Amicus Curiae Brief — Air Line Pilots Ass'n v. O'Neill

QUESTION PRESENTED

Whether petitioner breached its duty of fair representation by

Negotiating a back 10-work agreement that ended a sinke by pilots

against Continental Air Lines and allocated positions between

returning strikers and pilots who worked during the strike.

TABLE OF CONTENTS

Page

ELE IESE LI EOI ED l

en. ccc cccccccccccoeecs 6

EE LEE 17

TABLE OF AUTHORITIES

Cases:

ALPA v. United Air Lines, Inc., 614 F. Supp. 1020

(N.D. Ill. 1985), aff'd, 802 F.2d 886 (7th Cir.

1986), cert. denied, 480 U.S. 946 (1987) ..... 5, 14

Alvey v. General Eiectric Co., 622 F.2d 1279 (7th

ec ccc cero cccccces y

American Postal Workers Union, Local 6885 v.

American Postal Workers Union, 665 F.2d 1096

ee 9

Anderson v. Creighton, 483 U.S. 635 (1987) .. 9, 10, 14

Barthelemy v. ALPA, 897 F.2d 999 (9th Cir.

DUG Caaascbbscccccccocceccocecce 10

Barton Brands, Lid. v. NLRB, $29 F.2d 793 (7th Cir.

EE 9

Bernard v. ALPA, 873 F.2d 213 (%h Cir.

EE ESS 10

Berrigan v. Greyhound Lines, Inc., 782 F.2d 295 (ist

ke ck coc ebéoves - 1!

Bowman v. Tennessee Valley Authority, 744 F.2d

1207 (6th Cir. 1984), cert. denied, 470 U.S. 1084

EEE EES EE 9, 10

Breininger v. Sheet Metal Workers, 110 S. Ct. 424

EE 7

Brotherhood of Railroad Trainmen v. Jacksonville

Terminal Co., 394 U.S. 369 (1969) .......... 16

Burkevich v. ALPA, 894 F.2d 346 (%h Cir.

en occu cecceseeccoce 10

Chauffeurs Local No. 139. Terry, 110 S. Ct. 1339

EEE 7

Chicago & N.W. Ry. v. United Transportation

Union, 402 U.S. $70 (1971) ................ . 16

(III)

IV

Cases — Continued: Page

Communications Workers v. Beck, 487 U.S. 735

Saat ein eee nd abeendia bee ant 7

Conley v. Gibson, 355 U.S. 41 (1957) ......... 7

Dement v. Richmond, F. & P. R.R., 845 F.2d 451

Gale Gs wh eed dodde dddenedbdcwoccecs. 9

Detroit & Toledo Shore Line R.R. v. United

Transportation Union, 396 U.S. 142 (1969) ... 16

Ford Motor Co. v. Huffman, 345 U.S. 330

RT cuenntesnabesnbelndsaueeunssiaeuds 8, 15, 16

Galindo v. Stoody Co., 793 F.2d ‘1502 (%h Cir.

i nie¢6ndeusaneueenadunvenegnensaanes: 10

Haerum v. ALPA, 892 F.2d 216 (2d Cir.

yer ey eee 9

Harlow v. Fitzgerald, 457 U.S. 800 (1982) ..... 14

Hendricks v. ALPA, 696 F.2d 673 (%h Cir.

SD df cdde cut doeddberatedeceasonassece 9

Hines v. Anchor Motor Freight, Inc., 424 U.S. 554

N° 4.46 Penk be hanced bens deh bbteees coe 7

Humphrey v. Moore, 375 U.S. 335 (1964) ...... 7

Independent Fed. of Flight Attendants v. Trans

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

rev'd in part, 109 S. Ct. 1225 (1989) ......... 5

International Ass'n of Machinists v. Street, 367 U.S.

Ey er Oe eee 16

International Brotherhood of Elec. Workers v.

Foust, 442 U.S. 42 (1979) .. 1... eee ees 7, 16

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

ee Gls CEE Sh cdéchdceueceeneveneessis 9

Masy v. New Jersey Transit Rail Operations, Inc.,

Lt, - | ff: i eee 7)

Moore v. Bechtel Power Corp. , 840 F.2d 634 (%h

Sy ee ee 10

Morgan v. St. Joseph Terminal R.R., 815 F.2d 1232

I, I eS i ur es 7)

NLRB vy. Fleetwood Trailer Co., 3#9 U.S. 375

Dt ahead Ghbbbasetdesenncediecuaetoss ts 13

Cases — Continued:

NLRB v. Local 299, Int'l Brotherhood of Teamsters,

782 F.2d 46 (6th Cir. 1986) .................

NLRB v. Mackay Radio & Telegraph Co., 304

RE Ce ee

Olsen v. United Parcel Service, Inc. , 892 F.2d 1290

inet ne bn neen cnr annaneceé

Parker v. Connors Steel Co., 855 F.2d 1510 (11th

Cir. 1988), cert. denied, 109 S. Ct. 2066

Dt iinet andi epnbeebeeendabucnsakionnns

Peterson v. Kennedy, 771 F.2d 1244 (9th Cir.

Sieh dc ti nt aoe densnendennseces

Ratkovsky v. United Transportation Union, 843 F.2d

ee Se SE a vo cecodcececonescecece:

Schultz v. Owens-Illinois Inc., 696 F.2d 505 (7th Cir.

PE eS ee ee ee ee

Steele v. Nashville R.R., 323 U.S. 192 (1944) ...

Street, Elec. Ry. & Motor Coach Employees v.

Lockridge, 403 U.S. 274 (1971) .............

Tedford v. Peabody Coal Co., 533 F.2d 952 (Sth Cir.

SE nhbbbebbb60 bKbedcdoccvcccvetessecece

Thomas v. Bakery Workers Union, 826 F.2d 755 (8th

ae

Thomas v. United Parcel Service, Inc. , 890 F.2d 909

EE ee

Trans World Airlines, Inc. v. Independent Fed. of

Flight Attendants, 109 S. Ct. 1225 (1989) ....

United Indep. Flight Officers, Inc. v. United Air

Lines, Inc., 756 F.2d 1274 (7th Cir. 1985) ...

United Steelworkers v. Rawson, 110 S. Ct. 1904

SE WaWbbbdesedetecocbesceusesessceeees :

Statutes:

Labor-Management Reporting and Disclosure Act

of 1959, § 101(a), 29 U.S.C. 41Maywl) .......

16

~

Vi

Statutes — Continued:

National Labor Relations Act, 29 U.S.C. 151 ef

BE cckccctbdcducbeGbeces bensecenewecnces

Railway Labor Act, 45 U.S.C. 152 ............

Miscellaneous:

Harper & Lupu, Fair Representation as Equal Pro-

tection, 98 Harv. L. Rev. 1212 (1985) .......

Leffler, Piercing the Duty of Fair Representation:

The Dichotomy Between Negotiations and

Grievance Handling, 1979 U. I. L.F. 35 ....

R. Stern, E. Gressman & S. Shapiro, Supreme Court

_ Practice Gt Ce ccondudespesgacnecess

Page

16

15

17

In the Supreme Court of the Gnited States

OCTOBER TERM, 1990

No. 89-1493

AIR LINE PILOTS ASSOCIATION INTERNATIONAL, PETITIONER

v.

JOSEPH E. O’Nent, ef at

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

This brief is submitted in response to the Court's order inviting

the Solicitor General to express the views of the United States.

STATEMENT

1. Since the 1940s, petitioner has represented Continental Air

Lines pilots in collective bargaining with the airline. In 1983, after

filing a petition under Chapter 11 of the Bankruptcy Code, Con-

tinental repudiated its collective bargaining agreements with peti-

tioner and other employee unions and unilaterally imposed

“emergency work rules” that cut pilots’ salaries by more than fifty

percent. In response, petitioner initiated a strike against Con-

tinental. Pet. App. B2.'

' There are four separately paginated appendices to the petition, numbered

| through 4. To simplify citations, we will cite to them as though they bad

been denominated A through D.

2

For the next two years, Continental employed permanent

replacements and cross-over strikers as pilots. During thai period,

the bankruptcy court upheld the airline’s rejection of its collec-

live bargaining agreement with petitioner and ordered the parties

to engage in collective bargaining. No new agreement was reached,

and, by August 1985, working pilots outnumbered strikers by

1,600 to 1,000. At that point, Continental gave notice that it

would no longer recognize petitioner as the pilots’ bargaining

representative. Pet. App. B2-B3.

On September 9, 1985, Continental posted its Supplementary

Base Vacancy Bid 1985-5 (85-5 bid) covering some 441 anticipated

vacancies for captains and first officers and an undetermined

number of second officer vacancies. Pilots interested in those

vacancies were invited to submit bids by September 18 specify-

ing their preferred position, base of operations, and aircraft.

Vacancies were then to be awarded on the basis of seniority. In

order to allow for necessary training, the 85-5 bid was posted

substantially in advance of the date when pilots were expected

actually to assume the positions covered by the bid. After the

date for submitting bids had passed, Continental “awarded” the

positions covered by the 85-5 bid to working pilots. Pet. App.

B3-B4; see Pet. 4; Br. in Opp. 3.?

In late September 1985, the Continental Master Executive

Council (MEC) — a committee that served, subject to the authority

of petitioner's executive board and board of directors, as the coor-

dinating council for Continental pilots — voted not to return to

work, but also authorized its officers and a negotiator to pursue

a settlement with Continental. Pet. App. B4. See Pet. C.A. Br.

8; Resp. C.A. Br. 9. During October 1985, representatives of peti-

tioner and Continental agreed to terms for the termination of

the strike and the resolution of litigation involving Continental,

petitioner, and individual pilots. On October 31, 1985, the

bankrupicy court entered an order and award embodying the

* Bids for 85-5 positions were submited not only by working pilots, but

also by some strikers. Contenental mimiated litigation to uy alidate the strikers’

bids. See Pet. App. B3-B4

3

parties’ agreement. Pet. App. D.’ Petitioner consented to the entry

of the order and award without providing notice to the striking

pilots or the MEC or submitting the agreement for ratification.

Under the order and award, each striker was entitled to select

one of three options. Strikers electing Option |, the most im-

portant for present purposes, waived claims against Continen-

tal and obtained the right to be reinstated, based upon seniori-

ty, m certain positions. The agreement allocated the first 100

captain positions in the 85-5 bid to working pilots. The next 70

captain positions (the remainder covered by the 85-5 bid) were

earmarked for returning strikers; however, unlike working pilots,

strikers were obligated to accept the base and aircraft type as-

signed by Continental. The agreement further provided that unti!

October 1, 1988, subsequent vacancies for captain positions would

be allocated between working pilots and returning stiikers on a

one-to-one ratio. Again, whereas working pilots could bid for

the base and aircraft type they preferred, returning strikers were

required to accept management's choice of base and aircraft.‘

The issue of how vacancies occurring after October 1, 1988, were

(0 be allocated among working pilots and returning strikers was

submitted to binding arbitration. /d. at B4-BS, D6-D8.*

The effect of these provisions was to allocate to returning

strikers some of the 85-5 bid positions that, according to Con-

. There has been a dispute between the parties as to whether the bankruptcy

court's approx al of the order and award 1s relevant to the merits of respondents’

law representation clawn. See Pet. App. B11. The court of appeals found that

petitioacr and Continental had agreed to the material terms of the order, and

the court analyzed was the equivalent of a negotiated agreement load Petr

troner has aot sought further review of that determination.

* We are advised that Continental abandoned its night (O assign returning

strtkers to positions of its choice in the Fall of 1987. See Motion to Intervene

tor Lumited Purpose and Pet. for Reh’g of Continental Airlines, Inc. at 7.

. Under Option 2, pilots « arving claims against Continental recenved specified

severance payments. Pilots choosing Opnon 3 retained their claims against Con-

tinental, Dut were to be remstated — based upon the chronological order of thew

ofters to return — only after all pilots choosing Option | had been reinstated

Pet. App. B4-B6.

4

tinental, had been awarded to working pilots. At the same time,

the agreement guaranteed working pilots more desirable positions

than they could have attained if all 85-5 bid positions and subse-

quent vacancies had been assigned to working pilots and return-

ing strikers on the basis of seniority alone. It was foreseeable that

the effects of placing working pilots in those positions would per-

sist, since (in the absence of a layoff) pilots cou.d not be displaced

from positions they occupied. See Pet. App. BS.°

2. Respondents have been certified as representatives of a

class of pilots who remained off the job until the end of the strike.

_ In their complaint, respondents alleged that petitioner breached

its duty of fair representation in negotiating and consenting to

the order and award. The complaint also asserted that petitioner’s

failure to submit the agreement for ratification was a violation

of Section 101(a) of the Labor-Management Reporting and

Disclosure Act of 1959, 29 U.S.C. 411(a)(1), and advanced two

additional causes of action. The district court granted summary

judgment in petitioner’s favor on all claims. See Pet. App. C.

3. The court of appeals reversed with respect to respondents”

fair representation claim. Quoting from this Court’s decision in

Vaca v. Sipes, 386 U.S. 171, 177, 190 (1967), the panel stated that

“{a] breach of the statutory duty of fair representation occurs only

when a union's conduct toward a member of the collective bargain-

ing unit is arbitrary, discriminatory, or in bad faith.” Pet. App.

B9. Because Vaca “recognizes three distinct standards of conduct,”

the court continued, “a breach of the duty of fair representation

does not require that a union’s conduct be taken in bad faith or

with hostile discrimination, but may rest upon the arbitrariness

or irrationality of the union’s acts.” /d. at B9-B10. Adhering to

standards it had announced in Tedford v. Peabody Coal Co. , 533

F.2d 952, 957 (Sth Cir. 1976), the court stated that a union’s deci-

sion could be considered arbitrary unless it was

(1) based upon relevant, permissible union factors which ex-

clude[ ] the possibility of it being based upon motivations

* With respect to matters other than their initial placement, returning strikers

were entitled to exercise their seniority upon being recalled to work. See Pet.

App. D9.

5

such as personal animosity or political favoritism; (2) a ra-

tional result of the consideration of these factors; and (3)

inclusive of a fair and impartial consideration of the interests

of all employees.

Pet. App. B10.

In this case, the court determined, a jury could find that peti-

tioner had acted arbitrarily by agreeing to an order and award

that “left the striking pilots worse off in a number of respects

than complete surrender to (Continental].” Pet. App. B11. The

court explained that returning strikers would have been legally

“entitled to reinstatement as vacancies occurred” (id. at B12), that

Continental “could not have changed its policy of assigning work

by seniority * * * unless it had a legitimate and substantial

business justification for doing so” (id. at B13), and that a trier

of fact could find that Continental “likely would have recognized

the returning strikers’ seniority rights and privileges if they had

unconditionally agreed to return to work” (id. at B14). The court

rejected petitioner’s contention that the agreeme x benefitted

returning strikers by giving them access to some of the positions

encompassed by the 85-5 bid, ruling that, “under ordinary seniori-

ty rules,” returning strikers would have been “entitled to fill the

vacancies announced in the 85-5 bid.” /bid.’ The court concluded

(ibid.):

A factfinder could infer that had [petitioner] unconditionally

offered to return the pilots to work, the strikers would have

been recalled in seniority order, and would have been able

successfully to bid for [85-5 bid] vacancies and also preserve

their litigation rights against [Continental].

’ In support of this conclusion, the court cited ALPA v. United Air Lines,

Inc., 614 F. Supp. 1020 (N.D. Il. 1985), aff'd in part, 802 F.2d 886 (7th Cir.

1986), cert. denied, 480 U.S. 946 (1987). The district court's decision in United

Air Lines was entered on August 8, 1985, and that case was pending on appeal

at the time petitioner agreed to the entry of the order and award in the bank-

ruptcy court. The court of appeals also included a “see also” citation to /n-

dependent Fed. of Flight Attendants (IFF A) . Trans World Airlines, Inc. , 819

F.2d 839 (8th Cir. 1987), rev'd in part, 109 S. Ct. 1225 (1989). The /FFA deci-

sion was issued after the entry of the order and award.

6

In addition, the court of appeals held that respondents had

raised a material issue of fact as to whether the order and award

unjustifiably discriminated against returning strikers. “Depend-

ing upon the explanation offered by [petitioner],” the court con-

cluded, “a factfinder might infer that the negotiated division of

pilots into strikers and nonstrikers and the subsequent unfavorable

discriminatory treatment of returning strikers constituted a breach

of the union’s duty of fair representation.” Pet. App. B15."

DISCUSSION

The courts of appeals have taken varying positions on the ques-

tion whether fair representation claims are subject to different

legal standards depending on whether they arise from a union's

actions in contract negotiations or in contract administration.

In our view, the resulting uncertainty warrants this Court’s at-

tention. If the Court does grant review and decides — as we believe

it should —that a fair representation claim arising in the context

of contract negotiations may be based on arbitrary union con-

duct, this case provides an excellent opportunity to clarify what

conduct may properly be characterized as arbitrary. These are

important questions. The scope of the duty of fair representa-

tion determines the extent to which employees are protected

against abuses of statutory authority conferred on unions and

also, to a significant degree, conti ols the ability of unions to act

as effective bargaining agents for employees with divergent

interests.

l. a. In Vaca v. sipes, 386 U.S. at 177, this Court sum-

marized the origins and scope of the fair representation doctrine.

The Court noted that a union has a statutory duty to bargaining

unit employees “both in its collective bargaining” and “in its en-

forcement of the resulting collective bargaining agreement.”

“Under [the fair representation] doctrine,” the Court continued,

“the exclusive agent’s statutory authority to represent all members

of a designated unit includes a statutory obligation to serve the

* The court of appeals affirmed the dismissal of respondents’ LMRDA claim.

Pet. App. B1S-B19. Respondents have not sought further review of that

question.

~

—

7

interests of all members without hostility or discrimination toward

any, to exercise its discretion with complete good faith and hones-

ty, and to avoid arbitrary conduct.” /bid.

Nothing in Vaca suggested that any part of the Court’s defini-

tion of a union’s duty of fair representation was limited to con-

tract administration. Indeed, the Court noted that the duty is

derived from the union’s authority to act as the exclusive represen-

tative of a bargaining unit’s employees, and the statutes confer-

ring that authority suggest no distinction based upon the nature

of the action taken on employees’ behalf.* The logic underlying

the rule that a union may not act arbitrarily in its capacity as

the exclusive representative of bargaining unit employees is no

less applicable to collective bargaining than it is to the administra-

tion of negotiated agreements. Cf. Conley v. Gibson, 355 U.S.

41, 46 (1957) (obligation to avoid unlawful discrimination ap-

plies equally in both contexts).

The Court has never been squarely presented with the ques-

tion whether Vaca’s three-part standard — which prohibits con-

duct that ‘is arbitrary, unjustifiably discriminatory, or in bad

faith — applies to the negotiation of a collective bargaining agree-

ment. However, the Court has often described the duty in terms

that suggest no essential difference in the standards applicable

to negotiating and administering collective agreements. United

Steelworkers v. Rawson, 110 S. Ct. 1904, 1911 (1990); Chau/-

feurs Local No. 139 v. Terry, 110 S. Ct. 1339, 1344 (1990); Brein-

inger v. Sheet Metal Workers, 110 S. Ct. 424, 429 (1989); Inter-

national Brotherhood of Elec. Workers v. Foust, 442 U.S. 42,

46-47 (1979). See also Communications Workers v. Beck, 487

U.S. 735, 743 (1988); Hines v. Anchor Motor Freight, Inc., 424

U.S. 554, 563-564 (1976); Street, Elec. Ry. & Motor Coach

Employees v. Lockridge, 403 U.S. 274, 299 (1971); Humphrey

v. Moore, 375 U.S. 335, 342, 350 (1964).'°

* See, e.g., Steele v. Nashville R.R., 323 U.S. 192, 198-207 (1944) (Railway

Labor Act); Ford Motor Co. .v. Huffman, 345 U.S. 330, 337 (1953) (extending

doctriné to National Labor Relations Act).

'© The discussion in Terry is representative. Immediately after quoting Vaca's

three-part standard for the duty of fair : presentation, the Court stated

8

Contrary to petitioner’s contention (Pet. 19), the Court’s deci-

sion in Ford Motor Co. v. Huffman, 345 U.S. 230, 337-338

(1953), does not foreclose liability for arbitrary conduct in col-

lective bargaining negotiations. In Huffman, while explaining why

a union enjoys broad authority to negotiate on behalf of bargain-

ing unit employees, the Court observed (345 U.S. at 338):

A wide range of reasonableness must be allowed a statutory

bargaining representative in serving the unit it represents,

subject always to complete good faith and honesty of pur-

pose in the exercise of its discretion.

This passage does not suggest that arbitrary conduct is insuffi-

cient tO sustain a fair representation claim —or that “good faith

and honesty of purpose” is invariably a complete defense. In

stating that a “wide range of reasonableness” was required for

effective bargaining, the Court surely did not imply that unions

should be immune from liability for arbitrary decisions. And,

contrary to petitioner’s suggestion, there is no essential conflict

between Vaca and Huffman. Vaca’s requirement of non-

arbitrariness, properly applied, provides unions with the “wide

range of reasonableness” they require for effective negotiations

while at the same time protecting employees from arbitrary ac-

tion. We agree with the court of appeals, therefore, that Vaca

provides the proper standard for this case and that a union can

be held to have violated its duty of fair representation in con-

tract negotiations by acting arbitrarily.

b. Nevertheless, the courts of appeals have expressed a variety

of views on this issue. A large number of decisions have applied

Vaca’s three-part test, including its requirement of non-arbitrary

that “[a] union must discharge its duty both in bargaining with the employer

and in its enforcement of the resulting collective bargaining agreement.” 110

S. Ct. at 1344. The plain implication was that the three-part obligation described

in Vaca applies in both contexts. Compare Pet. 19 1.9 (suggesting that Vaca

“unplicitly recognized * * * two different standards”). To be surg. since Terry

did not present the question whether arbitrary conduct would suffice to establish

a breach of the duty of fair representation, the Court's description of the duty

was not a holding. Compare Br. in Opp. 8-9.

9

action, to the negotiation of collective bargaining agreements.''

But in a substantial number of decisions, the courts have sug-

gested that there is a difference in kind — warranting a distinc-

tion in applicable fair representation standards — between

negotiating an agreement on behalf of bargaining unit employees

and administering the agreement.

Thus, the Seventh Circuit has stated that “[t}here is one stand-

ard for appraising a union’s conduct when a claim arises out of

union action in negotiating agreements with an employer and a

different standard when the claim arises from a union's ad-

ministration of the collective bargaining agr . especially in

the context of processing grievances.” Schultz v. Owens-Illinois

Inc., 696 F.2d 505, 514 (1982).'? Recently, extended dicta in two

Seventh Circuit decisions have elaboratéd upon the distinction

Schultz drew between negotiations and other actions undertaken

by a union in its capacity as exclusive representative.'’ A decision

'' E.g., Haerum v. ALPA, 892 F.2d 216, 221 (2d Cir. 1989); Jones v. Trans

World Airlines, Inc., 495 F.2d 790, 798 (2d Cir. 1974); Masy v. New Jersey

Transit Rail Operations, Inc., 790 F.2d 322, 327-328 (3d Cir. 1986); Dement

v. Richmond, F. & P. R.R., 845 F.2d 451, 458 (4th Cir. 1988); Anderson v.

Ideal Basic Industries, 804 F.2d 950, 952 (6th Cir. 1986); Bowman v. Tennessee

Valley Authority, 744 F.2d 1207, 1213-1214 (6th Cir. 1984), cert. denied, 470

U.S. 1084 (1985); Barton Brands, Lid. v. NLRB, 529 F.2d 793, 799 (7th Cir.

1976); Thomas v. Bakery Workers Union, 826 F.2d 755, 758-759 (8th Cir. 1987);

Morgan v. St. Joseph Terminal R.R., 815 F.2d 1232, 1234 (8th Cir. 1987);

Bernard v. ALPA, 873 F.2d 213, 216 (9th Cir. 1989); Hendricks v. ALPA,

696 F.2d 673, 677 (9th Cir. 1983); American Postal Workers Union, Local 6885

v. American Postal Workers Union, 665 F.2d 1096, 1105-1107 (D.C. Cir. 1981).

'2 Schultz appears to be inconsistent with the standards articulated in the

Seventh Circuit’s decision in Barton Brands, Lid. v. NLRB, $29 F.2d 793, 19

(1976). Further, after explaining that different standards were applicable in

contract negotiations and contract administration, Schultz went on to analyze

whether a reinterpretation of a contract that the court considered analogous

to the negotiation of a contract was “patently unreasonable” or “arbitrary.

696 F.2d at 515-516. See also Alvey v. General Electric Co., 622 F.2d 1279,

1287-1289 (7th Cir. 1980).

') Thomas v. United Parcel Service, Inc., 890 F.2d 909, 916-919 (7th Cir.

1989); Olsen v. United Parcel Service, Inc., 892 F.2d 1290, 1293-1294 (7th Cir.

1990). See also United Indep. Flight Officers, Inc. v. United Air Lines, Inc.,

10

from the Sixth Circuit suggests that “[bjad faith or intentional

misconduct by the union must be shown” to establish a breach

of the duty of fair representation in “collective bargaining

decisions.” '* In a line of cases, the Ninth Circuit has distinguished

“procedural and ministerial” acts, which will be held to violate

the duty of fair representation if arbitrary, from acts involving

“a union’s judgment,” which will be held to breach the duty only

if discriminatory or in bad faith.'* The Eleventh Circuit has ar-

ticulated different standards for fair representation claims aris-

ing from collective bargaining and claims arising from grievance

processing, although both standards impose liability when a union

has acted arbitrarily, and there seems to be little difference

756 F.2d 1274, 1281-1283 (7th Cir. 1985). The cited passages in Thomas and

Olsen were dicta because the cases involved grievance processing and did not

present the question, which Thomas and Olsen discussed at length, whether

Vaca applied outside that context. In addition, in Olsen, the court stated that

a union, when acting as the employees’ representative in negotiations, “meets

its duty of fair representation * * * by exercising its judgment in a manner that

is not patently unreasonable. [Parker v. Connors Steel Co., 855 F.2d 1510,

1519 (1ith Cir. 1988)} (a union breaches us duty in the negotiation of an agree-

ment if its conduct is ‘arbitrary, irrational, or undertaken in bad faith’).” We

perceive no significant difference in substance between these standards and those

articulated in Vaca.

'* Ratkovsky v. United Transportation Union, 843 F.2d 869, 876 (6th Cir.

1988). See also NLRB v. Local 299, Int'l Brotherhood of Teamsters, 782 F.2d

46, 50-52 (6th Cir. 1986) (requiring that there have been discrimination against

a subgroup of bargaining unit employees). In this respect, Ratkovsky appears

to be inconsistent with the Sixth Circuit's decisions in Bowman v Tennessee

Valley Authority, 744 F.2d 1207, 1213-1214 (1984), cert. denied, 470 U.S. 1084

(1985), and Anderson v. Ideal Basic Industries, 804 F.2d 950, 952 (1986). Fur-

ther, at one point, Rafovsky states that “ijt is well established that a claim

of fair representation requires a showing of bad faith, discrimination, or ar-

bitrary conduct on the part of the union.” 843 F.2d at 876 (citing Vaca).

'? Burkevich v. ALPA, 894 F.2d 346, 349 (9th Cir. 1990); Moore v. Bechtel

Power Corp, 840 F.2d 634, 636 (9h Cir. 1988); Galindo v. Sitoody Co., 793

F.2d 1502, 1513-1514 (9th Cir. 1986); Peterson v. Kennedy, 771 F.2d 1244,

1254 (9h Cir. 1985). These decisions seem to be in conflict with Barthelemy

v. ALPA, 897 F.2d 999, 1005-1006 (9th Cir. 1990), and Bernard v. ALPA,

873 F.2d 213, 216 (9th Cir. 1989).

between the two.'* The First Circuit took note of a contention

that fair representation claims are subject to “bifurcated stand-

ards,” but found it unnecessary to decide whether separate stand-

ards should be recognized.'’ Commentators have also discussed

the possibility of different standards in negotiation and grievance

processing.'®

Many of the statements recognizing different standards for con-

tract negotiations and contract administration have been dicta.

Moreover, in preceding footnotes, we have alluded to cir-

cumstances that tend to undercut the authoritativeness of those

‘atements — and thus perhaps to mitigate the need for this Court’s

view. Nevertheless, when this body of case law is examined as

. whole, it displays a significant division of opinion on the ques-

tion whether the standards of conduct to which unions must

adhere in negotiating agreements are different from those ap-

plicable to contract administration. In our view, the uncertainty

in this area is sufficient to call for this Court’s attention.

2. If the Court grants review and concludes that a showing

of arbitrary conduct is sufficient to establish a breach of the duty

of fair representation, this case also provides an excellent oppor-

tunity to clarify the standards for determining whether a union

has acted arbitrarily. The court of appeals indicated that ar-

bitrariness could be found in a case in which a union has relin-

quished an established right of bargaining unit employees without

receiving anything of value on their behalf. We would agree if

it could be shown that the right of the employees was clearly

‘© Parker v. Connors Steel Co., 855 F.2d 1510, 1519-1520 (Lith Cir.), cert.

denied, 109 S. Ct. 2066 (1989). Parker stated that “in the context of negotia-

tions,” a violation of duty is established if the union's conduct “is arbitrary,

irrational, or in bad faith.” /d. at 1520. “In the context of grievance process-

ing,” the court continued, “the employee must show that the union's handling

of the grievance was either arbitrary, discriminatory, or done in bad faith.” /bid.

'” Berrigan vy. Greyhound Lines, Inc. , 782 F.2d 295, 297-299 (1st Cir. 1986).

'* See, e.g., Leffler, Piercing the Duty of Fair Representation: The Dichotomy

Between Negotiations and Grievance Handling, 1979 U. Il. L.F. 35; Harper

& Lupu, Fair Representation as Equal Protection, 98 Harv. L. Rev. 1212,

1259-1266 (1985).

12

established at the time of the union's decision and if it was also

clear at that time that nothing of value was received in exchange.

But we disagree with the court of appeals’ determination that a

finding of arbitrariness could be made in this case. In our view,

the court failed to take sufficient account of the legal and prac-

tical uncertainties confronting the union at the time of the set-

tlement. Thus, the court’s approach could pose severe problems

for future efforts to achieve negotiated solutions of labor disputes.

The court of appeals concluded that “a jury could find that

the order and award left the striking pilots worse off in a number

of respects than complete surrender to [Continental].” Pet. App.

B11. Most importantly, according to the court, the order and

award deprived returning strikers of the right they would have

had to compete with working pilots (many of whom had less

seniority) for all positions encompassed by the 85-5 bid as well

as later vacancies. /d. at B12, B14. However, when the union

agreed to entry of the award and order, Continental was taking

the position that it had definitively awarded the positions in the

85-5 bid to working pilots. In fact, the airline had initiated an

action to invalidate bids for those positions that had been sub-

mitted by strikers. In this situation, the union faced a choice be-

tween, on the one hand, pursuing litigation to establish the

strikers’ rights to all of the contested positions and, on the other,

accepting a compromise providing returning strikers with access

to some 85-5 bid positions.

We believe that, at the time of the settlement, there was uncer-

tainty as to whether returning strikers were legally entitled to com-

pete for positions encompassed by the 85-5 bid. Under this Court’s

decisions, Continental was entitled to employ permanent

replacements and cross-over strikers to continue operations during

the strike and was not required to discharge those employees to

make room for returning strikers. NLRB v. MacKay Radio &

Telegraph Co., 304 U.S. 333, 345-346 (1938). On the other hand,

Continental would have been required to offer returning strikers

vacant positions equivalent to those the strikers had held before

going On strike (absent countervailing Icgitimate and substantial

13

business justifications for refusing to do so). NLRB v. Fleetwood

Trailer Co., 389 U.S. 375, 378 (1967). Unjustified refusals to

reinstate strikers who offer unconditionally to return to work

“discourage employees from exercising their rights to organize

and to strike.” /bid.

The issue left unsettled by this Court’s decisions is whether 85-5

positions “awarded” to working pilots would have been considered

“vacancies” available to returning strikers. Continental’s position,

as we understand it, has been that the bid procedure serves its

legitimate interest in designating particular employees for an-

ticipated vacancies in advance, so that the airline can begin at

once to provide necessary training and arrange to fill positions

vacated by pilots who have bid successfully for better jobs. Under

that position, refusing to rebid those vacancies to accommodate

returning strikers could not be characterized as an unjustifiable

infringement of the right to strike. The countervailing argument,

as we understand it, is that an award confers only a limited, con-

ditional expectancy of a position and that it would not have under-

cut Continental’s legitimate interests to place returning strikers

in positions that were not actually filled or for which training

had not commenced. If that view of the bidding process were

valid, a refusal to allow returning strikers equal access to posi-

tions available when they agreed to return might be viewed as

an unjustified infringement of the right to strike.'?

Regardless of how this dispute might be resolved on its merits,

we believe there is no basis on which a trier of fact could find

that a decision to opt for a compromise was arbitrary. A union

in petitioner's position could legitimately take account of the risks

and delay inherent in litigation in deciding whether to agree to

'* The fact that some strikers had submitted bids for positions covered by

the 85-5 bid gave rise to an additional complexity. We understand that Con-

tinental sought to invalidate all those bids on the ground that they were part

of a union ploy to place disloyal pilots in a position where they could disrupt

the airline’s operations. In view of that dispute, a litigated solution would have

required a court to resolve the competing claims of three groups of pilots: (1)

working pilots who bid for 85-5 positions, (2) striking pilots who submitted

contested bids for those positions, and (3) strikers who sought reinstatement

without having submitted timely bids.

14

a negotiated settlement. Further, the district court decision cited

in the court of appeals’ opinion, A .PA v. United Air Lines, Inc.,

614 F. Supp. 1020, 1045-1046 (D.C. Ill. 1985), aff'd in part, 802

F.2d 886 (7th Cir. 1986), cert. denied, 480 U.S. 946 (1987), did

not clearly establish the pilots’ entitlement to the 85-5 bid posi-

tions. When petitioner consented to the entry of the order and

award, the United Air Lines decision was on appeal; the outcome

of the appeal could not be known; and, especially in view of the

differences between the facts of the United and Continental

disputes, the Seventh Circuit’s decision might well not have been

followed in the circuit in which most litigation between petitioner

and Continental had been brought.?¢

A mistake in the assessment of the state of the law on this issue

at a particular time would not ordinarily call for this Court’s

review. However, the court of appeals’ decision in this case ap-

pears to involve a more fundamental problem. In its recitation

of the standards by which it determines whether a union has acted

arbitrarily, the court, quoting its opinion in Tedford, emphasized

that it was necessary to determine whether a decision challenged

in a fair representation case is “a rational result of the considera-

tion of [permissible union] factors.” Pet. App. B10. Judged by

its application in this case, that standard appears to permit

imposition of liability based upon a union’s failure to anticipate

© As petitioner has noted (Pet. 25-26), in United Air Lines, the carrier rebid

the entire airline in the early days of a strike, and the district court concluded

(in light of other facts) that the rebid was motivated by anti-union animus.

614 F. Supp. at 1046. The court of appeals affirmed on this basis. 802 F.2d

at 898-900. The availability of such a rationale in this case was — at the very

least — subject to doubt.

In considering the significance due the district court's decision in United Air

Lines, we believe that standards governing the availability of qualified immunity

to public officials provide a useful analogy. In determining whether an official

is immune from liability for an alleged violation of a plaintiff's constitutional

rights, his action is “assessed in light of the legal rules that were ‘clearly estab-

lished at the time it was taken.” Anderson v. Creighton, 483 U.S. 635, 639 (1987);

Harlow v. Fitzgerald, 457 U.S. 800, 818-819 (1982).

15

the manner in which an unsettled issue of law will be resolved.?'

In our view, the imposition of liability on that basis would con-

tradict the principles recognized in Ford Motor Co. v. Huffman,

345 U.S. at 337-338. Thus, this case affords an opportunity for

this Court to consider whether, in its articulation and applica-

tion of the Tedford formulation, the Fifth Circuit has departed

from the correct standard for determining what conduct qualifies —

as arbitrary.??

3. The standards circumscribing a union’s duty of fair

representation are an important element of federal labor law.

Properly defined, the duty of fair representation provides signifi-

cant protection to employees and, at the same time, gives unions

needed leeway to pursue negotiated settlements. “The heart of

the Railway Labor Act is the duty, imposed by [45 U.S.C. 152,

First] upon management and labor, ‘to exert every reasonable

effort to make and maintain agreements concerning rates of pay,

rules, and working conditions, and to settle all disputes . . . in

order to avoid any interruption to commerce or to the operation

of any carrier growing out of any dispute between the carrier and

2! We note that, in the present case, the underlying issue of law is still in

dispute.

The court cited evidence suggesting that Continental had honored returning

strikers’ seniority in the past and could be expected to do so in the future. Pet.

App. B12-B14 & n.3. However, even if it would have been arbitrary for peti-

tioner to fail to act on the indications cited by the court, petitioner would still

have had to confront the question whether Continental would withdraw its

“awards” of 85-5 bid positions and permit returning strikers to compete for

them. That is, an assurance that strikers would have been returned on the basis

of seniority would have resolved just one of two questions facing petitioner

after the closing of the 85-5 bid; the other was whether Continental would be

required to return strikers to positions encompassed by that bid.

22 We note that respondents have also argued, inter alia, that petitioner's

leadership consented to the entry of the order and award based upon self-interest

and political motivations, concealed their actions from the rank-and-file and

their representatives, and falsely assured striking pilots that any agreement wquild

be submitted for ratification. See Pet. App. B7. The court of appeals did not

decide whether there were disputed issues of fact requiring a trial on those allega-

tions of bad faith. These theories of liability could be considered on remand

if the Court were to grant review and vacate the court of appeals’ judgment.

16

the employees thereof.’ ” Brotherhood of Railroad Trainmen v.

Jacksonville Terminal Co., 394 U.S. 369, 377-378 (1969). See

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

U.S. 570, 574 (1971); International Ass’n of Machinists v. Street,

367 U.S. 740, 758-761 (1961). The statute’s objective is “to pre-

vent, if possible, wasteful strikes and interruptions of interstate

commerce.” Detroit & Toledo Shore Line R.R. v. United

Transportation Union, 396 U.S. 142, 148 (1969). Because of their

potential impact on national transportation systems, strikes in

transportation industries can have particularl; severe effects on

the national economy.

Recent years have seen a number of bitter labor disputes in

the interstate transportation industries. Uncertainty regarding the

extent to which settlements will expose unions to liability for a

breach of the duty of fair representation can only complicate the

efforts of management, unions, and federal mediators to achieve

negotiated resolutions of those disnutes. Cf. I/nternational

Brotherhood of Elec. Workers v. Foust, 442 U.S. at 51-52.

Because potential litigants in interstate transportation industries

often have a choice among forums in various circuits, national

uniformity in this area is particularly important. Finally, although

this case arises in the context of the Railway Labor Act, the duty

of fair representation also applies to employees represented by

unions under the National Labor Relations Act, 29 U.S.C. 151

et seq. See Ford Motor Co. v. Huffman, 345 U.S. at 337.

4. Petitioner suggests (Pet. 29) that it would be appropriate

for the Court to grant the petition, vacate the court of appeals’

judgment, and remand for reconsideration in light of the deci-

sion in Trans World Airlines, Inc. v. Independent Fed. of Flight

Attendants, 109 S. Ct. 1225 (1989). We disagree. In TWA, a deci-

sion rendered after the events at issue, the only question presented

was whether full-term strikers were entitled to displace cross-overs

who held positions at the conclusion of a strike. The Court did

not address the separate issue of when cross-overs (or, for that

matter, permanent replacements) acquire an interest in a posi-

tion sufficient to defeat the reinstatement rights of returning

full-term strikers. Nor did it address the questions of fair represen-

17

tation presented here. Under these circumstances, Court's deci-

sion in TWA does not justify summary disposition of this case.??

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

STUART M. GERSON

Assistant Attorney General

DAVID L. SHAPIRO

Deputy Solicitor General

STEPHEN L. NIGHTINGALE

Assistant to the Solicitor General

WILLIAM KANTER

DEBORAH RUTH KANT

Attorneys

AUGUST 1990

2) Respondents argue (Br. in Opp. 7) that review is not warranted because

the court below remanded the case for further proceedings and thus ifs deci-

sion is interlocutory. But the court of appeals has finally determined the ap-

plicable legal standard and concluded, erroneously in our view, that a trier of

fact could find the union's conduct to be arbitrary. The case is suitable for

review at this juncture, because there is an “important and clear-cut issue of

law that is fundamental to the further conduct of the case and that would other-

wise qualify as a basis for certiorari.” R. Stern, E. Gressman & S. Shapiro,

Supreme Court Practice 225 (6th ed. 1986); see id. at 225-226 and cases cited

therein.

’ US GOVERNMENT PRINTING OFFICE 1990-262 203/20057