# Petition for Writ of Certiorari — Cook v. Pan American World Airways, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1987
- **Citation:** 484 U.S. 913

## Text

87-2170 (marr
Ne. | FILED

/ AUD 9 3987
IN THE “JOSEPH F SPANIOL, JR.

Supreme Court of the United BpLERK

OCTOBER TERM, 1987

JOHN C. COOK, et al.,
and

F.J. LEWANDOWSKI, et al.,

" Petitioners,

PAN AMERICAN WORLD AIRWAYS, INC.; AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL; AIR LINE PILOTS ASSO-
CIATION, PAN AM CHAPTER; FLIGHT ENGiNEERS IN-
TERNATIONAL ASSOCIATION; FLIGHT ENGINEERS INTER-
NATIONAL ASSOCIATION, PAN AM CHAPTER,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

JEFFREY C. LONDA
HUTCHESON & GRUNDY
3300 Citicorp Center

1200 Smith Street
Houston, Texas 77002-4579
(713) 951-2812

ROBERT E. COHN
KEVIN F.. FLYNN
SHAW, PITTMAN, POTTS

JEFFREY BERNBACH & TROWBRIDGE

521 Fifth Avenue 2300 N Street, N.W.
New York, New York 10175 Washington, D.C. 20037
(212) 687-9730 (202) 663-8060

Of Counsel for Petitioners Counsel for Petitioners

WILSON - EPes PRINTING Co., INC. - 789-O096 - WASHINGTON, D.C. 20001

i :

QUESTION PRESENTED FOR REVIEW

Did the lower courts err in holding, contrary to the
Age Discrimination in Employment Act (“ADEA”) and
applicable regulations and case precedent, that the Pan
Am pilot seniority system is as a matter of law entitled
to exemption from the ADEA pursuant to Section
4(f) (2) of that statute, when (i) such system is not
“bona fide” because it is based not on length of service
but rather on the career expectations of younger, junior
employees, and (ii) such system is a subterfuge to evade
the ADEA’s purposes because it was not implemented by
Pan Am for legitimate business purposes, but rather with
reckless disregard for the ADEA?

(1)

ia

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II.

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TABLE OF CONTENTS

STATEMENT OF THE CASE ............................
A. Procedural History .......... ELLE SD Rohe aOR
ne EE ee

REASONS THE WRIT SHOULD BE
EE ile bisidiipeieabipyetiaiendicnatiinnsseansasitisnn siconanbesiensanan

THE LOWER COURTS’ HOLDING THAT
PAN AM’S PILOT SENIORITY SYSTEM IS
AS A MATTER OF LAW “BONA FIDE”
WITHIN THE MEANING OF ADEA SEC-
TION 4(f) (2) IS LEGALLY ERRONEOUS,
CONFLICTS MARKEDLY WITH APPLICA-
BLE PRECEDENT AND EEOC INTERPRE-
TATIONS ON THIS ISSUE, AND PURPORTS
TO DECIDE IMPORTANT QUESTIONS OF
FEDERAL LAW WHICH SHOULD BE SET-
pny 5) Get) 9 een

THE LOWER COURTS’ HOLDING THAT
PAN AM’S PILOT SENIORITY SYSTEM IS
A MATTER OF LAW NOT A “SUBTERFUGE
TO EVADE THE PURPOSES OF THE
ADEA” WITHIN THE MEANING OF SEC-
TION 4(f)(2) IS LEGALLY ERRONEOUS,
CONFLICTS WITH APPLICABLE PRECE-
DENT AND EEOC INTERPRETATIONS ON
THIS ISSUE, AND PURPORTS TO DECIDE
AN IMPORTANT QUESTION OF FEDERAL
LAW WHICH SHOULD BE SETTLED BY
asin tniinsstecaepnisacensenacnepchass soeesenscs

A. The Lower Courts Erred In Holding That
Pan Am Adopted The Pilot Seniority System
For Legitimate Business Purposes ................

(iii)

10

17

18

iv

TABLE OF CONTENTS—Continued
Page

B. The Lower Courts Erred In Holding That
Pan Am’s Bad Faith And Discriminatory
Motive Cannot Be Established By Evidence
Showing Its Reckless Disregard Of The
ADEA In Adopting The Pilot Seniority
UNI seni ciitadenerte cr seers. dy 21

An Employer’s Actual Discriminatory In-
tent Must Be Proven By Direct Evidence In
Order To Show That A Seniority System Is
A “Subterfuge To Evade The Purposes of
we Gece ee 25

oe Ce se 29

Vv

TABLE OF AUTHORITIES
CASES Page

Air Line Pilots Ass’n v. Trans World Airlines,
Inc., 547 F. Supp. 1221 (S.D.N.Y. 1982); aff'd
in part, rev’d in part, 713 F.2d 940 (2d Cir.
1984) ; aff'd in part, rev'd in part, 469 U.S. 613

STII sicsicicncsibidatinitpslcaiilintinssaciapaiesiadgdiek captnamccedmanbbabiebanlinaea 26
Allison v. Western Union Telegraph Co., 680 F.2d

a I I cia cisinsneen chariioicccmndtiiaiadcants 28
American Tobacco Co. v. Patterson ........................ 26
California Brewers Ass’n v. Bryant, 444 U.S. 598

CIEE = his beitnsctacohccteedecciteaphiatiiensdeabiniedaain<apenacnibatedsnaa duis 14, 16
Cipriano v. Board of Education, 785 F.2d 51 (2d

A FN ecbicetita icsradincencsiheanksusdaietectionsdaedieatesle passim
Cook v. Pan American World Airways, Inc., 647

F. Sapp. 816 (8.D.N.Y. 1986) ..........................-... passim.

Cook v. Pan American World Airways, Inc., 771
F.2d 635 (2d Cir. 1985), cert. denied, 106 S.Ct.

Ne CI aitaseiiedessidetninnte neteadteamnicecensteanddeianaueesbiniass passim
Crosland v. Charlotte Eye, Ear & Throat Hospital,

GO6 F264 BOG (40m Cie. 1668) 2002 enccensecees..... 7
Darby v. United States, 132 F.2d 928 (5th Cir.

MID ctctscienscoticecictecesceinidtientiana ead laeeeiae deme eer, 22
Dowd v. Blackstone Cleaners, Inc., 306 F. Supp.

Se Ce. Be TD cbeedeccicccceeenieaans 24
EEOC v. Home Ins. Co., 672 F.2d 252 (2d Cir.

SD cxvccccinechisinlacacdsetavagieabedienareadesilie adel iedmmaisised passim
EEOC v. Sandia Corp., 639 F.2d 600 (10th Cir.

SRR ENTE REE POE eC ONE HE ITS PE IO 28
EEOC v. Western Elec. Co., 713 F.2d 1011 (4th

Cir. 1968) ....... SOS La eM HR ETS PAE TT RP) 28
F.X. Messina Constr. Corp. v. Occupational S. &

pp AR Be Rs Pe ees eae ee 24
Geller v. Markham, 635 F.2d 1027 (2d Cir. 1980),

cert. denied, 451 U.S. 945 (1981) .........022.2.. passim
Gray v. New England Tel. & Tel. Co., 792 F.2d 251

RE Se, ME wxctaosots bu. cnieleterkecucimastsetond taktemans 19
Holt v. Gamewell Corp., 797 F.2d 36 (1st Cir.

PD sthrencttnninksicisdecblomcahanciceignnnsethbessastinitniandbeisbedeipens 28

Kelly v. American Standard, 640 F.2d 974 (9th
BN MUD sansesncadapcidnclcnsasdaciabasboscebeunbebecenateeaee 28

vi

TABLE OF AUTHORITIES—Continued

Page
Laffey v. Northweat Airlines, Ine., 667 F.2d 429
(D.C, Cir, 1976), cert, denied, 484 U.S, 1086
CHIP CTED . Cuvsincstennsncnnisnecitisttallabasecbiiibiseitiaiite ated ces bore ea 23
Leftwich v, Harria-Stowe State College, 702 F.2d
Ce Ce Ce, Bee cence 28
Loeb v, Textron, Ine,, 600 F.2d 1008 (lat Cir.
ae pensasnsnnananstentajasaamiaieiiiinice ds ualbtacaasisittekser es 20
Matthysse v,. Securities Processing Serv., Ine., 444
We BU. OGD Cae Ec BCU cctcicctdcucsneetsincccencest 21
Nabob Oil Co, v, United States, 190 F.2d 478 (10th
Cir.), cert. denied, 242 U.S. 876 (1951) 000000... 22
Paolillo v. Dresser Industries, Inc., 813 F.2d 583
i Be, Ry id ON Coe ine eT ee ME 7,19
Sins v. Mme. Paulette Dry Cleaners, No. 82-5438,
slip op. (S.D.N.Y. June 26, 1986) ......................... 24
Thornborough v. Columbus and Greenville Rail-
road Co., 760 F.2d 633 (5th Cir. 1985) —............ 28
Trans World Airlines v. Thurston, 469 U.S. 111
CIEE. unsencececemninvialeaalicécancr aie ee passim
United Air Lines, Inc. v. McMann, 484 U.S. 192
CIID D .. nsnacssstisnnitnsinensunisiiineaielaiecstiaes arena eiaaee 25
United States v, Illinois Cent. R. Co., 303 U.S. 239
ERINIIED : exccasesniesenembseetininnisiniaiiatanicaeatal ieee 23
United Statea v. Murdock, 290 U.S, 889 (1983) | 22
STATUTES AND REGULATIONS
Age Discrimination in Employment Act, 29 U.S.C,
§ 628-681 (1986) . a passim
New York Human Rights Law, N, y. “Exec, ‘Law
oe FS: | eA LD ical 2

BO C.F. § 1625.8 (1986) .....c.ccccsccsccssssscssssscsssscseseces passim

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

No,

JOHN C. CooK, et al.,
and

F.J. LEWANDOWSKI, et al.,
. Petitioners,

PAN AMERICAN WORLD AIRWAYS, INC.; AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL; AIR LINE PILOTS ASSO-
CIATION, PAN AM CHAPTER; FLIGHT ENGINEERS IN-
TERNATIONAL ASSOCIATION; FLIGHT ENGINEERS INTER-
NATIONAL ASSOCIATION, PAN AM CHAPTER,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

Petitioners John C. Cook, et al., and F.J, Lewandowski,
et al., file this Petition for a Writ of Certiorari (‘Peti-
tion”) in the above-captioned action.

I. STATEMENT OF THE CASE

This Court should grant a writ of certiorari to review
the decision issued on May 8, 1987, by the U.S. Court
of Appeals for the Second Circuit in the above-captioned

2

case, Petitioners will discuss the procedural history and
the basic facts involved in this case in this section of
the Petition,

A. Procedural History

On March 7, 1984, 489 of the 773 Petitioners filed a
Complaint in the U.S, District Court for the Southern
District of New York, alleging that Respondents Pan
American World Airways, Inc. (“Pan Am”), and the
Air Line Pilots Association, International (“ALPA”),
Air Line Pilots Association, Pan Am Chapter (“ALPA-
PAA”), Flight Engineers International Association
(“FEIA”) and Flight Engineers International Associa-
tion, Pan Am Chapter (“FEIA-PAA”) (collectively
“Unions”) had violated, inter alia, the Age Discrimina-
tion in Employment Act (“ADEA”), 29 U.S.C. §§ 623-
631 (1987), and New York Human Rights Law
(“NYHRL”), N.Y. Exec. Law § 290, et seg. (1987), in
implementing Pan Am’s pilot seniority system. Petition-
ers are all over 40 years of age, are and/or have been
employed as pilots and/or flight engineers by Respondent
Pan Am, and are members and/or apprentice members
of Respondent Unions,

On March 27, 1985, Lewandowski, et al. v, Pan Ameri-
can World Airways, Inc,, et al,, 85 Civ, 2871, was filed,
in which 153 additional Pan Am pilote/flight engineers
raised legal and factual issues identical to those in Cook;
that case has been consolidated with the Cook case, and
181 more Petitioners have legally “opted in” to the action
since such consolidation,

On October 31, 1984, the District Court granted Re-
spondents’ motions for summary judgment and/or for
dismissal of the complaint in Cook on procedural grounds.
On August 22, 1985, the Second Circuit reversed that
decision and remanded the Cook case to the District
Court for consideration on the merits. Cook v. Pan

ae

3

American World Airways, Inc., 771 F.2d 685 (2d Cir.
1985), cert. denied, 106 S.Ct. 895 (1986).

On June 27, 1986, Pan Am and the Unions filed mo-
tions for summary judgment seeking dismissal of Cook
and Lewandowski on the grounds that the seniority sys-
tem challenged by Petitioners is allegedly exempt as a
matter of law from the ADEA, The District Court
granted Respondents’ motions by Opinion (“Cook Opin-
ion’) issued November 6, 1986, See Cook v. Pan Ameri-
can World Airways, Inc., 647 F. Supp. 816 (S8.D.N.Y.
1986), which appears at pp. 54a-74a in the Appendix
which accompanies this Petition. On May 8, 1987, the
Second Circuit affirmed the District Court’s decision,
adopting in toto and without elaboration the Cook Opin-
ion issued by the District Court; the Second Circuit’s
order appears in the accompanying Appendix at 77a. Be-
cause they issued but one opinion in this case between
them, the Second Circuit and District Court shall be
referred to herein collectively as “the lower courts,” un-
less otherwise noted, and the decision on appeal here as
“the lower courts’ decision,”

B, Basic Facts

The following factual account is as set forth in the
Appendix attached hereto, which has been extracted from
the Joint Appendix (“JA”) and deposition transcripts
on file with the Clerk of the Court for the Second Circuit,
In 1980, Pan Am merged with National Airlines, Ine.
(“National”), Respondents ALPA and FEIA, through
their respective chapters, represented Pan Am and Na-
tional pilots and flight engineers. Respondent Unions
submitted to an arbitrator, Mr. Lewis M. Gill, the issue
of how the Pan Am and National pilot and flight engi-
neer seniority lists were to be merged; the basis of this
action is the pilot, not the flight engineer seniority sys-

d

tem.! Pan Am was not a party to such arbitration and
expressly reserved the right to accept or reject the re-
sulting arbitration award (“Gill Award” or “Award”).
Pan Am representatives attended all of the Gill arbitra-
tion hearings. Cook Opinion, App. at 59a. As explicitly
stated in the Cook Opinion, “Defendant Pan Am was
aware that pre-merger Pan Am pilots as a group were
older than pre-merger National pilots, and that any in-
tegrated seniority system which disadvantaged pre-
merger Pan Am pilots would at the same time disad-
vantage older pilots.” Cook Opinion, App. at 64a. The
same can be said for Respondent Unions. This issue was
discussed repeatedly during the Gill arbitration hearings
which Pan Am representatives attended.

On March 12, 1981, Mr. Gill issued his Award. It
created a seniority system comprised of two components:
(1) an integrated list of all Pan Am and National pilots,
and (2) provisions “conditioning and restricting” the
straightforward allocation of employnient benefits to
pilots according to their sequence on the list.

First, the Gill Award incorporated a “ratio” method
of integrating a substantial member of fcrmer National
pilots into the Pan Am pilot seniority list, thereby dis-
advantaging hundreds of pre-merger Pan Am (i.e., more
senior and older) pilots. App. at 42a-43a. It is undis-
puted that, as the lower courts themselves even recog-
nized, the ratio had the effect of putting “National pilots
with shorter length of service ahead of the earlier hired
and generally older Pan Am pilots.” Cook Opinion, App.
at 60a. Moreover, while the part of the final list actu-

1 The flight engineer system is not relevant to Petitioners’ claims.
While some of the Petitioners currently hold flight engineer vosi-
tions, all of the Petitioners are part of the pilot system and it is
inarguable that (i) pilot positions are generally more lucrative and
prestigious than flight engineer positions, and (ii) only the pilot
system determines the allocation of pilot positions to Pan Am
airmen.

5

ally integrated by ratio constituted 49 percent of the
total number of pilots employed by Pan Am and National
as of the merger, the employment rights of pilots on no
less than 61 percent of the merged pilot list were either
directly or indirectly affected by the ratio. See Chart,
App. at 80a. Obviously, the bottom part of the pilot
seniority list cannot be said to have been integrated by
length of service when hundreds of junior former Na-
tional pilots who would, based on pure length of service,
be below the more senior Pan Am pilots at that part of
the list have instead been moved above them because of
the ratio. Hence, it is most accurate to say that over 60
percent of the Pan Am pilot seniority list (7.e., the 49
percent of the list ‘‘ratioed” plus the 12 percent of the
list which is below the ratioed portion) is constructed in
a manner which is anti-length of service. (Further in-
formation on how the ratio is anti-length of service can
be found in the Appendix at pp. 24a-28a.)

Second, the “conditions and restrictions” imposed by
the Gill Award on the operation of the integrated list
also were designed to disadvantage hundreds of pre-
merger Pan Am (2e., more senior and older) pilots.
Those conditions and restrictions were originally pro-
posed by the younger, more junior National pilots for
the specific purpose of advancing their interests and
subordinating those of the older, senior Pan Am pilots.
App. at 42a-43a. The conditions and restrictions have
been incorporated into the pilot system to the detriment
of older employees. (Further information on how the
conditions and restrictions are anti-length of service can
be found in the Appendix at pp. 36a-39a and 43a.)

The Unions adopted and presented the Gill Award to
Pan Am as a joint proposal. Pan Am adopted the Gill
Award as its pilot and flight engineer seniority system
on June 26, 1981, three and one-half months after it was

6

issued. Cook Opinion, App. at 64a.2 With the acquies-
cence and support of the Unions, Pan Am has continued
to implement the Gill Award to the detriment of older
and more senior pilots.

II. REASONS THE WRIT SHOULD BE GRANTED

Under the applicable criteria set forth in Rule 17 of
the Rules of the United States Supreme Court, a writ of
certiorari should be granted in this case. The lower
courts’ decision purports to decide an important question
of federal law which has not been, but should be, settled
by this Court. Furthermore, the lower courts’ decision
is legally erroneous, and conflicts markedly with other
applicable precedent on this issue and with the inter-
pretation of the ADEA by the agency charged with its
enforcement, 1.¢., the U.S. Equal Employment Oppor-
tunity Commission (“EEOC”).

The basic legal issues in this case are not complex.
Petitioners have alleged on the basis of abundant and
generally undisputed statistical and testimonial evidence
that the Pan Am pilot seniority system has a severe ad-
verse impact on pilots over the age of 40. As acknowl-
edged by the lower courts, “the parties seem to assume
that the system resulted in a discriminatory impact on
older pilots.” Cook Opinion, App. at 65a, fn. 3. Eight
federal circuits have adopted the view, which no federal
circuit has rejected, that an employment policy, such as
the Pan Am pilot senority system, which has such an ad-

? It is essential to note the irrelevance of the fact that the original
proposal for structuring Pan Am’s pilot seniority system was set
forth by an arbitrator rather than by Pan Am or the Unions. It
is absolutely unquestioned, and was conceded as such by the lower
courts, that the arbitration proceeding in no way bound Pan Am.
Cook Opinion, App. at 59a, 64a. Pan Am was free to accept or
reject the Gill Award proposal, and did in fact accept it for its
own operational reasons. This Court is to treat the Pan Am pilot
seniority system as it would any other seniority system or employ-
ment policy.

7

verse impact violates the ADEA. See, e.g., Geller v.
Markham, 635 F.2d 1027 (2d Cir. 1980), cert. denied,
451 U.S. 945 (1981). However, the lower courts in
granting and upholding summary judgment in favor of
Respondents in this case have erroneously decided that
evidence which clearly demonstrates such an impact need
not be submitted to the trier of fact, and that Pan Am’s
pilot system is deserving of exemption from the ADEA
by virtue of Section 4(f) (2) of that statute.

Section 4(f)(2) is a very important part of the
ADEA. It states:

It shall not be unlawful for an employer, agency, or
labor organization—

. . . (2) to observe the terms of a bona fide sentor-
ity system or any bona fide employee benefit plan
such as a retirement, pension, or insurance plan,
which is not a subterfuge to evade the purposes of
(the Act)...

29 U.S.C. § 623(f) (1986) (emphasis added).

When an employer and/or union claims to be pro-
tected by Section 4(f) (2) from liability for any and all
discriminatory effects of a seniority system, it assumes
the burden of proving that the system conforms to the
above standards. See Paolillo v. Dresser Industries, Inc.,
813 F.2d 583 (2d Cir. 1987); EEOC v. Home Ins. Co.,
672 F.2d 252, 260 (2d Cir. 1982). See also Crosland v.
Charlotte Eye, Ear & Throat Hospital, 686 F.2d 208,
212 (4th Cir. 1982).

The lower courts have determined, and Petitioners
agree, that the following EEOC regulation sets forth the
proper definition of a “bona fide” seniority system under
Section 4(f) (2) of the ADEA:

Though a seniority system may be qualified by such
factors as merit, capacity or ability, any bona fide
seniority system must be based on length of service
as the primary criterion for the equitable allocation

8

of available employment opportunities and preroga-
tives among younger and older workers.

29 C.F.R. § 1625.8(b) (1987) (emphasis added). See
also Cook, 771 F.2d at 644; Cook Opinion, App. at 66a.
Thus, in order for a seniority system to be “bona fide”
within the meaning of Section 4(f) (2), it must be
proven that it is primarily based on length of service
and that it is not qualified by factors unrelated to job
competence or performance. The burden of proof in both
respects is on Respondents. Home Ins., 672 F.2d at 260;
Crosland, 686 F.2d at 212.

Even if the system is proven to be “bona fide,” in
order for Respondents to prevail and obtain the Section
4(f) (2) exemption they must still prove that the system
is not a “subterfuge” to evade the ADEA’s purposes.
The EEOC’s regulation as to the “subterfuge” require-
ment provides in pertinent part:

Adoption of a purported seniority system which gives
those with longer service lesser rights, and results in
discharge or less favored treatment to those within
the protection of the Act, may, depending upon the
circumstances, be a subterfuge to evade the purposes
of the Act.

29 C.F.R. § 1625.8(b) (1987) (emphasis added). See
also Cook, 771 F.2d at 644; Cook Opinion, App. at 67a-
68a. Thus, to carry their burden of showing “no sub-
terfuge,” Respondents must prove that the seniority sys-
tem in question does not adversely affect older employees
and that it was adopted and implemented for legitimate,
nondiscriminatory reasons. Home Ins., 672 F.2d at 260.
Respondents did not carry their burden of proof.

' The importance of this case, and of the issues decided
incorrectly by the lower courts, cannot be overem-
phasized. In even the narrowest sense, its impact is
enormous: it will directly affect the employment rights
of over two thousand Pan Am pilots, almost a thousand

9

of whom are Petitioners here whose careers will be de-
stroyed if the lower courts’ decision is allowed to stand.
Even more important, however, are the interests of mil-
lions of employees over age 40 whose working lives are
governed by seniority systems, and whose employment
rights will be imperiled by the lower courts’ unreasonably
restrictive interpretation of Section 4(f)(2) of the
ADEA—an interpretation which derives no support from
the language nor the history of the statute or the appli-
cable EEOC regulations. This Court should grant the
requested writ, if for no other reason than to issue a
definitive interpretation of the ADEA’s Section 4(f) (2)
exemption.

This Court should grant the writ of certiorari for
the following reasons, which will be discussed separately
in the remaining sections of this Petition:

1. The lower courts’ holding the Pan Am’s pilot
seniority system is as a matter of law “bona fide”
within the meaning of ADEA Section 4(f) (2) is
legally erroneous, conflicts markedly with appli-
cable precedent and EEOC interpretations on this
issue, and purports to decide important questions
of federal law which should be settled by this
Court.

2. The lower courts’ holding that Pan Am’s pilot
seniority system is as a matter of law “‘not a sub-
terfuge to evade the purposes of the ADEA”
within the meaning of Section 4(f) (2) is legally
erroneous, conflicts with applicable precedent and
EEOC interpretations on this issue, and purports
to decide an important question of federal law
which should be settled by this Court.

10

Ill. THE LOWER COURTS’ HOLDING THAT PAN AM’S
PILOT SENIORITY SYSTEM IS AS A MATTER OF
LAW “BONA FIDE” WITHIN THE MEANING OF
ADEA SECTION 4(f)(2) IS LEGALLY ERRONE-
OUS, CONFLICTS MARKEDLY WITH APPLICA-
BLE PRECEDENT AND EEOC INTERPRETA-
TIONS ON THIS ISSUE, AND PURPORTS TO
DECIDE IMPORTANT QUESTIONS OF FEDERAL
LAW WHICH SHOULD BE SETTLED BY THIS
COURT

In holding that the Pan Am pilot seniority system is
“bona fide’ within the meaning of Section 4(f) (2) of
the ADEA, the lower courts stated as follows:

The integration .. . of two bona fide seniority lists
in a way reasonably designed to preserve pre-merger
expectations is itself a bona fide seniority system.

Cook Opinion, App. at 67a. This holding is completely il-
logical, could lead to dangerous consequences at odds
with the ADEA’s purposes, and accordingly should be
reviewed and reversed by this Court. If allowed to stand,
the lower courts’ holding would render meaningless the
EEOC’s regulations on this issue, which both the District
Court and Second Circuit have adopted as binding in
this case. The holding would also establish a principle,
contrary to the ADEA, that the structure and effect of
a seniority system is completely irrelevant to its legality.

First, the lower courts determined in the above-quoted
holding that because both the pre-merger Pan Am and
National pilot seniority lists were based primarily on
length of service and therefore as a matter of law “bona
fide,” the integration of the two lists was also auto-
matically bona fide. This holding has serious implica-
tions. It would mean that if the seniority lists of two
companies are each based on length of service, and the
two companies merge, the resulting merged seniority list
will itself be considered to be based on length of service,

11

and therefore exempt from the ADEA, regardless of what
method or formula was used to merge the lists, and re-
gardless of the effect of such merged list—i.e., regard-
less of whether the merged list is in fact based primarily
on length of service.

A common sense interpretation of the ADEA and
pertinent cases and regulations demands that the actual
_method of integrating two seniority lists, and the actual
effect of this integration, must be scrutinized to deter-
mine whether the integration results in a seniority sys-
tem which is itself based primarily on length of service
within the meaning of Section 4(f) (2). In this case,
Pan Am’s post-merger pilot seniority system governs
the employment rights of all Pan Am’s pilots, and should
be examined to determine whether it is based primarily
on length of service and therefore bona fide. Pan Am’s
and National’s pre-merger pilot seniority systems are
irrelevant to this analysis.

The problems which could be caused by the lower
courts’ ill-considered analysis on this point become obvi-
ous when one posits the following situation. Suppose
that the seniority list of one company consists solely of
employees over age 50 with an average of 30 years serv-
ice in a craft, with such employees arranged in order of
length of service. The seniority list of another company,
merging with the first, consists solely of employees under
age 30 with an average 10 years of service in the same
craft, arranged the same way. Under the lower courts’
holding in Cook, the two lists could he legally integrated
by placing all the employees over age 50 below all the
more junior employees under age 30, simply because the
two companies’ pre-merger lists were based on length of
service. This is surely not a result contemplated by the
drafters of the ADEA. The fact is that the applicable
EEOC regulation states that the seniority system itself—
in this case, the merged Pan Am and National pilot sys-
tem—must be based primarily on length of service.

12

The lower courts’ holding precludes analysis of the
merged system by mistakenly focusing on the Pan Am
and National lists before the merger.

Second, the lower courts further erred in holding that
a merged seniority system is “bona fide” by virtue of its
being qualified by the pre-merger “expectations” of em-
ployees governed by its terms. The lower courts’ hold-
ing on this issue was based on their acceptance of the
spurious argument that (1) before the merger of Pan
Am and National, the National pilots had a greater ex-
pectation of advancement than did the Pan Am pilots
and (2) it was proper and legal for considerable credit
to be given for those expectations under the merged sys-
tem—even though the National pilots were younger and
less experienced than their Pan Am counterparts. The
lower courts found that if the merged Pan Am pilot
seniority system had been based completely on length of
service, it would have disturbed the “expectations” of
the concededly junior National pilots. Cook Opinion,
App. at 61a. Taking this into account, the lower courts
upheld as bona fide the Pan Am pilot seniority system
and particularly those aspects thereof specifically in-
tended to fulfill junior pilot expectations.

Such an approach stands in blatant contravention of
the EEOC’s “bona fide” regulation quoted in Section II
of this Petition. Under that regulation, quoted in full
above, a seniority system must be based primarily on
length of service but “may be qualified by such factors
as merit, capacity, or ability.” 29 C.F.R. § 1625.8
(1987) (emphasis added). The similarity of the mean-
ings of the words “merit,” “capacity” and “ability”
clearly indicates that the regulation was intended to per-
mit an employer to establish a seniority system to some
extent qualified by objective, measurable standards of
actual job competence and performance. It was not in-
tended to permit the establishment of a seniority system
qualified by one group of junior employees’ wholly spec-

Nia ine —~

13

ulative “expectations” that they would or should advance
in their new employer’s organization more quickly than
another group of senior employees—particularly when
such “expectations” are in no way based on objective
criteria of job qualification or competence.

The junior National pilots’ pre-merger “expectations,”
on which the Pan Am pilot seniority system is based,
bear no relation to any of the criteria set forth in
EEOC’s “bona fide” regulation. At no time in the Gill
arbitration hearings or during this case was the argu-
ment ever made that the National pilots as a group were
in any way superior in “merit, capacity or ability” to
the Pan Am pilots as a group. Arbitrator Gill never
made such an arguiment in his Award or Opinion, and
Pan Am and the Unions have never made such an argu-
ment in the course of this action. If anything, it was
acknowledged by all of the parties to the Gill Award that
the Pan Am pilots, some of whom had ten years more
credited experience than National pilots to whom the
Pan Am pilot system gave superior rights, were more
able, in the sense of being more seasoned, than the junior
National group.

The “expectations” on which the Pan Am pilot senior-
ity system was based were not even indirectly derived
from considerations of “merit, capacity and ability.” They
were instead derived from the rights and entitlement
which the generally junior National pilots had developed
vis-a-vis each other in their own pre-merger seniority
system, as well as from an extremely speculative assess-
ment that, unmerged, National Airlines had better future
financial prospects than Pan Am. In large part, each
National airman could credit any expectation for advance-
ment which he may have had in his previous employ to the
fact that he was competing with a far less senior group
of pilots at National than were employed by Pan Am at
the same time. None of this, of course, has anything to
do with “merit, capacity and ability.” The National pilots’

14

expectations also bore no relation to any measure of the
National pilots’ time served in employment; as found by
the lower courts, the very consideration of such expecta-
tions constituted a deviation from the establishment of a
system based on length of service.

The Pan Am pilot seniority system, as approved by the
lower courts because of the system’s purpose of preserving
pre-merger pilot “expectations,” violates the letter of the
pertinent EEOC “bona fide” regulation. It also violates
its spirit, and indeed runs counter to the entire rationale
underlying the ADEA. One of the ADEA’s primary pur-
poses is to prevent the dilution of the seniority rights of
older employees by considerations unrelated to job per-
formance or competence. In promulgating its “bona fide”
regulation, the EEOC, citing this Court, stated that “the
principal feature of any and every [bona fide] seniority
system is that preferential treatment is dispensed on the
basis of some measure of time served in employment.”
46 Fed. Reg. 47725 (September 29, 1981) ; citing Cali-
fornia Brewers Ass’n v. Bryant, 444 U.S. 598 (1980). By
stating generally that a bona fide seniority system may be
qualified by the “expectations” of a group of junior em-
ployees, regardless of whether those expectations are rea-
sonable or in any way related to job performance or com-
petence, the lower courts have repudiated this funda-
mental tenet of the ADEA.

Even if this Court holds that a bona fide seniority sys-
tem may be “qualified” by the “expectations” of junior
employees whose employment rights are governed by its
terms, which it should not, it should still hold that the
lower courts erred in deciding that the Pan Am pilot
seniority system is “bona fide” under prevailing law. The
Pan Am pilot system is not simply qualified by junior em-
ployee expectations; it is in fact based completely on this
factor, both in conception and in practical application.
The Gill Opinion, reproduced in the Joint Appendix at
78-136, describes explicitly the basis on which the pilot

—"

15

system adopted by Pan Am and the Unions was con-
structed. Arbitrator Gill stated that his proposed system
was designed to accomplish four “basic objectives.” See
J.A. at 99-100. The primary two objectives for which the
pilot seniority system was designed by Arbitrator Gill
relate directly to satisfying pilot “expectations,” which
Arbitrator Gill proceeded to expand in the case of the
junior National pilots. None of the four objectives relates
directly or indirectly to the principle that “preferential
treatment must be dispensed on the basis of some measure
of time served in employment.”

In practical application as well, the Pan Am pilot sys-
tem has operated predominantly under the influence of
those of its provisions incorporated exclusively to preserve
the expectations of the junior National pilots. As ex-
plained above, the Pan Am pilot system has not distributed
every employment benefit in every case to pilots in the
strict order of their sequence on the integrated list. Cer-
tain provisions in the Gill Award explicitly “conditioned
and restricted” the straightforward operation of the inte-
grated list in many circumstances. Unfortunately for
Petitioners, these “conditions and restrictions” were not
designed to ameliorate, but rather to exacerbate, the im-
pact of the list on older, more senior pilots. Petitioners
have produced affidavit testimony, reproduced in the Ap-
pendix, showing that the sole reason for the inclusion of
such conditions and restrictions in the system “was to
benefit the former National pilots by reserving positions
for them to which they would not be assigned under a
date of hire/length of service list” (i.e., to fulfill junior
National pilet expectations). App. at 42a. Pan Am could
have foreseen that the conditions and restrictions would
greatly influence the distribution of pilot assignments
under the pilot system and would have a severely adverse
effect on senior, generally older pilots.

In sum, the Pan Am pilot seniority system is illegally
based on the “expectations” of junior, generally younger,

16

employees governed by its terms. The lower courts have
in effect ruled that a seniority system can allocate superior
benefits to younger employees, not because of how long
those employees have served or what their abilities are,
but simply because of what those younger employees think
they deserve.

The lower courts’ decision undermines not only the
EEOC’s regulation, but also a body of more general au-
thority applicable to seniority systems. Most notable
among such cases is one decided by this Court, California
Brewers Ass’n v. Bryant, 444 U.S. 598 (1980). Bryant
involved a company rule which established two seniority
tracks: one for employees of more than 45 weeks, the
other for employees of less. The Court held that the 45-
week rule was part of the company’s seniority system, and
was thus governed by Title VII provisions applicable to
seniority systems, because it was time-based: “(L)ike
any seniority rule, the 45-week requirement focuses on
length of employment.” 444 U.S. at 609-610. In so hold-
ing, this Court stated:

In the area of labor relations, “seniority” is a term
that connotes length of employment. A “seniority sys-
tem” is a scheme that, alone or in tandem with non-
seniority criteria, allots to employees ever-improving
employment rights and benefits as their relative
lengths of pertinent employment increase. Unlike
other methods of allocating employment benefits and
opportunities, such as subjective evaluations or edu-
cational requirements, the principal feature of any
and every “seniority system” is that preferential
treatment is dispensed on the basis of some measure
of time served in employment.

Id. at 606. This principle is undermined by the Pan Am
pilot system, which is in no way time-based but rather
expectation-based.

In sum, the lower courts seriously erred in holding that
“the integration of two bona fide seniority lists in a way

17

reasonably designed to preserve pre-merger expectations
is itself a bona fide seniority system.” The first part of
the lower courts’ holding undermines the letter and spirit
of the ADEA and applicable EEOC regulations and case
authority by disregarding the structure and effect of a
merged seniority system, and instead focusing irrelevantly
on pre-merger issues which are of no consequence to a
merged company’s employees. Second, the idea that a
seniority system can be considered ‘bona fide’ within the
meaning of ADEA Section 4(f)(2) when it is wholly
based on the “expectations” of younger, junior employees
finds no support in the statutory dictates of the ADEA
or any regulation or case authority issued pursuant
thereto.

IV. THE LOWER COURTS’ HOLDING THAT PAN AM’S
PILOT SENIORITY SYSTEM IS AS A MATTER OF
LAW NOT A “SUBTERFUGE TO EVADE THE PUR-
POSES OF THE ADEA” WITHIN THE MEANING
OF SECTION 4(f)(2) IS LEGALLY ERRONEOUS,
CONFLICTS WITH APPLICABLE PRECEDENT
AND EEOC INTERPRETATIONS ON THIS ISSUE,
AND PURPORTS TO DECIDE AN IMPORTANT
QUESTION OF FEDERAL LAW WHICH SHOULD
BE SETTLED BY THIS COURT

As noted above, even if the Pan Am pilot seniority sys-
tem were “bona fide” as a matter of law within the mean-
ing of the ADEA’s Section 4(f) (2) exemption, which it
definitely is not, the lower courts’ decision should still be
reviewed and reversed by this Court. The lower courts
erred in holding that the system has not been maintained
as a “subterfuge to evade the purposes of the ADEA.”

Under the EEOC’s “subterfuge” regulation, quoted in
Section II of this Petition, a system may, “depending on
the circumstances,” be considered a subterfuge if it gives
those with longer service lesser rights and results in less
favored treatment to those protected by the ADEA. 29
C.F.R. § 1629.8(b) (1987). As to the “treatment” issue,

18

the lower courts essentially conceded that older, more
senior pilots were disadvantaged by the system; the iynch-
pin of their analysis of the bona fide issue, rebutted above,
is that such disadvantageous treatment was justifiable. The
lower courts’ inquiry into the “cireumstances” surround-
ing the pilot seniority system’s implementation was con-
fined to a determination that Pan Am and the Unions
had valid business purposes in adopting and effectuating
the system. The lower courts’ legal analysis of this issue
was erroneous and their decision should be reviewed and
reversed by this Court.

A. The Lower Courts Erred In Holding That Pan Am
Adopted The Pilot Seniority System For Legitimate
Business Purposes

The lower courts found that Pan Am’s purpose in adopt-
ing the pilot system “was its desire to integrate the air-
lines as quickly as possible with a system that was oper-
ationally manageable.” Cook Opinion, 647 F. Supp. at 823.
According to the lower courts, this constituted a legitimate
business purpose sufficient to result in a holding on sum-
mary judgment that the pilot system could not be a sub-
terfuge to evade the ADEA’s purposes: “Pan Am’s desire
to ‘get on with its business’ is a legitimate reason for
adopting the [Gill] award,” Cook Opinion, App. at 69a-
70a, citing Cipriano v. Board of Education, 705 F.2d 51
(2d Cir. 1986).

This holding contorts the business purpose defense,
which is based on the assumption that an employer with
a legitimate purpose for structuring a seniority system in
a certain way could not have adopted the system to avoid
the ADEA. The business purpose defense does not extend
to an employer such as Pan Am, which argues that it was
eager to adopt and implement any seniority system simply
to “get on with its business.” The lower courts are con-
tradicted by the same authority they cite for support on
this point; under Cipriano, the employer must show a

19

legitimate business purpose for the structure of the sys-
tem in question. See Cipriano, 785 F.2d at 58 (employer
has obligation of “showing a legitimate reason for struc-
turing the plan as it did”). Neither Pan Am nor the
Unions have offered any legitimate business purpose for
structuring the pilot seniority system so as to subordinate
senior, older employees to junior, younger employees, as
the current system does. For this reason alone, a writ of
certiorari should be granted in this case and the lower
courts’ holding reversed. Since tle business purpose de-
fense has been recognized in decisions involving not only
the ADEA but also Title VII of the Civi! Rights Act, 42
U.S.C. § 2000e et seg. (1987), it is not unreasonable to
suggest that the lower courts’ ruling on this issue imperils
reasonable application of both of those statutes.

Furthermore, Petitioners have submitted evidence cast-
ing considerable doubt on whether Pan Am actually imple-
mented the current pilot system for the purposes new
alleged, and showing that the ends with which Pan Am
contends it was then concerned could not possibly have
been achieved by adopting this system.* But the lower
courts refused to even consider the reascnableness of Pan
Am’s alleged business purposes, stating that “what is im-
portant here is what Pan Am believed at the time of adop-
tion of the system.” Cook Opinion, App. at 69a (emphasis
added). This statement constitutes a dangerous precedent
which this Court should repudiate. The statement is di-
rectly contradicted by the only case which the lower courts
cited as supporting its position, Gray v. New England Tel.

3 For example, Pan Am now claims that it decided to adopt the
system for economic operational reasons, but as the lower courts
themselves noted, Pan Am did no cost analysis of the system before
so deciding. The lower courts’ holding nonetheless approving Pan
Am’s decision cannot be rationally squared with the Second Circuit
case Paolillo v. Dresser Industries, Inc., 813 F.2d 583 (1987), in
which the Second Circuit held that an employer is liable under the
ADEA if it cannot demonstrate a clear cost justification for an
employment policy which adversely affects older workers.

20

& Tel. Co., 792 F.2d 251 (1st Cir. 1986). In Gray, the
court was called upon to determine whether an employer
had a valid business purpose for implementing an al-
legedly discriminatory policy. The court stated:

Our focus must be on the perception of the decision-

maker . . . and whether this perception was credible
and reasonable, in determining whether there is a
jury issue.

Id. at 256 (emphasis added), citing Loeb v. Textron, Inc.,
600 F.2d 1008, 1012 n.6 (1st Cir. 1979) (“The reason-
ableness of the employer’s reasons mav, of course, be pro-
bative of whether they are pretexts [for discrimina-
tion]’’). In this case, the reasonableness of the “‘business
purpose” offered by the employer merits particular close
judicial scrutiny. Here, the lower courts relied, at best,
not on what Pan Am believed, but on what Pan Am offi-
cials sey Pan Am believed when it decided to adopt the
Gill Award. Pan Am bases its assertions in this regard
not on documentary evidence prepared contemporaneously
with its decision, but on recent deposition testimony of
company officials reconstructing a decisionmaking process
in the distant past.

It is especially important in a case such as this for a
court and/or jury to examine from an objective standpoint
the reasonableness of Pan Am’s representations as to its
purposes for adopting this employment policy. The Dis-
trict Court should have undertaken such analysis, not so
as to second-guess Pan Am’s business judgment, but so as
to responsibly exercise its obligation to determine whether
the employer has borne its burden of showing, and not
simply claiming, that it had a legitimate business reason
for its actions. See Cipriano, 785 F.2d at 58 (employer
has the obligation of “showing a legitimate business rea-
son for structuring the plan as it did’). Pan Am did not
indisputably show a valid business purpose for adopting
the seniority system set out in the Gill Award and the
lower courts erred in deciding that it did.

21

B. The Lower Courts Erred In Holding That Pan Am’s
Bad Faith And Discriminatory Motive Cannot Be
Established By Evidence Showing Its Reckless Dis-
regard Of The ADEA In Adopting The Pilot Sen-
iority System

The lower courts held that substantial evidence, sub-
mitted below by Petitioners, that Pan Am acted with
reckless disregard of the ADEA in deciding to adopt the
pilot seniority system does not establish a fact question
for trial concerning Pan Am’s bad faith and discrimina-
tory motive. By so holding, the lower courts flouted com-
pelling precedent and common sense.

The Second Circuit itself stated, when it decided pro-
cedural issues in this action two years ago, that among
the circumstances to be considered in connection with the
substantive question of “subterfuge” within the mean-
ing of Section 4(f) (2) is whether Pan Am engaged in
“willful discrimination.” Cook, 771 F.2d at 644. The
Second Circuit further stated that as to this issue, evi-
dence bearing on whether or not Pan Am and the Unions
acted “in bad faith or with discriminatory motives” in
adopting or agreeing to the seniority system should be
explored. 7d. The definition of “bad faith,” established
in longstanding precedent in the Second Circuit and others,
includes “willfulness.” See, e.g., Matthysse v. Securities
Processing Serv., Inc., 444 F. Supp. 1009, 1821
(S.D.N.Y. 1977) (“bad faith” is equivalent to “willful
ignorance’). Clearly, the Second Circuit bound itself to
consider, in its analysis of whether the Pan Am pilot
system is a “subterfuge,” facts which provided the basis
for Petitioners’ contention that Pan Am “willfully” vio-
lated the ADEA and thereby acted in bad faith.

In Trans World Airlines v. Thurston, 469 U.S. 111,
105 S.Ct. 613 (1985), this Court held that an employer
“willfully” violates the ADEA if it “knew or showed
reckless disregard for the matter of whether its conduct

22

was prohibited by the ADEA.” (Emphasis added.) Id.
at 624, quoting the Second Circuit opinion in the same
ease, Air Line Pilots Ass’n v. Trans World Airlines, Inc.,
713 F.2d 940, 956 (1984). This Court elaborated upon
the above definition by citing language from cases in-
volving allegedly “willful” violations of other statutes.
See Nabob Oil Co. v. United States, 190 F.2d 478 (10th
Cir.), cert. dented, 342 U.S. 876 (1951); Darby v.
United States, 182 F.2d 928 (5th Cir. 19438) (Fair
Labor Standards Act); United States v. Murdock, 290
U.S. 389 (1933) (tax violation). Hence, an employer
“wilfully” violates the ADEA if (1) it “wholly disre-
gards the law . . . without making any reasonable effort
to determine whether the plan he is following would con-
stitute a violation of the law”; (2) its conduct is
“marked by careless disregard for whether or not one
has the right to so act”; or (3) it shows “a disregard
for the governing statute and an indifference to its re
quirements.” Id. at 624-625.

In Thurston, this Court applied the above standard to
the conduct of TWA and determined that it had not
“willfully” violated the ADEA by implementing a trans-
fer/retirement policy applicable to 60 year-old pilots.
The Court stated: “TWA officials acted reasonably and
in good faith in attempting to determine whether their
plan would violate the ADEA.” This Court emphasized
that “TWA officials met with their lawyers to determine
whether the mandatory policy violated the ADEA” and
later noted that TWA “sought legal advice and consulted
with the union” on this specific issue. Jd. at 626.

Applying the standards set forth in Thurston and the
cases upon which it relied, Pan Am clearly acted with
“reckless disregard” of the ADEA, and thus willfully
violated that Act, by adopting the Gill Award and imple-
menting the pilot seniority system which it mandated.
This Court is in fact presented with a textbook case of a

23

willful violation of the ADEA. Pan Am concedes that it
had full knowledge of the specific provisions of the ADEA
and was aware that the Gill pilot seniority system would
definitely have an adverse impact on employees over the
age of 40. Nonetheless, by its own admission, offered re-
peatedly in depositions, Pan Am never investigated,
either on its own or through legal counsel, whether the
system might possibly violate the ADEA. In fact, Pan
Am never even investigated or inquired as to whether
the system would possibly violate any federal or state
statute. In short, Pan Am undertook absolutely no in-
vestigation to determine the legality of a seniority sys-
tem which was to govern indefinitely the careers and
lives of over two thousand of its employees. The senior
Pan Am official responsible for Pan Am’s decisions in
this matter explicitly stated in deposition that even
though “any logic would say that there would be an
impact” on older pilots if Pan Am adopted the Gill
Award, he had a predisposition to “go with it’”—“unless
it was horribly expensive or blatantly illegal, immoral
and wrong.” 4

The actions of Pan Am officials in this case stand in
stark contrast to those of the TWA officials in Thurston,
who were found not liable for willfully violating the
ADEA because they sought advice from both company
and union counsel on the legal issues raised in that case.
T’ urston, 105 S.Ct. at 626. But Pan Am’s actions are
similar to, and if anything evidence more recklessness
than, those of numerous defendants found liable of will-
ful statutory violations.® In fact, in no reported case has

4 See Deposition of Martin Shugrue, Pan Am’s Vice Chairman,
on file with the Clerk of the Court for the Second Circuit; p. 56-57
(emphasis added).

5 See United States v. Illinois Cent. R. Co., 8038 U.S. 239 (1938)
(willful violation found where defendant showed “careless disre-
gard for whether or not it had the right to so act”); Laffey v.
Northwest Airlines, Inc., 567 F.2d 429 (D.C. Cir. 1976), cert. de-

24

a defendant disregarded a statute as blatantly as Pan
Am did here without being held liable for a willful or
bad faith violation thereof. That Pan Am apparently
did not undertake an inquiry into its legal obligations in
this matter after learning of the Gill system’s potential
(and ultimately realized) adverse impact on older pilots
with longer service can only be attributed to a conscious
effort on its part to close its eyes to the requirements of
the law.

The lower courts were similarly blind to the long line
of authority compelling the result urged by Petitioners.
In deciding this issue in Respondents’ favor, the lower
courts attempted to distinguish between the “inten-
tional” and “willful” standards in the ADEA, contend-
ing that the willful standard is only to be applied to
the question of whether liquidated (7.e., double) damages
should be assessed as to a violation already found to be
intentional. The lower courts ignored a basic point of
law: in any criminal or civil mens rea analysis, the
term “willful” defines a more culpable state of mind,
calling for a more stringent penalty, than does the term
“intentional.” Under the ADEA, a violation judged to
be “intentional” is penalized by an assessment of com-
pensatory damages; a violation judged to be “willful” is
penalized by an assessment of double damages. 29 U.S.C.
§ 625(b) (1987). This is not a quirk in the law. It re-
flects a sensible determination that if a defendant is

nied, 434 U.S. 1086 (1978) (willful violation found where defend-
ant knew of statutory obligation but did not take steps reasonably
calculated to resolve doubt about its application); F.X. Messina
Constr. Corp. v. Occupational S. & H.R.C., (1st Cir. 1974) (willful
violation found where defendant was “indifferent to the require-
ments of the law”); Sims, 82-5438, slip op. (S.D.N.Y. June 26,
1986) (bad faith violation found where defendant made no effort
to learn and comply with law’s requirements) ; Dowd v. Blackstone
Cleaners, Inc., 306 F. Supp. 1276 (N.D. Tex. 1969) (willful viola-
tion found where defendant did not obtain legal opinion as to ap-
plication of statute).

&
3
‘
z
ce]
3

25

confronted with a legal requirement (¢.g., a prohibition
of employment policies which adversely affect older
workers) and deliberately refuses to investigate its obli-
gations under that requirement, its intent to violate the
requirement is to be assumed and it is to be punished
additionally for its willfulness. Under the ADEA, as in
the case of a simple speed limit on a highway, a funda-
mental rule applies: ignorance of the law is not an
excuse.

This Court has defined the term “subterfuge,” as it
appears in ADEA Section 4(f) (2), as “an artifice of
evasion.” United Airlines, Inc. v. McMann, 434 U.S. 192
(1977). It is not possible for a company to more bla-
tantly evade a statute’s purposes than by completely ig-
noring it in its rush to implement a policy which it
knows will adversely affe2t older workers.

C. The Lower Courts Erred in Holding That An Em-
ployer’s Actual Discriminatory Intent Must Be
Proven By Direct Evidence In Order To Show That
A Seniority System Is A “Subterfuge To Evade The
Purposes of The ADEA”

The lower courts’ holding on the subterfuge issue is based
on the premise that direct evidence of actual discrimina-
tory intent—.e., a “smoking gun’”—must be presented
by a plaintiff in order to prove that a seniority system
is a “subterfuge to evade the purposes of the ADEA,”
and thereby avoid summary judgment on this issue. The
lower courts’ ruling shifts the burden of proof on the
subterfuge issue to Petitioners in this action, when in
fact it should have been placed upon Respondents. See,
e.g., Crosland, 686 F.2d at 212 (4th Cir. 1982). As dis-
cussed above, Petitioners have adduced evidence which
bears directly on the subterfuge issue, and which should
have been sufficient to assure that this issue would not
be decided by summary judgment against Petitioners.

26

The ADEA does not require Petitioners to show more
than they have, nor should the lower courts have done so.

In stating summarily that “when a seniority system
is at issue, plaintiffs must show discriminatory intent as
part of their prima facie case,” Cook Opinion, App. at
70a, fn. 7, the lower courts could only cite for support
one case: Air Line Pilots Ass’n Int'l v. Trans World
Airlines, Inc., 547 F. Supp. 1221 (8.D.N.Y. 1982), aff'd
in part and rev’d in part, 713 F.2d 940 (2d Cir. 1983),
aff'd in part and rev'd in part, 469 U.S. 613 (1985).
That case is hardly compelling precedent. First, the ulti-
mate issues in that case, as to which the District Court
was reversed by the Second Circuit and this Court, did
not pertain at all to the District Court’s dictum on Sec-
tion 4(f) (2). Second, as explained below, the District
Court in the above-cited case blatantly misapplied Title
VII authority ° with no regard for clear differences be-

tween the seniority system provisions in Title VII and
the ADEA.

Section 4(f) of the ADEA, quoted above, does not ad-
dress the issue of whether a seniority system is main-
tained with discriminatory intent. Furthermore, the
EEOC’s interpretation of the “subterfuge” clause clearly
dictates that a seniority system violates the ADEA if it
“gives those with longer service lesser rights,” regard-
less of the employer’s intent. 29 C.F.R. § 1625.8 (1987).
In contrast, Section 703(h) of Title VII contains a pro-
vision, not contained in the ADEA, that specifically ex-
empts from Title VII’s prohibitions a bona fide seniority
system maintained free of discriminatory intent:

Sec. 703

(h) Notwithstanding any other provision of this
title, it shall not be an unlawful employment practice

8 American Tobacco Co. v. Patterson, 456 U.S. 63 (1982).

juieg aid

ah ae coir RSet aed NSW breetoe eile aA

PC a ee Te ee OP ee ee ey Pe te a Ae ee Ue

27

for an employer to apply different standards of com-
pensation, or different terms, conditions, or privileges
of employment, pursuant to a bona fide seniority or
merit system, or a system which measures earnings
by quantity or quality of production or to employees
who work in different locations, provided that such
differences are not the result of an intention to dis-

criminate because of race, color, religion, sex, or
national origin.

42 U.S.C. § 2000e-2 (1987). There is no corollary “in-
tent” requirement in the ADEA.

Furthermore, the absence of the “intent” language in
Section 4 of the ADEA refiects a considered legislative
judgment that seniority systems should be treated differ-
ently under the ADEA than under Title VII. The
ADEA was passed three years after the Civil Rights
Act of 1964. Several of its most significant sections are
quite similar to the corresponding sections of Title VII,
including those which generally describe the various pro-
hibited employment practices’ and which govern the
timeliness of discrimination charges.* However, where
Title VII and the ADEA address the same issue by using
totally different language, it clearly reflects a legislative
decision that the two statutes involve different legal and
policy considerations as to that issue, and the sections
should not be viewed as interchangeable. Such is the
case with the bona fide seniority system exemptions. If
Congress had desired that “unintentionally” discrimina-
tory seniority systems be exempt from the ADEA, it
could have easily incorporated the language contained in
Section 703(h) of Title VII into the ADEA, just as it
utilized other Title VII provisions. But instead of mim-
icking Title VII’s intent requirement, Congress excluded

TTitle VII: 42 U.S.C. § 2000e-2(a)-(d); ADEA: 29 U.S.C.
§ 623(a)-(d).

8 Title VII: 42 U.S.C. § 2000e-5(e); ADEA: 29 U.S.C. § 626(d).

28

the “intent” langvage from the ADEA and only ex-
empted systems which are not “a subterfuge to evade
the purposes of the Act.”® Hence, to transplant Title
VII to the ADEA arena in regard to the intent issue ig-
nores the deliberate omission in the ADEA, and the
EEOC regulations, of the requirement, found only in
Title VII, that grievants challenging a seniority system
on age grounds must prove discriminatory intent.

In their misguided invocation of Title VII authority
on the intent issue, the lower courts have undermined
two established lines of cases decided under the ADEA.
First, no less than eight federal circuits have adopted,
and none have rejected, the view that an employment
policy which is shown to have a disadvantageous impact
on older workers constitutes a violation of the ADEA,
even if there is no showing that the employer had a dis-
criminatory intent in implementing the policy. This
Court has not rejected this view, despite having had the
opportunity to do so. See Geller v. Markham, 635 F.2d
1027 (2d Cir. 1980), cert. denied, 451 U.S. 945 (1981).
See also Holt v. Gamewell Corp., 797 F.2d 36 (1st Cir.
1986); EEOC v. Western Electric Co., 713 F.2d 1011
(4th Cir. 1983); Thornborough v. Columbus and Green-
ville Railroad Co., 760 F.2d 633 (5th Cir. 1985); Left-
wich v. Harris-Stowe State College, 702 F.2d 686 (8th
Cir. 1983); Kelly v. American Standard, 640 F.2d 974
(9th Cir. 1981); EEOC v. Sandia Corp., 639 F.2d 600
(10th Cir. 1980); Allison v. Western Union Telegraph
Co., 680 F.2d 1318 (11th Cir. 1982). In the absence of
explicit language in Section 4(f)(2) of the ADEA or
the EEOC’s regulations, it is not reasonable to impose
an “intent” requirement in this case, particularly in the
face of overwhelming evidence that Pan Am’s pilot
seniority system has a severely adverse impact on older
pilots.

®See 113 Cong. Rec. 31,254 (statement of Sen. Yarborough) ;
Id. at 34,752 (statement of Rep. Dwyer).

29

Second, even if this Court determines that Section
4(f) (2) does carry some “intent” requirement, it is a
matter of established law in other circuits that such in-
tent can be proven by circumstantial evidence:

To be sure, this [i.e., showing discrimination because
of age] can be done in many ways. Direct evidence
of discriminatory intent, e.g., a paper scrap with the
notation “lay-off—too old” beside a plaintiff’s name,
would of course suffice. (But) circumstantial evi-
dence of employer subterfuge also would suffice so
long as it serves the general purpose of supporting
the asserted proposition and excluding other prop-
ositions.

Williams v. General Motors Corp., 656 F.2d 120, 130
(5th Cir. 1981).

Finally, the policy reasons for excluding the “intent”
requirement from the ADEA’s seniority system exemp-
tion are easily deduced. As this Court has recognized in
Bryant, quoted above, seniority systems by their very
nature are supposed to favor senior, generally older, em-
ployees. Thus, any seniority system which operates, as
Pan Am’s pilot system does, to the detriment of senior
workers should be presumed to have been designed inten-
tionally for that purpose, and should not be extended
preferential treatment under the Section 4(f)(2) ex-
emption.

In sum, the lower courts’ holding on this issue is be-
reft of both precedental and policy support.

Ill. CONCLUSION

For the reasons stated above, the Petition for Writ of
Certiorari should be granted. The lower courts erred in
holding on summary judgment that the Pan Am pilot
seniority system is “bona fide.” The lower courts’ analy-
sis fails to properly focus on the construction and effect
of a merger company’s integrated seniority system, and

30

whether that merged system is based primarily on length
of service, and instead focuses irrelevantly and illogically
on the two companies’ pre-merger seniority systems. The
lower courts’ analysis also attacks the very underpinnings
of the ADEA by exalting the career expectations of
younger, more junior employees and subordinating those
of older, more senior employees within the ambit of the
ADEA’s protection. Further, the lower courts erred in
holding that the Pan Am system is not a “subterfuge to
evade the ADEA.” The Pan Am pilot system has not
been proven to have been adopted for a legitimate busi-
ness purpose. It has been shown to have been adopted in
reckless and willful disregard of the ADEA.

In sum, this case merits the Court’s attention. The
legal errors committed by the lower courts below, and
discussed herein, threaten the interests of literally mil-
lions of older individuals in every industry whose em-
ployment rights are governed by seniority systems, and
who ultimately depend on a rational application of the
ADEA’s provisions to ensure that those rights are not
taken from them.

Respectfully submit: ed,

JEFFREY C. LONDA
HUTCHESON & GRUNDY
3300 Citicorp Center
Houston, Texas 77002-4579

ROBERT &}. COHN
KEVIN F.. FLYNN

JEFFREY BERNBACH SHAW, PITTMAN, PoTTs
521 Fifth Avenue & TROWBRIDGE

New York, New York 10175 2300 N Street, N.W.
(212) 687-9730 Washington, D.C. 20037

Of Counsel for Petitioners Counsel for Petitioners

APPENDIX

2
Sy
.

%
Ee de’)

la
APPENDIX

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

Index No. 84 CIV.

JURY TRIAL DEMANDELC

JOHN C. Cook, et al.;
Plaintiffs
- against -

PAN AMERICAN WORLD AIRWAYS, INC.; AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL; AIR LINE PILOTS ASSo-
CIATION, PAN AM CHAPTER; FLIGHT ENGINEERS INTER-
NATIONAL ASSOCIATION; FLIGHT ENGINEERS INTERNA-
TIONAL ASSOCIATION, PAN AM CHAPTER;

Defendants.

COMPLAINT

John C. Cook, et al., Plaintiffs, by and through their
attorneys, Butler & Binion, file this Complaint against
Pan American World Airways, Inc. (“Pan Am’); Air
Line Pilots Association, International (“ALPA”); Air
Line Pilots Association, Pan Am Chapter (“ALPA-
PAA”); Flight Engineers International Association
(“FEIA”’); and Flight Engineers International Associa-
tion, Pan Am Chapter (“FEIA-PAA’’). In suppori of
this Complaint, Plaintiffs will show the Court the fol-
lowing:

I.

PARTIES

1. Appendices A and B, attached hereto and made a
part hereof, constitute a list of 489 Plaintiffs compiled

2a

as of the date of filing. Additional Plaintiffs are expected
to “opt in” to this action.

2. Defendant Pan Am has continuously been and is
now a New York corporation. It has no registered agent
listed with the office of the Secretary of State for the
State of New York. Therefore, it may be served with
process by serving an officer of said corporation at its
headquarters offices, located at the Pan Am Building,
200 Park Avenue, New York, New York, 10166. Pan
Am is doing business in and has substantial contacts with
the State of New York and City of New York, where it
is engaged in the aviation business and employs more than
twenty employees. Defendant Pan Am has continuously
been and is now an employer engaged in an industry
affecting commerce within the meaning of Sections 11(b),
(g) and (h) of the ADEA, 29 U.S.C. $$ 630(b), (g) and
(h).

3. Defendant ALPA has continuously been and is now
an unincorporated association which represents pilots em-
ployed by Pan Am and other airlines concerning terms
and conditions of employment. Defendant ALPA is made
up of “chapters,” each of which represents the pilots em-
ployed by a particular airline. Defendant ALPA may be
served with process by serving the president, Secretary/
Treasurer, or a business representative of said associa-
tion at its offices located at 1625 Massachusetts Ave.,
N.W. Washington, D.C. 20036. Defendant ALPA has
substantial contacts with the State of New York and
City of New York. Defendant ALPA has continuously
been and is now a labor organization engaged in an in-
dustry affecting commerce within the meaning of Sec-
tions 11(d and (e) of the ADEA, 29 U.S.C. §§ 630(d)
and (e). Defendant ALPA is subject to and must com-
ply with the Railway Labor Act, 45 U.S.C. § 151 et seq.,

made applicable to the aviation business by 45 U.S.C.
§ 181, et seq.

Vee -

3a

4. Defendant ALPA-PAA has continuously been and
is now an unincorporated association which represents
pilots employed by Pan Am concerning terms and condi-
tions of employment, and is a chapter of Defendant
ALPA. It may be served with process by serving the
President, Secretary/Treasurer, or a business representa-
tive of said association at its offices located at 200 Park
Avenue, New York, New York, 10166. Defendant ALPA-
PAA has continuously been and is now a labor organiza-
tion engaged in an industry affecting commerce within
the meaning of Sections 11(d) and (e) of the ADEA,
29 U.S.C. §§ 630(d) and (e). Defendant ALPA is sub-
ject to and must comply with the Railway Labor Act,
45 U.S.C. § 151 et seg., made applicable to the aviation
business by 45 U.S.C. § 181, et seg.

5. Defendant FEIA has continuously been and is now
an unincorporated association which represents flight en-
gineers employed by Pan Am and other airlines concern-
ing terms and conditions of employment. Defendant FEIA
is made up of “chapters,” each of which represents the
flight engineers employed by a particular airline. De-
fendant FEIA may be served with process by serving the
President, Secretary/Treasurer, or a business representa-
tive of said association at its offices located at 905 - 16th
St., N.W., Washington, D.C. 20006. Defendant FEIA
has continuously been and is now a labor organization
engaged in an industry affecting commerce within the
meaning of Sections 11(d) and (e) of the ADEA, 29
U.S.C. 8§ 630(d) and (e).

6. Defendant FEIA-PAA has continuously been and
is now an unincorporated association which represents
flight engineers employed by Pan Am concerning terms
and conditions of employment, and is a chapter of De-
fendant FEIA. It may be served with process by serv-
ing the President, Secretary/Treasurer, or a business
representative of said association at its offices located at
Roosvelt Field, Garden City, N.Y. Defendant FETA-

4a

PAA has continuously been and is now a labor organiza-
tion engaged in an industry affecting commerce within
the meaning of Sections 11(d) and (e) of the ADEA,
29 U.S.C. $$ 680(d) and (e).

Il.
JURISDICTION AND VENUE

7. Jurisdiction of this Court is invoked to a) 28 U.S.C.
$$ 451 and 1848; b) 28 U.S.C. § 1837; and c) the prin-
ciple of pendant jurisdiction. This is an action author-
ized and instituted pursuant to a) Section 7(c), 29 U.S.C.
§ 626(c), of the Age Discrimination in Employment Act
of 1967, as amended (““ADEA’’), 28 U.S.C. § 621, et seq.,
which incorporates by reference Sections 16(b) and 17,
29 U.S.C. $§ 216(b) and 217, of the Fair Labor Stand-
ards Act of 1938, as amended, 29 U.S.C. § 201 et seq.;
b) the Railway Labor Act, 45 U.S.C. § 151, et seq., as
made applicable to the above-named Defendants by 45
U.S.C. $181, et seg., and c) the New York Human

Rights Law, N.Y. Exec. Law § 290, et seg. (McKinney
1983).

8. The unlawful employment practices alleged below
have been and are now being committed within the State
of New York, in the Southern District. Venue in this
Court is thus proper under 28 U.S.C. §§ 13891(b) and
1392 (a).

III.
FACTUAL ALLEGATIONS

9. Plaintiffs John C. Cook, et al., are all over 40 years
of age, are and/or have been employed as Pilot-Flight
Engineers by Defendant Pan Am, and are members and/
or apprentice members of the Defendants ALPA, ALPA-
PAA, FEIA, and FEIA-PAA. All of the Plaintiffs whose
names are listed in Appendix A filed charges, containing
some or all of the allegations stated herein, in one or more

3
%

5a

of the following federal and state equal employment of-
fices: a) the New York Regional Office of the U.S. Equal
Employment Opportunity Commission;' b) the Miami
District Office of the U.S. Equal Employment Opportu-
nity Commission;? ¢c) the San Jose Area Office of the
U.S. Equal Employment Opportunity Commission;* d)
the New Jersey Division on Civil Rights;* e) the New
York State Division of Human Rights;*® and f) the
California Department of Fair Employment and Hous-
ing.© The above-referenced charges were filed between
the dates of April 12, 1983, and September 2, 1983. This
civil action is thus being commenced more than sixty
days after the filing of all of the above-referenced charges,
in compliance with the requirements in Section 7(d) of
the ADEA, 29 U.S.C. § 626(d). The Plaintiffs listed in
Appendix B did not file charges in federal or state equal
employment offices, but are similarly situated individuals,
with similar or identical claims against the Defendants,
and are thus properly joined as Plaintiffs. This Com-
plaint will be amended by the addition to Appendix B

of other similarly situated Plaintiffs “opting in” to the
action.

10. In 1980, Defendant Pan Am merged with Na-
tional Airlines (“National”). Defendants ALPA and
FEIA, through their chapters representing Pan Am and
National pilots and flight engineers (i.e. chapters now
consolidated as Defendants ALPA-PAA and FEIA-

vV Church Street, Room 1501, New York, New York 10007.

? DuPont Plaza Center, Suite 414, 300 Biscayne Boulevard Way,
Miami, Florida 33131.

% Crocker Plaza Building, 84 West Santa Clara, San Jose, Cali-
fornia 95113.

#180 University Avenue, Newark, New Jersey.
5270 Broadway, New York, New York.
6 322 W. First Street, Los Angeles, California 90012.

6a

PAA), submitted to an arbitrator the integration of the
pilot and flight engineer seniority lists of the to-be-merged
companies. Defendant Pan Am expressly reserved the
right to accept or reject the resulting arbitration award,
which was issued on March 12, 1981. However, Defend-
ant Pan Am subsequently accepted and implemented the
Award in its entirety.

11. The pilot seniority list resulting from the arbitra-
tion award was first implemented on a system-wide basis
on March 28, 1983, has been implemented continuously up
until the present time, and will continue indefinitely to
be implemented, by Defendant Pan Am with the active
support and/or acquiescence of Defendants ALPA, ALPA-
PAA, FEIA, and FEIA-PAA. The major characteristics
of Pan Am’s current pilot seniority system are as follows.

First, there are three cockpit positions on Pan Am’s
aircraft: two are pilot positions (Captain and First
Officer), the third is the less rewarding and less lucrative
Flight Engineer position. Under the current Pan Am
pilots seniority system, pilots who worked for National
before the merger of Pan Am and National may not be
“bumped down” to the Flight Engineer position. Pilots
who worked for Pan Am before the merger may be so
demoted.

Second, rather than merging the pilot seniority lists of
Pan Am and National such that the seniority position of
each pilot would depend on his amount of credited ex-
perience, the current pilot seniority list uses a ratio to
insert large numbers of former National pilots under age
40 ahead of older and more experienced Pan Am pilots
over the age of 40.

Third, all pilot furloughs (i.e., layoffs) before 1986
are to proceed according to a one-for-one formula,
whereby equil numbers of former Pan Am and former
National pilots are furloughed, regardless of relative

credited experience or relative position on the seniority
list.

Ta

12. On March 28, 1983, Defendant Pan Am caused to
be issued assignments (“assignrhents”) to its flight deck
crew personnel, based on the pilot and flight engineer
seniority system.

13. On June 15, 1988, Defendant Pan Am caused to
be furloughed, under the above-described pilot seniority
system, three of the Plaintiffs named in Appendix A:
Robert L. Jarboe, Clifford E. Cool, and Richard V. Paul.

IV.
LEGAL CAUSES OF ACTION

14. By using and adopting, and by indefinitely con-
tinuing to use and adopt, the above-described seniority
system in making employment decisions, Defendant Pan
Am has limited, segregated and classified the Plaintiffs
so as to deprive or tend to deprive them of employment
opportunities and otherwise adversely affect Plaintiffs’
status as employees, because of Plaintiffs’ age, and will
continue to do so, in willful and continuous violation of
Section 4{a) of the ADEA, 29 U.S.C. § 628(a).

15. By using and adopting, and by indefinitely con-
tinuing to use and adopt, the above-described seniority
system in making employment decisions, Defendant Pan
has discriminated and will continue to discriminate
against Plaintiffs in compensation and terms, conditions
and privileges of employment because of age, in willful
and continuous violation of Section 296 of the New York
Human Rights Law, N.Y. Exec. Law § 296.

16. By actively supporting and/or acquiescing in, and
by indefinitely continuing to actively support and/or
acquiesce in, the above-described seniority system, De-
fendants ALPA, ALPA-PAA, FEIA, and FEIA-PAA
have limited, segregated, and classified their membership
so as to deprive or tend to deprive the Plaintiffs of em-
ployment opportunities, limit Plaintiffs’ employment op-
portunities, and otherwise adversely affect the Plaintiffs’
status as employees, and will continue to do so, on the

8a

basis of their age, in willful and continuous violation of
Section 4(c) of the ADEA, 29 U.S.C. § 623(c), and Sec-
tion 296 of the New York Human Rights Law, N.Y.
Exec. Law § 296.

17. By actively supporting and/or acquiescing in, and
by indefinitely continuing the support and/or acquiesce
in, the above-described seniority system, Defendants
ALPA, ALPA-PAA, FEIA, and FEIA-PAA have dis-
eriminated and will continue to discriminate against
Plaintiffs because of age, in willful and continuous vio-
lation of Section 296 of the New York Human Rights
Law, N.Y. Exec. Law § 296.

18. By actively supporting and/or acquiescing in, and
by indefinitely continuing the support and/or acquiesce
in, the policies and practices complained of in the above
paragraphs, the representation of Plaintiffs’ interests by
Defendants ALPA, ALPA-PAA, FEIA, and FEIA-PAA
has been and will continue to be arbitrary, discriminatory
and/or in bad faith. Defendants have thereby breached
their duty under the Railway Labor Act, 29 U.S.C.
§ 151 et seq., to fairly represent the interests of the
Plaintiffs.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully request that this
Court:

A. Grant preliminary and permanent injunctions pro-
hibiting defendants Pan Am, ALPA, ALPA-PAA, FEIA,
and FEIA-PA from taking or causing to be taken any
actions based on the illegal seniority system described
herein, and correcting all past actions taken on the basis
thereof, and further ordering Defendant to construct and
implement a seniority system which eradicates the effects

of the past and present unlawful employment practices
described herein.

B. Order Defendants Pan Am, ALPA, ALPA-PAA,
FEIA, and FEIA-PAA to make Plaintiffs whole by an
award of damages.

9a
C. Order defendants Pan Am, ALPA, ALPA-FEIA,
FEIA, and FEIA-PAA to pay liquidated damages to

Plaintiffs, in light of Defendants’ willful violation of the
law.

D. Order Defendants to pay Plaintiffs’ attorneys’ fees
and costs, including court costs.

E. Grant such other and further relief as this Court
may deem just and proper.

Respectfully submitted,
BUTLER & BINION

/s/ Jeffrey C. Londa
By: JEFFREY C. LONDA
1600 Allied Bank Plaza
Houston, Texas 77002
(713) 237- 3270
ROBERT E. COHN
KEVIN F. FLYNN
1747 Pennsylvania Ave., N.W.
Suite 900
Washington, D.C. 20006
(202) 466-6900
Counsel for Plaintiffs

Of Counsel:

/s/ Jeffrey Bernbach
JEFFREY BERNBACH
521 Fifth Avenue
New York, New York 10175
(212) 687-9730

JURY TRIAL

Plaintiffs request a jury trial on all questions of fact
raised by their Complaint.

/s/ Jeffrey C. Londa
JEFFREY C. LONDA

Dated, March _, 1984

10a

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

Sa hh el OND

Index No. 84 CIV.
JOHN C. Cook, et al.;

a

- against - Plaintiffs

PAN AMERICAN WORLD AIRWAYS, INC.; AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL; AIR LINE PILOTS ASsso-
CIATION, PAN AM CHAPTER; FLIGHT ENGINEERS INTER-
NATIONAL ASSOCIATION; FLIGHT ENGINEERS INTERNA-
TIONAL ASSOCIATION, PAN AM CHAPTER;

Defendants.

VERIFICATION OF COMPLAINT

STATE OF NEW YORK )
= *
COUNTY OF NEW YORK )

JOHN C. COOK, being duly sworn, deposes and says:
1. I am one of the Plaintiffs in the above action.

2. The facts pleaded in the foregoing Complaint are
true and correct to the best of my knowledge, informa-
tion and belief.

/s/ John C. Cook

JOHN C. Cook
Sworn to before me this

14th day of March, 1984

/s/ Linda L. Natoli
Notary Public
Linba L. NATOLI
Notary Public, State of New York
No. 24-4743274
Qualified in Kings County
Commission Expires March 30, 1985

lla

MERGER OF PAN AM AND ARBITRATION
NATIONAL AIRLINES FLIGHT

DECK CREW MEMBER

SENIORITY LISTS

AWARD
TABLE OF CONTENTS

Page
I. INTEGRATED SENIORITY LISTS .................. 1
Sa Sn sania biblinanetienmeabe 1
EI oo peieeiapiaeuintentannens 2
i el, I a EN «Ce eS A 3
III. RESOLUTION OF DISPUTES ................0000...... 5

IV. CONDITIONS AND RESTRICTIONS ..............
I I i estat 6

B. Restriction on 747 and DC-10-30 Captain
EET IGEPS SSN eee Es SOC doa 6
i a slaahanieibunenmanes 7
ESAS Re SS Ce 7
Ne a isidssianseabdomneentes 7
F. Protection of Flying Until January 1, 1986.. 8

G. Sale of B-747 or DC-10-30 Prior to January
Bis FIED dpindiidlidesteinsibadintdekstiacdietideakbthmiacddgbbedaloubans 11

H. Sale of L-1011 or DC-10-10 Prior to January
CNL eee etn Ge eo Acre We ere see 12
Bh | MU a 13
V. MISCELLANEOUS PROVISIONS. .....W00000000...... 13

12a
AWARD
I. INTEGRATED SENIORITY LISTS

There shall be two integrated seniority lists, one in-
cluding National Pilcts and all persons on the Pan Am
Pilots’ System Seniority List on January 18, 1980, and
the other including National Flight Engineers and all
persons on the Pan Am Pilots’ System Seniority List on
January 18, 1980.

A. Pilot List. This list shall be constructed as follows:

1.

on

For airmen hired before February 22, 1964, by
date of hire.

Thereafter, straight length of service through
D. J. Slattery (P1289).

Beginning immediately after Slattery, insert Na-
tional Pilots fror- Seattle (N231) through God-
win (N241).

Immediately below Godwin, begin a ratio in
sequence of 1 National, 3 Pan Am (repeated 3
times), then 1 National and 4 Pan Am, then 1-3
4 times, 1-4 once, and so on through Southard
(N496) and Bandy (P2112). Exception: Add
1 Pan Am Pilot at a point one-quarter of the
way down the ratio portion of the list, 1 more
Pan Am at the halfway point, 1 more Pan Am at
the three-quarter point.

Beginning immediately below Southard, resume
straight length of service for all those in active
service as of January 18, 1980.

Those on furlough on January 18, 1980, with re-
call rights, shall be slotted into the list at the
time of their recall, based on the relative length
of service of the others on the list at that time.
Exception: Those on furlough who had been

13a

given notice of recall before January 18, 1980,
and either had actually resumed work shortly
after that date or had their scheduled recalls
4 cancelled upon announcement of the merger,
shall, upon recall, be slotted into the list based on
the relative length of service of the others on the
list as of January 18, 1980. This covers those on
‘ Pan Am roster McConnell (P2232) through
Myers (P2265).

B. Engineer List.

‘ 1. Straight date of hire for all NAL Flight Engi-
i neers hired before February 22, 1964 and all
; PAA Flight Engineers hired prior to February
22, 1964; followed by

2. All PAA Pilots hired prior to February 22, 1964,
and who, by virtue of the Pan Am Crew Comple-
ment Agreement dated May 13, 1968, have a
right to bid Flight Engineer positions; followed
by

3. All remaining NAL Flight Engineers, and all
remaining PAA Pilots through Myers (P2265)
merged by length of service on January 18, 1980;
followed by

4. Those remaining PAA Pilots on furlough on
January 18, 1980 with recall rights, who shall be
slotted into the list at the time of their recall,
based upon the relative length of service of the
others at that time.

II. DEFINITIONS

As used hereinafter, the following terms shall have
the meanings indicated:

A. A “NAL” Pilot is a Pilot who was in the employ
of National Airlines prior to January 18, 1980. A “NAL

l4a

Flight Engineer” is a Flight Engineer who was in the
employ of National Airlines prior to that date. A “PAA
Pilot” is a Pilot who was in the employ of Pan American
prior to that date. Unless the context otherwise pro-
vides, that term includes all individuals on furlough as
of that date and those individuals hired as Pilots who
are now serving as Flight Engineers on Pan Am. A
“PAA Flight Engineer” refers to the PAA Appendix A
Flight Engineers. The term “group” has reference to
all of either the NAL or PAA Pilots or NAL or PAA
Flight Engineers in the employ of their respective com-
panies prior to January 18, 1980.

B. “Status” means the state or condition of a Cap-
tain, First Officer or Flight Engineer.

C. “Equipment” means a particular type of aircraft,
i.e., B-747, DC-10, L-1011 or B-727.

D. “Category” or “Position”, used interchangeably
herein, means an airman position of Captain, First Of-
ficer or Flight Engineer in particular equipment, i.e.,
B-747 First Officer, B-727 Captain, or L-1011 Flight
Engineer.

E. “Vacancy” means an available position not yet
occupied by an airman.

F. “Bid” means the contractual process by which
Pilots and Flight Engineers at the time of a proffer,
affirmatively express their desire for a given vacancy or
vacancies. Following the receipt of bids, the Company
awards vacancies.

G. “Assignment” means the contractual process by
which Pilots or Flight Engineers are involuntarily given
positions by the Company.

H. “Reduction in Force” means the contractual proc-
ess by which the Company reduces the number of posi-
tions in a given status and equipment.

a

15a

I. “Bump” means the contractual process by which a
more senior Pilot or Flight Engineer may exercise his
seniority to displace a more junior Pilot or Flight Engi-
neer from the junier Pilot’s or Flight Engineer’s posi-
tion.

J. “Displacement” means the contractual process by
which a Pilot or Flight Engineer loses or relinquishes
his position as a result of either a reduction in force or
a bump.

K. “Furlough” means the process by which airmen
are removed from the Company’s active foree by reason
of lack of work.

L. Company shall refer to Pan American World Air-
ways.

M. “Proffer” means the process by which the Com-
pany makes vacancies available for bid.

N. “Base” means a location at which Pilots and
Flight Engineers are stationed or domiciled and from
which the Company conducts flight operations in one or
more type(s) of equipment.

O. “Replacement aircraft” means any new type of
aircraft acquired by the Company for use in lieu of any
similar (in terms of range and capacity) aircraft now in
the fleet. Specifically, with regard to the B-727, replace-
ment aircraft may include B-737, B-757, B-767, A-300
and/or DC-9 aircraft, without being limited to those
types.

Ill. RESOLUTION OF DISABILITY

Any dispute relating to the application, implementa-
tion, or interpretation of this Award shall be initially
presented to a standing commtitee composed of two (2)
NAL Pilot, two (2) PAA Pilot, two (2) NAL Flight
Engineer, and two (2) PAA Flight Engineer Merger
Representatives, to be appointed by their respective Mas-

16a

ter Executive Councils (or appropriate FEIA bodies)
immediately following the issuance of this Award. In the
event that the dispute cannot be resolved by the Com-
mittee by majority vote and reduced to writing and
signed, it shall be submitted for resolution to a neutral
arbitrator. The neutral arbitrator shall be one mutually
agreed upon by all the parties, if he is available. If he is
not, nine (9) names shall be drawn from a hat contain-
ing the names of all arbitrators on the then-effective
ALPA approved list. The parties shall then engage in
the striking procedure set forth in ALPA’s Merger Pol-
icy. All disputes resolved under these procedures, either
by standing committee or arbitration, shall become a
part of the Award and shall be final and binding.

Any dispute arising between the Merger Representa-
tives on the one hand and the Company on the other shall
be arbitrated. The method of selecting the arbitrator
shall be as specified in the Agreement. between the Com-
pany and the Air Line Pilots Association, International
In no event shall System Board of Adjustment proce-
dures be utilized to resolve such disputes, unless all af-
fected Merger Representatives agree. In the event of the
death, resignation or other inability of any Merger Kep-
resentative to serve, the other Merger Representative
from that group (NAL Pilot, PAA Pilot, NAL Flight
Engineer, PAA Flight Engineer) shall have the right to
designate a successor representative from the group he
represents.

IV. CONDITIONS AND RESTRICTIONS

A. No system flush. Pilots or Engineers holding base
station category awards on the date of this Award may
not be displaced by Pilots or Engineers formerly em-
ployed by the other airline, regardless of system senior-
ity, unless specifically permitted by a provision in this
Award, nor shall the expiration of the conditions and
restrictions set forth herein, in themselves, be the oc-

17a

easion for the displacement or excess of any Pilot or
Engineer from a base station category award held on
such expiration date.

B. Restriction on 747 and DC-10-30 Captain Vacan-
cies. Subsequent to January 1, 1986, so long as the sum
of 747 and DC-10-30 aircraft does not exceed 51, all
Captain vacancies on such aircraft shall be allocated on
a ratio of 9.66 Pan Am to 1 National, as follows: 10 Pan
Am to 1 National, then 9 Pan Am to 1 National, then
10 Pan Am to 1 National, then repeat same sequence.
(See explanatory comments. )

All such Captain vacancies exceeding 437 (the num-
ber corresponding to 45 747’s and 6 DC-10-30’s) shall be
awarded by system seniority.

(No allocation is provided as to First Officer or
Flight Engineer seats on 747 and DC-10-30 aircraft.
After January 1, 1986, all of those vacancies shall be
awarded by system seniority. )

C. Cross bidding. As before on each airline. Pan Am
airmen continue cross-bidding practices vis-a-vis each
other, but Pan Am Pilots cannot bump National Engi-
neers. National Pilots cannot bid Engineer positions,
National Engineers cannot bid Pilot positions. National
Engineers to have some rights as Pan Am Appendix A
Engineers against being displaced from Engineer seats
by Pilots.

D. New flying. Up until January 1, 1986, except as
otherwise provided in this Award, all vacancies above the
reserved levels on 747, 1011, DC-10 and 727 aircraft
and all vacancies on other types of aircraft which may
be placed in service, shall be awarded in the ratio of
2 Pan Am airmen to 1 National airman.

E. Furloughs. After January 1, 1986, furloughs go
by the list. Up until January 1, 1986, furloughs shall be
made in the following sequence:

18a

1. National airmen in the “constructive notice”
category (defined below) and any Pan Am air-
meri who have heen recalled from furlough and |
slotted into the list below some or all of the con-
structive notice airmen. As between those two
groups, the furloughs will be proportionate to
the numbers in each group. (Examples: If
there are 100 in the constructive notice group
and 200 returned furloughees below them on the
list, the sequence would be i National to 2 Pan
Am; if there were 150 such returned fur-
loughees, the sequence would be 1 National, 2
Pan Am, 1 National, 2 Pan Am; if there were
50 such returned furloughees, the sequence would
be 2 National, 1 Pan Am.)

2. Above those two groups, the furloughs shall be
on a one-to-one basis, in the following sequence:
3 Pan Am airmen, then 2 National Pilots and
1 National Engineer.

3. Recalls of all those thus furloughed shall be in
the inverse order of the furloughs.

- ; peter yy ‘Ghaci’s szpdeiak

Definition of “constructive notice” airmen. Includes
all National Engineers beginning with Conley (N275)
and all National Pilots beginning with Chiabotti (N583).

F. Protection of flying until January 1, 1986.

1. Protection of 747, 1011 and DC-10 flying.
Category vacancies up to the numbers specified
below, and any additional vacancies occasioned
by the number of aircraft listed, shall be re-
served for the airmen of the respective airlines
which flew the aircraft prior to the merger:

|

19a

Category Aircraft Number Vacancies
Captain 747 45 396
F/O 747 45 513
FEO 747 45 527
Captain 1011 12 97
F/O 1011 12 114
FEO 1011 12 108
Captain DC-10 16 110
F/O DC-10 16 98
FEO DC-10 16 108

Vacancies in excess of those listed above which
are created by additional aircraft in any of these
categories above the number of aircraft listed
(45, 12, or 16) shall be allocated in the propor-
tion of 2 Pan Am airmen to 1 National airman
as specified in the New Flying provision.

2. Protection of 727 flying.

(a)

(b)

All B-727 flying (Captains, F/O’s and
FEO’s) in connection with the IGS flying
now based in Berlin shall be reserved to the
Pan Am Pilots & FEO. The total number of
Captain, F/O, and FEO positions thereby
reserved and occupied at any time shall be
counted as Pan Am positions in the opera-
tion of the ratio provisions below.

All awarding of vacancies, reductions in
force, or other staffing changes in the B-727
(or any replacement aircraft) shall be accom-
plished in order to allocate Captain, F/O
and FEO positions to the two groups in ac-

(c)

(d)

20a

cordance with the ratio which most closely
approximates the following:

National Pan Am
Captain 242 86
F/O 414 86
FEO 219 91

On any particular proffer, vacancies shall be
awarded first to the airmen of one group or
the other to the extent necessary to achieve
or maintain the desired ratio(s) below the
levels specified in (b) above. Once the
ratio(s) is achieved, awards up to the spec-
ified levels shall then go to the groups in
accordance with the ratio(s) set forth in
(b) above. Additional vacancies above the
levels set forth above shall be awarded in
accordance with the proportion of 2 Pan Am
to 1 National, as specified in the New Fly-
ing provisions.

If there is a reduction in the number of
Captain F/O and/or FEO positions on the
B-727, such reduction shall be accomplished
in the following manner: The allocation of
displacements between the two groups shall
be determined by the reverse order in which
the respective groups achieved such positions
by application of the New Flying provision,
until the levels specified in (b) above are
reached. Thereafter displacements shal! be
allocated in accordance with the ratio set
forth in (b) above.

G. Sale of B-747 or DC-10-30 prior to January 1,
1986. In the event that, prior to January 1, 1986, the
Company sells or otherwise withdraws from service any

21a

B-747 or DC-10-30 aircraft in active service as of the
effective date of this Award, and there remain in service
fewer than 45 B-747’s or 5 DC-10-30’s (or in the event
the DC-10-30 now being withheld from service is not in
service at the time of a DC-10-30 sale, 4 DC-10-30’s),
the affected group(s) shall be entitled to the following:

1. If the total of Pan Am airmen in B-747 Captain,
F/O or FEO positions falls below 396, 513, or
527, respectively, and/or

2. If the total of National airmen in DC-10-30 Cap-
tain, F/O or FEO positions falls below 34 (or in
the event of the DC-10-30 now being withheld
from service is not in service at the time of a
DC-10-30 sale, 28),

the affected group shall be awarded Captain, F/O and/or
FEO vacancies from the other group’s positions on the
other equipment up to the number by which the sale or
withdrawal has reduced the affected group’s positions;
provided, however, that if there are insufficient positions
over and above the numbers for the other group set forth
in 1. and 2. to restore the reduction in the affected
group’s positions, the shortage shall be shared propor-
tionally between the two groups, using for the propor-
tions the figures listed above. Subsequent vacancies shall
be awarded to maintain in proportion any deficiencies
until the numbers set forth in 1. and 2. above are again
reached.

This provision shall not operate retroactively to give
rise to any entitlements based on the sale or holding out
of service of any aircraft before the effective date of
this Award. It only applies to the sale or holding out of
service of aircraft taking place after the effective date
of this Award.

The term “affected airman group” means the number
by which the total number of airmen flying that type of

22a

aircraft is reduced by the sale or withdrawal from serv-
ice in question.

H. Sale of L-1001 or DC-10-10 aircraft prior to Janu-
ary 1, 1986. In the event that, prior to January 1, 1986,
the Company sells or otherwise withdraws from service
any L-1011 or DC-10-10 aircraft in active service as of
the effective date of this Award, so that there remain in
service fewer than 12 L-1011’s or 11 DC-10-10’s, the
affected group(s) shall be entitled to the following:

1. If the total of Pan Am airmen in L-1011 Cap-
tain, F/O or FEO positions fails below 97, 114
and 108, respectively, and/or

2. The total of National airmen in DC-10-10 Cap-
tain, F/O or FEO positions falls below 76, 64
and 74, respectively,

the affected group shall be awarded Captain, F/O and/or
FEO vacancies from the other group’s positions on the
other equipment up to the number by which the sale or
withdrawal has reduced the affected group’s positions;
provided, however, that if there are insufficient positions
over and above the numbers for the other group set forth
in 1. and 2. to restore the reduction in the affected
group’s positions, the shortage shall be shared propor-
tionally between the two groups, using for the propor-
tions the figures listed above. Subsequent vacancies shall
be

C. If there are vacancies for which no bids are re-
ceived and assignments must be made by the Company,
the vacancies shall be assigned by inverse order of senior-
ity in accordance with the applicable provisions of the
then current Working Agreements.

D. In the event a National Pilot does not have a
seniority number sufficient to permit him to bid and hold
a Pilot position, he shall, nonetheless, have a prior right

23a

to a First Officer position in the most junior Pilot equip-
ment until such time as he is furloughed in accordance
with the provisions of this Award.

In the event a National Pilot on furlough is recalled
to duty, he shall have a prior rijut to a First Officer
position even though his seniority number is not sufficient
to permit him to bid and hold such a position.

Subject to the foregoing, an airman on furlough, whose
recall is anticipated due to quota calculations, shall be
proffered system vacancies concurrent with active airmen
and may execute his system seniority accordingly.

/s/ Lewis M. Gill
LEwIs M. GILL, Arbitrator
March 12, 1981

24a
AFFIDAVIT

THE STATE OF TEXAS _)

)
COUNTY OF HARRIS )

BEFORE ME, the undersigned authority, on this day
personally appeared Ira Stuart Chorush who under oath
did state the following:

My name is Ira Stuart Chorush. I am over the age of
twenty-one years and am fully competent to make this
affidavit.

I received a Ph.D. degree in statistical genetics from
Purdue University in 1970 and have spent the last six-
teen years employed as a statistical consultant. Much of
my work during that time has been devoted to statistical
analysis of employment decisions. Further details of my
education and employment history are available in At-
tachment 1 which is attached to this affidavit.

I have been retained by Jeffrey C. Londa of the law
firm of Butler & Binton, whe is representing a group of
airplane pilots who are challenging the pilot seniority
system which is based on the Gill arbitration award and
which was adopted and implemented by Pan Am. It is
my understanding that Mr. Londa and his clients claim
that such system operates to the detriment of older pilots.
I have conducted several analyses which are probative of
this claim. The foliowing is a correct description of my
work in this matter. To the best of my knowledge and
belief, the analyses contained herein have been conducted
according to generally accepted principles of statistics.

The data used to conduct this analysis are a listing of
airplane pilots employed by Pan Am ordered by date of
hire. This date may be the date hired by either Pan Am
or National Airlines, depending upon which predecessor
airline the airman worked for. In addition, the date of

‘
+2

25a

birth of each airman and his pilot seniority number by
virtue of the Gill award are used. A listing of the data
used is attached to this affidavit as Attachment 2.*

Of primary interest in the section of the list where
airmen have been assigned seniority numbers that are
not consistent with their date of hire. These anomalies
occur from position 1035 on the list (page 14 of Attach-
ment 2, airman W. C. Swift) to position 2096 (page 30
of Attachment 2, airman R. B. Southard). Within these
positions it is true that the more recently hired airmen
were never assigned pilot seniority numbers that would
make them less senior than they would have been had
date of hire been used as the sole basis for pilot seniority.
Indeed, in many cases, pilot seniority is substantially
greater for more recently hired pilots.

As an ilustration, consider page 25 of Attachment 2.
Airman W. H. Sanford would have been pilot number
1843 if length of service had been used. Instead, he is
pilot number 2083. In contrast, Airman R. D. Sellars
would have been pilot number 1855 if length of service
were the criterion; instead, he is pilot number 1142.
Thus, Sellars is 941 positions above Sanford on the sen-
iority list despite having less service with his carrier.

It is likewise possible to examine the effects of the Gill
award, as adopted and implemented by Pan Am, upon
older pilots. Airman Sanford was born in 1937 while
Airman Sellars was born in 1944. Thus, the older air-
man, Sanford, lost 240 positions in seniority vis-a-vis his
length of service (1843 to 2083) while the younger Sel-
lars gained 713 positions (1855 to 1142).

It is my purpose to examine whether the inversions in
the seniority list that were the result of the Gill award,
as adopted and implemented by Pan Am, seemed to re-
sult in a systematic deleterious effect upon older airmen.
For this purpose, I defined airmen born before 1940 as

* NoTE: Attachment 2 is set forth in Joint Appendix at 303-335.

26a

older, while airmen born in 1940 cr later were younger.
This would make older airmen 40 years old or more at
the time of the merger of National Airlines and Pan Am,
while younger airmen were under 40. The actual pilot
seniority number and the length of service seniority
number were compared for each airman, in the area of
the seniority list where inversions occur, and the differ-
ence between the two was calculated. In all, 267 airmen
gained seniority positions as a result of the Gill award,
as adopted and implemented by Pan Am, while 916 air-
men lost seniority. The first question that might be
asked is whether older and younger pilots fared simi-
larly under Pan Am’s pilot seniority system which is
based on the Gill award.

TABLE 1
Older Pilots Younger Pilots
Airman gained seniority 93 * 174 ’ f
Airman lost seniority we" 137 **

Chi-square = 269

* All of these airmen worked for National before the National/
Pan Am merger.

** All of these airmen worked for Pan Am before the National/

Pan Am merger.
Table 1, above, shows that 174 younger pilots fared bet-
ter under Pan Am’s system which is based on the Gill
award while 137 fared worse. Conversely, only 93 older
pilots gained under such system while 779 lost seniority.
Thus, 55.9% of the younger airmen benefitted, while
only 10.7% of the older airmen did.

The above data was subjected to a chi-square test to
determine whether statistically significant discrepancy
existed. A chi-square value of 269 was obtained which
has a probability of less than one in one million of oc-
eurring by chance. The conclusion is that it is exceed-
ingly unlikely that the phenomenon arises by chance;
younger airmen fared substantially better than older
airmen under the Gill award.

27a

A second question that should be asked is whether the
average improvement in younger airmen’s seniority is
significantly greater than zero; conversely, whether the
decline in older airmen’s seniority is likewise greater
than zero. It has already been stated that 174 younger
airmen gained seniority while 137 lost seniority. For
each airman, the number of positions gained or lost was
calculated. The mean (average) change in seniority was
computed with gains in seniority assigned a plus (+)
sign and losses a minus (—) sign. In addition, the
standard deviation of the mean was calculated. Results
are shown in Table 2.

TABLE 2
Mean Gain in Seniority for Younger Airmen
Average number of ranks increase 167.045
Standard deviation of mean 17.380
t 9.611

The average younger airman advanced more than 167
ranks in the seniority list as a result of Pan Am’s sys-
tem which is based on the Gill award. The standard
deviation was 17.380 which leads to a t value of 9.611.
The probability of obtaining so high a t value by chance
is less than one in one million.

With the number of airmen involved in this analysis,
the t statistic takes on many of the characteristics asso-
ciated with the normal distribution. Thus, the t value of
9.611 has approximately the same meaning as a dis-
crepancy of 9.611 standard deviations between zero, the
hypothesized value and 167, the actual number of ranks
advanced.

It should therefore not be too surprising that the re-
sult for older airmen is opposite and likewise highly
significant.

TABLE 3
Mean loss in seniority for Older Airmen
Average Number of ranks decrease — 59.455
Standard deviation of mean 8.238
t 7.218

28a

As shown in Table 3, the average older airman lost more
than 59 positions in the seniority list. With a standard
deviation of 8.238, a t value of —7.218 was obtained.
This has a probability of occurring by chance of less
than one in one hundred thousand. It is therefore ex-
tremely unlikely that the average 59 positions lost repre-
sent a random event.

In summary then, the effects of Pan Am’s seniority
system which is based on the Gill award have been exam-
ined relative to age. It can be concluded that the results
emphatically indicate that Pan Am’s seniority system
which is based on the Gill award has acted and acts to
the detriment of older airmen (i.e., airmen over 40 years
of age).

/s/ Ira Stuart Chorush
IRA STUART CHORUSH

SUBSCRIBED AND SWORN TO BEFORE ME by
the said Ira Stuart Chorush on this the 14th day of July,
1986, to certify my hand and seal of office.

/s/ Nancy L. Dean
Notary Public in and for the
State of TEXAS

My Commission Expires:

NANCY L. DEAN

Notary Public, State of Texas

My Commission Expires May 16, 1987

Bonded by Lovett Agency, Lawyers Surety Corp.

JCL/PAPF3/3

24a

IRA STUART CHORUSH, Ph.D.

Education

Ph.D., Statistical Genetics, Purdue University, West
Lafayette, Indiana, 1970

M.Sce., Statistical Genetics, Purdue University, West
Lafayette, Indiana, 1968

B.Se., Mathematics and Genetics, McGill University,
Montreal, P.O. Canada, 1965

Consulting Experience

Fourteen years’ consulting experience

Pertinent Experience

Consultant, St. Joseph’s Hospital. Aided hospital in
planning for future services by forecasting demands
for different specialized treatments.

Consultant, Major metropolitan newspaper. Worked
with large metropolitan newspaper to establish most
cost-effective delivery system of product. In addi-
tion, developed forecasting system to predict opera-
tional variables of concern to the newspaper.

Technical Coordinator, Federal Reserve Bank of
Dallas. Worked with the Federal Reserve Bank and
with the eight major Dallas-Fort Worth commercial
banks to determine, by computer simulation, the
probable impact on each bank of the establishment
of a Regional Check Processing Center in the area.

Technical Coordinator, National candy manufac-
turer. Designed and helped implement an inventory
comtrol, production scheduling and standard cost
syscem.

Senior Consultant, United Virginia Bankshares.
Established optimum check clearing methodology for

30a

bank holding company and developed model to eval-

uate clearing alternatives.

In addition, general consulting services have been fur-

nished on behalf of the following organizations:

American National Bank—Chicago
Bank of the Southwest

Baker & Botts

Baylor College of Medicine

City of Dallas, Texas

City of Denton, Texas

City of Garland, Texas

Citicorp

Dallas-Fort Worth Clearinghouse Association
First National Bank of Atlanta
First National Bank of Dallas
First National Bank of Fort Worth
Friendswood Development Corporation
Fulbright & Jaworski

Houston Lighting & Power

IBM

Lewis & Coker, Inc.

Mitsubishi, Ltd.

Morton Southwest

Rapides Packing Company

Texas Commerce Bank

Texas Instruments

TRW/ Mission

Vinson & Elkins

EEO Consulting Experience

Prudential Insurance Company. Development em-
ployment model in conjunction with other analyses
to determine whether discrimination against Blacks

had occurred. Testified as expert witness.

National Supply Company. Developed analyses to
determine whether discrimination against females

has occurred. Testified as expert witness.

3la

Fluor Engineers and Constructors. Development
analyses to determine whether discrimination based
on national origin had occurred in the hiring process.
Testified as expert witness.

In addition, EEO consulting services have been furnished
on behalf of the following organizations:

American Cast Iron Pipe Company
Aramco Services Corporation
Arthur Brothers
Bethlehem Steel
Central Freight Lines
Champion Paper Company
Chemetron Corporation
Cities Service Company
Continental Trailwavs

~ Curtin Matheson Scientific
Drilco
Federal Reserve Bank of Dallas
Houston Chronicle
Houston Lighting & Power
Houston Police Department
IBM
J. P. Stevens
Lockheed
Memorial Hospital System
Petrotex
Republic Steel
Rockwell
Shell Oil
Southern Pacific Railroad
State Farm
Swift Packing Company
Texas Commerce Bank
United Gas Pipeline
U.S. Department of Justice
Weaver Oil & Gas
Western Electric

32a

Wilson Industries
Zapata

Served as expert counsel to the following law firms:

Baker & Botts (Houston)

Fulbright & Jaworski (Houston)

Butler, Binion, Rice, Cook & Knapp (Houston)

Andrews, Kurth, Campbell & Jones (Houston)

Hutcheson & Grundy (Houston)

Hewett, Johnson, Swanson & Barbee (Dallas)

Thomas, Taliaferro, Burr, Foreman & Murray (Bir-
mingham)

Publications and Awards

Author of six papers dealing with statistical genetics.
Awarded membership in Sigma Xi.

33a
AFFIDAVIT
DISTRICT OF COLUMBIA) | s.s.

BEFORE ME, the undersigned authority, on this day
personally appeared Mr. Harold M. Gay, Jr., who under
oath did state as follows:

1. My name is Harold M. Gay, Jr. I am over the age
of twenty-one years and fully competent to make this
affidavit.

2. I am presently 44 years of age. I was born on
January 31, 1942. I have been employed by Pan Amer-
ican World Airways, Inc. (‘Pan Am’’) as a pilot since
December 20, 1965. I am a member and an officer of the
Air Line Pilots Association (“ALPA’’), currently serving
as Chairman, Air Line Pilots Association, Pan American
World Airways, Inc. (““ALPA-PAA’’), Local Executive
Council #6.

3. I have read Plaintiffs’ Complaint dated March 7,
1984. I am familiar with the pilot seniority system re-
ferred to in the Complaint, with events concerning its
construction and implementation, and particularly with

its subsequent impact on all pilots in the employ of
Pan Am.

4. Before the merger of Pan Am and National, Pan
Am’s fleet consisted of the Boeing 747 (‘“B-747”), Lock-
heed 1011 (“L-1011”) and Boeing 727 (“B-727”). Na-
tional’s fleet consisted of the DC-10 and B-727. Under
the Gill Award, the terms of which Pan Am adopted as
its pilot seniority system, the pre-merger assignments of
Pan Am airmen on the B-747 and L-1011 and former
National airmen on the DC-10 were to be preserved until
January 1, 1986. A “fence” was thus constructed which
prevented pre-merger Pan Am airmen from obtaining
assignments on the DC-10 and pre-merger National air-
men from obtaining assignments on the B-747 and

34a

L-1011. The “fence” was constructed so that during the
pre-1986 ‘freeze” period, the members of the respective
pilot groups would receive the same intra-group promo-
tions and demotions as they would have absent the mer-
ger. Under the terms of the pilot seniority system, this
“fence” would be crossed and the “freeze” ended only if
Pan Am were to sell or withdraw from service aircraft
which had belonged solely to either Pan Am of National
before the merger (i.e., the B-747, L-1011 or DC-10).
Pan Am’s sale or withdrawal of any of the above aircraft
would trigger certain “conditions and restrictions” con-
tained in the Gill Award designed to permit crossing of
the “fence” in the event of such sale or withdrawal. If
before January 1, 1986, Pan Am sold or withdrew from
service none of the above-listed aircraft, the flight opera-
tions of Pan Am and National would be maintained as
before the merger with respect to those aircraft (i.e.,
completely separate).

5. In or about September 1981, Pan Am posted the
integrated pilot seniority list, but stated that such list
was “tentative” and that pilots could submit protests to
Pan Am concerning their seniority position for an un-
specified period following the posting of the tentative list.
The “final” integrated pilot seniority list, based on Pan
Am’s adoption of the Gill Award, was issued in or about
March 1982.

6. Between the time of its posting of the “final” inte-
grated pilot seniority list and early February 1983, Pan
Am did not sell or withdraw from service any B-747,
L-1011 or DC-10 aircraft. Hence, Pan Am’s and Na-
tional’s flight operations remained essentially separate.
Even though the B-727 operations of Pan Am and Na-
tional were nominally “integrated,” this had no practical
impact on Pan Am’s business because (1) Pan Am had
owned B-727 aircraft before the merger and thus reaped
no unique or significant benefits in gaining access to
B-727’s formerly owned by National; and (2) crossover

85a

of Pan Am and National airmen on the B-727 was lim-
ited in practice by the Gill Award. See paragraph 10(c),
infra.

7. In early 1983, Pan Am commenced the first of a
series of transactions involving the acquisition, sale or
withdrawal from service of a number of its aircraft.
These transactions have triggered “conditions and restric-
tions” under the Pan Am pilot seniority system, some of
which continue to affect the allocation of opportunities
and prerogatives to pilots in the system. These “condi-
tions and restrictions” have since operated in tandem
with, and have exacerbated the discriminatory impact of,
the seniority list integrated by ratio. To wit, the “condi-
tions and restrictions” have resulted in extensive cross-
overs of young former National airmen to equipment
formerly flown only by Pan Am airmen, denied older Pan
Am pilots, including Plaintiffs in this action, with ionger
service and flying experience the same opportunities, and
thereby had an adverse impact on Pan Am pilots over the
age of 40 throughout the seniority list.

8. On March 28, 1988, Pan Am issued an “award”
reassigning pilots under its pilot seniority system. These
reassignments were the first governed by the crossover
“conditions and restrictions” discussed above. As a direct
result of the application of these “conditions and restric-
tions” to the operation of the integrated seniority list, the
reassignments of March 28, 1983, had the following
adverse impact on senior Pan Am pilots over the age of
40 with more flying experience, including Plaintiffs in
this action:

(a) Approximately one hundred (100) former Na-
tional pilots under the age of 40 were given
Captain or First Officer positions superior to
those of several hundred Pan Am pilots over the
age of 40 with greater actual seniority (i.e.,
longer service or earlier date of hire).

36a

(b) Of those one hundred (100) former National
pilots under the age of 40, approximately six-
teen (16) were given First Officer positions on
wide-bodied aircraft, and approximately six (6)
were given Captain positions superior to those
of several hundred Pan Am pilots over the age
of 40 with greater actual seniority.

(ec) Three (3) Pan Am pilots (Richard Jarboe,
Clifford Cool and Richard Paul), who were all
over the age of 40 and had over 16 years of
credited experience as of March 28, 1983, lost
their jobs on June 15, 1983, pursuant to the
terms of the pilot seniority system. Over one
hundred (100) former National pilots under
the age of 40 and with less actual seniority than
Messrs. Jarboe, Cool and Paul remained em-
ployed by Pan Am. See paragraph 10(e), infra.

(d) In hundreds of other instances, Pan Am pilots
over the age of 40 received assignments inferior
to those of former National pilots who were
younger and had less actual seniority than their
Pan Am counterparts.

9. Pan Am has since issued a number of awards reas-
signing pilots in the Pan Am pilot seniority system. Each
of these awards has been heavily affected by the above-
described “conditions and restrictions” in the Gill Award,
in addition to the operation of the integrated pilot senior-
ity list. Each of the awards has had an adverse impact
on senior pilots over the age of 40, including Plaintiffs,
which impact has been similar to, if not greater than,
that caused by the Award of March 28, 1983. Each of
the awards has been substantially influenced by the “con-
ditions and restrictions” in the Gill Award.

10. The “conditions and restrictions” in the Gill
Award have disadvantaged Pan Am pilots, including

37a

Plaintiffs, who are older and have longer service and fly-
ing experience than those benefitted. For example:

(a) No system flush (p. 6)—had the effect of keep-
ing Pan Am and National pilots in their pre-
merger positions between 1981 and 1983, thus
allowing younger National pilots to hold posi-
tions and receive salaries to which older Pan
Am pilots with longer service were entitled.

(b) Restrictions on 747 and DC-10-30 Captain va-
cancies (p. 6)—was to take effect as of Janu-
ary 1, 1986, but Pan Am is contending that it
is not applicable; issue is in arbitration.

(ce) Cross-bidding (p. 7)—allowed former National
pilots to retain higher-paying Captain and First
Officer positions while older and more senior
Pan Am pilots remained in or in some cases
were even demoted to lesser-paying Flight Engi-
neer positions.

(d) New flying (p. 7)—provided that if Pan Am
were to increase its utilization of any aircraft
before January 1, 1986, new assignments on
such aircraft would not be distributed by actual
seniority (i.e., by length of service or date of
hire), nor even by the integrated seniority list,
but rather by a ratio of two Pan Am airmen to
one National airman. This provision thus had
the effect of incorporating into the pilot seniority
system another ratio, even more age discrimi-
natory and less seniority-based than the one
used in the Gill Award to merge the two lists.
Since Pan Am pilots outnumber National pilots
by more than three to one, and Pan Am pilots
as a group are older and more senior, this two-
to-one ratio distributed “new flying” assign-
ments in a pattern which disadvantaged older
Pan Am pilots with longer service.

38a

(e) Furloughs (p. 7)—provided that furloughs (i.e.,

layoffs) before January 1, 1986, would not be
governed by actual credited seniority (i.e., with
pilots with lesser service or more recent dates of
hire furloughed first) nor even by the seniority
list (ie., with pilots at the bottom of the list
furloughed first), but rather by a formula
whereby one Pan Am airman would be fur-
loughed for each National airman furloughed.
This provision was used to effectuate the fur-
lough discussed in paragraph 8(c) above, which
had an adverse impact on these pilots over age
40. Moreover, an accompanying provision gov-
erning recalls of furloughed pilots has also been
interpreted by Pan Am so as to disadvantage
pilots over age 40.

(f) Protection of flying until January 1, 1986

(p. 8)—

(1) Protection of 747, L-1011 and DC-10 fly-
ing—had the effect of barring older, more
senior Pan Am pilots from receiving as-
signments on aircraft formerly owned by
National.

(2) Protection of 727 flying (p. 9)—required
older, more senior Pan Am pilots to move
to Berlin, West Germany, in order to re-
ceive B-727 Captain positions, while
younger, less senior National pilots were
able to remain in the United States and
hold such positions. This provision also al-
located other positions on the B-727 by
ratios which had an adverse impact on
senior Pan Am pilots over the age of 40.
As interpreted by Pan Am, this provision
was extended to deny positions on newly
acquired B-727 and A-300 aircraft to older,
more senior Pan Am pilots.

30a

(g) Sale of B-747 or DC-10-30 prior to January 1,
1986—had same effect as (f) (1).

(h) Sale of L-1011 or DC-10-10 aircraft prior to
January 1, 1986—had same effect as (f) (1).

(i) Recapture provisions—took effect as of Januarv
1, 1986, and will allow younger, less senior Na-
tional pilots to regain positions which they re-
ceived prior to January 1, 1986, and which
older, more senior Pan Am pilots would other-
wise be abie to claim in the

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_0736%3A1. Public record. Not legal advice.