Amicus Curiae Brief — Eastern Air Lines, Inc. v. Air Line Pilots Ass'n, International

od 2

No. 90-1902

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1990

EASTERN AIR LINES, INC.,

Petitioner,

vs.

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL and

EASTERN AIR LINES MASTER EXECUTIVE COUNCIL,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE ELEVENTH CIRCUIT

MOTION FOR LEAVE TO FILE BRIEF AND BRIEF

OF AMICI CURIAE AIR TRANSPORT

ASSOCIATION OF AMERICA AND OFFICIAL

COMMITTEE OF UNSECURED CREDITORS OF

EASTERN AIR LINES, INC.

CHARLES G. BAKALY, JR.

(Counsel of Record)

KENNETH E. JOHNSON

O’MELVENY & MYERS

Citicorp Center

153 East 53rd Street

New York, New York 10022-4611

(212) 326-2000

Attorneys for Amici Curiae, Air

Transport Association of

America and Official

Committee of Unsecured

Creditors of Eastern Air

Lines, Inc.

Bowne of Los Angeles, Inc., Law Printers. (213) 627-2200

BN)

No. 90-1902

In the Supreme Court

OF THE

United States

OcTOBER TERM, 1990

EASTERN AIR LINES, INC.,

Petitioner,

VS.

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL and

EASTERN AIR LINES MASTER EXECUTIVE COUNCIL,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE ELEVENTH CIRCUIT

MOTION OF AIR TRANSPORT ASSOCIATION OF

AMERICA AND OFFICIAL COMMITTEE OF

UNSECURED CREDITORS OF EASTERN AIR

LINES, INC. FOR LEAVE TO FILE BRIEF OF

AMICI CURIAE IN SUPPORT OF PETITION

FOR WRIT OF CERTIORARI

The Air Transport Association of America (the

Association“) and Official Committee of Unsecured

Creditors of Eastern Air Lines, Inc. (the “Committee’’)

move the Court for leave to file the attached brief of amici

curiae in support of the Petition for Writ of Certiorari.

The consent of the attorney for the petitioner has been

obtained. The consent of the attorney for the respondents

was requested but refused.

2

I

NATURE OF THE INTEREST OF THE ASSOCIA-

TION AND THE COMMITTEE

The Association was founded in 1936. It is a non-profit,

unincorporated association of federally certificated air

carriers providing scheduled and charter passenger and

cargo service. The Association’s 20 operator members

account for more than 97% of the passenger and cargo

traffic flown annually in the United States.’

Many of the members of the Association are parties to

collective bargaining agreements with labor unions. It is

crucial to the Association’s members that courts uphold

an employer’s right to operate its business during an

economic strike by hiring permanent replacements. An

essential part of this right is the employer's ability to

refuse to fire the permanent replacements to make room

for returning strikers. If this right is not enforced by the

courts, employers will effectively lose the ability to oper-

ate during a strike by hiring permanent replacements for

the strikers.”

The Committee represents all of the general unsecured

creditors of Eastern Air Lines, Inc. (“Eastern”). Eastern

‘Operator members authorizing this brief are: Alaska Airlines, Inc.,

Aloha Airlines, Inc., American Airlines, Inc., American Trans Air,

Ine., Continental Airlines, Inc., DHL Airlines, Eastern Air Lines,

Ine., Hawaiian Airlines, Midway Airlines, Inc., Pan American World

Airways, Inc., Southwest Airlines, Trans World Airlines, Ine., The

Trump Shuttle, United Parcel Service, and USAir, Inc.

In the interest of its members, the Association has filed numerous

amicus briefs in other cases before this Court which involve employ-

ment law issues. These include: United Paperworkers International

Union v. Misco, Inc., 484 U.S. 29 (1987); Dep’t of Transportation v.

Paralyzed Veterans of America, 477 U.S. 597 (1986).

3

filed a voluntary petition for relief under Chapter 11 of

the United States Bankruptcy Code on March 9, 1989. On

March 22, 1989, the Committee was appointed by the

United States trustee for the Southern District of New

York. The unsecured creditors represented by the Com-

| mittee include, among others, former employees, the Pen-

sion Benefit Guaranty Corporation, trade creditors,

_ debenture holders, and aircraft and engine manufactur-

| ers, holding claims aggregating in excess of $2.3 billion.

Should the decision below be permitted to stand, East-

ern’s estate could be subject to potential additional

claims of approximately $75 million, representing claims

for backpay and benefits allegedly owed to the striking

pilots. The respondents assert that these claims arose

during the course of the administration of Eastern’s

Chapter 11 estate and therefore have priority over the

claims of the unsecured creditors represented by the

Committee, see 11 U.S.C. § 503 (b) (1). Thus, the Commit-

tee has a significant interest in requesting this Court to

correct the erroneous decision beiow.

II

ISSUES TO BE ADDRESSED BY THE

AMICI CURIAE

The decision below bears significantly on an airline’s

right to carry on its business in the face of a crippling

pilots’ sympathy strike. The decision below impermissibly

restricts this right by holding that Eastern was required

to reinstate returning strikers, notwithstanding its preex-

isting commitment of permanent employment to replace-

ment pilots who were still in training when the strike

ended. The amici curiae brief addresses the conflict

einai ail

4

among the circuit courts of appeals on this issue, exam-

ines the failure of the court below to adhere to this

Court’s authority, discusses the national importance and

practical effect of the rule adopted by the Eleventh

Cireuit Court of Appeals, and deals with the manner in

which that rule frustrates the purposes of the Bankruptcy

Code.

For the foregoing reasons, the Court should grant this

Motion for Leave to File Brief of Amici Curiae in Support

of Petition for Writ of Certiorari.

Dated: August 13, 1991.

Respectfully submitted,

CHARLES G. BAKALY, JR.

(Counsel of Record)

KENNETH E. JOHNSON

O’MELVENY & MYERS

Citicorp Center

153 East 53rd Street

New York, New York 10022-4611

(212) 326-2000

Attorneys for Amici Curiae, Air

Transport Association of America

and Official Committee of Unsecured

Creditors of Eastern Air Lines, Inc.

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES....................

BRIEF OF AMICI CURIAE IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI.....

DESCRIPTION OF INTEREST OF AMICI CU-

ei Be iG UU

CONSENT OF PARTIES Ss

STATEMENT OF THE CASE..................

REASONS FOR GRANTING THE WRIT .......

I. REVIEW IS NEEDED TO RESOLVE THE

CONFLICT BETWEEN THE CIRCUITS ON

WHETHER THE NLRB’S “OFFER AND AC-

CEPTANCE” TEST, WHICH PERMITS THE

EMPLOYER TO REFUSE TO REINSTATE

STRIKERS WHEN PERMANENT

REPLACEMENTS HAVE BEEN HIRED

BUT NOT YET COMMENCED WORK,

SHOULD BE APPLIED IN CASES ARIS-

ING UNDER THE RLA...................

II. THE DECISION BELOW IS CONTRARY TO

THE DECISIONS OF THIS COURT WHICH

GIVE RLA EMPLOYERS A BROADER

RANGE OF SELF-HELP THAN WOULD BE

AVAILABLE UNDER THE NLRA.........

III. THE DECISION BELOW RAISES POLICY

ISSUES OF NATIONAL IMPORTANCE RE-

GARDING CONSISTENT APPLICATION

OF THE RAILWAY LABOR ACT AND THE

FULFILLMENT OF THE OBJECTIVES OF

THE BANKRUPTCY CODE ...............

„ 5 Fo oo SS arb sec chwerweveveescoces

13

ij

TABLE OF AUTHORITIES

Cases

Page

Air Line Pilots Ass’n v. United Air Lines, Inc., 616 F.

Supp. 849 (N. D. IIl. 1985), aff’d in part and rev d

in part, 802 F.2d 886 (7th Cir. 1986), cert.

denied, 480 U.S. 946 (1987) ................ 9, 10, 11

Anderson, Clayton & Co., Inc., 120 N. L. R. B. 1208

. ͥ /// / / 6

Belknap, Inc. v. Hale, 463 U.S. 491 (1983)

— Pe ee ae 5, 7, 8, 14, 16

Brotherhood of Railway & Steamship Clerks v.

Florida East Coast Ratlway Co., 384 U.S. 238

( ˙ ⁴ö” eek ites AL ees 15

Burlington Northern R. Co. v. Brotherhood of

Maintenance of Way Employes, 481 U.S. 429

(...... eee ees 6a a's 13, 15

C.H. Guenther & Son, Inc., 174 N.L.R.B. 1202

(1969), enf’d, 427 F.2d 983 (5th Cir.), cert.

denied, 400 U.S. 942 (1970) ................. 6

Elliot River Tours, 246 N.L.R.B. 935 (1979) ..... 12

Flight Attendants v. Trans World Airlines, Inc., 132

L.R.R.M. [BNA] 2422 (W.D. Mo. 1989) ...... 16

H. & F. Binch Co., 188 N.L.R.B. 720 (1971), enf’d,

456 PF. ad 367 (2d Cir. 1978) . 7

Hot Shoppes, Inc., 146 N.L.R.B. 802 (1964)...... 6, 16

Independent Federation of Flight Attendants v.

Trans World Airlines, Inc., 819 F.2d 839 (8th Cir.

1987), cert. granted in part and denied in part,

485 U.S. 958 (1988), rev’d, 489 U.S. 426 (1989) 8,11

iii

TABLE OF AUTHORITIES

CASES

Page

International Association of Machinists v. Interna-

tional Aircraft Services, Inc., 302 F.2d 808 (4th

RS ee ee 7

Kurz-Kasch, Inc., 286 N. L. R. B. 1343 (1987), enf.

denied, 865 F. 2d 757 (6th Cir. 1989).......... 6

National Airlines, Inc. v. International Ass’n of Ma-

chinists, 416 F.2d 998 (5th Cir. 1969)......... 8

National Airlines, Inc. v. International Ass’n of Ma-

chinists, 430 F.2d 957 (5th Cir. 1970), cert. de-

R 8, 9

NLRB v. Erie Resistor Corp., 373 U.S. 221 (1963) 4

NLEB v. Fleetwood Trailer Co., 389 U.S. 375 (1967) 5, 12

NLRB v. Mackay Radio d Telegraph Co., 304 U.S.

/ ĩ ˙—ieiAnnr!. „ 4, 5, 6, 8

Newbery Energy Corp., 227 N. L. R. B. 436 (1976) 7

Pan American World Airways, Inc. v. International

Brotherhood of Teamsters, 894 F.2d 36 (2d Cir.

0 tee CR eke ů ů ³˙¹m.mmAͤĩ NS e000 13

Solar Turbines, Inc., 302 N.L.R.B. No. 3 (1991) .. 6,12

Southwest Engraving Co., 198 N. L. R. B. 694 (1972) . . 7

Trainmen v. Jacksonville Terminal Co., 394 U.S. 369

SE kod Calin sigh be dudb dee bade ems 13

Trans World Airlines, Inc. v. Flight Attendants, 489

e skwed obs bts crea 5, 8, 9, 11, 13, 14

Transport Service Co., 302 N. L. R. B. No. 4 (1991). 6,7

iv

TABLE OF AUTHORITIES

Statutes and Regulations

Page

National Labor Relations Act,

e FETE Te ET TTT LTE 2,6

EE ee ee 10

Railway Labor Act,

e ũ ůAt¾ lll... 2, 5

J ss a kc cnitcareecceccense 11

Z voce cc cccccuccuvecnes 10, 11

e ũ ë r 10, 11

b 17

Legislative Materials

S. Rep. No. 989, 95th Cong., 2d Sess. 49 (1978) 18

H. Rep. No. 595, 95th Cong., Ist Sess. 340 (1977) 18

— . 28 Dw 3 ————— mea» ss —— geet

— hor

No. 90-1902

In the Supreme Court

OF THE

United States

OcTOBER TERM, 1990

EASTERN AIR LINES, INC.,

Petitioner,

vs.

Arr LINE PILOTS ASSOCIATION, INTERNATIONAL and

EASTERN AIR LINES MASTER EXECUTIVE COUNCIL,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE ELEVENTH CIRCUIT

BRIEF OF AMICI CURIAE,

AIR TRANSPORT ASSOCIATION OF AMERICA

AND OFFICIAL COMMITTEE OF UNSECURED

CREDITORS OF EASTERN AIR LINES, INC.,

IN SUPPORT OF PETITION FOR WRIT OF

CERTIORARI

2

DESCRIPTION OF INTEREST OF AMICI CURIAE

The Air Transport Association of America (the “Asso-

ciation”) and Official Committee of Unsecured Creditors

of Eastern Air Lines, Inc. (the “Committee”) adopt the

statement made in the Motion for Leave to File Brief,

immediately preceding this brief, as the description of the

interest of amici curiae. In addition, amici curiae submit

that the decision below poses a fundamental threat to an

important principle of federal labor policy: the right of an

employer to permanently replace strikers during an eco-

nomic strike. This principle is especially important to

commercial air carriers, who are charged, under the Rail-

way Labor Act, 45 U.S.C. 55 151 et seg. (“RLA”), with the

duty to avoid unnecessary interruptions in the free flow of

airline passengers and freight throughout the nation.

In a 2-1 decision, the Eleventh Circuit held that, follow-

ing the end of an eight-month sympathy strike called by

respondent Air Line Pilots Association, International

(“ALPA”), replacement pilots who had been hired by

petitioner Eastern Air Lines, Inc. (“Eastern”), and who

were undergoing an extensive, job-specific training pro-

gram mandated by Federal Aviation Administration

(“FAA”) regulations, were not to be accorded “perma-

nent replacement” status. This decision is in conflict with

the Fifth Circuit, which follows the “offer and accept-

ance” rule developed by the National Labor Relations

Board (“NLRB”) in analogous cases arising under the

National Labor Relations Act, 29 U.S.C. 55 151 et seq.

(“NLRA”). Under the “offer and acceptance” rule, the

employer is not required to reinstate returning strikers if

the employer has made a firm commitment of permanent

employment to their replacements, even if the replace-

ments have not yet commenced work due to training

requirements or other contingencies. The court below

3

ignored the “offer and acceptance” rule, thereby creating

a split among the circuits on a legal issue which is

important to all RLA employers.

The decision below also violates this Court’s holdings

that an RLA employer’s right to self-help is broader than

that which would be available under the NLRA. Despite

this Court’s holdings on this point, the Eleventh Circuit’s

majority opinion sharply limits an RLA employer’s ability

to carry on its business during a strike. By holding that

the RLA employer must reinstate returning strikers, even

if this would require the RLA employer to breach

promises of permanent employment to the replacements,

the decision effectively deters RLA employers from offer-

ing permanent employment to replacement workers who

must undergo a lengthy period of job-specific training.

The decision also may deter replacements from leaving

their present jobs and accepting an offer of permanent

employment if made, since the Eleventh Circuit’s decision

requires the employer to displace the replacements with

returning strikers if the replacements are still in training

when the strike ends. If the employer cannot hire suffi-

cient numbers of temporary replacements to operate the

business during a strike, as is undisputed in this case, the

RLA employer would have little choice but to cease

operations during the strike. This is contrary not only to

federal labor policy, but also to the fundamental policy of

the Bankruptcy Code, which is to permit the rehabilita-

tion of the debtor and continuance of the business as a

viable going concern. Certiorari should be granted to

correct the decision below, which impermissibly restricts

an RLA employer’s right to use self-help to operate its

business during a strike.

4

CONSENT OF PARTIES

Respondents to this action refused consent to the filing

of this brief by the Association and the Committee. A

motion for leave to file this brief is attached. Petitioner

has consented to the filing of this brief and written

consent is filed concurrently herewith.

STATEMENT OF THE CASE

The Association and the Committee adopt the State-

ment of the Case set forth in the Petition for Writ of

Certiorari, as well as Petitioner's description of the Opin-

ions Below, Jurisdiction, Statute Involved, and Question

Presented.

REASONS FOR GRANTING THE WRIT

L

REVIEW IS NEEDED TO RESOLVE THE CON-

FLICT BETWEEN THE CIRCUITS ON WHETHER

THE NLBB’S “OFFER AND ACCEPTANCE” TEST,

WHICH PERMITS THE EMPLOYER TO REFUSE

TO REINSTATE STRIKERS WHEN PERMANENT

REPLACEMENTS HAVE BEEN HIRED BUT NOT

YET COMMENCED WORK, SHOULD BE A-

PLIED IN CASES ARISING UNDER THE RLA.

This Court has long recognized that an employer has

the right to take such actions which are required “to

protect and continue his business” during an economic

strike.’ NLRB v. Mackay Radio & Telegraph Co., 304 U.S.

This Court has reaffirmed Mackay Radio on several occasions.

See NLEB v. Erie Resistor Corp., 373 U.S. 221, 232 (1963) (“We have

no intention of questioning the continuing vitality of the Mackay

5

333, 345 (1938). This includes the right “to replace the

striking employees with others in an effort to carry on the

business.” Id. Upon the conclusion of the strike, the

employer “is not bound to discharge those hired to fill the

places of strikers,” id., but instead may honor its commit-

ment of permanent employment to the replacement work-

ers. Otherwise, it would be virtually impossible in many

strikes to induce replacement workers to leave their

existing jobs and work during the strike. See Belknap, Inc.

v. Hale, 463 U.S. 491, 519 (1983) (Blackmun, J., eoneur-

ring) (“The employer makes offers of permanent employ-

ment to induce replacement workers to take jobs.)

The Mackay Radio rule applies to cases, such as this,

which arise under the Railway Labor Act, 45 U.S.C.

55 151 et seg. (“RLA”). See Trans World Airlines, Inc. v.

Flight Attendants, 489 U.S. 426, 433-34 (1989). In the

decision below, the Eleventh Circuit acknowledged that

Mackay Radio defined Eastern’s right to hire permanent

replacements during ALPA’s sympathy strike. The court

erred, however, in holding that Mackay Radio did not

apply to replacement pilots who had been hired during

the strike but were still in training when the strike ended.

It is undisputed that Eastern had promised permanent

employment to all of these replacement pilots many

months before the strike ended, contingent only upon

their successful completion of Eastern’s FAA-mandated,

carrier-specific, pilot training program. Thus, the Elev-

enth Cireuit’s decision improperly required Eastern to

displace the replacement pilots with returning strikers, in

direct contradiction of Mackay Radio and subsequent

decisions. Mackay Radio, 304 U.S. at 347 (“the [em-

rule); NLRB v. Fleetwood Trailer Co., 389 U.. 375, 379 (1967);

Belknap, Inc. v. Hale, 463 U.S. 491, 504 n.8 (1983); Trans World

Airlines, Inc. v. Flight Attendants, 489 U.S. 426, 433-34 (1989).

6

ployer] was not bound to displace men hired to take the

strikers’ places in order to provide positions for them“).

For the past 53 years, Mackay Radio has provided a

stable rule that governs an employer’s right of self-help

during an economic strike: the employer is free to make

and keep commitments of permanent employment to the

workers who are hired to replace the strikers. In applying

this rule to cases governed by the National Labor Rela-

tions Act, 29 U.S.C. §§ 151 et seg. (“NLRA”’), both the

National Labor Relations Board (“NLRB”) and the

courts have repeatedly held that an employer may refuse

to reinstate strikers if this would require the displace-

ment of replacement workers who have accepted offers of

permanent employment, even if the replacements have not

yet started working when the strikers unconditionally

offer to return to work. This issue arises in a variety of

factual settings, including cases where (1) employer per-

sonnel policies require a training or probationary period

before an employee becomes permanent“; (2) the job

offer is contingent upon passing various posthire tests or

examinations; (3) the replacement requests a delay in

F. ., Anderson, Clayton & Co., Inc., 120 N. L. R. B. 1208 (1958)

(new hires required 1-4 months of training and were subject to a

6 month probationary period); Kurz-Kasch, Inc., 286 N.L.R.B. 1343

(1987), enf. denied on other grounds, 865 F.2d 757 (6th Cir. 1989)

(replacements did not begin work until one month after strike ended

due to need to train them); C. H. Guenther & Son, Inc., 174 N. L. R. B.

1202, 1212 (1969), enf d, 427 F.2d 983 (5th Cir.), cert. denied, 400

U.S. 942 (1970) (replacements required to serve 3 “training or

probationary period” of 30 or 60 days); Hot Shoppes, Inc., 146

N.L.R.B. 802, 804 (1964) (fact that replacements “required some

training” irrelevant to whether employer intended that they perma-

nently replace strikers).

FE. g., Solar Turbines, Inc., 302 N. L. R. B. No. 3 (1991) (job offers

contingent upon passing drug and alcohol test); Transport Service

7

starting work for his or her own convenience; and (4) the

employer requests replacements from a union hiring hall

for strikers who refuse to cross an unauthorized picket

line. Under all of these circumstances, the Board and the

courts have held that the employer was not required to

reinstate returning strikers because the replacements had

already been offered, and accepted, permanent

employment.

In stark contrast to the Eleventh Circuit's majority

opinion in this case, no NLRA decision has ever held that

an employer must reinstate returning strikers after their

Co., 302 N.L.R.B. No. 4 (1991) (job offers contingent upon passing a

physical exam, polygraph test, and motor vehicle records check).

E. g., International Association of Machinists v. International Air-

craft Services, Inc., 302 F.2d 808, 810 (4th Cir. 1962) (replacements

lived out of state when hired and needed time to relocate before

starting work); H. & F. Binch Co., 188 N.L.R.B. 720 (1971), enf’d,

456 F. 2d 357 (2d Cir. 1972) (replacement needed time to arrange for

babysitter); Southwest Engraving Co., 198 N.L.R.B. 694 (1972) (re-

placement did not start work until husband commenced position as

supervisor for same employer).

E. g., Newbery Energy Corp., 227 N. L. R. B. 436 (1976) (employer

obtained replacements from IBEW hiring hall after employees re-

fused to cross Teamsters picket line that IBEW did not respect).

*Consistent with the NLRB rule, this Court recognized, in Belknap,

Inc. v. Hale, 463 U.S. at 504 n.8, that It] he refusal to fire permanent

replacements because of commitments made to them in the course of an

economic strike satisfies the requirement. . that the employer have a

‘legitimate and substantia) justification’ for its refusal to reinstate

strikers.” (Emphasis added.) In other words, it is the employer’s

commitment to provide a permanent job that is important, not

whether the replacement has actually reported to work or is in a

“productive” rather than “training” or “probationary” status. All

jobs require some degree of training, which is a fact recognized by the

NLRB and the courts in NLRA cases, but completely ignored by the

Eleventh Cireuit in the decision below.

8

permanent replacements have accepted binding offers of

employment.’ Instead, decisions under the NLRA uni-

formly recognize that the employer is “free to make and

keep” its “solemn promises of permanent employment” to

the replacement workers. See Belknap, Inc. v. Hale, 463

U.S. at 506. Indeed, for the employer to reinstate strikers

and breach a promise of permanent employment to the

replacements may give rise to liability for breach of

contract to the replacement workers. Id. Rather than

discuss or analyze these principles, however, the Eleventh

Cireuit simply declared, in a footnote, that NLRA cases

were irrelevant. 920 F.2d at 725 n.3.

In contrast to the Eleventh Circuit’s decision, the Fifth

Circuit follows the “offer and aceeptance” rule to deter-

mine whether an RLA employer may decline to reinstate

strikers due to its preexisting commitments to the perma-

nent replacements. In National Airlines, Inc. v. Interna-

tional Association of Machinists, 416 F.2d 998 (5th Cir.

1969) (“National T), the Fifth Circuit held that Mackay

defines an employer’s right to permanently replace strik-

ers under the RLA, as well as the NLRA. Id. at 1006.

Subsequently, in National Airlines, Inc. v. International

"The only RLA decision to depart from the “offer and acceptance”

rule is Independent Federation of Flight Attendants v. Trans World

Airlines, Inc., 819 F.2d 839 (8th Cir. 1987), cert. granted in part and

denied in part, 485 U.S. 958 (1988), rev’d on other grounds, 489 U.S.

426 (1989). There, the Eighth Cireuit concluded that flight attendant

trainees were not “permanent replacements” until the completion of

their training. As discussed infra, the Eighth Circuit's analysis is

erroneous, since the court confused the issue of whether the replace-

ments were RLA “employees” with the question of whether the

employer properly engaged in self-help by hiring permanent

replacements.

“This court cited National I, with approval, for this proposition in

Trans World Airlines, Inc. v. Flight Attendants, 489 U.S. at 433.

9

Association of Machinists, 430 F.2d 957 (5th Cir. 1970),

cert. denied, 400 U.S. 992 (1971) (“National IT’), the

Fifth Cireuit specifically applied the “offer and accept-

ance” rule to hold that an RLA employer could honor its

commitment to permanent replacements so long as a

binding offer of employment had been accepted by the

replacements.” 430 F.2d at 961. As stated in National II,

“if an employer has the intention to bind itself to a firm

contract of employment, and the employee has accepted a

specific job assignment, the replacement is ‘hired’ even

though subsequently he may be divested of the job for

failure to pass medical or security clearance.” Id. Na-

tional II cites NLRA cases in support of this rule, and

correctly concluded that there is no reason to restrict an

RLA employer’s right of self-help to anything less than

that available under the NLRA. See Trans World Airlines,

Inc. v. Flight Attendants, 489 U.S. 426, 439-40 (1989)

(RLA employer’s right of self-help during a strike is

greater than would be available under the NLRA).

In contrast to National II, the Eleventh Circuit majority

did not look to any NLRA cases for guidance on the

question of whether Eastern’s promise of permanent em-

ployment should be respected.“ Even more troubling is

the majority opinion’s failure to analyze the substantive

Accord, Air Line Pilots Ass’n v. United Air Lines, Inc., 616 F. Supp.

849, 851 (N. D. III. 1985) (“Permanent replacements hired from

outside the company ... need not actually begin working in order to

retain their jobs following the conclusion of a strike“), rev’d on other

grounds, 802 F.2d 886 (7th Cir. 1986), cert. denied, 480 U.S. 946

(1987).

101 his dissent, Judge Anderson concluded that National II gov-

erned this case and compelled the conclusion that Eastern lawfully

refused to reinstate the strikers due to its preexisting commitment of

permanent employment to the replacements. 920 F. 2d at 731.

10

provisions of the RLA which Eastern allegedly violated

by honoring its promise of permanent employment to the

replacement pilots. ALPA’s cross-complaint asserts that

Eastern’s refusal to reinstate the striking pilots violated

Sections 2, Third and 2, Fourth of the RLA, 45 U.S.C.

$§ 152, Third, 152, Fourth, but neither the district court

nor the Eleventh Circuit majority opinion even discussed

these provisions. Rather than analyze these RLA provi-

sions, the Eleventh Circuit simply declared that an RLA

employer’s refusal to reinstate strikers could be an “un-

fair labor practice.” 920 F.2d at 725."

Instead of analyzing the substantive provisions of the

RLA, the Eleventh Circuit majority discussed only

whether the replacement pilots fell within the RLA’s

definition of an employee.“ 920 F.2d at 726. This is

irrelevant, however, to the question of whether Eastern

properly engaged in self-help by offering permanent em-

ployment to the replacement pilots. The issue of whether

a replacement worker is an RLA “employee” has been liti-

gated in cases where the replacement sues the carrier for

allegedly violating the replacement’s Section 2 rights.

E.g., Air Line Pilots Ass’n v. United Air Lines, Inc., 802

F.2d 886, 910 (7th Cir. 1986), cert. denied, 480 U.S. 946

(1987) (trainees who had not yet commenced active duty

“The RLA does not enumerate any unfair labor practices.”

Instead, “unfair labor practices” are defined in Section 8 of the

NLRA, 29 U.S.C. § 158.

The RLA defines an “employee” as:

“every person in the service of a carrier (subject to its continu-

ing authority to supervise and direct the manner of rendition of

his service) who performs any work defined as that of an

employee or subordinate official in the orders of the Interstate

Commerce Commission now in effect.. . 45 U.S.C. § 151, Fifth.

11

were not RLA “employees” entitled to Section 2 rights).

The issue is pertinent there because Sections 2, Third and

2, Fourth grant rights only to “employees” within the

definition of RLA Section 1, Fifth, 45 U.S.C. § 151, Fifth.

Here, however, it is the strikers, rather than their replace-

ments, who claim a violation of Sections 2, Third and 2,

Fourth. The question of whether the replacements are

RLA “employees” is not pertinent — instead, the rele-

vant issue (which was never acknowledged by either the

district court or the Eleventh Circuit) is whether Eastern

violated Sections 2, Third and 2, Fourth, by refusing to

reinstate the strikers.’*

The Eleventh Cireuit's majority opinion is also unsup-

ported by the decisions of this Court. This Court has

never based an employer’s right of self-help on whether

“The Eighth Cireuit decision in Independent Federation of Flight

Attendants v. Trans World Airlines, Inc., 819 F.2d 839 (8th Cir. 1987),

cert. granted in part and denied in part, 485 U.S. 958 (1988), rev’d on

other grounds, 489 U.S. 426 (1989), incorrectly relied upon United Air

Lines to hold that the employer’s right to permanently replace

depended upon whether the replacements were RLA “employees.”

Significantly, the Eighth Circuit’s analysis failed to identify any

provision of the RLA that had been violated by TWA’s refusal to

reinstate the returning strikers, and thus suffers the same analytical

flaw as the Eleventh Circuit’s majority opinion in this case.

“There is nothing in the record below that could support a finding

that Eastern violated either statutory provision. Section 2, Third, 45

U.S.C. § 152, Third, prohibits employers from interfering, influene-

ing, or coercing employees in the designation of employee representa-

tives. Section 2, Fourth, 45 U.S.C. 5 152, Fourth, provides that

employees have the right to organize and bargain collectively without

employer interference. Both provisions address I] primarily the

precertification rights and freedoms of unorganized employees,”

TWA, 489 U.S. at 440, and do not imply any limitation upon an

employer's right of self-help when responding to a union’s strike. Id.

at 442.

12

the permanent replacement is a statutory “employee”

under either the RLA or the NLRA. Instead, the Court

has always examined whether an employer has “legitimate

and substantial business justifications” for refusing to

reinstate returning strikers. NLRB v. Fleetwood Trailer

Co., 389 U.S. 375, 378 (1967). Such business justifications

often take forms which are unrelated to hiring statutory

employees, such as subcontracting work,“ discontinuing

certain types of work, or assigning supervisors to perform

bargaining unit work. Thus, asking whether pilot trainees

have achieved RLA “employee” status begs the ques-

tion — the relevant issue is whether the employer’s prom-

ise of permanent employment to the replacements,

contingent upon the successful completion of training, is

a valid business justification for refusing to reinstate the

returning strikers." The Eleventh Circuit’s decision is

erroneous, and should be reviewed by this Court to re-

solve the conflict among the Circuits.

. Elliot River Tours, 246 N. L. R. B. 935 (1979) (2-year subcon-

tract of bargaining unit work lawful response to strike threat).

“The NLRB recently rejected the argument that the replacement's

“employee” status was relevant to the employer’s right to replace in

Solar Turbines, Inc., 302 N.L.R.B. No. 3 (1991). There, the union

argued that returning strikers should displace newly hired replace-

ments, since the new hires who had not yet passed a drug / aleohol test

were not yet statutory “employees” under the NLRA. The Board

acknowledged that although “employee” status was relevant for

certain purposes, such as defining the employer's collective bargain-

ing obligation, it was irrelevant to whether the replacements had to

be fired to make room for returning strikers. Instead, the only

relevant issue was whether the replacements had accepted an offer of

employment, conditioned upon passing the drug / aleohol test. Id., slip

op. at 3-4 n.3. Here too, whether the pilots were statutory RLA

“employees” during their training period is simply not relevant to the

question of whether Eastern engaged in lawful self-help by honoring

its commitment of permanent employment to the replacement pilots.

13

II.

THE DECISION BELOW IS CONTRARY TO THE

DECISIONS OF THIS COURT WHICH GIVE RLA

EMPLOYERS A BROADER RANGE OF SELF-

HELP THAN WOULD BE AVAILABLE UNDER

THE NLRA.

This Court has repeatedly recognized that, once the

RLA’s procedures for resolving a major dispute are ex-

hausted, the parties may “employ the full range of

whatever peaceful economic power they can muster.

Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 392

(1969). In Jacksonville Terminal, it was the employer

which attempted to enjoin the union’s attempt to engage

in self-help by secondary picketing. This Court declined

to incorporate into the RLA any restrictions on secondary

picketing that had been developed under the NLRA due

to the absence of detailed legislative standards or an

administrative agency (such as the NLRB) charged with

statutory enforcement of the RLA. Instead, the Court

held that both unions and employers are free to enjoy the

“full range” of self-help following exhaustion of the

RLA’s conciliation procedures. Id. at 392-93. Accord,

Burlington Northern R. Co. v. Brotherhood of Maintenance

of Way Employes, 481 U.S. 429 (1987); Pan American

World Airways, Inc. v. International Brotherhood of Team-

sters, 894 F. 2d 36 (2d Cir. 1990).

Most recently, in Trans World Airlines, Inc. v. Flight

Attendants, 489 U.S. 426 (1989), this Court reviewed its

prior decisions and concluded that they “have read the

RLA to provide greater avenues of self-help to parties

that have exhausted the statute’s ‘virtually endless’...

dispute resolution mechanisms than would be available

under the NLRA.” Id. at 439 (emphasis added). In TWA,

flight attendants who crossed a picket line and worked

14

during a strike were permitted to bid for, and retain after

the strike, preferred assignments that were normally held

by more senior striking flight attendants. This Court held

that TWA’s policy was a lawful means of self-help. In

reaching this conclusion, this Court specifically rejected

the union’s argument that an RLA employer's right to

self-help is more limited than under the NLRA:

“(Prior cases] provide the backdrop for the Union’s

contention that, in this case, we should understand

provisions of the RLA to limit ‘the full range of

whatever peaceful economic power [the parties] can

muster,’ beyond the limitations even imposed by the

NRLA. This we decline to do.” Id. at 439-40 (cita-

tions omitted, emphasis in original).

Because RLA employers are entitled to “greater ave-

nues of self-help...than would be available under the

NLRA,” TWA, 489 U.S. at 439, an employer such as

Eastern is entitled to at least the same, if not more,

latitude in honoring its commitments to permanent

replacements than is granted to NLRA employers. Since

the NLRA cases uniformly permit employers to honor

promises of permanent employment to replacements who

are still in training (or who have not yet started work for

any number of other reasons), Eastern should not be

penalized for taking the same measure of self-help. In-

stead, Eastern merely honored its “solemn promises of

permanent employment” to the replacement pilots, Bel-

knap, supra, 463 U.S. at 506, as permitted by the deci-

sions of this Court.

15

III.

THE DECISION BELOW RAISES POLICY ISSUES

OF NATIONAL IMPORTANCE REGARDING CON-

SISTENT APPLICATION OF THE RAILWAY LA-

BOR ACT AND THE FULFILLMENT OF THE

OBJECTIVES OF THE BANKRUPTCY CODE.

In addition to creating conflict with the Fifth Circuit,

and ignoring this Court’s holdings that the right to self-

help under the RLA is broader than under the NLRA, the

Eleventh Circuit’s majority opinion also raises two public

policy issues of national importance. First, the decision

conflicts with the RLA’s objective of avoiding interrup-

tions to commerce and the operation of air and rail

carriers. Second, the decision ignores the fundamental

policy of the Bankruptcy Code, which is intended to

provide troubled companies with relief from creditors and

provide an opportunity for rehabilitation of the business.

The decision below would undercut both of these key

policies by making it extraordinarily difficult for many

RLA employers to continue their operations during a

strike, thus leading to disruptions in commerce and, in

cases where carriers are operating under the protection of

the Bankruptcy Code, greater risks that the carrier will

not be rehabilitated.

This Court has recognized that, during a strike, RLA

employers must be able to engage in self-help to avoid

interruptions in the operation of air and rail carriers. See

Burlington Northern, supra, 481 U.S. at 451-52 (“the

availability of... self-help measures... may increase the

effectiveness of the RLA in settling major disputes by

creating an incentive for the parties to settle. ...”); Broth-

erhood of Railway & Steamship Clerks v. Florida East

Coast Railway Co., 384 U.S. 238, 244 (1966) (“The car-

rier’s right of self-help is underlined by the public service

16

aspects of its business.”). Here, Eastern’s decision to hire

replacement pilots was essential to its effort to rebuild its

operations following ALPA’s sympathy strike. The

record below shows that Eastern could not have recruited

sufficient numbers of replacement pilots without the

promise of permanent employment; indeed, Eastern sub-

mitted 70 declarations from replacement pilots stating

that they would not have come to work for Eastern absent

a promise of permanent employment. (Eastern’s Petition

at 4.) Thus, that promise of permanent employment was

an essential element of Eastern’s ability to effectively

engage in self-help.

It is especially critical to commercial air carriers that

they not be required to reinstate returning strikers while

their replacements are still in training. Under FAA regu-

lations, all pilots must undergo a lengthy period of car-

rier-specific training. Even experienced pilots who have

flown similar types of aircraft for other large carriers

must undergo extensive, carrier-specific training before

being allowed to operate aircraft for their new employer.

Moreover, pilots on active duty must comply with the

FAA’s “recent experience” requirement of three takeoffs

and landings within the 90-day period preceding any

‘although the record amply demonstrates the business necessity

of Eastern’s decision to hire permanent replacements, Eastern had

no burden to make such a showing. Instead, the “business necessity”

of a decision to hire permanent replacements is presumed. See Flight

Attendants v. Trans World Airlines, Inc., 132 L.R.R.M. [BNA] 2422,

2423 (W.D. Mo. 1989) (“[I]t would seem that the existence of a

strike and the use by the employer of a promise of permanent tenure

are the only factual matters that need be established to show business

justification” for refusing to reinstate strikers); accord, Belknap, Inc.

v. Hale, 463 U.S. 491, 504 n.8 (1983); Hot Shoppes, Inc., 146 N. L. R. B.

802, 805 (1964).

17

flight, as well as periodic proficiency checks. 14 C. F. R.

55 121.439-.441 (1990).

In light of these FAA requirements, the Eleventh Cir-

cuit’s majority decision would gravely limit an air car-

rier’s ability to use self-help to operate during a strike.

Replacement pilots would no longer be able to rely upon

the employer’s promise of permanent employment, since

that promise would be meaningless if the strikers offer to

return to work while the replacements are still in training.

Moreover, labor unions representing pilots would be

granted extraordinary bargaining power in comparison to

other labor unions. Under the Eleventh Circuit majority

opinion, a pilots’ union could continue a strike up to the

time when replacement pilots were about to complete a

lengthy and costly training program, and the strikers

would still be assured immediate reinstatement if they

offered to return to active duty at that time.

The majority opinion of the Eleventh Circuit, if permit-

ted to stand, would have very serious adverse effects on

airline employers. It would be unfair to employers who

have made legally binding promises of permanent employ-

ment to the replacement pilots. If the strikers are rein-

stated and displace the replacements, then the employer

faces liability for breach of contract to the replacements.

On the other hand, if the employer honors its commitment

to the replacements and refuses to reinstate the strikers,

it faces liability to the strikers under the Eleventh Cir-

cuit’s reasoning. The only alternative to this dilemma

would be to continue to employ both the strikers and the

replacements, even though this would generally result in

costly and inefficient overstaffing. Faced with these alter-

natives, many RLA employers would probably refrain

from hiring permanent replacements, even though it may

be virtually impossible for some carriers (as it was for

18

Eastern) to attract sufficient numbers of temporary

replacements to continue operations. In many cases the

employer would simply elect to cease operations during a

strike due to the excessive costs, and potential liabilities,

of hiring permanent replacements, thereby losing its abil-

ity to provide air service to the public.

The Eleventh Cireuit's decision also runs contrary to

the fundamental policy of the Bankruptcy Code. The

Bankruptcy Code is intended to provide troubled compa-

nies with a “breathing spell” from their creditors, and to

permit the business to be rehabilitated for the benefit of

all interested parties, including creditors, equity holders,

and the debtor’s employees. See H. Rep. No. 595, 95th

Cong., Ist Sess. 340 (1977); S. Rep. No. 989, 95th Cong.,

2d Sess. 49 (1978). Contrary to this basic policy, the

Eleventh Circuit decision makes it much more difficult for

a struggling employer operating under Chapter 11 of the

Bankruptcy Code to reorganize when faced with a strike.

If a carrier operating under the Bankruptcy Code refrains

from hiring permanent replacements due to the Eleventh

Cireuit’s decision, then it significantly reduces the likeli-

hood that it will be able to operate, and successfully

reorganize, during a strike. This is a very real problem in

the airline industry, where four domestic carriers are

currently operating under the protection of the Bank-

ruptey Code.“ When the employer is in bankruptcy, the

principles underlying the Bankruptcy Code suggest that

greater self-help should be permitted in order to increase

the likelihood of rehabilitating the debtor.

America West Airlines; Continental Airlines; Midway Airlines;

and Pan American World Airways. In addition, Trans World Airlines

has publicly announced its intention to file a petition for

reorganization.

19

Finally, the Eleventh Circuit’s majority opinion might

create, rather than g oid, additional disruption of airline

operations in the aftermath of a strike. Following a

lengthy strike, the returning strikers might not be able to

immediately resume work due to the FAA “recent experi-

ence” requirements. Instead, the strikers very well may

be required to undergo training before resuming active

duty. It would be extremely ironic for an air carrier to

suffer further delays in restoring operations due to the

need to retrain returning strikers for flight duty, while

permanent replacements who are near completion of their

training are discharged to make room for the strikers.

20

CONCLUSION

For the foregoing reasons, the Association and the

Committee respectfully submit that this case presents a

substantial federal question for this Court’s review, that

the decision below conflicts with this Court’s and other

circuit courts’ authority and that, accordingly, this Court

should grant the petition for writ of certiorari.”

DATED: August 13, 1991.

Respectfully submitted,

CHARLES G. BAKALY, JR.

(Counsel of Record)

KENNETH E. JOHNSON

O’MELVENY & MYERS

Citicorp Center

153 East 53rd Street

New York, New York 10022-4611

(212) 326-2000

Attorneys for Amici Curiae,

Air Transport Association of

America and Official Committee

of Unsecured Creditors of

Eastern Air Lines, Inc.

Because the decision below presents important issues concern-

ing the administration of the RLA, and because Eastern’s unsecured

creditors include the Pension Benefit Guaranty Corporation, the

Association and the Committee respectfully suggest that the views of

the Solicitor General should be requested. The Solicitor General has

participated as amicus curiae in other cases presenting issues of an

employer’s right to self-help in the airline industry. E. ., Trans Worid

Airlines, Inc. v. Flight Attendants, 489 U.S. 426, 428 (1989).