Petition for Writ of Certiorari — Gvozdenovic v. United Air Lines, Inc.

( FILED

91-334 AUG 20 1992

No. OFFICE OF THE CLERK

need

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1991

ZLATKO GVOZDENOVIC; MARGARITA WALINSKI; PATRICIA

CARGOULD; FRANK PEREA, Individually And On Behalf Of

That Class Of 1202 Former Pan Am Flight Attendants Now

Employed By United Airlines, Inc., And As Members Of The ~

Pan Am Seniority Arbitrauon Committee,

Petitioners,

VS.

UNITED AIR LINES, INC.; THE ASSOCIATION OF FLIGHT

ATTENDANTS, AFL-CIO, And Its President, SUSAN BIANCHI-

SAND; AU RODNEY; PAMELA GREENLEAF, As Members Of

The United Airlines Seniority Arbitration Committee; PATRI-

CIA FRIEND, Chairperson Of The United Airlines Master

Executive Council; And THE UNITED PREACQUISITION

FLIGHT ATTENDANTS,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

JOHN F. HENNING, JR.

HENNING, WALSH & KING

100 Bush Street, Suite 440

San Francisco, CA 94104

(415) 981-4400

Attorneys for Petitioners

BOWNE Of SAN FRANCISCO. INC. + 190 NINTH ST. « S.F.-CA 94103 + (415) 864-2300

QUESTIONS PRESENTED

1. Whether the union security provisions of Railway Labor

Act (RLA) Section 152 Eleventh (a) may be contractually

restricted?

2. Whether the denial of the 60-day grace period under RLA

Section 152 Eleventh (2) is subject to the six month limitation

period or is a continuing violation for the period of its enforce-

ment in the case of patent illegality?

3. Whether a carrier’s grant of illegal financial assistance

under RLA Section 152 Fourth is subject to the six month

limitation period or is a continuing violation for the period of

assistance in the case of patent iliegality?

4. Whether the illegal imposition and collection of dues under

RLA Section 152 Eleventh (a) are subject to the six month

statue of limitations or are continuing violations for the period of

collection in the case of patent illegality?

5. Whether violations of the duty of fair representation

(DFR) in the making, enforcement and conduct of an arbitration

are subject to the six month limitations period commencing with

the entry of the arbitration award or prior thereto?

6. Whether an arbitration award under the RLA should be

vacated where the primarily affected parties were not parties to

the underlying arbitration agreement?

LIST OF PARTIES

The names of all parties to the proceeding in the Second

Circuit are listed in the caption.

ii

TABLE OF CONTENTS -—

CURIS PUPIN PURINE. ooo occ cc cscs neesescens

CPSU OUIE UD MAY oc csi cewsidvewsyecceave errr

PTI © 6 5. so ec cccadecedsxas heuvaeeaenens

I

THE COURT OF APPEALS’ DECISION PRESENTS A

CRITICAL ISSUE FOR THE INTERPRETATION

AND APPLICATION OF THE UNION SECURITY

PROVISIONS OF RLA SECTION 152 ELEVENTH

CRD TRPUEE EE coc ccevcnsaeeenseeW else see

II

THE COURT OF APPEALS’ DECISION INTERPRET-

ING RLA SECTION 152 ELEVENTH (a) CON-

FLICTS WITH THE DECISIONS OF THIS COURT

Ill

THE COURT OF APPEALS’ DECISION RESPECT-

ING APPLICABLE LIMITATIONS PERIODS FOR

THE VIOLATIONS OF RLA SECTIONS FOURTH

AND ELEVENTH (a) CONFLICTS WITH THE DE-

CISIONS WITHIN THE SECOND AND OTHER

GRIRIEEED 0 ves wscsvecenasn0beuuye ean eee eeeS

IV

THE COURT OF APPEALS’ DECISION RESPECT-

ING THE APPLICABLE LIMITATIONS PERIOD

FOR DFR VIOLATIONS PERTAINING TO AN AR-

BITRATION PROCESS CONFLICTS WITH THE

DECISIONS OF THIS COURT ..... ccc cveccesess -

iii

TABLE OF CONTENTS

Vv

THE COURT OF APPEALS’ DECISION RESPECT-

ING THE ENFORCEMENT OF AN ARBITRATION

AWARD UNDER THE RLA CONFLICTS WITH

THE DECISIONS WITHIN THE SECOND AND

EE S vviccaccceccgecccessecccsscces

ee Sas dd ve 6h eked ceive vets weess

APPENDIX [Opinion of the Second Circuit (A:1), Opin-

ion of the District Court for the Southern District of New

York (B:1) and the District Court’s Bench Decision

(C:1) ]

K

12

15

iv

TABLE OF AUTHORITIES

Cases

Page

American Federation of Musicians v. Wittstein, 379 U.S.

ee aro ae ae ctaiate ica ak pag a le ae $e, Pegler 7

American Renaissance Times, Inc. v. Saxis Steamship, Co.,

$02 F.2d 674 (2d Cir. N.Y. 1974)................... 12

Alexander v. Gardner-Denver, 415 U.S. 36, 1974 ........ 7

Avco Corp. v. Aero Lodge, 735, 390 U.S. 557, 559 (1968)

5 es cae Chee eae RR eo ies Cin cnet see 10, 12, 15

Beardsly v. Chicago & Northwestern Trasp. Co., 850 F.2d

Rar Gee Ge MOD SEE ioc vccssecceveccvowses 13, 14

Beck v. Communication Workers of America, 487 U.S. 735

es oa ers Ne ee ear cee 7, 8,10

Braen v. Pheifer Transp. Co., 361 U.S. 129 (1959)....... 8

Cook v. Pan Am. 771 F.2d 635, 637 (2nd Cir. N.Y. 1985) 13

DelCostello v. Teamsters, 462 U.S. 151 (1983).......... a, 3

Ellis v. Western Airlines, 652 F. Supp. 938 (S.D.D.C. 1986) 9

Felter v. Southern Pacific Transportation Co., 359 U.S. 326

ROBIN eg pal RN PAE eRe a to 8,9, 10

Hogan v. Brotherhood of Railway Employees, 817 F.2d 248

ee I anc low Snip Gudea wae biroweccewes 12

Jones v. Trans World Airlines, Inc., 495 F.2d 790 (2d Cir.

Os I reso Ge ha eae ee tb eeu Kunuces 14

Local Lodge No. 1424, iAM v. NLRB, 362 U.S. 411 (1960)

Lead Gitex wads be ahs & CREME ee wk Os Bee eieee 5,9

Machinists v. Street, 367 U.S. 740 (1960) .............. 8

NLRB v. Campbell Soup Co., 378 F.2d 259 (9th Cir. Cal.

SES Cea eae Wnuk ban weg ia ee eee Ue cca ckoes « 8,9

NLRB v. Gotifired Baking Co., 210 F.2d 772 (2nd Cir.,

EE RS oy ey Cee ee ae ee ee 9

NLRB v. Sightseeing Guides and Lecturers Union 2006 of

Greater New York, AFL-CIO, 310 F.2d 40 (2d Cir. N.Y.

| REA See sole ORD ee et ae 9

Northeastern National Bank v. United States, 387 U.S. 213

Sct a) dakUss 9i4 cae chad aercaetunenuteeols 11,12

Vv

TABLE OF AUTHORITIES

CASES

Page

Orion Shipping and Trading Co., Inc. v Eastern States

Pertoleum Corp. of Panama. S.A., 312 F.2d 229 (2d Cir.

t,he a Or eee Pr Eee Pe ere 12

Pennsylvania R. R. v. Rychlik, 352 U.S. 480 (1957) ..... 8

Robinson v. Pan American World Airways, 777 F.2d 84 (2d

oe 2 ae a eee 12

Rice v. Sioux City Cemetery, 349 U.S. 70 (1955) ....... 7

Sanders v. Airline Pilots Association, 361 F. Supp. 670

SP WE een cis eu SG bce baveen bass nee cess 12

United States v. Gainey, 380 U.S. 360 (1965)........... 7

United States v. Ruzicka, 329 U.S. 287 (1946).......... 7

Upshaw v. United States, 335 U.S. 410 (1948) .......... 8

West v. Conrail, 107 S. Ct. 1538, 1541, n. 2 (1987) ...... 12

Wilkinson v. United States, 365 U.S. 399 (1960) ..... 8,11, 12

Statutes

Labor Magagement Reporting and Disclosure Act, § 101... 2,3

Railway Labor Act, Secs. 2, Fourth & Eleventh,

DO cenccecineserusebaneeerie rn eneeas tana 5, 6, 9, 10

No.

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1991

ZLATKO GVOZDENOVIC; MARGARITA WALINSKI; PATRICIA

CARGOULD; FRANK PEREA, Individually And On Behalf Of

That Class Of 1202 Former Pan Am Flight Attendants Now

Employed By United Airlines, Inc., And As Members Of The

Pan Am Seniority Arbitration Committee,

Petitioners,

VS.

UNITED AIR LINES, INC.; THE ASSOCIATION OF FLIGHT

ATTENDANTS, AFL-CIO, And Its President, SUSAN BIANCHi-

SAND; AU RODNEY; PAMELA GREENLEAF, As Members Of

The United Airlines Seniority Arbitration Committee; PATRI-

CIA FRIEND, Chairperson Of The United Airlines Master

Executive Council; And THE UNITED PREACQUISITION

FLIGHT ATTENDANTS,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Petitioners Zlatko Gvozdenovic, et al., respectfully pray that a

writ of certiorari issue to review the judgment and opinion of the

Unites States Court of Appeals for the Second Circuit entered in

the above-entitled proceeding on May 22, 1991.

2

OPINIONS BELOW

The opinion of the Court of Appeals for the Second Circuit is

reported at 933 F2d 1100 (2nd Cir. N.Y. 1991), and is reprinted

in the appendix hereto, (Appendix A-1). The Opinion of the

United States District Court for the Southern District of New

York (Griesa, D.J.) (Appendix B-1), and its bench remarks

(Appendix C-1) issued in conjunction with said Opinion, have

not been officially reported; but, the Opinion is unofficially re-

ported at 118 Labor Cases (CCH) 4 10,542 (D.C. N.Y. 1990).

JURISDICTION

Invoking jurisdiction pursuant to the provisions of the Federal

Arbitration Act, 9 USC §§ 10, 11, the RLA, 45 USC §§ 151, et

seq., and the Labor Management Reporting and Disclosure Act

(LMRDA), 29 USC § 411, 412, on December 28, 1987, the

petitioners filed their initial action in the Southern District of

New York alleging a course of conduct by respondents United

Airlines, Inc. (United) and the Association of Flight Attendants

(AFA), and certain of its officers and members, which violated

petitioners’ legal entitlements under the foregoing statues and

required the setting aside of a certain arbitration award dated

September 26, 1987.

On March 30, 1990, upon hearing of the parties cross motions

for summary judgment, the District Court dismissed petitioners’

claims by its bench remarks of that date, as supplemented by its

Opinion filed August 17, 1990.

On petitioners’ appeal to the Second Circuit, the Court of

Appeals affirmed the District Court’s decision on May 22, 1991.

No petition for rehearing was sought. The jurisdiction of this

Court to review the judgment of the Second Circuit is invoked

under 28 USC § 1254(1).

3

STATUTORY PROVISIONS INVOLVED

1. RLA Section 152 Fourth and Eleventh (a) and (b):

§ 152. General Duties

Fourth. Assistance in organizing or maintaining organization

by carrier forbidden

[I]t shall be unlawful for any carrier to interfere in any way with

the organization of its employees, or to use the funds of the carrier

in maintaining or assisting or contributing to any labor organiza-

tion of its employees, or to use the funds of the carrier in

maintaining or assisting or contributing to any labor organization,

labor representative, or other agency of collective bargaining,

Eleventh. Union security agreements; check-off. ...

[Any carrier or carriers as defined in this chapter and a labor

Organization or labor organizations duly designated and autho-

rized to represent employees in accordance with the requirements

of this chapter shall be permitted—

(a) to make agreements, requiring, as a condition of continued

employment, that within sixty days following the beginning of

such employment, or the effective date of such agreements,

whichever is the later, all employees shall become members of the

labor organization representing their craft or class: Provided, that

no such agreement shall require such condition of employment

with respect to employees to whom membership is not available

upon the same terms and conditions as are generally applicable to

any other member. ...

(b) to make agreements providing for the deduction by such

carrier or carriers from the wages of its or their employees in a

craft or class and payment to the labor organization representing

the craft or class of such employees, of any periodic dues,

initiation fees, and assessments (not including fines and penal-

4

ties) uniformly required as a condition of acquiring or retaining

2. LMRDA Section 411 (a) (3)

411. Bill of rights; constitution and bylaws of labor

organizations

(3) Dues, initiation fees, and assessments

Except in the case of a federation of national or international

labor organizations, the rates of dues and initiation fees payable

by members of any labor organization in effect on September 14,

1959 shall not be increased, and no general or speciai assessment

shall be levied upon such members, except

(B) in the case of a labor organization, ... (i) by majority vote

of the delegates voting at a regular convention,..., or (ii) by

majority vote of the members in good standing of such labor

organization voting in a membership referendum conducted by

secret ballot, or (iii) by majority vote of the members of the

executive board or similar governing body of such labor organiza-

tion, pursuant to express authority contained in the constitution

STATEMENT OF THE CASE

The history of this case as set forth under the “Background”

section of the Court of Appeals’ decision (A: 3-6) is incorporated

by reference. For the purposes of this petition, there is no dispute

over the Court of Appeals’ determination of the factual back-

ground of this case.

Notwithstanding, the petitioners take issue with the Court of

Appeals’ findings with respect to the running of the various

limitations periods on petitioners’ duty of fair representation and

RLA claims and, most importantly, the Court of Appeals inter-

pretation and application of the RLA’s union security clause to

newly hired employees.

5

With respect to petitioners’ DFR claims of discriminatory

treatment by AFA in the making and enforcement of the seniority

arbitration agreement, the Court of Appeals found that such

claim began to run for purposes of the six month limitation period

of DelCostello v. International Bhd. of Teamsters, 462 U.S. 151,

169-71 (1983), with AFA’s ratification of the arbitration agree-

ment on March 14, 1986, thus expiring prior to the filing of the

action on December 28, 1987. (A: 8-9).

The Court of Appeals similarly found that petitioners’ claims

respecting the imposition and collection of AFA dues during the

first sixty days of their employment, to the extent that this was

asserted as a violation of RLA section 152 Eleventh (a) and (b),

was also time barred under the six month limitations period which

the Court of Appeals found ran from the date of petitioners’

hiring and/or the ratification of the arbitration agreement impos-

ing such dues. (A: 10-11). The same result was reached in the

Court of Appeals’ treatment of petitioners unlawful assistance

claims under RLA section 152 Fourth. Jbid.

In each of these instances of dues and assistance violations, the

Court of Appeals rejected any argument that they qualified as

“continuing violations,” since the continuing activities, while so

found, did not flow from “tan agreement invalid on its face or with

one validly executed, but unlawfully administered,” citing Local

Lodge No. 1424, 1A.M. v. NLRB, 362 U.S. 411, 423 (1960).

(A: 11). .

On the issue of the viability of the arbitration agreement, while

admittedly made before petitioners were hired by United, the

Court of Appeals confirmed the District Court’s finding that the

subsequent participation of the petitioners’ class in the arbitration

constituted sufficient consent; and that, in any event, the arbitra-

tion agreement constituted a third-party agreement to which they

were bound. (A: 7-8).

Finally with respect to petitioners’ LMRDA claims that the

imposition of dues to the petitioners’ class during the first sixty

days of their employment also violated their rights under the dues

adoption by majority vote under LMRDA Section 411 (a) (3), the

Court of Appeals concluded that United and AFA were contrac-

6

tually free to redefine the former Pan AM flight attendants as

other than “newly employed flight attendants,” thereby exempt-

ing fromthe provisions of RLA Section 152 Eleventh (a) and (b)

and the provisions of the collective bargaining agreement’s union

security clause (A: 12). The Court of Appeals’ opinion authorizes

the contractual deletion of the 60-day grace period afforded

employees under the RLA in which to join or not to join a union.

The Court of Appeals’ decision effectively allows the imposition

by contract of a closed shop conditioning the hiring of new

employees on their acceptance of union membership.

As will be demonstrated in the following arguments, the Court

of Appeals’ disposition of these issues is contrary to controlling

law and the decisions of this Court and the Circuit Courts.

REASONS FOR GRANTING THE WRIT

I

THE COURT OF APPEALS’ DECISION PRESENTS A

CRITICAL ISSUE OF FIRST IMPRESSION FOR THE

INTERPRETATION AND APPLICATION OF THE

UNION SECURITY PROVISIONS OF RLA SECTION

ELEVENTH (a) AND (b)

The most grievous error of the Court of Appeals’ decision lies

in its emasculation of the provisions of RLA Section 152 Elev-

enth (a)-and (b) whereby the Court of Appeals held that United

and AFA were contractually free to redefine the status of the

1202 former Pan Am Flight Attendants in a status other than

“newly employed flight attendants.” Pg. 7, [bid. In effect, there-

fore, the Court of Appeals’ decision allows the imposition by

contract of a closed shop requiring union membership as a

condition of hiring.

As a matter of clear statutory mandate, the union security

provisions of RLA Section 152 Eleventh (a) and (b) apply to the

first “sixty days following the beginning of...employment...”

45 USC § 152 Eleventh (a). As found by the District Court and

the Court of Appeals, the “beginning of ... employment” of the

1202 Former Pan Arn Flight Attendants was as of February 11,

Pi

7

1986; prior to that time they were employees of Pan Am and

members of another labor organization. (A: 3-4).

If the Court of Appeals’ decision is allowed to stand, parties

subject to the RLA could contractually redefine and/or eradicate

a “beginning” date of employment so as to strip newly hired

employees from the protections of the union security provisions of

RLA Section 152 Eleventh (a) and (b) and effectively require

mandatory union membership as a condition of hire. Such an

abrogation by private parties of a statutory protection cannot be

countenanced. See: Alexander v. Gardner-Denver, 415 U.S. 987,

1974).

For this reason, petitioners respectfully submit that good cause

exists for the granting of this petition on the ground that the Court

of Appeals’ decision presents a critical issue of first impression for

the interpretation and application of the union security provisions

of RLA Section 152 Eleventh (a) and (b). United States v.

Gainey, 380 U.S. 63, 65 (1965); American Federation of Musi-

cians v. Wittstein, 379 U.S. 171, 175 (1964); Rice v. Sioux City

Cemetery, 349 U.S. 70, 79 (1955); United States v. Ruzicka, 329

U.S. 287, (1946).

II

THE COURT OF APPEALS’ DECISION INTERPRETING

RLA SECTION ELEVENTH (a) AND (b) CONFLICTS

WITH THE DECISIONS OF THIS COURT

In this Court’s latest decision respecting union security clauses

under the Railway Labor Act and the National Labor Relations

Act, it was found in Beck v. Communications Workers of

' The Court of Appeals’ confusion regarding the jurisdictional param-

eters of the RLA is also evident in its finding that “[a]s the exclusive

bargaining representative of United flight attendants, the AFA has a

duty under section 8(b) of the National Labor Relations Act, 29 USC

§ 158(b), to represent all of those employees, including the Pan Am

transferees...” (A: 19-20). No citation is necessary for the basic

proposition that AFA in its representation of United flight attendants is

subject solely to the RLA.

8

America, 487 U.S. 735, 743 (1988), that “[t]he necessity of

deciding the scope of § 8(a)(3) (union security clause) arises

because petitioners seeks to defend themselves on the ground that

the statute authorizes precisely this type of conduct.”

A similar statement could be made herein because the Court of

Appeals confirmed the exclusion of the former Pan Am Flight

Attendants from the protection of the union security provisions of

the RLA on the ground that the “statute authorized” the parties

to define new employees so as to exclude petitioners from the

protection of Section 152 Eleventh and its 60-day grace period.

Under the Court of Appeals’ approach, United and AFA were

well within their rights to contractually require the former Pan

Am Flight Attendants to join the AFA as a condition of their

hiring at United. This requirement flies in the face of the statutory

intendments underlying the union security provisions under both

the NLRA and the RLA under which “a man can get a job

without joining the union.” Beck v. Communications Workers of

America, supra. at 760. See also: Machinists v. Street, 367 U.S.

740 (1960); Pennsylvania R. Co. v. Rychlik, 352 U.S. 480, 494-

496 (1957); also: NLRB v. Campbell Soup, 378 F.2d 259, 261

(9th Cir. Cal. 1967) (Deducting of dues without affording af-

fected employees the benefits of the 30-day grace period under

the NLRA ruled illegal].

Such an approach also places itself in direct conflict with this

Court’s decision in Felter v. Southern Pacific Transportation Co.,

359 U.S. 326, 336 (1958), wherein this Court found under similar

circumstances that RLA section 152 Eleventh “makes it clear

that the organization was not to function as its members’ agent in

waiving their statutory rights.” Yet, such is the result allowed by

the Court of Appeals’ decision.

For this reason, petitioners submit that good cause exists for

the granting of this petition on the ground that the Court of

Appeals’ decision conflicts with the decisions of this Court.

Wilkinson v. United States, 365 U.S. 399, 401 (1960); Braen v.

Pfeifer Transportation Co., 361 U.S. 129, 130 (1959); Upshaw v.

United Siates, 335 U.S. 410 (1948).

9

Ill

THE COURT OF APPEALS’ DECISION RESPECTING AP-

PLICABLE LIMITATIONS PERIODS FOR THE VIOLA-

TIONS OF RLA SECTIONS FOURTH AND ELEVENTH

(a) AND (b) CONFLICTS WITH THE DECISIONS

WITHIN THE SECOND AND OTHER CIRCUITS AND

THIS COURT

The Court of Appeals premises its findings against continuing

violations of RLA Sections Fourth and Eleventh (a) and (b)

upon its determination that the violations did not “flow frorn an

agreement invalid on its face,” citing Local Lodge 1424, I.A.M. v.

NLRB, supra. But, to the extent that the agreement denied the

petitioners their 60-day grace period vouchsafed under RLA

Section 152 Eleventh (a) and (b), the agreement was indeed

“invalid on its face.” By the same token, to the extent that United

contracted to finance AFA’s arbitration proceedings, that contrac-

tual commitment was also patently “invalid on its face” as in

contravention to the proscriptions of RLA Section 152 Fourth.

The case before us is clearly distinguishable from the facts of

Local Lodge 1424 where on the face of the agreement there

existed a valid union security clause which provided for a “45 day

grace period to become and remain members of the union.” Local

Lodge 1424, I.A.M. v. NLRB, supra. at 412. Hence, the decisions

of and the Second and other Circuits have found violations of

union security clause provisions to be continuing violations until

terminated. NLRB v. Campbell Soup Co., supra.; NLRB vy.

Sightseeing Guides and Lecturers Union, Local 2006 of Greater

New York, AFL-CIO, 310 F.2d 40, 41 (2nd Cir. N.Y. 1962)

[mere retention of illegal clause actionable]; NLRB v. Gottfried

Baking Co., 210 F.2d 772, 779-780 (2nd Cir. N.Y. 1954); Ellis v.

Western Airlines, 652 F.Supp. 938, 939 (S.D. Cal. 1986) [illegai

dues checkoff under RLA for three year period preceding filing of

action and five years after execution of contract].

Lastly, under this Court’s decision in Felter v. Southern Pacific

Transportation Co., supra., respecting union security agreements,

it was found that “any agreement is ineffective as to an employee

10

who did not furnish the employer a written assignment in con-

formity with the Act.” (emphasis supplied) Jbid. at 334.

Given that the agreement herein made no provision for the

sixty day grace period mandated by RLA Section 152 Eleventh,

the United-AFA Agreement was perforce “ineffective” as to the

petitioners’ class as it pertained to the check-off of their dues

payments to the AFA. And, any argument by the Court of

Appeals that the AFA could contract away this requirement,

whether through a third-party beneficiary contract or through

collective bargaining is precluded. As previously quoted above,

RLA Section 152 Eleventh “makes it clear that the organization

was not to function as its members’ agent in waiving their

statutory rights.” /bid. at 336.

If then, the dues check-cff procedures of the United-AFA

Agreement were “ineffective” as to petitioners’ class of 1202, the

mere passage of time from the imposition of the procedures on

February 11, 1986, through the filing of this action on December

28, 1987, cannot make those procedures effective or valid. To

allow the passage of six months to effective “waive” an em-

ployee’s right to require strict compliance with RLA Section 152

Eleventh would contravene the clear admonition of Felter against

such waiver.

In short, the imposition of the check-off herein was void ab

initio and the taking of all dues from the 1202 under the

provisions of the United-AFA Agreement must be set aside and

returned te the 1202 until such time as a valid agreement and

assignment is executed in strict compliance with RLA Section

152 Eleventh; and, under Felter the limitations period is tolled

until such a valid agreement and assignment are executed. See

also: Beck v. Communications Workers of America, supra. at 741

(violations extended to dues deductions for the six months pre-

ceding the filing of the action, not back to the execution of the

collective bargaining agreement).

For this reason, petitioners submit that good cause exists for

the granting of this petition on the ground-that the Court of

Appeals’ decision conflicts with the decisions within the Second

and other Circuits and this Court. Avco Corp. v. Aero Lodge 735,

:

1}

390 U.S. 557, 559 (1968); Northeastern National Bank v. United

States, 387 U.S. 213, 217 (1967); Wilkinson v. United States,

supra.

~

IV

THE COURT OF APPEALS DECISION RESPECTING THE

APPLICABLE LIMITATIONS PERIOD FOR DFR VIO-

LATIONS PERTAINING TO AN ARBITRATION PRO-

CESS CONFLICT WITH THE DECISIONS OF THIS

COURT AND THE CIRCUITS

Notwithstanding the fact that all of respondents’ DFR viola-

tions must be deemed “contin ing,” the argument that such

violations were terminated or completed outside the six month

limitation period is contrary to public policy and controlling DFR

law respecting labor and management’s obligations under a con-

tractual arbitration process. The fact of the matter is that petition-

ers’ claims of “compulsory unionism” and “discriminatory dues”

were inextricably bound up with the provisions of the Seniority

Arbitration Agreement and the arbitration of the petitioners’

seniority status with United.

Most cases involving allegations of DFR violations by a union

in connection with the grievance procedure involve isolated,

discrete actions or inaction by the union at the beginning of,

during, or at the close of the arbitration process. However, in all

such cases, the limitations periods are measured from the issu-

ance of the arbitration award since judicial interference prior to

this point would inevitably interfere with the “private settlement

of disputes.” DelCostello v. Teamsters, supra. at 171-172 [both

DFR violations measured from the date of the arbitration award].

Under the petitioners’ view, once the issue was committed to

the arbitration process by the negotiation of the Side Letter

Arbitration Agreement on December 6, 1985, the six month

limitation period was tolled until entry of the Award on Septem-

ber 26, 1987. To begin the running of the statute at any time prior

thereto would encourage a multiplicity of suits and frustrate the

federal labor policy in favor of arbitration and the “private

settlement of disputes.” Prior to the entry of the arbitration award

12

herein, the expectation and possibility, however unreasonable,

existed that petitioners could have achieved full recovery under

the award and could, thereby, avoid the incurrence of any damage

that would give rise to a DFR claim. See: Robinson v. Pan

American World Airways, Inc., 777 F.2d 84, 87-89 (2nd Cir.

N.Y. 1985); West v. Conrail, 107 S.Ct. 1538, 1541, n.2 (1987);

Hogan v. Brotherhood of Ry. Employees, 817 F.2d 248, 250 (4th

Cir. Va. 1987).

For this reason, petitioners submit that good cause exists for

the granting of this petition on the ground that the Court of

Appeals’ decision respecting the applicable limitations period

pertaining to an arbitration process conflict with the decisions of

this Court and the Circuits. Avco Corp. v. Aero Lodge 735, supra.;

Northeastern National Bank v. United States, supra.; Wilkinson v.

United States, supra.

V

THE COURT OF APPEALS’ DECISION RESPECTING

THE APPLICATION OF AN ARBITRATION PROCESS

UNDER THE RLA CONFLICTS WITH THE DECISIONS

WITHIN THE SECOND AND OTHER CIRCUITS

The Court of Appeals’ decision to the effect that the arbitration

agreement was effective, under a third-party beneficiary theory

and/or by the subsequent consensual participation of the petition-

ers, is in direct conflict with the holdings of the Second and

Eighth Circuits. While the Court of Appeals attempts to distin-—

guish its decisions in American Renaissance Times, Inc. v. Saxis

Steamship Co., 502 F.2d 674, 678 (2nd Cir. N.Y. 1974) and

Orion Shipping and Trading Co., Inc. v. Eastern States Petroleum

Corp. of Panama, S.A., 312 F.2d 229, 301 (2nd Cir. N.Y. 1967),

it made no mention of the holding of Sanders v. Air Line Pilots

Assn., Intern., 361 F.Supp. 670, 676-677 (D.C. S.D. N.Y. 1973)

cited by petitioners.

In Sanders, a factually similar case to that herein, the District

Court ruled that under the circumstances of the acquisition of

Slick Airways by Airlift International, an award entered under a

“tripartite” senior arbitration agreement between: (1) Slick Air-

13

ways and its successors, (2) the Airline Pilots Assn., Intern.

(ALPA) and (3) the Flight Engineers International, was binding

on Slick’s successor, Airlift International, and the former pilot

and engineering personnel of Slick. “[H Jowever, the Airlift flight

crew personnel had not been a party to the tripartite agreement

and therefore were not bound by it.” (Emphasis supplied) /bid at

676.

If, then, ALPA could not bind the Airlift pilot personnel,

whom it also represented at both Slick and Airlift, to the terms of

its tripartite arbitration agreement which was found binding on

their employer Airlift, by the same token, respondent AFA should

not be allowed to bind the 1202 to the “bilateral agreement” it

executed with United since the former Pan Am Flight Attendants

“had not been a part of the (arbitration) agreement and therefore

were not bound by it.”

Indeed, a review of all reported seniority arbitration agree-

ments, given judicial scrutiny under the RLA, fails to disclose a

single instance where a collective bargaining representative was

empowered to bind employees under an arbitration agreement,

that were not its members of the bargaining unit at the time of

execution. See: Cook v. Pan Am. 771 F.2d 635, 637 (2nd Cir.

N.Y. 1985) (union of “employees involved” executed

agreement). :

But if doubt should still exist, the decision in Beardsly v.

Chicago & Northwestern Transp. Co., 850 F.2d 1255 (8th Cir.

Ohio 1988) should erase all doubt. In Beardsly a mirror image of

the instant case was played out under the auspices of the RLA.

As in the instant case, the Defendant United Transportation

Union (UTU) represented the majority employees of the

purchasing carrier and negotiated a seniority agreement which

prevented, as herein, the dovetailing of their prior dates of hire.

However, “although the (UTU) did involved the union represen-

tative of the former Rock Island employees in preliminary discus-

sion, these representatives were not present when the final

agreements were reached, were not parties to these agreements,

and had virtually no control over the terms of these agreements.”

Ibid. at 1261.

14

When, therefore, the minority employees demanded arbitration

under the agreement for loss of their respective dates of hire, the

issue was taken to arbitration. Ibid. at 1262. As in the instant

case, during the pendency of the arbitration, the UTU changed its

policy pursuant to an internal grievance procedure which resulted

in a date of hire policy for acquired employees of purchased

railroads. Ibid. at 1261-1263. However, without notice of this

change of policy, as herein, the Arbitrator subsequently entered

his award sustaining the prior seniority agreement which denied

minority employees their date of hire rights. Jbid. 1263.

Confronted with these circumstances, the Eighth Circuit set

aside the Arbitration Award based upon several premises. Citing

Jones v. Trans World Airlines, 495 F.2d 790 (2nd Cir. N.Y.

1974), the Eighth Circuit emphasized that it was the duty of the

majority UTU “to provide substantive and procedural safeguards

for minority members of the collective bargaining agreement.”

Jones, at 798. The Eighth Circuit observed that to the extent that

the UTU, as herein at AFA, deviated from the “standard prac-

tice” of dovetailing seniority in mergers and acquisitions based

“on some sort of dovetailing” of the respective groups dates of

hire (/bid. at 1268), it questioned the neutrality of the UTU to

represent the interests of the minority employees who “would

adversely affect the seniority rights of the employees” of the

acquiring railroad. [bid. at 1269.

Equally significant in the view of the Eighth Circuit was the

fact that the agreement was reached without the “active and

significant participation of the representatives of the former Rock

Island employees”, (Emphasis on original—Jbid. at 1269), as

contemplated by the UTU’s Constitution. In this instance, the

AFA Constitution also contemplated active participation of the

minority employees in the determination of their seniority rights

by providing a negotiation process with arbitration in the case of

impasse, a process denied plaintiffs’ class herein.

Given the Beardsly scenario, the Eighth Circuit set aside the

Arbitration Award because the underlying agreement had been

procured in breach of the UTU’s DFR and by virtue of the fact

that the arbitrator had not been provided with a notice of the

15

UTU’s change of policy in favor of dovetailing seniority. bid. at

1269-1270.

As a result, the Eighth Circuit required the District Court “to

order the parties to renegotiate an implementing agreement... .

with the requirements that the minority employees will partici-

pate in an active and significant manner”. /bid. at 1271.

For this reason, petitioners submit that good cause exists for

the granting of this petition on the ground that the Court of

Appeals’ decision conflicts with the decisions within the Second

and other Circuits. Avco Corp. v. Aero Lodge 735, supra; North-

eastern National Bank v. United States, supra.

CONCLUSION

For the foregoing reasons, petitioners respectfully submit that

good cause exists for the granting of this petition for writ of

certiorari. Respectfully submitted,

JOHN F. HENNING, JR.

HENNING, WALSH & KING

100 BUSH STREET, SUITE 440

SAN FRANCISCO, CA 94104

(415) 981-4400

Attorneys for Petitioners

[APPENDICES TO FOLLOW]

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 1092--August Term, 1990

(Argued February 22, 1991 Decided May 22,1991)

Docket No. 90-7885

Zlatko Gvozdenovic; Margarita Walinsxi; Patricia Cargould;

Frank Perea, Individually and on behalf of that class of

1202 former Pan Am Flight Attendants Now Employed

vy United Airlines, Inc., and as Members of the Pan Am

Seniority Arbitration Committee,

Plaintiff-Appellants,

-against-

United Air Lines, Inc.; The Association of Flight Attena.nts,

AFL-CIO; and its President, Susan Bianchi-Sand; Au

Rodney; Pamela Greenleaf, As members of the United

Airlines Seniority Arbitration Committee; Patricia Friend,

Chairperson of the United Airlines Master Executive

Council; United Preacquisition Flight Attendants,

Defendants-Appellees.

Before:

Feinberg, Miner and Mahoney,

Circuit Judges.

Appeal from judgment entered in the United States District

Court for the Southern District of New York (Griesa, J.),

dismissing after bench trial class action suit brought by employees

of Pan Am division acquired by United to vacate arbitral decision

regarding method by which they were integrated into United’s

seniority list and alleging violations by union of statutory duties in

A-2

connection with arbitration and member ship in collective bar-

gaining unit.

Affirmed.

John F. Henning, Jr., San Francisco, CA (Henning, Walsh &

King, San Francisco, CA, Scott H. Robb, Robb & Hen-

ning, New York, NY of counsel), for Plaintiffs-

Appellants.

Stephen B. Moldoff, New York, NY (Michael L. Winston,

Cohen, Weiss & Simon, New York, NY, of counsel), for

Defendants-Appellees Association of Flight Attendants,

Susan Bianchi-Sand, Patricia Friend, and the “Pre-Acqui-

sition United Airlines Flight Attendants”’.

Eric Rosenfeid, New York, NY (Maurice L. Miller, Seyfarth,

Shaw, Fairweather & Geraldson, New York, NY, of coun-

sel), for Defendants-Appellees

United Airlines, Inc., and Stephen Wolf.

Miner, Circuit Judge:

~‘aintiffs-appellants appeal from a judgment entered on August

29, .990 in the United States District Court for the Southern

District of New York (Griesa, J.), dismissing a class action suite

brought against defendants-appellees United Airlines, Inc.

(“United”) and the Association of Flight Attendants (“AFA”),

asserted under the Railway Labor Act (“RLA”), 45 U.S.C.

§§ 151 et seq., the Labor-Management Reporting and Disclosure

Act (“LMRDA”), 29 U.S.C. §§ 411, 412 and provisions of the

Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 10, 11. In the

complaint, appellants sought to vacate an arbitral award and

sought damages, based on alleged breach of the statutory duty of

fair representation, enforcement of compulsory union member-

ship, improper dues assessment and breach of contract by

appellees.

Appellants are 1202 former flights attendants of Pan American

World Airways, Inc. (“Pan Am”), who began working for United

after United purchase Pan Am’s Pacific Division, in which they

had been employed. On appeal, they contend that the district

oar ll

A-3

court improperly dismissed their petition for vacatur of the

arbitration award because they were not parties to the agreement

providing for the arbitration and because certain conduct of the

AFA during the arbitration violated its duty to represent all its

members fairly. Appellants also argue that the district court

improperly dismissed on statute of limitation grounds their claims

that the AFA ran an illegal “closed shop” and unlawfully raised

their union dues, and that United improperly had given financial

assistance to incumbent United employees to engage in the

arbitration.

We hold that, because appellants participated voluntarily and

actively in the arbitration process, they are bound by its outcome

and the district court therefore properly dismissed their petition to

vacate the award. We also hold that appeliants’ claims of breach

of the AFA’s duty of fair representation, impermissible enforce-

ment of compulsory union membership and improper financial

assistance by United are time-barred. With regard to the unlawful

dues increase claim, we hold that, under Reed y. United Transp.

Union, 488 U.S. 319 (1989), appellants are not barred by the

applicable statue of limitations from presenting this claim, but

that it fails on its merits. Accordingly, we affirm that judgment of

the district court.

BACKGROUND

On April 22, 1985, United entered into an agreement with Pan

Am’s Pacific Division. As part of the acquisition agreement,

United promised to hire at least 1,202 of the Pan Am Pacific

Division flight attendants and, “[s]ubject to agreement... with

the collective bargaining representatives of Buyer’s employees, . . .

[to] give [the incoming flight attendants] full recognition to all

period of service with” Pan Am.

On August 1, 1985, United and the AFA, the collective

bargaining representative for United employees, began negotia-

tions over a new collective bargaining agreement. An important

issue to be resolved in the negotiations was the method of

determining the seniority status of the 1202 incoming flight

A-4

attendants in relation to that of United’s pre-acquisitions flight

attendants. On December 6, 1985, representatives of United and

the AFA entered into a Letter of Agreement setting out the terms

and conditions of employment for the incoming flight attendants.

The Letter of Agreement, ultimately incorporated into the collec-

tive bargaining agreement, was ratified by the AFA’s members on

March 14, 1986. The Letter of Agreement provided that the new

employees would become AFA members on the date they com-

menced work with United and that the issue of their seniority

status would be determined through arbitration in which the

incoming flight attendants and the incumbent United flight at-

tendants would be the only participants. The arbitration was to be

financed largely by United. The Letter of Agreement also pro-

vided that “the arbitrator shall determine the appropriate method

of integration, based upon equitable and contractual considera-

tions. In making this or any other determination, the arbitrator

shall...not reduce the seniority accrued by any United flight

attendant.”

On three successive dates, December 6, 1985, January 8 and

24, 1986, Pan Am Pacific Division flight attendants were notified

in conditional offers of employment sent to them by United that

their seniority rights were to be determined through this process.

Pan Am’s Pacific Division employees were guaranteed continued

employinent under their collective bargaining agreement with Pan

Am and were under no compulsion to transfer to United. On

February 11, 1986, the 1202 Pan Am flight attendants who had

accepted United’s offer of employment became flight attendants

for United.

On March 7, 1986, United deposited $132,700 into each of the

bank accounts it had opened for the 1202 incoming flight attend-

ants and the incumbent United employees to cover their costs of

arbitration. Both sides drew on their respective accounts for this

purpose. The Independent Union of Flight Attendants

(“IUFA”), which had represented the incoming flight attendants

during their employment at Pan Am, selected a committee of five

to represent the former Pan Am attendants in the arbitration.

Similarly, the United Master Executive Council (““UMEC’’), the

AFA’s representative body at United, created a five-member

A-5

committee to represent the incumbent United flight attendants.

Each committee chose legal counsel, who in turn selected Arthur

Stark to act as arbitrator.

The first arbitration hearing was held on June 27, 1986. The

incumbent flight attendants argued that the seniority of the 1202

incoming flight attendants should be based on their date of hire by

United, while the incoming flight attendants contended that they

should receive full credit for their entire term of employment with

Pan Am. In an interim decision issued on September 8, 1986,

Arbitrator Stark decided that the new flight attendants would be

integrated into the United seniority list. After additional hearings,

he established in a final decision issued on September 26, 1987 an

integration formula entitling them to partial credit for their

service at Pan Am. Specifically, under Stark’s formula, the first

1500 most senior employees on the integrated seniority list would

be the first 1500 on the existing United list; thereafter, one Pan

Am transferring flight attendant would be inserted on the list of

United flight attendants on the basis of a ratio of 1:7.47. United

revised the seniority list accordingly.

On December 28, 1987, the four appellants named individually

as plaintiffs in this suit commenced the action, seeking relief

against the AFA only, and, on May 5, 1988, amended their

complaint to add several causes of action and United as a

defendant. In the amended complaint, appellants alleged six

causes of action: two claims of breach by the AFA of its statutory

duty of fair representation, as implied under RLA § 2, 45 U.S.C.

§ 152; the unlawful imposition of union membership in violation

of RLA § 2 (Eleventh) (b), 45 U.S.C. § 152 (Eleventh) (b); the

denial of equal rights under the AFA constitution in violation of

LMRDA § 101(a)(1), 29 U.S.C. § 411 (a)(1); and breach of

the contract between the AFA and its members established by

the union’s constitution, and breach of the acquisition contract

between United and Pan Am, in violation of New York contract

law. In the amended complaint, appellants aiso moved to certify

their suit under Fed. R. Civ. P. 23(b)(1)(A) and (B) as a class

action, in which the interests of all 1,202 former Pan Am flight

attendants would be represented. Later, in briefs submitted to the

district court, appellants raised the additional claim of improper

A-6

financial assistance by United, in violation of RLA § 2 (Fourth),

45 U.S.C. § (Fourth).

After discovery, each side moved for summary judgment or

judgment on the pleadings. At a hearing on January 17, 1990, the

district court denied the motions and directed trial on the ciaim of

breach of duty of fair representation which, it believed, also was

dispositive of the petition to vacate the arbitral award, the denial

of equal rights claim and the breach of contract claim. A bench

trial was held before Judge Griesa on March 29 and 30, 1990. On

the latter date, he decided the issues of whether the Letter of

Agreement was void and whether the inclusion in the Letter of

Agreement of the provision that the arbitrator “could not reduce

seniority accrued by any United flight attendant” constituted a

violation of the AFA’s duty to represent the 1,202 fairly. Judge

Griesa determined that the agreement was not void and that

plaintiffs were bound by it because of their willing participation in

the arbitration, and that the no-reduction provision did not

prejudice the placement of the 1,202 incoming flight attendants

on United’s seniority list. Judge Griesa then dismissed all claims

relating to the duty of fair representation.

In an Opinion dated August 17, 1990, Judge Griesa dismissed

the remaining claims of unlawful imposition of union membership

and illegal financing, finding that they were barred by a six-month

statute of limitations. In the opinion, Judge Griesa also formally ~

confirmed the class status of the action.

DISCUSSION

I. Validity of Arbitration Award

Appellants content that the Letter of Agreement, in which

United and the AFA agreed to submit the seniority issue to

arbitration, is void because it was entered into before their

employment with United effectively began. Because they were

neither formal employees of United nor members of AFA at the

time of the Letter of Agreement, appellants argue, they could not

be parties to any arbitration agreement and are not bound by the

arbitral outcome. See American Renaissance Lines, Inc. v. Saxis

A-7

S.S. Co., 502 F. 2d 674, 677 (2d Cir. 1974); Orion Shipping &

Trading Co. v. Eastern States Petroleum Corp., 312 F. 2d 299,

300-01 (2d Cir.), cert. denied, 373 U.S. 949 (1963).

Although a party is bound by an arbitral award only where it

had agreed to arbitrate, an agreement may be implied from the

party’s conduct. See Teamsters Local Union No. 764 v. J. H.

Merritt & Co., 770 F. 2d 40, 42 (3d Cir. 1985); cf Kamakazi

Music Corp. v. Robbins Music Corp., 684 F.2d 228, 231 (2d Cir.

1982) (“[i]t is hornbook law that parties by their conduct may

agree to send issues outside an arbitration clause to arbitration.’’).

Here, appellants’ conduct manifested a clear intent to arbitrate

the dispute. The record demonstrates their active and voluntary

participation in the arbitration; for example, through the IUFA,

they chose a committee to represent them in the arbitration, and,

on their behalf, the committee withdrew funds from the bank

account set up to cover its expenses, chose counsel to represent

the transferring flight attendants in the arbitration and argued

vigorously that they should receive full credit for their time of

employment with Pan Am. Also, there is no evidence that, at any

point before or during the arbitration, appellants objected to the

process, refused to arbitrate or made any attempt to seek judicial

relief.

Appellants’ reliance on Saxis and Orion Shipping is misplaced

because those cases involved commercial, not iabor, arbitration.

Under the RLA, terms and conditions of employment for union-

ized employees are established through collective bargaining

between the employer and the union representative for the bar-

gaining unit. 45 U.S.C. § 152 (First) (duty of carriers and em-

ployees to settle disputes), (Fourth) (collective bargaining); see

also Order of R.R. Telegraphers v. Chicago & N. Western Ry. Co.,

362 U.S. 330, 339 (1960); Virginian Ry. Co. v. System Fed'n No.

40, Ry. Employees Dep't of the Am. Fed'n of Labor, 300 U.S.

515, 547-48 (1937). Unlike a standard commercial contract, a

collective bargaining agreement binds both those members within

a bargaining unit at the time the agreement is reached as well as

those who later enter the unit. J.J. Case Co. v. NLRB, 321 US.

332, 335-36 (1944); see Wood v. National Basketball Ass'n, 809

F.2d 954, 960 (2d Cir 1987); NLRB v. Laney & Duke Storage

A-8

Warehouse Co., 369 F.2d 859, 866 (Sth Cir. 1966). Thus, the

1202 incoming flight attendants are bound by the collective

bargaining agreement, including its arbitration provision, even

though they were not involved in the negotiation preceding it or

employed by United at the time of the negotiation. As the district

court found, they were effectively third-party beneficiaries of the

Letter of Agreement. See J.J. Case Co., 321 U.S. at 336.

Similarly, appellants’ reliance on Beardsly v. Chicago & N.

Western Transp. Co., 850 F.2d 1255 (8th Cir. 1988), cert. denied,

489 U.S. 1066 (1989) is misplaced. Unlike Saxis and Orion

Shipping, Beardsly implicated a labor arbitration. However, in

Breadsly the agreement establishing the seniority status of em-

ployees who were hired by Chicago & Northwestern after it had

purchased the railroad that employed them was reached without

the involvement of the new hires, despite their repeated requests

to participate and objections to the arbitration. Breadsly, 850 F.2d

at 1262-63, 1269-70. By contrast, appellants here were permitted

to participate and did so without objection.

Appellants also argue that the arbitrator’s award should be

vacated because, under 9 U.S.C. § 10(a), it was reached through

“fraud on the arbitration process.” This contention is based on the

fact that the AFA failed to inform either the 1202 incoming flight

attendants or the arbitrator of an amendment to its constitution,

proposed in November 1986 and formally ratified in June 1987,

regarding its policy for seniority integration in a merger with an

airline whose employees are not represented by the AFA. Under

the amendment, seniority integration would “be accomplished by

compiling an integrated seniority list in the same manner as

provided for seniority integration between flight attendants on

AFA carriers.” New Section J.2., AFA Constitution, Rev. 87

(emphasis added). We reject appellants’ contention. The adop-

tion of the AFA amended merger policy was prospective in nature

and expressly inapplicable to the United-Pan Am merger

transaction.

Appellants’ final argument for vacatur is that the AFA

breached its duty to represent all of its members fairly, as required

by the RLA. See Vaca v. Sipes, 386 U.S. 171, 177 (1967).

Although the district court addressed this argument on its merits,

ee

A-9

the duty of fair representation claim may be dismissed as barred

by the applicable statute of limitations, as the district court found

with the more specific claims of violation of the RLA. In

DelCostello v. International Bhd. of Teamsters, 462 U.S. 151,

169-71 (1983), the Court held that the six-month limitations

period of the National Labor Pelations Act applies to claims of

breach of duty of fair representation. In this case, the period

began to run, at the latest, as of the date the AFA ratified the

allegedly violative agreement, March 14, 1986, by which time the

1202 incoming flight attendants already had begun working for

United and were aware of the terms of the Letter of Agreement.

See Local Lodge No. 1424, I.A.M. v. NLRB, 362 U.S. 4i1, 415-19

(9160); United Indep. Flight Officers, Inc. v. United Air Lines,

Inc., 756 F.2d 1262, 1273 (7th Cir. 1985); Englehardt v. Consoli-

dated Rail Corp., 594 F. Supp. 1157, 1172 (N.D.N.Y. 1984),

affd, 756 F.2d 1368 (2d Cir. 1985). The action was not com-

menced until December 28, 1987 and thus is time-barred.

Moreover, even on its merits, the argument must fail. As the

exclusive bargaining representative of United flight attendants,

the AFA had a duty under section 8(b) of the National Labor

Relations Act, 29 U.S.C. § 158 (b), to represent all of those

employees, including the Pan Am transferees, both in collective

bargaining with United and in enforcing the resultant collective

bargaining agreement. See Air Line Pilots Ass'n v. O'Neill, 59

U.S.L.W. 4175, 4179 (Mar. 19, 1991); Vaca, 386 U.S. at 177.

“[T] he exciusive agent’s statutory duty to represent all members

of a designated [bargaining] unit includes a statutory obligatio to

serve the interests of all members without hostility of discrimina-

tion toward any, to exercise its discretion with complete good

faith and honesty, and to avoid arbitrary conduct.” Vaca, 386 U.S.

at 177; see also Air Wisconsin Pilots Protection Comm. v. Sander-

son, 909 F.2d 213, 216 (7th Cir. 1990), cert. denied, 111 S. Ct.

958 (1991).

Review of the terms negotiated by a union to determine

whether the union breached its duty of fair representation “must

be highly deferential, recognizing the wide latitude that negotia-

tors need for the effective performance of their bargaining respon-

sibilities.” O'Neill, 59 U.S.L.W. at 4179. A breach by the union

A-10

exists only where it is established that the terms negotiated “can

be fairly characterized as so far outside a ‘wide range of reasona-

bleness,* . . . that [they are] wholly ‘irrational’ or ‘arbitrary.’ ” /d.

(quoting Ford Motor Co. v. Huffman, 345 U.S. 330, 338 (1953)).

It cannot be said that the decisions of United and the AFA to

allow an arbitrator to determine the competitive rights of the

appellants was arbitrary, discriminatory, in bad faith, or wholly

outside a wide range of reasonableness. The AFA was faced with

two groups of its members with objectives that were directly at

odds. Submission of the impending dispute to arbitration was an

equitable and reasonable method of resolving it. Appellants fail to

demonstrate that their interests were not fully represented in the

arbitration proceedings. See Cook v. Pan Am. World Airways,

Inc., 771 F.2d 635, 645 (2d. Cir. 1985), cert. denied, 474 US.

1109 (1986) (no violation of union’s duty of fair representation

where evidence demonstrated that all interests of all employee

groups were represented vigorously throughout proceedings). We

therefore agree with the district court’s finding that the 1202

incoming flight attendants and the incumbent employees were

treated under the arbitration agreement “with perfect parity.”

It. Appellants’ remaining claims

Appellants allege that the mandate in the Letter of Agreement

that they become members of the AFA immediately upon com-

mencement of their employment violated RLA § 152 (Elev-

enth) (a), which permits a carrier to agree with a union that all

employees covered by a collective bargaining agreement will

become union members within sixty days of beginning employ-

ment. They also contend that, because deductions from their

paychecks for union dues began immediately upon hire, the AFA

violated LMRDA 8 411 (a) (3). Finally, they argue that the bank

accounts opened by United constituted an illegal grant of financial

assistance to the incumbent flight attendants, under RLA § 152

(Fourth).

The district court found that the claims of denial of a 60-day

grace period, illegal financial assistance and unlawful dues assess-

ment were time barred. With regard to the first two claims, we

believe that the district court’s decision was correct. The com-

A-11

mencement of the suit on December 27, 1987 was more than six

months after both the date on which appellants were required to

become AFA members, February 11, 1986, and the date of which

the Letter of Agreement was ratified, March 14, 1986. Thus, the

six-month period in which appellants were required to protest any

unlawful denial of a sixty-day grace period or unlawful financial

assistance had lapsed. Cf. DelCostello, 462 U.S. at 172; Robinson

v. Pan Am. World Airways, Inc., 777 F.2d 84, 87-89 (2d Cir.

1985). Likewise, appellants’ argument that continued hiring of

former Pan Am flight attendants and withdrawals by the Pan Am

arbitration committee from the finance account up until the time

of the arbitration award bring the claims within the six-month

statue of limitations is meritless. These claims do not allege

“continuing” violations because any “vice in the enforcement of

this agreement is manifestly not independent of the legality of its

execution, as would be the case, for example, with an agreement

invalid on its face or with one validly executed, but unlawfully

administered.” Local Lodge No. 1424, 362 U.S. at 423.

With regard to appellants’ claim under LMRDA § 411 (a) (3)

of an illegal dues increase, we hold that Reed v. United Transp.

Union, 488 U.S. 319 (1989), requires that we apply New York’s

three-year statute of limitations for personal injury actions, rather

than “borrow” the six-month limitations period specified in the

National Labor Relations Act, as the district court did. See

Rodonich v. House Wreckers Union Local 95 of Laborers’ Int'l

Union, 817 F.2d 967, 977 (2d Cir. 1987). The district court erred

in relying on Gordon v. Winpisinger, 630 F. Supp. 1276

(E.D.N.Y. 1986) as authority for holding that appellants’ claim

was barred by the six-month statute of limitations, because Reed

directly overrules the holding in that case.

The rationale of Reed—that a claim under Title I of the

LMRDA does not directly challenge the stable relationship

between the employer and the union, 488 U.S. at 331, and

therefore is not subject to the NLRA limitations period—-applies

to this case, in which appellants’ Title I claim stems from an

internal union dispute which had little direct, destabilizing effect

on the relationship between United and the AFA. Although Reed

involved a “free speech” claim under section 411(a)(2), which

A-12

may be more clearly essential to the maintenance of union

democracy than a claim under section 411 (a) (3), “Title I claims

all serve the core function of enhancing union democracy through

enforcement of the rights of union members, not of protecting the

integrity of collective bargaining or of grievance-and-arbitration

procedures.” Reed, 488 U.S. at 331 n.6 (emphasis in original).

However, even though the section 41!(a)(3) claims is not

time-barred, we hold that it properly was dismissed. Besides the

simple fact that appellants have produced little evidence of any

illegal dues assessments or increases, the sixty-day grace period of

the United-AFA collective bargaining agreement, upon which

they base their “unlawful dues increase” claims, applies only to

conventional, newly-hired employees, not to individuals hired

laterally as a result of a merger. The section provides that

“[n]ewly employed flight attendants” must apply for AFA mem-

bership within sixty days of commencing employment, and “shall

be admitted to membership in the Union upon expiration of their

probationary period as defined in... the Agreement.” During the

probationary period, “the seniority provisions of [the collective

bargaining agreement] do not apply to flight attendants unless

retained in the service of the Company after the probationary

period,” and “[t]he service of flight attendants may be termi-

nated at any time during the probationary period without a

hearing.” However, the Letter of Agreement excused the incom-

ing flight attendants from having to undergo a probationary

period, and gave them other unique employment benefits because

of the circumstances under which they were hired. Thus. it seems

clear that the incoming flight attendants were not “newly em-

ployed flight attendants” as defined in the collective bargaining

agreement and were constrained to pay the AFA dues immedi-

ately upon commencing employment.

CONCLUSION

We affirm the judgment of the district court dismissing appel-

lants’ complaint in its entirety.

We Rides < cen AS i ate a oe

mabe ee -

APPENDIX B

United States District Court

Southern District of New York

Zlatko Gvozdenovic, et al.,

Plaintiffs,

- against -

United Airlines, Inc., et al.,

Defendants.

87 Civ. 9243

(TPG)

OPINION

This action under the Railway Labor Act, 45 U.S.C. §§ 151 et

seq., is brought by 1,202 flight attendants formerly employed by

Pan American World Airways who began working for United

Airlines after United purchased the: Pacific Division of Pan

American.

Plaintiffs’ primary claim is that the arbitration fixing their

senioriiy status vis-a-vis United’s flight attendants violated the

Act and that the arbitration award should be set aside. This basic

claim is the subject of the first, second, fourth, fifth and sixth

causes of action in the amended complaint filed May 5, 1988. |

Plaintiffs also assert claims of two other violations of the Act: (1)

that plaintiffs, or most of them, were required to become mem-

bers of defendant Association of flight Attendants (“AFA”)

pursuant to an illegal agreement between AFA and United; and

(2) that United’s funding of the seniority arbitration was illegal,

even if the arbitration in other respects was valid. The member-

ship claim is the subject of the third cause of action in the

amended complaint. The funding claim is not asserted in the

complaint but was presented in the motion papers.

A two day non-jury trial was held on March 29 and 30, 1990,

after which the court made partial findings of fact and conclusions

of law from the bench. The court dismissed the claim seeking to

have the arbitration award vacated, thus dismissing the first,

B-2

second, fourth, fifth and sixth causes of action. The court reserved

decision on the membership and funding claims.

The present opinion constitutes the court’s decision on the

latter two claims. It is determined that they should be dismissed

as barred by the statue of limitations.

It should be noted that this is a class action. Four named

plaintiffs are representing themselves and the other members of

the class—a total of 1,202 persons. This opinion refers to the 1202

as “plaintiffs.” An appropriate motion for class certification was

filed. This motion was not opposed. The case went to trial as a

class action. The court now formally confirms that this is a class

action on behalf of the 1202 persons under Fed. R. Civ. P.

23(b) (1).

FACTS

In April 1985 United entered into an agreement with Pan

American to acquire its Pacific Division. As part of the transac-

tion, United was required to offer employment to the Pan Ameri-

can flight attendants who had worked in that division.

In the fall of 1985 United commenced negotiations with AFA

concerning rules for seniority integration of the Pan American

attendants and changes in the basic United collective bargaining

agreement which was up for renewal the following spring. By

letter of November 25, 1985 United informed the Pan American

attendants that under the terms of a tentative agreement, their

competitive seniority would be determined by arbitration to which

the two groups, the United Attendants and the Pan American

attendants, would be parties. Competitive seniority is a relative

measure of tenure which bears on an employee’s ability to

successfully bid for a particular station or flight assignment.

On December 6, 1985 United and AFA executed a letter

agreement (the “December Agreement’) which extended the

basic collective bargaining agreement and established certain

rules with respect to the incoming Pan American attendants. Two

features of the Decernber Agreement are relevant to the remain-

ing claims in this action. First, it provided that the Pan American

B-3

attendants would become AFA members on the date them

commenced work with United. Second, it provided that United

would pay the costs of the seniority arbitration.

The provision about immediate membership in AFA treated

the incoming Pan American attendants somewhat differently

from ordinary new employees of United as governed by the basic

collective bargaining agreement. This basic agreement, as it

existed before the acquisition of the Pan American division, and

as it has existed since that time, allows new flight attendants a

grace period of 60 days in which to apply for membership.

Moreover, the collective bargaining agreement gives the employ-

ees the option of becoming regular AFA members or assuming

“financial core status,” whereby they do not become members,

but pay a monthly service fee for its representation in collective

bargaining matters.

AFA’s membership ratified the December Agreement on Janu-

ary 22, 1986, to take effect on February 11,1986. On January 24,

1986, United sent each of the Pan American flight attendants a

mailgram, offering employment and describing the December

Agreement. No Pan American attendant was compelled to join

United.

A total of 1,202 former Pan American attendants (now plain-

tiffs in this action) went to work for United commencing Febru-

ary 11, 1986. About 85% of them became members of the

Association in accordance with the December Agreement. The

remaining 15% did not become members but elected to take

“financial core status.” Although the December Agreement did

not expressly provide for the financial core option, AFA appar-

ently did not object to. its use.

On March 7, 1986 United deposited approximately $265,000

on account to cover the seniority arbitration costs, as stipulated in

the December Agreement.

The United and Pan American attendant groups each selected

a committee to represent their interests in the arbitration. These

committees chose counsel who in turn agreed upon an arbitrator.

Neither United nor AFA was a party to the arbitration.

B-4

After conducting hearings, the arbitrator issued his decision

and award on September 26, 1987. PLaintiffs filed this suit on

December 28, 1987.

DISCUSSION .

The AFA Membership Claim

The Railway Labor Act contains a provision permitting a

Carrier to agree with a union that all employees covered by the

agreement will become members of the union within 60 days

following the beginning of employment, provided that member-

ship must be available to all the affected employees on the same

terms and conditions. 45 U.S.C. § 152 Eleventh (a)

The third cause of action in the amended complaint, as some-

what modified by various later submissions by plaintiffs, attempts

to assert a claim that this statutory provision has been violated.

The latest articulation of this claim was made by plaintiffs’

attorney at the trial in March 1990. At that time the attorney

argued that plaintiffs “were forced to become members” of AFA

and were not granted the “60-day election period which the law

requires.” The attorney argued that “we are entitled to get our

dues back” for the entire period of membership. The further

request is that the court should order that plaintiffs now have a

60-day period in which to choose whether they want to join the

union or not.

Defendants contend that this claim regarding AFA member-

ship is barred by the statute of limitations.

The Railway Labor Act does not specify a statute of limita-

tions. Where a federal statute is silent as to a limitation period,

courts generally borrow the limitation period from an analogous

state law. However, in dealing with some federal labor law claims,

courts look to analogous federal cause of action for limitation

periods. See: DelCostello v. International Brotherhood of Team-

sters, 462 U.S. 151 (1983). It is by now well! settled that the six-

month statute of limitations from § 10 of the National Labor

Relations Act, 29 U.S.C. § 160(b), governs a claim such as this

one under § 2, Eleventh of the Railway Labor Act. Coyle v.

B-5

Brotherhood of Railway, Airline and Steamship Clerks, 838 F.2d

1404, 1406-7 (Sth Cir. 1988); Hogan v. Brotherhood of Railway,

Airline, and Steamship Clerks, 817 F.2d 248, 250 (4th Cir. 1987)

With regard to the present case, plaintiffs’ alleged cause of

action accrued when them commenced employment with United

and were simultaneously required to become AFA members (or

assume the financial core status). This was February 11, 1986.

The December 28, 1987 date of commencement of suit was more

than six months thereafter.

Plaintiffs argue that this is a claim of a continuing violation

extending to the present time, that the cause of action has never

accrued and that there is not statute of limitations bar. However,

when plaintiffs’ attorney attempts to explain his theory, he asserts

nothing more than the contention that there a few former Pan

American attendants who did not become employed on February

11, 1986, and who either become employed at a later date or

might still become employed at some future date. See: Plaintiffs’

Memorandum of August 19, 1988, p. 5. But such persons are not

plaintiffs in this action. The are not included in the group of 1202.

The 1202 plaintiffs are solely those who commended employment

on February 11, 1986. Their claims about immediate compuisory

union membership (or financial core status) unquestionably ac-

crued on February 11, 1986. The question of accrual dates for

persons entering employment at a later time is irrelevant to

plaintiffs.

It is also well to note that any contention by plaintiffs of current

injury, by virtue of their continued AFA membership, would not

support a continuing violation theory for statue of limitations

purposes. The theory applies only to an ongoing violation not to

continuing adverse effects of a past violation. United Air Lines v.

Evans, 431 U.S. 553, 558 (1976); Engelhardt v. Consolidated

Rail Corp., 594 F.Supp. 1157 (S.D. N.Y. 1984), affd’ 757 F.2d

1368 (2nd Cir,. 1985).

Almost as an aside, plaintiffs claim that AFA’s failure to give

them a 60-day grace period was an illegal dues increase in

violation of § 101(a)(3) of the Labor Management and Report-

ing Disclosure Act, 29 U.S.C. § 411(a) (3). This cause of action

B-6

is also barred by a six-month limitations period adopted by the

courts for § 101 claims. Gordon v. Winpisinger, 630 F.Supp. 1276

(E.D. N.Y 1986), and the cases cited therein.

The Arbitration Funding Claim

Plaintiffs also contend that United violated § 2 Fourth of the

Railway Labor Act by funding the seniority arbitration. That

statute provides:

[1]t shall be unlawful for any carrier... to use funds of the

carrier in maintaining or assisting or contributing to any labor

organization, labor representative, or other agency of collective

bargaining. .. .

45 U.S.C. § 152, Fourth. This claim is not asserted in the

complaint but only in later briefs.

The court finds that the claim is time-barred under the six-

month limitation period from § 10(b) of the National Labor

Relations Act, chosen by the Second Circuit to govern claims

under § 2, Fourth of the Railway Labor Act. See: Robinson v.

Pan American World Airways, 777 F.2d 84, 87-9 (2nd Cir.

1985). United’s payment of funds for the arbitration occurred on

March 7, 1986, and the alleged cause of action accrued at that

time. This suit was filed more than a year later.

CONCLUSION

By virtue of the rulings made from the bench at the trial and

the rulings made in this opinion, all claims asserted by plaintiffs in

this action are dismissed.

SO ORDERED.

Dated: New York, New York

THOMAS P. GRIESA

U.S.D.J.

August 17, 1990

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APPENDIX C

United States District Court

Southern District of New York

Zlatko Gvozdenovic, et al.,

Plaintiffs,

- against -

United Airlines, Inc., et al.,

Defendants.

87 Civ. 9243 (TPG)

Trial Court Decision

March 30, 1990

DECISION OF THE COURT

THE COURT: I think I had better put some rulings on the

record on the issues which I am prepared to decide, and those

issues are as follows: The question of whether the arbitration

agreement was void. The question of whether the arbitration

provisions were inherently unfair and invalid by virtue of Para-

graph B1 (h) (ii) of the arbitration agreement, which has been the

principal focus of the litigation as it has emerged. And the

question of whether the union breached its duty in fair

representation.

I was hoping to be abie to rule on all the issues in the case

today, but I will have to reserve decision and issue a further ruling

on two points, that is, the claim that funding by United Airlines

was unlawful, and the claim that the Pan American people were

deprived of the statutory right to have 60 days to decide whether

to join the new union.

The reason I am deciding some of the issues today is that the

result, it seems to me, is quite clear. There has been presentation

of lengthy argument in papers, a lengthy discussion off the record

in January, and now two days of tria!. I have no need for post-trial

briefs, and there is no reason to delay this partial ruling, and |

think it will be efficient to get it on the record.

C-2

It should be noted that the trial we had has been without jury,

and what I put on the record now and at a later point, a further

decision that I issue later, will constitute the Court’s findings of

fact and conclusions of law.

This case arises from an agreement dated April 22, 1985,

between Pan American Airways and United Airlines in which the

Pacific ocean service of Pan American was sold to United.

The dispute which this case involves is a dispute regarding the

flight attendants who were employed by Pan American in its

Pacific service. About 1,200 of them decided to move over to

United Airlines and certain problems arose from the move.

It should be noted that at the time the flight attendants were

employed by Pan American they were represented by their union,

which was called the Independent Union of Flight Attendants, or

IUFA. This was not the same union as the one which represented

the United Airlines flight attendants. The latter union is the

Association of Flight Attendants, known as the AFA; it is a

defendant here.

United Airlines is a defendant. And the action is brought as a

class action on behalf of certain former Pan American flight

attendants who moved over to United Airlines.

Going back to the facts of the dispute:

Following the agreement between Pan American and United of

April 1985, a dispute arose about how the Pan American flight

attendants would be integrated for seniority purposes with the

United flight attendants. This, of course, came to the attention of

United Airlines, and United Airlines suggested that the matter be

arbitrated.

It was contemplated that the Pan American flight attendants,

or at least many of them, would become members of AFA, and an

arbitration agreement was negotiated between United Airlines

and AFA during the final months of the year 1985. This arbitra-

tion agreement related specifically to the problem of the flight

attendants, and after it was concluded, it was signed and dated as

of March 14, 1986.

C-3

The approximately 1,200 Pan American flight attendants be-

came employees of United Airlines on February 11, 1986. They

needed to be integrated for seniority purposes into approximately

11,000 United Airlines flight attendants.

It should be noted that no Pan American flight attendant was

required to move over to United Airlines. Those who did move

did so voluntarily.

The arbitration arrangement contemplated in the arbitration

agreement was that the arbitration would be between the two

groups of flight attendants: the former Pan American attendants

and the United attendants. Both were groups at least most of

whom were members of AFA.

It was contemplated that United Airlines would make pay-

ments to the two groups in order to finance the arbitration and in

order to allow each group to obtain counsel and otherwise partici-

pate in the arbitration. United Airlines would pay the fees of the

arbitrator, also.

United Airlines was not to be a party to the arbitration, nor was

AFA, as such. The arbitration was between the two groups. The

arbitration agreement contained certain provisions which have

been focused on heavily in this proceeding.

Paragraph A of the arbitration agreement provided that: “For

purposes of compensation, Pan Am flight attendants hired by

United Airlines will be given full credit for their flight attendant

seniority at Pan Am, adjusted on the same basis as United flight

attendants.”

Paragraph B provided that “The competitive seniority of Pan

Am flight attendants shall be determined in accordance with the

following procedures.” Certain procedures were then laid out

which are not required to be summarized kere. But those proce-

dural provisions contain subparagraph 1(g) and i(h), which are

extremely important to this proceeding.

Subparagraph 1|(g) provided that “The arbitrator shall initially

determine whether any competitive seniority credit shall be

awarded to the former Pan American flight attendants.”

C-4

In other words, it was possible, as an initial proposition, that all

the Pan American flight attendants would be simply put at the

bottom of the seniority list. And the first duty of the arbitrator was

to determine whether this should or should not be done as a basic

proposition.

Subparagraph 1(h) went on to provide that in making this or

any other determination, the arbitrator shall do certain things or

refrain from certain things, and the agreement went on to contain

subdivisions (i) through (iv). (i) provided that the arbitrator

should maintain the relative positions of the United flight attend-

ants on their seniority list and of the former Pan Am flight

attendatns on the Pan Am seniority list. (ii) provided that the

arbitrator shall “not reduce the seniority accrued by any United

flight attendant.” (iii) provided that the arbitrator shall not

impose any negative operational or cost impact on United. (iv) is

not required to be described here.

Now, the testimony has provided the court with certain defini-

tions of crucial terms used in the arbitration agreement.

Paragraph A refers to the seniority of the former Pan Am flight

attendants. This simply means the length of service of those Pan

Am attendants, adjusted for certain purposes.

This adjusted length of service is used, or was to be used for

purposes of compensaiton. In and of itself, this seniorithy had

nothing to do with competition between flight attendants or

among flight attendants or assignments, et cetera.

As I’ve indicated, Paragraph A provided that the seniority of

the Pan Am attendants should be adjusted on the same basis as

that of the United flight attendants.

Paragraph B introduces the concept of competitive seniority,

and competitive seniority means the ranking of the flight attend-

ants on a list in order of seniority. The evidence is that, in

connection with the airline industry, the main significance of

competitive seniority is to determine which of several flight

attendants who are applying for stationing at a particular location

or are applying for particular flights will receive the desired

assignment.

ee \

A

C-5

Subdivision B1(h)(ii) uses the phrase “seniority accrued.”

Plaintiffs expert defined this quite clearly as referring to the

seniority or length of time of service accrued and made it clear

that this term does not refer to competitive seniority.

Thus, we see that the arbitration agreement contains different

terms used for different purposes. There is the term “seniority” or

“accrued seniority,” and then there is the different and distinctive

term “competitive seniority.”

Following the making of the arbitration agreement, the arbitra-

tion went forward before an arbitrator by the name of Arthur

Stark. He handed down decisions, deciding the issues presented

to him. He handed down an Interim Award of Arbitrator, July 14,

1986. Then a second Interim Award of Arbitrator, September 8,

1986. His Final Opinion and Award was handed down on Sep-

tember 26, 1987, and that same date he issued a further document

with certain specifics of his relief, called “Award of Arbitrator.”

That was dated September 26, 1987.

In these various decisions, the arbitrator determined that the

Pan Am flight attendants would be awarded competitive seniority

credit. He further determined the method by which the Pan Am

flight attendants would be integrated into the United system

seniority list.

Based on factors which are carefully and thoroughly described

in his metriculous decisions, he determined that in the new

seniority list, the first 1,500 flight attendants would be the first

1,500 on the existing United seniority list.

After this, the integration would be performed on a ratio basis

with one Pan Am transferee placed on the list for every 7.47

United flight attendants. This meant that a Pan Am name would

be inserted after every 7 or 8 United flight attendants on the list.

A new list was created which contained information designed to

carry out all phases of the agreement as amplified by the arbitra-

tion award. The combined set of Pan Am and United flight

attendants was ranked in order dictated by the award. In the new

list two sets of dates were given. One date was given for each

flight attendant, both former Pan Am and United, and that was

C-6

the date reflecting their adjusted seniority. This would be the date

that they stated work, subject to adjustment for such factors as

leave of absence and so forth.

This date was obviously set forth pursuant to Paragraph A of

the arbitration agreement, which provided that, for purposes of

compensation, the Pan Am flight attendants would be given full

credit based on their flight attendant seniority, adjusted on the

same basis as that of United flight attendants.

There was -another set of dates reflecting the fact that the

United Airlines management was maintaining the service dates

and the adjusted seniority of their own flight attendants exactly

the same now as it had been.

For purposes of competitive seniority, there was no need to

change the dates of the United Airlines people, and subparagraph

B1(h) (ii) forbad that to be changed.

However, when the Pan Am people were slotted in, it was

inevitable that their Pan Am dates, as adjusted, might not fall

chronologically into the list, and a chronological listing was

necessary for the competitive seniority list, according to the

evidence which has been presented to the court.

Therefore, this second list, this competitive seniority list, was

accomplished by having dates assigned to each of the former Pan

Am flight attendants to correspond with the same date as the date

of the United flight attendants immediately above them.

This was provided in the Award of Arbitrator, dated Septem-

ber 26, 1987.

Now, we come to the issues in the case and the necessary

findings of fact and conclusions of law. ,

Plaintiffs have made certain claims, al] but two of which I am

dealing with today.

Plaintiffs claim that the arbitration agreement was void because

they were not parties to it. In this connection, plaintiffs readily

agree with the obvious, that is, that there was a dispute which

required arbitration. This is not a situation where a party is

attempting to resist arbitration. The plaintiffs agree that arbitra-

C-7

tion was the proper procedure for resolving the dispute. Indeed, a

committee of the former Pan Am flight attendants participated in

the arbitration with counsel. So the problem is nct with the

arbitration as a concept.

The argument of the plaintiff really boils down to an attack on

the fairness of the arbitration agreement in one respect, and that

relates to subparagraph B1(h) (ii), which forbids the arbitrator to

reduce the seniority accrued by any United flight attendant. This

is the heart of the case.

It is this that is said to have rendered the arbitration agreement

improper and void. It is this which is said to have made the

arbitration itself unfair.

The claim is that the United flight attendants were given a

benefit and a guarantee by this provision which was not conferred

upon the Pan Am flight attendants. It is said that in some way this

required and forced the arbitrator to give a preference to the

United flight attendants in integrating the two lists for purposes of

determining the ultimate competitive seniority.

In addition to the claims which I have just discussed, there is a

general claim against AFA of failure to perform the duty of fair

representation.

The first issue to be dealt with is the claim that the arbitration

agreement was void because plaintiffs were not parties to it.

It is generally true that a person cannot be bound by an

arbitration agreement and a person cannot be required to partici-

pate in an arbitration unless that person is a party to the

arbitration agreement.

Here, plaintiffs did not themselves enter into or sign the

arbitration agreement of March 1986.

However, in my view, this in no way renders the arbitration

agreement void.

United Airlines and AFA entered into an arbitration agreement

dealing with an unusual situation. The arbitration was not to

determine an issue between United Airlines and AFA. The

matter was more complex.

C-8

The dispute was an issue two groups, that is, the Pan Am flight

attendants, who were going over to United Airlines, and the

existing United Airlines flight attendants.

The Pan Am flight attendants had been members of their own

union, but their union—the old union which they had at Pan Am

—could not properly represent them in their problem as employ-

ees at United Airlines. If their old union, IUFA, had purported to

sign an arbitration agreement, there would have been considerable

doubt about the standing of IUFA to enter into any such

agreement. So the agreement was properly entered into by United

Airlines and AFA.

One could, as an initial proposition, ask why representatives of

the Pan Am flight attendants and representatives of the group of

United Airlines flight attendants did not sign the arbitration

agreement. However, the evidence makes clear that both groups

understood what was being done, consented to it, and felt they

were greatly benefited by it. In effect, they were third-party

benficiaries of the arbitration agreement of March 1986.

It is certainly possible that the Pan Am flight attendants, being

nonsignatories to the arbitration agreement, might have objected

to it and might have refused to arbitrate under it. However, they

did no such thing. They exercised their rights as beneficiaries of

that agreement. They accepted the funds provided by United

Airlines to carry on the arbitration and to employ counsel. A

committee representing the Pan Am flight attendants was ap-

pointed and was active in the arbitration, as was a committee

representing the United Airlines flight attendants. The United

Airlines flight attendants’ committee also received funds from

United Airlines, employed counsel, and fully participated in the

arbitration.

Therre is no basis whatever, under these circumstances, for

holding that the procedures by which the arbitration agreement

was arrived at were improper or were such as to now void the

entire arbitration process.

This still leaves the issue of whether, in regard to the particular

provision in question, that is, subparagraph B1 (h) (ii), this provi-

sion was inserted unfairly and improperly and in breach of the

ee

C-9

duty of AFA to fairly represent its members, including the group

which had come over from Pan American.

Surely, AFA had a duty of fair representation, and if it was to

enter into an agreement for these two groups to arbitrate, it is

surely the case that AFA had a duty to insure that the provisions

of the arbitration agreement were fair and were not tipped in favor

of either side.

If this subdivision (ii) was unfair to the Pan Am flight

attendants and if the arbitration based upon it was unfair, then the

plaintiffs in this case would have a right to relief.

This is the issue which has occupied most of the debate and

almost all of the evidence presented at the trial. As I say, it is the

heart of the case.

Subdivision (ii) provided that the arbitrator could not reduce

the seniority accrued to any United flight attendant. Plaintiffs

contend that this provision dictated that the United attendants

would be put in a preferred position in regard to competitive

seniority.

The trouble is that there is no merit whatever to the position of

plaintiffs.

The simple and clear and conclusive fact is that Subdivi-

sion (ii) in no way dictated or affected how the arbitrator would

deal with the competitive seniority position of the Pan Am flight

attendants.

(ii) dealt with accrued seniority and provided that the arbitra-

tor could not reduce the seniority accrued by any United flight

attendant. This in no way reached or touched the question of the

relative rank of the United flight attendants vis-a-vis the new Pan

Am people. It is apparent from the text, and it is even more

apparent when the evidence of the background of the agreement

is considered, that this is the case.

Accrued seniority is most significant with regard to compensa-

tion and other financial benefits.

The court finds, on the basis of the text of the agreement and

the credible testimony, that the United Airlines management

C-10

wished to have a provision preventing the arbitrator from chang-

ing the seniority dates of the United flight attendants so as to

prevent their compensation being changed.

United Airlines’ management wanted to avoid that and asked

that that provision be inserted in the arbitration agreement. But

this in no way affected how the Pan Am flight attendants were to

be integrated for purposes of relative ranking with the United

flight attendants for purposes of bidding on stations and flights.

This finding is supported by the overwhelming evidence in the

case. It is so conclusively proved that there really can be no shred

of a valid dispute about it.

One of the two witnesses called by plaintiffs at this trial was

Michael Staudt, who was on the Pan Am flight attendants

committee. His deposition was taken, and excerpts were read into

evidence, and he admitted over and over and over in a number of

forms that Subdivision (ii) in no way affected the ability of the

arbitrator to place Pan Am flight attendants on the competitive

list in any way which the arbitrator deemed to be equitable.

(ii) was no limitation at all on the power of the arbitrator with

regard to competitive seniority, and it is competitive seniority

which is the subject of the present action. No one is claiming

improper compensation or claiming any problem about seniority

in that regard.

Now, I should address another point. Plaintiffs’ attorney has

repeatedly tried to emphasize that (ii) tips the playing field, so-

called, and takes away the required even playing field because it

refers only to United flight attendants.

The text of the agreement shows that this is simply not the

case.

There is, indeed, a comparable provision regarding the Pan Am

flight attendants. The playing field is even. On the subject dealt

with by (ii), both the Pan Am flight attendants and the United

flight attendants are treated with perfect parity in this agreement,

and, as I say, the proverbial playing field is in all respects even.

C-11

In this regard, we should focus not only on (ii) but on

Paragraph A.

As I have noted several times, (ii) forbids the arbitrator from -

reducing the seniority accrued by any United flight attendant. In

other words, the arbitrator could not make a change in the

seniority of any United flight attendant which would alter his or

her compensation or other financial benefits.

The same subject is dealt with with respect to Pan Am flight

attendants in Paragraph A, which provides that “For purposes of

compensation, Pan Am flight attendants hired by United Airlines

will be given full credit for their flight attendant seniority at Pan

Am, adjusted on the same basis as United flight attendants.”

Now, what obviously occurred here was the following: United

Airlines management had no intention on its own initiative of

altering the accrued seniority, that is, the seniority for compensa-

tion purposes, of its own employees, the United flight attendants.

When it came to the agreement dealing with the two groups, it

was readily agreed—and this was embodied in Paragraph A--that

the Pan Am flight attendants would be treated in exactly the same

way. They would be given full credit for their flight attendants

seniority at Pan Am, adjusted on the same basis as United flight

attendants.

So, by virtue of the quite obvious decision of the United

Airlines management for its own people and by virute of Para-

graph A dealing with the Pan Am people, the two groups were to

be dealty with in exactly the same way on the subject of accrued

seniority affecting compensation and other financial benefits.

Now, circling back to (ii), it is obvious that there was a

potential problem created by the arbitration in that the arbitrator

might somehow act in such a way as would affect the compensa-

tion rights of the United flight attendants, possibly to reduce them

or possibly to increase them.

With the arbitration process going forward, the intention of the

United Airlines management—which I have just mentioned and

which can be inferred from the evidence—needed to be protected

against some possible act by the arbitrator, and, therefore, subpar-

oe

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agraph B1(h) (ii) was inserted to protect against this eventuality

and to make sure that nothing occurred in the arbitration which

changed the compensation rights of the United flight attendants.

Thus, as a result of a decision of the United Airlines manage-

ment, and as a result of complementary provisions in the arbitra-

tion agreement, that is, Paragraph A and Subparagraph

Bl(h) (ii), the two groups were treated with perfect parity in

regard to compensation. That was the obvious intention of Subdi-

vision (ii). Nothing more and nothing less.

Turning to competitive seniority, the arbitrator, as indicated by

his lengthy decision, made his determination of the method of

integrating on the basis of a variety of relevant and persuasive

factors, not hindered or affected in any way by Subdivision (ii).

One of the most powerful factors was that the Pan Am flight

attendants who were stationed at the so-called gateways to the

Pacific, that is, San Francisco, Los Angeles and Honolulu, were

insured that they could stay there.

Despite any seniority differences, the United flight attendaiats

were not eligible, under the agreed arrangements, for bidding

against those existing Pan Am flight attendants for those domi-

ciles. There were other factors used by the arbitrator in determin-

ing the method of integration, and none of them related to this

subdivision (ii).

The court concludes that there is no basis whatever for holding

the arbitration agreerment void or invalid, in whole or in part,

because of any unfair provision. There was simply no unfairness

whatever in respect to Subdivision (ii). There was no failure of

any duty of fair representation, and there was no breach of

fiduciary obligation.

Now, this concludes the findings and conclusions on the points

that I am prepared to decide this afternoon.

I am constrained to go further.

This a day and age in which the courts, the Congress and the

public are most concerned about wastefui litigation. The issues

ee

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which we have spent two days trying should never have been

vresented.

Plaintiffs had in their hands the deposition of one of their own

people, Michael Staudt. It proved them out of court, and surely

they knew of what Mr. Staudt would say before he literally said it.

The testimony of plaintiffs’ expert, Professor Morris, was of no

weight whatever on the points urged by plaintiffs.

The only testimony of weight which Professor Morris gave was

when the court pressed him upon the definition of the terms in the

arbitration agreement, and at that point his testimony had the

effect of the testimony of Mr. Staudt. It simply destroyed any

semblance of a case for plaintiffs.

I am speaking strongly, and I do so by design. This is a

shocking example of wasteful litigation.

A union and an airline and the court have been subject to an

enormous amount of paperwork in an attempt to pursue claims

that are wholly irresponsible. I am speaking of the claims I have

decided today, and these are the ones which have occupied the

bulk of the effort and time in this litigation.

Decision is reserved on the points not covered by today’s ruling.

(Adjourned)