots in cases of promotion and demotion,

retention in case of reduction in force,

recall after furlough, choice of vacancies,

choice of vacation and schedule bidding,

and such other purposes as may be

provided in this Agreement.

Thus, the voluntary separation package seems to

40 Doc. 802, Page ID 90.

55a

run counter to the collective bargaining agreement.

The Carriers state in their briefing, “because Flight

Options pilots faced possible furlough due to

overstaffing Flight Options decided to offer a very

generous voluntary separation program (“VSP”) to

see if enough pilots will take the offer to avoid a

potential furlough.”41 The voluntary separation

program seems aimed at reducing the workforce.

Independent of how any separation program

plays out, the Carriers were required to meet, confer

and negotiate with the pilot certified representative

before offering the separation proposal.

As the Supreme Court has explained, the RLA,

does not undertake to compel agreement

between the employer and employees, but

it does command those preliminary steps

without which no agreement can be

reached. It at least requires the employer

to meet and confer with the authorized

representative of its employees, to listen to

their complaints, to make reasonable effort

to compose differences—in short, to enter

into a negotiation for the settlement of

labor disputes . . .42

The Supreme Court has further explained that

the RLA’s duty to bargain in good faith is similar to

the National Labor Relations Act duty to bargain in

41 Doc. 13-1 at 18.

42 Virginian Ry. Co. v. Sys. Fed'n No. 40, 300 U.S. 515,

548 (1937).

56a

good faith and that “the duty of management to

bargain in good faith is essentially a corollary of its

duty to recognize the union.”43,44

Counter-Defendants Carriers must rescind the

VSP offers made and bargain in good faith with

Pilots Union.

Conclusion

For the reasons above, this Court GRANTS the

motion for preliminary injunction and ORDERS the

Counter-Defendants Carriers to accept the integrated

seniority list, rescind the voluntary separation

package and bargain in good faith with CounterPlaintiffs Pilots Union.

IT IS SO ORDERED.

Dated: May 25, 2016

s/

James S. Gwin

JAMES S. GWIN

UNITED STATES DISTRICT JUDGE

43 Chicago & N. W. Ry. Co. v. United Transp. Union, 402

U.S. 570, 575 (1971).

44 The Carriers argue that the Eighth Circuit’s reasoning

in Int’l Ass’n of Machinists & Aerospace Workers, Dist. Lodge

No. 19 v. Soo Line R. Co., 850 F.2d 368 (8th Cir. 1988) should

apply here. There, the Eighth Circuit, in a divided opinion,

decided that the implementation of a voluntary separation

package despite a collective bargaining agreement was a

“minor dispute.” However, this Court is not bound by that

decision and finds that the case at hand is more similar to

Bhd. of Ry., Airline & S.S. Clerks, Freight Handlers, Exp. &

Station Employees v. Chesapeake & Ohio Ry. Co., No. C 83451, 1983 WL 1754, at *7 (N.D. Ohio Oct. 19, 1983), which

found that the implementation of a voluntary separation

package did constitute a major dispute.

57a

____________________

APPENDIX C

____________________

No. 16-3606

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

FILED

August 18, 2017

DEBORAH S. HUNT, Clerk

FLIGHT OPTIONS,

LLC; FLEXJET, LLC;

ONESKY

FLIGHT, LLC; FLIGHT

OPTIONS HOLDING I,

INC.,

Plaintiffs/CounterDefendantsAppellants,

v.

INTERNATIONAL

BROTHERHOOD OF

TEAMSTERS, LOCAL

1108; INTERNATIONAL

BROTHERHOOD OF

TEAMSTERS,

AIRLINE DIVISION,

Defendants/CounterClaimants-Appellees

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

ON APPEAL FROM

THE UNITED

STATES DISTRICT

COURT FOR THE

NORTHERN

DISTRICT OF OHIO

58a

ORDER

Before: COLE, Chief Judge; COOK and WHITE,

Circuit Judges.

The court received a petition for rehearing en

banc. The original panel has reviewed the petition for

rehearing and concludes that the issues raised in the

petition were fully considered upon the original

submission and decision of the case. The petition

then was circulated to the full court. No judge has

requested a vote on the suggestion for rehearing en

banc.

Therefore, the petition is denied.

ENTERED BY ORDER OF THE COURT

s/Deborah S. Hunt

Deborah S. Hunt, Clerk

59a

____________________

APPENDIX D

____________________

45 U.S.C. § 151a. General purposes

The purposes of the chapter are: (1) To avoid any

interruption to commerce or to the operation of any

carrier engaged therein; (2) to forbid any limitation

upon freedom of association among employees or any

denial, as a condition of employment or otherwise, of

the right of employees to join a labor organization; (3)

to provide for the complete independence of carriers

and of employees in the matter of self-organization to

carry out the purposes of this chapter; (4) to provide

for the prompt and orderly settlement of all disputes

concerning rates of pay, rules, or working conditions;

(5) to provide for the prompt and orderly settlement

of all disputes growing out of grievances or out of the

interpretation or application of agreements covering

rates of pay, rules, or working conditions.

45 U.S.C. § 152. General duties

First. Duty of carriers and employees to settle

disputes

It shall be the duty of all carriers, their officers,

agents, and employees to exert every reasonable

effort to make and maintain agreements concerning

rates of pay, rules, and working conditions, and to

settle all disputes, whether arising out of the

application of such agreements or otherwise, in order

to avoid any interruption to commerce or to the 55a

60a

operation of any carrier growing out of any dispute

between the carrier and the employees thereof.

***

Sixth. Conference of representatives; time;

place; private agreements

In case of a dispute between a carrier or carriers

and its or their employees, arising out of grievances

or out of the interpretation or application of

agreements concerning rates of pay, rules, or working

conditions, it shall be the duty of the designated

representative or representatives of such carrier or

carriers and of such employees, within ten days after

the receipt of notice of a desire on the part of either

party to confer in respect to such dispute, to specify a

time and place at which such conference shall be

held: Provided, (1) That the place so specified shall be

situated upon the line of the carrier involved or as

otherwise mutually agreed upon; and (2) that the

time so specified shall allow the designated conferees

reasonable opportunity to reach such place of

conference, but shall not exceed twenty days from the

receipt of such notice: And provided further, That

nothing in this chapter shall be construed to

supersede the provisions of any agreement (as to

conferences) then in effect between the parties.

Seventh. Change in pay, rules, or working

conditions contrary to agreement or to section

156 forbidden

No carrier, its officers, or agents shall change the

rates of pay, rules, or working conditions of its

employees, as a class, as embodied in agreements

61a

except in the manner prescribed in such agreements

or in section 156 of this title.

***

45 U.S.C. § 153. National Railroad Adjustment

Board

First. Establishment; composition; powers and

duties; divisions; hearings and awards; judicial

review

There is established a Board, to be known as the

“National Railroad Adjustment Board”, the members

of which shall be selected within thirty days after

June 21, 1934, and it is provided—

(a) That the said Adjustment Board shall consist

of thirty-four members, seventeen of whom shall be

selected by the carriers and seventeen by such labor

organizations of the employees, national in scope, as

have been or may be organized in accordance with

the provisions of sections 151a and 152 of this title.

(b) The carriers, acting each through its board of

directors or its receiver or receivers, trustee or

trustees, or through an officer or officers designated

for that purpose by such board, trustee or trustees, or

receiver or receivers, shall prescribe the rules under

which its representatives shall be selected and shall

select the representatives of the carriers on the

Adjustment Board and designate the division on

which each such representative shall serve, but no

carrier or system of carriers shall have more than one

voting representative on any division of the Board.

(c) Except as provided in the second paragraph of

subsection (h) of this section, the national labor

62a

organizations, as defined in paragraph (a) of this

section, acting each through the chief executive or

other medium designated by the organization or

association thereof, shall prescribe the rules under

which the labor members of the Adjustment Board

shall be selected and shall select such members and

designate the division on which each member shall

serve; but no labor organization shall have more than

one voting representative on any division of the

Board.

(d) In case of a permanent or temporary vacancy

on the Adjustment Board, the vacancy shall be filled

by selection in the same manner as in the original

selection.

(e) If either the carriers or the labor organizations

of the employees fail to select and designate

representatives to the Adjustment Board, as provided

in paragraphs (b) and (c) of this section, respectively,

within sixty days after June 21, 1934, in case of any

original appointment to office of a member of the

Adjustment Board, or in case of a vacancy in any

such office within thirty days after such vacancy

occurs, the Mediation Board shall thereupon directly

make the appointment and shall select an individual

associated in interest with the carriers or the group

of labor organizations of employees, whichever he is

to represent.

(f) In the event a dispute arises as to the right of

any national labor organization to participate as per

paragraph (c) of this section in the selection and

designation of the labor members of the Adjustment

Board, the Secretary of Labor shall investigate the

claim of such labor organization to participate, and if

63a

such claim in the judgment of the Secretary of Labor

has merit, the Secretary shall notify the Mediation

Board accordingly, and within ten days after receipt

of such advice the Mediation Board shall request

those national labor organizations duly qualified as

per paragraph (c) of this section to participate in the

selection and designation of the labor members of the

Adjustment Board to select a representative. Such

representative, together with a representative

likewise designated by the claimant, and a third or

neutral party designated by the Mediation Board,

Constituting a board of three, shall within thirty

days after the appointment of the neutral member,

investigate the claims of the labor organization

desiring participation and decide whether or not it

was organized in accordance with sections 151a and

152 of this title and is otherwise properly qualified to

participate in the selection of the labor members of

the Adjustment Board, and the findings of such

boards of three shall be final and binding.

(g) Each member of the Adjustment Board shall

be compensated by the party or parties he is to

represent. Each third or neutral party selected under

the provisions of paragraph (f) of this section shall

receive from the Mediation Board such compensation

as the Mediation Board may fix, together with his

necessary traveling expenses and expenses actually

incurred for subsistence, or per diem allowance in

lieu thereof, subject to the provisions of law

applicable thereto, while serving as such third or

neutral party.

***

64a

(i) The disputes between an employee or group of

employees and a carrier or carriers growing out of

grievances or out of the interpretation or application

of agreements concerning rates of pay, rules, or

working conditions, including cases pending and

unadjusted on June 21, 1934, shall be handled in the

usual manner up to and including the chief operating

officer of the carrier designated to handle such

disputes; but, failing to reach an adjustment in this

manner, the disputes may be referred by petition of

the parties or by either party to the appropriate

division of the Adjustment Board with a full

statement of the facts and all supporting data

bearing upon the disputes.

(j) Parties may be heard either in person, by

counsel, or by other representatives, as they may

respectively elect, and the several divisions of the

Adjustment Board shall give due notice of all

hearings to the employee or employees and the

carrier or carriers involved in any disputes submitted

to them.

(k) Any division of the Adjustment Board shall

have authority to empower two or more of its

members to conduct hearings and make findings

upon disputes, when properly submitted, at any place

designated by the division: Provided, however, That

except as provided in paragraph (h) of this section,

final awards as to any such dispute must be made by

the entire division as hereinafter provided.

(l) Upon failure of any division to agree upon an

award because of a deadlock or inability to secure a

majority vote of the division members, as provided in

paragraph (n) of this section, then such division shall

65a

forthwith agree upon and select a neutral person, to

be known as “referee”, to sit with the division as a

member thereof, and make an award. Should the

division fail to agree upon and select a referee within

ten days of the date of the deadlock or inability to

secure a majority vote, then the division, or any

member thereof, or the parties or either party to the

dispute may certify that fact to the Mediation Board,

which Board shall, within ten days from the date of

receiving such certificate, select and name the referee

to sit with the division as a member thereof and

make an award. The Mediation Board shall be bound

by the same provisions in the appointment of these

neutral referees as are provided elsewhere in this

chapter for the appointment of arbitrators and shall

fix and pay the compensation of such referees.

(m) The awards of the several divisions of the

Adjustment Board shall be stated in writing. A copy

of the awards shall be furnished to the respective

parties to the controversy, and the awards shall be

final and binding upon both parties to the dispute. In

case a dispute arises involving an interpretation of

the award, the division of the Board upon request of

either party shall interpret the award in the light of

the dispute.

(n) A majority vote of all members of the division

of the Adjustment Board eligible to vote shall be

competent to make an award with respect to any

dispute submitted to it.

(o) In case of an award by any division of the

Adjustment Board in favor of petitioner, the division

of the Board shall make an order, directed to the

carrier, to make the award effective and, if the award

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includes a requirement for the payment of money, to

pay to the employee the sum to which he is entitled

under the award on or before a day named. In the

event any division determines that an award

favorable to the petitioner should not be made in any

dispute referred to it, the division shall make an

order to the petitioner stating such determination.

(p) If a carrier does not comply with an order of a

division of the Adjustment Board within the time

limit in such order, the petitioner, or any person for

whose benefit such order was made, may file in the

District Court of the United States for the district in

which he resides or in which is located the principal

operating office of the carrier, or through which the

carrier operates, a petition setting forth briefly the

causes for which he claims relief, and the order of the

division of the Adjustment Board in the premises.

Such suit in the District Court of the United States

shall proceed in all respects as other civil suits,

except that on the trial of such suit the findings and

order of the division of the Adjustment Board shall be

conclusive on the parties, and except that the

petitioner shall not be liable for costs in the district

court nor for costs at any subsequent stage of the

proceedings, unless they accrue upon his appeal, and

such costs shall be paid out of the appropriation for

the expenses of the courts of the United States. If the

petitioner shall finally prevail he shall be allowed a

reasonable attorney's fee, to be taxed and collected as

a part of the costs of the suit. The district courts are

empowered, under the rules of the court governing

actions at law, to make such order and enter such

judgment, by writ of mandamus or otherwise, as may

be appropriate to enforce or set aside the order of the

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division of the Adjustment Board: Provided, however,

That such order may not be set aside except for

failure of the division to comply with the

requirements of this chapter, for failure of the order

to conform, or confine itself, to matters within the

scope of the division's jurisdiction, or for fraud or

corruption by a member of the division making the

order.

(q) If any employee or group of employees, or any

carrier, is aggrieved by the failure of any division of

the Adjustment Board to make an award in a dispute

referred to it, or is aggrieved by any of the terms of

an award or by the failure of the division to include

certain terms in such award, then such employee or

group of employees or carrier may file in any United

States district court in which a petition under

paragraph (p) could be filed, a petition for review of

the division's order. A copy of the petition shall be

forthwith transmitted by the clerk of the court to the

Adjustment Board. The Adjustment Board shall file

in the court the record of the proceedings on which it

based its action. The court shall have jurisdiction to

affirm the order of the division, or to set it aside, in

whole or in part, or it may remand the proceedings to

the division for such further action as it may direct.

On such review, the findings and order of the division

shall be conclusive on the parties, except that the

order of the division may be set aside, in whole or in

part, or remanded to the division, for failure of the

division to comply with the requirements of this

chapter, for failure of the order to conform, or confine

itself, to matters within the scope of the division's

jurisdiction, or for fraud or corruption by a member of

the division making the order. The judgment of the

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court shall be subject to review as provided in

sections 1291 and 1254 of Title 28.

(r) All actions at law based upon the provisions of

this section shall be begun within two years from the

time the cause of action accrues under the award of

the division of the Adjustment Board, and not after.

***

Second. System, group, or regional boards:

establishment by voluntary agreement; special

adjustment boards: establishment, composition,

designation of representatives by Mediation

board, neutral member, compensation, quorum,

finality and enforcement of awards.

Nothing in this section shall be construed to

prevent any individual carrier, system, or group of

carriers and any class or classes of its or their

employees, all acting through their representatives,

selected in accordance with the provisions of this

chapter, from mutually agreeing to the establishment

of system, group, or regional boards of adjustment for

the purpose of adjusting and deciding disputes of the

character specified in this section. In the event that

either party to such a system, group, or regional

board of adjustment is dissatisfied with such

arrangement, it may upon ninety days' notice to the

other party elect to come under the jurisdiction of the

Adjustment Board.

If written request is made upon any individual

carrier by the representative of any craft or class of

employees of such carrier for the establishment of a

special board of adjustment to resolve disputes

otherwise referable to the Adjustment Board, or any

dispute which has been pending before the

69a

Adjustment Board for twelve months from the date

the dispute (claim) is received by the Board, or if any

carrier makes such a request upon any such

representative, the carrier or the representative upon

whom such request is made shall join in an

agreement establishing such a board within thirty

days from the date such request is made. The cases

which may be considered by such board shall be

defined in the agreement establishing it. Such board

shall consist of one person designated by the carrier

and one person designated by the representative of

the employees. If such carrier or such representative

fails to agree upon the establishment of such a board

as provided herein, or to exercise its rights to

designate a member of the board, the carrier or

representative making the request for the

establishment of the special board may request the

Mediation Board to designate a member of the special

board on behalf of the carrier or representative upon

whom such request was made. Upon receipt of a

request for such designation the Mediation Board

shall promptly make such designation and shall

select an individual associated in interest with the

carrier or representative he is to represent, who, with

the member appointed by the carrier or

representative requesting the establishment of the

special board, shall constitute the board. Each

member of the board shall be compensated by the

party he is to represent. The members of the board so

designated shall determine all matters not previously

agreed upon by the carrier and the representative of

the employees with respect to the establishment and

jurisdiction of the board. If they are unable to agree

such matters shall be determined by a neutral

70a

member of the board selected or appointed and

compensated in the same manner as is hereinafter

provided with respect to situations where the

members of the board are unable to agree upon an

award. Such neutral member shall cease to be a

member of the board when he has determined such

matters. If with respect to any dispute or group of

disputes the members of the board designated by the

carrier and the representative are unable to agree

upon an award disposing of the dispute or group of

disputes they shall by mutual agreement select a

neutral person to be a member of the board for the

consideration and disposition of such dispute or

group of disputes. In the event the members of the

board designated by the parties are unable, within

ten days after their failure to agree upon an award,

to agree upon the selection of such neutral person,

either member of the board may request the

Mediation Board to appoint such neutral person and

upon receipt of such request the Mediation Board

shall promptly make such appointment. The neutral

Person so selected or appointed shall be compensated

and reimbursed for expenses by the Mediation Board.

Any two members of the board shall be competent to

render an award. Such awards shall be final and

binding upon both parties to the dispute and if in

favor of the petitioner, shall direct the other party to

comply therewith on or before the day named.

Compliance with such awards shall be enforcible by

proceedings in the United States district courts in the

same manner and subject to the same provisions that

apply to proceedings for enforcement of compliance

with awards of the Adjustment Board.

71a

45 U.S.C. § 156. Procedure in changing rates of

pay, rules, and working conditions.

Carriers and representatives of the employees

shall give at least thirty days' written notice of an

intended change in agreements affecting rates of pay,

rules, or working conditions, and the time and place

for the beginning of conference between the

representatives of the parties interested in such

intended changes shall be agreed upon within ten

days after the receipt of said notice, and said time

shall be within the thirty days provided in the notice.

In every case where such notice of intended change

has been given, or conferences are being held with

reference thereto, or the services of the Mediation

Board have been requested by either party, or said

Board has proffered its services, rates of pay, rules,

or working conditions shall not be altered by the

carrier until the controversy has been finally acted

upon, as required by section 155 of this title, by the

Mediation Board, unless a period of ten days has

elapsed after termination of conferences without

request for or proffer of the services of the Mediation

Board.

72a

____________________

APPENDIX E

____________________

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

___________________________________

FLIGHT OPTIONS,

LLC; FLEXJET, LLC;

Plaintiffs,

v.

INTERNATIONAL

BROTHERHOOD OF

TEAMSTERS, LOCAL

1108; INTERNATIONAL

BROTHERHOOD OF

TEAMSTERS,

AIRLINE DIVISION,

Defendants

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 1:16-cv00732

DECLARATION OF ROBERT SULLIVAN

I, Robert Sullivan, hereby state and affirm as

follows:

1. I am over 21 years of age, have personal

knowledge of the matters described in this

declaration, and am competent to testify to the

73a

matters herein.

2. I am the Chief Administrative Officer of

OneSky Flight, LLC.

3. After OneSky acquired Flexjet, the IBT began

organizational efforts in late 2014 to represent the

Flexjet pilots.

4. The Flexjet Pilots Organizing Committee

("FJPOC") formally announced themselves to Flexjet

on January 30, 2015.

5. On July 4, 2015, the IBT applied to represent

the Flexjet and Flight Options pilots as a single

transportation system.

6. The NMB's single carrier finding only

addresses union representation without bearing on

an airline's function as one company from an

operational/ organizational standpoint.

7. Flight Options and Flexjet are still operating

as two airlines, and they each have their own Federal

Aviation

Administration

operating

certificate,

different operating procedures and specifications,

different clients (known as "owners"), different

aircraft with different livery, different pilot groups,

and different management teams running each

separate airline.

8. For example, Flight Options and Flexjet pilots

do not comingle to fly aircraft with each other.

9. To fly an aircraft at Flight Options, a pilot

must be trained and qualified on that aircraft and

that specific carrier's operating procedures—and the

same is true for Flexjet aircraft.

10. A number of Flight Options pilots took

74a

personal leaves of absence and took a position at

Flexjet. These pilots had to train and qualify on

Flexjet aircraft and are now Flexjet employees, with

inactive leave-of-absence status at Flight Options.

11. The 2010 CBA and its pay, work rules,

furlough provisions, and seniority system cover

Flight Options pilots.

12. In

contrast,

individual

employment

agreements and Flexjet work rules cover Flexjet

pilots.

13. The 2010 CBA does not apply to the Flexjet

pilots, and the Union have never argued that it

applies until now.

14. Nor do any of the work rules or employment

agreements at Flexjet apply to Flight Options pilots.

15. In essence, each pilot group works under the

rules of its employer.

16. The IBT began fence agreement negotiations

with Flight Options in November 2014 and

negotiated until late February 2015.

17. At that time, the IBT stopped negotiating for a

fence because (the Carriers believe) that it was

concerned that it did not have enough votes to win a

combined election of Flexjet and Flight Options

pilots.

18. The IBT did not communicate about or attempt

to negotiate a fence agreement for almost nine

months while it contemplated its next move.

19. Indeed, the IBT did not reach out to Flight

Options' counsel to request to re-open fence

negotiations until October 29, 2015.

75a

20. At that point, Flight Options' counsel, Tom

Jerman of Jones Day, retired from the practice of law

and indicated that the Company would be hiring new

labor counsel.

21. W. Chris Harrison with Ogletree Deakins

began representing Flight Options in January 2016,

and the Union and Flight Options exchanged another

round of proposals in February 2016 before meeting

again in March and April 2016 to exchange

additional proposals.

22. The parties are currently selecting dates for

May 2016 to meet and negotiate the fence agreement.

23. Job and pay protection for Flight Options

pilots have been sticking points in these negotiations,

as well as the Carriers' ability to transition pilots

across the fence to correct an imbalance in the

amount of flying for each Carrier, which could avoid

potential furloughs.

24. An interest arbitration for the fence agreement

is scheduled in June 2016, and the fence agreement

will either be resolved at the parties' pre-arbitration

negotiations or by Arbitrator Herb Fishgold in

interest arbitration.

25. Neither Flight Options nor OneSky have hired

the Flexjet pilots: they still operate separately as

Flexjet employees.

26. No operational merger affecting the pilot group

seniority has been announced. Flight Options and

Flexjet pilots do not bid against each other for

positions, schedules, vacation, or any other condition

of employment, and the flight operations are

completely separate.

76a

27. The IBT did not represent Flexjet pilots when

OneSky acquired Flexjet. Instead, the pilots were

unrepresented.

28. Furthermore, the IBT does not have a

"Teamsters Merger Policy"—which matters because

such a policy would provide transparency to pilots

about the seniority integration process. A pilot's

standing on the seniority list impacts his or her

career progression, bidding, schedules, movement

from first officer to captain, and vacation.

29. The IBT has no merger policy and did not tell

the pilots what it intended to do.

30. Instead, the IBT produced a "final" list to the

Company after a brief period of closed-door meetings.

31. But the Carriers heard nothing further from

the IBT about seniority integration until after the

election.

32. By early January 2016, this newly devised

Flexjet Merger Committee began meeting with the

Flight Options Merger Committee—but not with the

Company—to negotiate seniority integration.

33. On January 10, 2016 and again on January 15,

2016, the Carrier objected to the IBT's closed

integration process and requested that the IBT

permit a Company representative to attend the

seniority integration negotiations so that the

Company could comply with its obligations under

McCaskill-Bond.

34. The IBT twice refused, rebuffing the Carriers'

attempts to participate and claiming that seniority

list integration was "an internal matter for the IBT

only."

77a

35. On February 24, 2016—only a few weeks

later—the IBT notified Flight Options and Flexjet

that the Merger Committees had purportedly agreed

on an ISL which essentially used longevity date

order.

36. This purported ISL also contains provisions

requiring pilots working for Flexjet on a leave of

absence from Flight Options to make an election at

some future unspecified time with unspecified

consequences.

37. Because the ISL appears to adversely target

the pilots working for Flexjet on a leave of absence

from Flight Options, the ISL may violate the 2010

CBA (to which Flight Options and the IBT—but not

Flexjet—are parties).

38. The Union appears intent on pursuing

implementation of this ISL as soon as possible, as it

filed a grievance seeking enforcement of the ISL

pursuant to the Flight Options pilots' 2006 CBA—

which does not cover Flexjet pilots.

39. The Company also anticipates that any Section

13 arbitration pursued by the Union will seek

enforcement of the current ISL.

40. A "final and binding integrated Pilot Seniority

List is issued" by Flight Options, not by the IBT.

41. Second, the Carriers provided representationelection training to all chief pilots in mid-2014, early

2015, and mid-2015, and human resources managers

also attended the mid-2015 training.

42. This training explained the concept and

importance of laboratory conditions and maintaining

the pilots' ability to vote free from interference,

78a

influence, or coercion. Weiss Decl. § XX (Ex. XX). The

Carriers instructed managers not to make promises

or threats; poll, spy or monitor; favor or penalize

based on union preference; and many other

important rules.

43. In October 2015, after the Carriers issued

videos from Kenn Ricci, the Carriers again provided

training to remind managers of these rules.

44. Since the election, Mr. Jerman's retirement,

and Mr. Harrison's retention, fence agreement

negotiations resumed.

45. The parties met in February, March, and April

2016 and are scheduling dates in May 2016.

46. Both sides have narrowed the issues down to

job and pay protection for Flight Options pilots

during the fence period and the Carriers' ability to

move pilots across the fence in times of over- or

understaffing to avoid furloughs.

47. Arbitration on the fence issue will occur in

June 2016 if the parties cannot reach an amicable

agreement first.

48. The Carriers have taken other actions to move

the bargaining process along. For example, Flight

Options has negotiated pending grievances with the

IBT, the parties have scheduled arbitrations over

other disputes, and both sides have worked to

maintain labor relations.

49. The Company has not crossed its arms and

refused to meet with the Union: the parties meet and

converse regularly as part of their ongoing

relationship.

79a

50. Because Flight Options faces possible pilot

furloughs due to overstaffing, Flight Options has

decided to offer a very generous voluntary separation

program ("VSP") to see if enough pilots will take the

offer to avoid a potential furlough.

51. The voluntary departure of pilots high on the

pay scale would mitigate the financial impact of the

separation payments.

52. Although Flight Options did not feel it had a

legal obligation to do so, it gave the IBT an

opportunity to review and agree to the program.

53. Although Flight Options presented a very

generous package, the IBT countered and demanding

significantly more money.

54. Despite the IBT's rejection of this offer, Flight

Options renewed the offer after telling the IBT that

the program was a good as it could be—but the IBT

would not accept it.

55. Because there is no status quo or CBA at

Flexjet, the Company issued the same VSP to the

Flexjet pilots, and it has been well-received.

Pursuant to 28 U.S.C. § 1746, I declare under penalty

of perjury under the laws of the United States of

America that the foregoing is true and correct.

Dated: April 29, 2016.

/s/Robert Sullivan

Robert Sullivan

80a

____________________

APPENDIX F

____________________

FLIGHT OPTIONS PILOTS COLLECTIVE

BARGAINING AGREEMENT

SECTION 1 - RECOGNITION and SCOPE

1.1 Introduction

1.1(a) Pursuant to the certification by the

National Mediation Board in Case No. R-7072

dated March 3, 2006, this Agreement is entered

into by and between Flight Options, LLC

(hereinafter “Flight Options” or “Company”) and

the International Brotherhood of Teamsters,

Airline Division (hereinafter “Union”) as

representative of Captains and First Officers of

the Company, (hereinafter “Pilot(s)”) pursuant

to the terms of the Railway Labor Act, as

amended (hereinafter the “Act”) in the mutual

interests of the Pilots and the Company to

promote the safety and continuity of air

transportation, to further the efficiency and

economy of operations, and to provide for orderly

collective bargaining pertaining to rates of pay,

rules or working conditions, between the

Company and its Pilots.

1.1(b) This Agreement shall supersede all

previous Agreements by and between the

Company and the Union or any other labor

organization or individual with respect to the

Pilots described above and shall constitute the

81a

sole Agreement between the Company and the

Union. Any and all agreements made by the

parties shall be reduced to writing and signed by

the authorized representatives. An “authorized

representative” of the Union shall be any

authorized agent of the Teamsters Airline

Division, including the President of the

Executive Board of Local 1108, or his designee.

1.2 Scope of the Agreement

1.2(a) Except as otherwise provided in this

Section, all present and future revenue flying

performed in and for the service of the Company,

its Affiliates, or the Company’s Parent, including

present and future flying performed on behalf of

the Company, its Affiliates, or Parent pursuant

to any agreement or arrangement to which the

Company, any of its Affiliates, or Parent holds a

majority interest, shall be performed by Pilots

named on the Flight Options Pilots Seniority

List in accordance with the terms and conditions

of this Agreement and any other applicable

agreement between the Company and the

International Brotherhood of Teamsters, Airline

Division.

1.2(b) The Company will actively employ a

minimum number of Line Pilots on the Flight

Options Seniority List that is commensurate

with the Company’s fractional hours under

Management and JetPASS card holder hours.

The number of Line Pilots required will be

measured quarterly by dividing the fractional

Hours under Management and JetPASS card

holder hours at the end of each quarter by 800

82a

hours, then multiplying by 4.0.

1.3 Exceptions to the Scope of this Agreement

1.3(a) Flying by Flight Options Owners

1.3(a)(1) Flying by any Flight Options

owner, as defined in the FARs, who is a

natural person, a certificated airman and

qualified to operate Flight Options

aircraft as a PIC or SIC, is not covered by

this Agreement.

1.3(a)(2) No Flight Options Pilot shall

be required to accompany owners who are

operating aircraft pursuant to this

exception.

1.3(b) Subcontract

Options Fractional

Program Flights

Charter of Flight

or JetPASS Card

Flying within the scope of this Agreement shall

not be subcontracted to any person or entity not

subject to this Agreement; provided, however,

that covered flying may continue to be

Subcontract Chartered to ATCO operators under

the following conditions:

1.3(b)(1) Subcontract Charter shall not

be used to reduce existing positions or to

slow expansion.

1.3(b)(2) ATCO operators shall conduct

all Subcontract Chartered flights under

FAR Part 135.

1.3(b)(3) Flight Options Pilots shall

wear uniforms different from those worn

by ATCO flight crews.

83a

1.3(b)(4) Flight Options Pilots shall not

be required to fly with ATCO Pilots.

1.3(c) Operating Partner Companies

1.3(c)(1) The Company may lease

aircraft in the Flight Options livery to

an Operating Partner Company for use

in the Operating Partner Company’s

private or charter operations, or for

Subcontract Charter in support of Flight

Options fractional or JetPASS card

holder trips. This flying activity is not

subject to the provisions of this

Agreement.

1.3(c)(2)

The

Operating

Partner

Company may sell or lease an aircraft in

the Flight Options livery to a local user

and retain the management of that

aircraft. The aircraft can be used in the

Operating Partner’s private or charter

operations, or for Subcontract Charter

in support of Flight Options fractional or

JetPASS card holder trips. This flying

activity is not subject to the provisions

of this Agreement.

1.3(c)(3)

The

Operating

Partner

Company may manage an aircraft

owned in the Flight Options fractional

aircraft ownership fleet. The aircraft can

be used in the Operating Partner’s

private or charter operations, or for

Subcontract Charter in support of Flight

Options fractional or JetPASS card

holder trips. This flying activity is not

84a

subject to

Agreement.

the

provisioNs

of

this

1.3(c)(4) Pilots with Operating Partner

Companies will wear uniforms different

from those worn by Flight Options

pilots.

1.3(d) Flying Conducted by Affiliates of

Flight Options

Flying conducted by any air carrier that is an

Affiliate of Flight Options which (1) utilizes

aircraft with a maximum take off weight of

110,000 pounds or greater or (2) for purposes of

freight or ACMI operations, or (3) engages in

scheduled passenger operations, shall not be

subject to the provisions of this Agreement.

1.3(e) Charter Broker Services

1.3(e)(1) The Company or Affiliate may

act as a charter broker without limitation

if the brokered flying is not performed by

the Company or Affiliate.

1.3(e)(2) If a brokered charter will be

flown by the Company or Affiliate, then

the brokered charter shall be assigned at

the Company’s direction according to the

following priority if pilots and suitable

aircraft are available to fulfill the terms of

the requested brokered flight, by:

1.3(e)(2)(i) Flight Options Pilots

operating aircraft owned or leased by

the Company;

1.3(e)(2)(ii) Pilots employed by an

Operating Partner Company;

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1.3(e)(2)(iii) An ATCO.

1.4 Parallel Operations

1.4(a) The Company shall not establish a

new air carrier to do fractional, JetPASS card

holder or other flying of the type covered by

this

Agreement,

unless

such

flying

operations are flown by Pilots on the Flight

Options Pilot Seniority List in accordance

with this Agreement.

1.4(b) If the Company acquires a controlling

interest in an air carrier that does fractional,

JetPASS card holder or other flying of the

type covered by this Agreement, the acquired

air carrier shall be consolidated utilizing the

procedures for Successor Transactions. A

“controlling interest” for purposes of this

Section means the ownership of an equity

interest representing more than 50 percent of

the outstanding capital stock of an Entity, or

voting securities representing more than 50

percent of the total voting power of

outstanding securities then entitled to vote

generally in the election of such Entity’s

board of directors or other governing body.

1.5 Successor Transactions

1.5(a) Successor Obligations

1.5(a)(1) This Agreement shall be

binding upon the parties hereto, their

successors, administrators, executors,

transferees

and

assigns.

Any

transaction that involves a transfer (in

a single transaction or in a series of

86a

related multi-step transactions) to a

Successor of ownership or control of

the Company and/or substantially all

of its assets shall be a “Successor

Transaction” and subject to this

Agreement.

1.5(a)(2) No contract or other legally

binding commitment involving the

transfer of ownership or control

pursuant to a Successor Transaction

shall be signed or otherwise entered

into unless it is agreed, as a material

and irrevocable condition of entering

into, concluding and implementing

such transaction that the Successor

shall assume the employment of Pilots

on the Flight Options Pilots Seniority

List in accordance with the status quo

consisting of the applicable rates of

pay, rules and working conditions set

forth in this Agreement (including its

merger protections).

1.5(a)(3) The Company shall give

written notice of the existence of this

Agreement, and provide a copy of this

Agreement to any proposed Successor

before the Company and the proposed

Successor enter into a Successor

Transaction. A copy of the notice

submitted to the proposed Successor

shall be provided to the Union under

standard confidentiality agreements at

the

Company’s

request

when

87a

permitted

by

applicable

law,

regulations and any confidentiality

agreements, the latter of which shall

not extend beyond the negotiation and

execution of the written definitive

agreement including the occurrence of

any material contingencies.

1.5(b) Pilot Protections in the Event the

Company is Acquired by another Air

Carrier

Unless otherwise agreed, the following

provisions shall apply in the event of a

Successor Transaction that affects the

Seniority rights of Pilots on the Flight

Options Pilot Seniority List where the

Company is acquired by another air carrier

or its affiliate, and shall bind the Successor

or surviving air carrier.

1.5(b)(1) The integration of the

Seniority Lists of the respective Pilot

groups shall be governed by Sections 3

and 13 of the Allegheny-Mohawk

Labor Protective Provisions (“LPPs”).

The parties shall promptly initiate the

Seniority integration procedures of

Sections

3

and

13

following

announcement of an operational

merger affecting the Seniority rights of

the Pilot groups. The Company or

other Successor, as appropriate, shall

accept the integrated Seniority List.

There shall be no system flush or

removal of Pilots from their positions

88a

as a result

integration.

of

Seniority

List

1.5(b)(2) Prior to integration of

Seniority Lists in accordance with

paragraph 1.5(b)(1), above, the parties

shall negotiate a mutually agreeable

fence agreement. The fences shall

remain in effect until Seniority Lists

and CBAs are merged. Until the fences

are removed, all aircraft (including

orders and options to purchase

aircraft) and the operations of each

pre-transaction carrier shall remain

separated. If the fence agreement

cannot be reached within 60 days of a

request by either party to begin

negotiations, all unresolved issues

shall be submitted to interest

arbitration. The arbitrator’s resolution

of the disputed issues shall be on an

issue-by-issue basis, rather than a

“total package” basis, and shall be

binding on the parties with respect to

the particular dispute, but shall have

no precedential or binding effect on

other or future disputes arising under

this subparagraph.

1.5(b)(3) Unless and until an

operational

merger

is

finally

effectuated, the Union shall continue

to be recognized as the representative

of the pre-merger Pilot craft or class to

the extent provided by law. In the

89a

event of an operational merger, the

representative of the post-merger craft

or class shall be established pursuant

to Section 2, Ninth of the Railway

Labor Act, as amended.

1.5(b)(4) Prior to an operational

merger, the surviving air carrier and

the representative of the consolidated,

post-merger Pilot craft or class shall

negotiate

modifications

to

the

collective

bargaining

agreement

necessary to permit the integration. If

a modified agreement is not executed

within nine months from the date a

final and binding integrated Pilot

Seniority List is issued, the parties

shall submit outstanding issues to

binding interest arbitration. The

arbitrator’s resolution of the disputed

issues shall be on an issue-by-issue

basis, rather than a “total package”

basis, and shall be binding on the

parties with respect to the particular

dispute, but shall have no precedential

or binding effect on other or future

disputes

arising

under

this

subparagraph. Until such time as a

fully merged agreement is reached,

either

through

bargaining

or

arbitration, the surviving air carrier

may continue to operate the two

carriers separately.

1.5(c) Pilot Protections in the Event of

90a

an Acquisition of an Air Carrier

1.5(c)(1) If Pilots of the acquired

carrier are hired by the Company, the

seniority lists of the respective Pilot

groups shall be integrated pursuant to

Teamsters Merger Policy if both

groups are represented by the IBT, or

if the Pilots of the acquired airline are

not represented by the IBT, then

pursuant to Sections 3 and 13 of the

Allegheny-Mohawk Labor Protective

Provisions.

Seniority

integration

procedures shall be promptly initiated

following

announcement

of

an

operational merger affecting the

seniority of the pilot groups. The

Company or other Successor, as

appropriate,

shall

accept

the

integrated seniority list. There shall be

no system flush or removal of Pilots

from their positions as a result of

seniority list integration.

1.5(c)(2) Prior to integration of

Seniority Lists in accordance with

paragraph 1.5(c)(1), above, the parties

shall negotiate a mutually agreeable

fence agreement. The fences shall

remain in effect for the period of time

the acquired carrier continues as a

separate transportation system. Until

the fences are removed, all aircraft

(including orders and options to

purchase aircraft) and the operations

91a

of each pre-transaction carrier shall

remain separated. If the fence

agreement cannot be reached within

60 days of a request by either party to

begin negotiations, all unresolved

issues shall be submitted to interest

arbitration. The arbitrator’s resolution

of the disputed issues shall be on an

issue-by-issue basis, rather than a

“total package” basis, and shall be

binding on the parties with respect to

the particular dispute, but shall have

no precedential or binding effect on

other or future disputes arising under

this subparagraph.

1.5(c)(3) Unless and until an

operational

merger

is

finally

effectuated, the Union shall continue

to be recognized as the representative

of the pre-merger Pilot craft or class to

the extent provided by law. In the

event of an operational merger, the

representative of the post-merger craft

or class shall be established pursuant

to Section 2, Ninth of the Railway

Labor Act, as amended.

1.5(c)(4) If Pilots of the acquired

carrier are hired by the Company, the

Agreement shall be modified in those

respects necessary to permit the

integration

through

negotiations

between the surviving air carrier and

the representative of the consolidated,

92a

post-merger Pilot craft or class. If a

modified agreement is not executed

within nine months from the date a

final and binding integrated Pilot

Seniority List is issued, the parties

shall submit outstanding issues to

binding interest arbitration. The

arbitrator’s resolution of the disputed

issues shall be on an issue-by-issue

basis, rather than a “total package”

basis, and shall be binding on the

parties with respect to the particular

dispute, but shall have no precedential

or binding effect on other or future

disputes

arising

under

this

subparagraph. Until such time as a

fully merged agreement is reached,

either

through

bargaining

or

arbitration, the surviving air carrier

may continue to operate the two

carriers separately.

1.5(c)(5) The Company may operate

the acquired carrier under the parties’

fence agreement for a reasonable

period following acquisition.

1.6 New Equipment

1.6(a) The Company may introduce new

equipment affecting Pilots covered by this

Agreement.

1.6(b) In those instances where the Company

introduces new equipment for which rates of

pay exist under this Agreement, the rates of

pay, rules and working conditions applicable

93a

to such aircraft shall be based on the

Agreement.

1.6(c) Any disputes about the operation of

this provision shall be submitted to

arbitration.

1.6(d) In those instances where the Company

intends to introduce into service an aircraft

type or model for which there are no existing

pay rates specified in subsection 27.1, or for

which no pay rates can be determined by

application of the formula set forth in

subsection 27.1(g), the Company shall

provide prompt written notice to the

Executive Board President. The parties may

meet at any time prior to, but no less than

120 days before the introduction of the new

equipment to negotiate the applicable rates

of pay and rules that are necessary to operate

the new equipment.

1.6(e) In those instances where the Company

contemplates introducing an aircraft typecertificated to exceed Mach 1.0 flight

(hereinafter “Supersonic Aircraft”) or a type

or model in aircraft class Very Light Jet

(“VLJ”) the Company shall provide prompt

written notice to the Executive Board

President. The parties may meet at any time

prior to, but no less than 180 days before the

introduction of the supersonic aircraft to

negotiate the applicable rates of pay, rules

and working conditions.

1.6(f) If the parties are unable to reach

agreement on the issues bargained pursuant

94a

to the provisions of paragraph 1.6(d) or 1.6(e)

above, by the 60th day prior to the date of the

introduction of the new equipment, they shall

submit their respective last offers on

disputed matters to interest arbitration. The

arbitrator’s resolution of the disputed issues

shall be on an issue-by-issue basis, rather

than a “total package” basis, and shall be

binding on the parties with respect to the

particular dispute, but shall have no

precedential or binding effect on other or

future disputes arising under provisions

related to new equipment.

1.6(g) The Company may operate the new

equipment prior to reaching an agreement

with the Union on all disputed issues, or the

issuance of an arbitrator’s final decision,

whichever is applicable. The agreement or

the arbitrator’s decision shall be retroactive

to the commencement of operations of the

new equipment. Rates of pay, rules and/or

working conditions shall be retroactive to the

first day of the operation of the new

equipment unless the agreement or

arbitrator’s decision otherwise provides.

1.7 Foreign Operations

1.7(a) The Company shall continue to be

subject to the Railway Labor Act, as

amended, with its headquarters, senior

management

and

Flight

Operations

Department situated within the United

States.

1.7(b) The Company shall not open a foreign

95a

operating base to perform flying covered by

this Agreement.

1.7(c) Nothing herein shall preclude an

affiliate of the Company from establishing

foreign

air

operations

that

operate

exclusively outside the United States except

for flights that originate or end in the United

States but do not both originate and end in

the United States.

1.8 Information Sharing

The Company will provide the Union, upon a

specific written request, with documents and

information reasonably necessary to determine

compliance with Section 1. Proprietary, sensitive

or confidential information shall be subject to

standard confidentiality agreements acceptable

to the Company, when requested.

1.9 Expedited Arbitration

1.9(a) The parties agree to arbitrate any

grievance filed by the Union in accordance

with the requirements of Section 21, alleging

a violation of Section 1 on an expedited basis.

Any such grievance shall proceed directly to

the System Board of Adjustment sitting with

a neutral arbitrator acceptable to both

parties. That neutral shall be selected from

the Scope Provision Arbitration Panel within

10 days of the filing of the grievance. The

hearing shall take place no later than 30

days after the selection of the neutral

arbitrator. The decision of the System Board

of Adjustment shall be rendered no later

than 30 days after the record is closed.

96a

Timelines, as referenced in this paragraph,

may be extended only by mutual agreement

of the parties in writing.

1.9(b) The Scope Provision Arbitration Panel

shall consist of seven arbitrators selected by

the parties. Said panel shall be established

by agreement of the parties before

ratification of this Agreement. Arbitrators for

disputes arising under this Section shall be

selected by alternately striking names from

the list. The party striking first shall be

selected by a coin toss for each successive

grievance filed under this section.

1.10 Definitions

The following definitions shall be applicable

throughout Section 1 of this Agreement, whether

or not the defined term is capitalized in the text.

1.10(a) “Affiliate” means (1) any Entity that

the Company controls; or (2) any other

corporate Subsidiary, Parent, or division of

the Company; or (3) any Entity controlled by

an Affiliate as defined in (1) or (2) of this

definition. “Affiliate” does not include Flight

Options Holdings I, Inc.

1.10(b) “ATCO” or “ATCO Operators” means

an air taxi operator or air management

company that conducts charter flights under

FAR Part 135. ATCO shall be applied to any

air operator which flies Flight Options

subcontract charter flying that would

otherwise be conducted by Flight Option

Pilots on the Flight Options Pilot Seniority

List.

97a

1.10(c) “Brokered Charter” means charter

flights that are brokered by the Company or

an Affiliate.

1.10(d) “Control, controlled or controlling

interest”

means

an

equity

interest

representing more than 50 percent of the

outstanding capital stock of an Entity; or

voting securities representing more than 50

percent of the total voting power of

outstanding securities then entitled to vote

generally in the election of such Entity’s

board of directors or other governing body.

1.10(e) “Entity” means a natural person,

corporation, association, partnership, trust or

any other form for conducting business.

1.10(f) “Hours under Management” means

the number of flying hours that are

contractually committed to fractional owners

or JetPASS card holder customers, excluding

Hours under Management that are in

redemption or retention.

1.10(g) “Line Pilots” means all pilots on the

Flight Options Seniority List excluding

Management Pilots.

1.10(h) “Operating Partner Company” means

a company that is in the Flight Options

Direct partner program. Pilots of an

Operating Partner Company are not on the

Flight Options Seniority List, and are not

subject to this Agreement. They operate

aircraft in Flight Options livery that are

either leased from or to the Company, or

managed for the Company, and share

98a

discounts in the Flight Options fuel, training,

and other programs. The aircraft may be

placed on the Flight Options certificate, or

may be placed on the certificate of the

Operating Partner Company. An Operating

Partner Company is not an Affiliate of Flight

Options.

1.10(i) “Parent” means an Entity that

controls another Entity. The Flight Options

LLC parent company is Flight Options

Holdings II, Inc, and “Parent” does not

include any entity that controls Flight

Options Holdings II, Inc.

1.10(j) “Subcontract Charter” is a charter

flight that is flown by an ATCO or Operating

Partner Company for a fractional owner or

JetPASS card holder.

1.10(k) “Subsidiary” means any Entity that

is controlled by another Entity.

END OF SECTION 1