Amicus Curiae Brief — Delta Air Lines, Inc. v. Association of Flight Attendants

OCTOBER TERM, 1989

DELTA AIR LINES, INC., PETITIONER

Vv.

ASSOCIATION OF FLIGHT ATTENDANTS, AFL-CIO

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

JOHN G. ROBERTS, JR.

Acting Solicitor General

STUART M. GERSON

Assistant Attorney General

DAVID L. SHAPIRO

Deputy Solicitor General

MICHAEL R. DREEBEN

Assistant to the Solicitor General

WILLIAM KANTER

MARC RICHMAN

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTIONS PRESENTED

1. Whether, after two air carriers merge, the National

Mediation Board’s exclusive jurisdiction over representa-

tion disputes bars arbitration of a union’s claim for dam-

ages based on the alleged violation by one of the carriers

of the successorship provision of its collective bargaining

agreement.

2. Whether a union’s request for arbitration of its

damages claim for breach of a successorship provision in

a collective bargaining agreement is rendered moot by

the National Mediation Board’s termination of the

union’s certification as representative.

(1)

TABLE OF CONTENTS

Cases:

(111)

Page

ee csnausthenneaniianscnneneaacs 1

i csacauunscetcesanaeunavinnsens 6

a _cesnnanstbadnvaonsnensnensbacens 20

TABLE OF AUTHORITIES

Air Line Employees Ass’n Vv. Republic Airlines,

Inc., 798 F.2d 967 (7th Cir.), cert. denied, 479

Nees uuensthssucteanssnes 13

ALPA V. Texas Int’l Airlines, Inc., 656 F.2d 16 (2d

ee swnhansheunesbssakeissesncas 13, 14

Andrews Vv. Louisville & N.R.R., 406 U.S. 320

Teen ais ni ccnsnnseunnenannnnaararasensaune 14

AT&T Technologies, Inc. v. Communications Work-

RI UI I CRUD osc. cnccccccccsscccnccccnnccccscnseees 9

Belknap, Inc. v. Hale, 463 U.S. 491 (19838) .......... 9,12

Brotherhood of Ry. & S.S. Clerks v. United Air

Lines, Inc., 325 F.2d 576 (6th Cir. 1963), cert.

dismissed, 379 U.S. 26 (1064) .........0000.00. 13

Consolidated Rail Corp. v. Railway Labor Execu-

tives’ Ass’n, 109 S. Ct. 2477 (1989) .........0..... 2

Delta Air Lines, Ine. v. International Bhd. of

Teamsters, 484 U.S. 806 (1987) ........000..000000..... 4

Ellis v. Brotherhood of Ry. Clerks, 466 U.S. 435

Neen TT a snnniasenntnaccunnennsscceins 18

Flight Engineers’ Int’l Ass’n v. Pan American

World Airways, Inc.:

716 F.Supp. 110 (S.D.N.Y. 1989) 2.000.000.0000... 15

No. 89-7911 (2d Cir. Feb. 18, 1990) ............. 14-15, 16

General Committee of Adjustment v. M.-K.-T.

ES |) 5

IBTCHWA, Local Union No. 2702 v. Western Air

Lines, Inc., 854 F.2d 1178 (9th Cir. 1988) _...... 5, 19

IBTCHWA, Local Union No. 2707 v. Western Air

Lines, Inc., 813 F.2d 1859 (9th Cir. 1987) ........... 4

Cases—Continued: Page

Independent Union of Flight Attendants v. Pan

American World Airways, Inc., 664 F. Supp. 156

(S.D.N.Y. 1987), aff’d, 836 F.2d 130 (2d Cir.

SUED. anenshipesccadeshannedtcumnsanindaeinaicndsialadedla ahaa cae 13, 15, 16

International Ass’n of Machinists v. Central Air-

lines, Ine., 872 U.S. 682 (1968) ............................ 2,10

International Ass’n of Machinists v. Northeast

Airlines, Inc., 586 F.2d 975 (1st Cir.), cert. de-

OT, SE Tee Ek CID cicecccecscensessenseeieesaniisiannecece 13

International Bhd. of Teamsters v. Texas Int’l Air-

lines, Inc., 717 F.2d 157 (5th Cir. 1983) ........ 9,10, 138

John Wiley & Sons, Inc. vy. Livingston, 376 U.S.

FE ental Aa rE noe BE lads 18

Lewis Vv. Continental Bank Corp., No. 87-1955

Is en 19

NLRB v. Burns Int’l Security Services, Inc., 406

Re NE IID etcetera et 18

Ozark Air Lines, Inc. v. NMB, 797 F.2d 557 (8th

SIP 2 ROOFER ECO ae BAUS A ne 10

Pittsburgh & L. E. R.R. v. Railway Labor Execu-

tives’ Ass’n, 109 S. Ct. 2584 (1989) 0.000. 2

Switchmen’s Union Vv. National Mediation Bd., 320

I ed Re

Textile Workers Union v. Lincoln Mills, 353 U.S.

A —__ RRIRS NEE A Iaen EPA n OER ee Bi OSE SO 18

Trans World Airlines/Ozark Airlines, 14 N.M.B.

BN I citi icctsoohes hen cunsensccanetshnah cotaieks iphcaeeaeaba ties 4

United Paperworkers Int’l Union v. Misco, Inc.,

EE ___y RPA Secreta. ener ver Tiare OR 12

Western Airlines, Inc. Vv. International Bhd. of

Teamsters, 480 U.S. 1801 (1987) -.....00000000..... 4,17,19

W. R. Grace & Co. Vv. Local Union 759, Int’l Union

of United Rubber Workers, 461 U.S. 757

RSE RENE: Medi a ee ee A OOOMET 9, 12,13

Statutes:

Railway Labor Act, 45 U.S.C. 151 et seq. -...0000000....

§ 2, Fourth, 45 U.S.C. 152 Fourth _......

§ 2, Sixth, 45 U.S.C. 152 Sixth ............0 nn...

§ 2. Seventh, 45 U.S.C. 152 Seventh -......00000...

"i |

a a Ce

mwnMwo eH

Vv

Statutes—Continued : Page

§ 2, Ninth, 45 U.S.C. 152 Ninth -......0000000..... 1, 7, 9, 11

§ 5, Second, 45 U.S.C. 155 Second ....................... 2

| RRR RTE a a aC Re ae Oe 2

KS SE A RLS a eee Ne 2,11

Miscellaneous:

Procedures for Handling Representation Issues

Resulting from Mergers, Acquisitions or Con-

solidations in the Airline Industry, 14 N.M.B.

a aa 11

Procedures for Handling Representation Issues

Resulting from Mergers, Acquisitions or Con-

solidations in the Railroad Industry, 17 N.M.B.

NE ECAR ERR SA. Ci CRN CA RUNS 11

3 Restatement (Second) of Contracts (1981) ........ i]

Iu the Supreme Court of the United States

OCTOBER TERM, 1989

No. 89-459

DELTA AIR LINES, INC., PETITIONER

Vv.

ASSOCIATION OF FLIGHT ATTENDANTS, AFL-CIO

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

This brief is filed in response to the Court’s invitation

to the Solicitor General to express the views of the

United States.

STATEMENT

1. The Railway Labor Act (RLA or Act), 45 U.S.C.

151 et seg., governs labor relations in the rail and air

transportation industries. Under Section 2 Ninth of the

Act, 45 U.S.C. 152 Ninth, the National Mediation Board

(NMB) has the authority to investigate representation

disputes and to certify bargaining representatives for a

creft or class. The NMB’s jurisdiction to resolve repre-

sentation disputes is exclusive and is not subject to judi-

cial review. Switchmen’s Union v. National Mediation

Bd., 320 U.S. 297 (1943).

The RLA creates separate procedures for “minor” dis-

putes—disputes over the interpretation or application of

a collective bargaining agreement. See Consolidated Rail

(1)

2

Corp. v. Railway Labor Executives’ Ass’n, 109 S. Ct.

2477, 2480 (1989). The Act requires that such disputes

be resolved through conferences and compulsory arbitra-

tion. 45 U.S.C. 152 Sixth. In the airline industry, these

disputes are presented to system adjustment boards con-

sisting of representatives of the union and the carrier.

45 U.S.C. 184. The NMB does not have power to adjudi-

cate minor disputes. Its involvement is limited to ap-

pointing a neutral referee if a system board deadlocks,

see International Ass’n of Machinists v. Central Airlines,

Inc., 372 U.S. 682, 683 (1963), and interpreting the

“meaning or the application” of agreements reached

through mediation, if either party so requests. 45 U.S.C.

155 Second.’

2. Respondent Association of Flight Attendants

(AFA) was the certified representative of the flight at-

tendants on Western Airlines, Inc. As required by the

Act, Western’s 1984 collective bargaining agreement

with AFA established a System Board of Adjustment to

resolve grievances arising from the interpretation or ap-

plication of the agreement. The agreement also included

a “successorship” clause providing: “This agreement

shall be binding on any successor or merged Company or

Companies, or any successor in the control of the Com-

pany, its parent(s) or subsidiary(ies) unti! changed in

accordance with the Railway Labor Act, as amended.”

Pet. App. 3a.

In September 1986, Western entered into a merger

agreement with Delta Air Lines. Under the agreement,

in December 1986, Delta was to acquire 100% control of

Western, and in April 1987, Western was to be merged

into Delta and to cease independent operations. Until

the operational merger, Western would continue to honor

its collective bargaining agreement with AFA. The mer-

1A third category of RLA dispute (not at issue in this case) is a

“major” dispute, which involves a conflict over a proposal to change

rates of pay, rules, or working conditions. 45 U.S.C. 152 Seventh

156; Pittsburgh & L. E. R.R. v. Railway Labor Executives’ Ass’n,

109 S. Ct. 2584, 2589 n.4 (1989).

8

ger agreement did not purport to bind Delta to the

Western-AFA collective bargaining agreement. Pet.

App. 3a, 28-29a.

3. Before the merger’s initial step, AFA filed a griev-

ance against Western, alleging that Western had

breached the successorship provision by failing to bind

Delta to the collective bargaining agreement. When

Western denied the grievance on grounds that it raised

representation issues within the exclusive jurisdiction of

the NMB, AFA submitted it to the System Board of Ad-

justment. Western failed to arbitrate.

After the first step of the merger took place, AFA

filed a complaint in the United States District Court for

the District of Columbia to compel arbitration. AFA

requested expedited arbitration or, alternatively, the

preservation of the status quo pending arbitration. As

relief in the arbitration, AFA sought the restructuring

of the merger so as to bind Delta to the existing collec-

tive bargaining agreemenc, or. in the event that Western

failed to do so, the payment of damages. Pet. App. 3a-

4a, 28a.

The district court dismissed AFA’s complaint, holding

that it raised a representation dispute within the exclu-

sive jurisdiction of the NMB. Pet. App. 27a-33a. The

court stated that when representational issues are inter-

twined with arguably independent “minor disputes,”

courts should not undertake to separate the two, thereby

dividing jurisdiction between the NMB and a system

board of adjustment. Jd. at 31a.

4.a. In another action commenced prior to the con-

summation of the merger, two other Western unions sued

Western in the United States District Court for the Cen-

tral District of California to compel arbitration. Like

AFA, these unions alleged that Western had breached

the successorship clauses of their collective agreements.

The unions requested injunctive relief against completion

of the merger pending arbitration. The district court

denied relief, but in March 1987 the Ninth Circuit is-

sued an order compelling arbitration and enjoining the

merger until the arbitration was completed or until the

4

airlines stipulated that the arbitration would bind the

successor corporation. IBTCWHA, Local Union No. 2707

Vv. Western Air Lines, Inc., 813 F.2d 1359, 13864 (1987).

At the carriers’ request, Justice O’Connor stayed that

order pending the filing and disposition of a petition for

certiorari. Western Airlines, Inc. v. International Bhd.

of Teamsters, 480 U.S. 1301 (1987) (O’Connor, J., in

chambers).

b. Following the stay of the Ninth Circuit’s crder, the

operational merger of Delta and Western took place.

Delta requested the NMB to determine whether the cer-

tifications of Western’s unions were extinguished as a

result of the merger. To answer that question, the NMB

applied the factors bearing on whether the merger had

produced a single transportation system, as set forth in

Trans World Airlines/Ozark Airlines, 14 N.M.B. 21%

(1987).2, On July 9, 1987, the NMB ruled that, the

merger having eliminated Western as a separate operat-

ing entity, the certifications of the unions at Western

were extinguished as of April 1, 1987. Pet. App. 60a-

62a.

ce. On October 5, 1987, following the NMB’s decision,

this Court granted the petition for a writ of certiorari

in the Ninth Circuit case, vacated the judgment, and re-

manded for consideration of mootness. Delta Air Lines,

Inc. v. International Bhd. of Teamsters, 484 U.S. 806

(1987). On remand, the Ninth Circuit dismissed the ac-

*If a merger results in the integration of two carriers’ operations

into a single transportation system, the NMB will generally deter-

mine that the certification of a union representing the acquired car-

rier’s employees (who have become a minority in the new entity)

has been extinguished. - (Alternatively, the NMB in its discretion

may order an election.) The NMB applies a multi-factor test in

making that determination, and it may reach different results for

different crafts or classes of employees. See, e.g., Trans World

Airlines/Ozark Airlines, 14 N.M.B. at 237-240. In contrast, if a

merger results in the carriers’ retaining separate transportation

systems despite common ownership or control, the NMB will not

extinguish existing union certifications,

5

tion as moot, stating that “none of the relief sought in

the original complaint is now available.” JBTCWHA,

Local Union No. 2702 v. Western Air Lines, Inc., 854

F.2d 1178, 1178 (1988).

5. In an opinion issued after these developments, the

court of appeals in this case reversed the district court’s

dismissal of AFA’s complaint. The court first held that

AFA’s damages claim was not moot because the breach-

of-contract allegations—if proved—could support a dam-

ages award in arbitration. Pet. App. 7a.* Turning to

Delta’s jurisdictional arguments, the court held that ar-

bitration of AFA’s successorship claim was not precluded

by the NMB’s exclusive jurisdiction over “representation

disputes.” The court explained that, regardless of an ar-

bitrator’s decision on AFA’s damages claim, the NMB

would still enjoy the exclusive power to certify or de-

certify a representative of Delta’s employees. The court

therefore concluded that arbitration of AFA’s damages

claim would not undermine the exclusive jurisdiction of

the NMB. Id. at 18a-18a.

The court also held that an arbitration remedy for

damages was not preciuded simply because the arbitra-

tion would involve what Delta characterized as a “repre-

sentation issue.” The court reasoned that to extend the

NMB’s authority to cover all “representation issues”

would be inconsistent with the specific functions assigned

to the NMB in the Railway Labor Act, and would con-

flict with the Act’s goal of encouraging “conciliation,

mediation, and arbitration” as the favored means of re-

solving labor disputes. Pet. App. 22a (quoting General

Committee of Adjustment v. M.-K.-T. R.R., 320 U.S. 323,

332 (1943)).

Finally, the court dismissed Delta’s suggestion that if

the NMB itself lacks power to provide a damages rem-

edy in a case such as this, then no tribunal can do so and

3 The court noted that another D.C. Circuit panel had previously

found AFA’s claims seeking “continued representation” to be moot,

but had directed further briefing on whether AFA’s claims for dam-

ages were moot. Pet. App. 6a.

6

the union is left without a remedy. Pet. App. 22a-23a.

The court found no public policy that justified rendering

successorship provisions “unenforceable and of no effect.”

Id. at 22a.

DISCUSSION

Petitioner urges that the arbitration ordered by the

court of appeals—involving AFA’s damages claim for

Western’s alleged pre-merger breach of a successorship

clause—infringes upon the exclusive jurisdiction of the

NMB over representation disputes. We do not agree with

that contention, nor do we believe it warrants this

Court’s review. The arbitration involved here would not

interfere with the exclusive authority of the NMB over

representation disputes. Rather, allowing the arbitration

to go forward is fully compatible with the statutory plan

to entrust representation disputes exclusively to the

NMB and to entrust minor disputes over contract appli-

cation exclusively to arbitrators.

Nor do we believe that this case conflicts with deci-

sions of other courts of appeals. Several decisions have

barred unions from pursuing contract claims for in-

junctive or declaratory relief on the ground that the

resolution of those claims would effectively determine a

representation dispute that is committed to the NMB.

Neither the holdings nor rationales of those cases require

the denial of arbitral jurisdiction to consider a claim for

damages for a pre-merger breach of a successorship pro-

vision. While one very recent decision of the Second Cir-

cuit rejected a union’s request, following an airline ac-

quisition, to compel arbitration of a claim for contract

damages, the facts of that case are significantly different

from those presented here. Any tension in rationales

between the two decisions does not warrant this Court’s

review at present. Finally, we do not believe that cer-

tiorari is required because of fears that the decision be-

low will create a climate of uncertainty inhibiting air-

line mergers. Such concerns are speculative, and, in any

event, are not rooted in policies deriving from the RLA.

While there is a technical conflict between the deci-

sion below and the result reached by the Ninth Circuit

7

on the second question presented (mootness), we do not

perceive a need for this Court to review that issue. The

decision below is consistent with well-established prin-

ciples of mootness. Moreover, the Ninth Circuit did not

discuss or explicitly decide the issue presented here, and

may well have viewed the issue of damages as not re-

solved by its opinion. Thus, in our view, the petition for

certiorari should be denied.

1. Petitioner’s central claim (Pet. 8-14) is that be-

cause the RLA vests exclusive authority over representa-

tion disputes in the NMB, it precludes arbitration of a

union’s request for damages based on an alleged breach

of the successorship provision in a collective bargaining

agreement. Nothing in the scheme of the Railway Labor

Act requires that result.

a. Neither the language nor the underlying policies of

the RLA reauire the denial of arbitration here. 45

U.S.C. 152 Ninth governs “any dispute * * * among a

carrier’s employees as to who are the representatives of

such employees,” and sets forth procedural mechanisms

for the NMB to use in investigating the dispute and in

certifying the proper representative. Following such cer-

tification, the carrier shall ‘treat with the representative

so certified as the representative of the craft or class.”

Ibid. It is settled that the courts lack authority to in-

tervene in such representation disputes, which are en-

trusted exclusively to the NMB. Switchmen’s Union v.

National Mediation Bd., supra.

The arbitration requested by AFA would not require

an arbitrator (or a court) to perform any functions

that the Act assigns exclusively to the NMB in 45 U.S.C.

152 Ninth. In particular, a system board of adjustment

would not be called upon to determine which union (if

any) is the representative of Delta’s flight attendants.

Nor would Delta be obliged to “treat with” any particular

representative as a result of an arbitral award. As a re-

sult, the representation rights secured for employees by

the RLA—the right “to organize and bargain collectively

through representatives of their own choosing” and the

8

right of a “majority of any craft or class * * * to deter-

mine who shall be the representative of the craft or class”

(45 U.S.C. 152 Fourth)—would not in any way be com-

promised by the arbitration sought by AFA.

A system board considering AFA’s claim would only

have to take actions fully appropriate to the board’s

function of resolving contract disputes. The board would

have to consult the collective bargaining agreement, de-

termine the meaning and application of the successorship

provision, and consider any defenses raised. If the sys-

tem board concluded that the agreement reflected West-

ern’s promise to structure any merger so as to preserve

the independent identity of its operations, and thereby to

bind Western’s successor to the AFA collective bargain-

ing agreement, damages may be available to remedy a

breach of that promise. Such an award would simply

compensate AFA for Western’s violation of a contractual

undertaking. It would not undermine the authority of

the NMB to certify a representative based on events as

they actually unfolded.‘

4 Much of petitioner’s argument that this case involves a repre-

sentation dispute depends on its formulation of the issue that would

be put to the arbitrator—whether “the successor clause of the

AFA/Western contract entitled AFA to be recognized by Delta as

the representative of former Western flight attendants” (Pet. 7).

That formulation mischaracterizes AFA’s claim. AFA does not

claim entitlement to recognition by Delta. As AFA reads the suc-

cessor clause, it “imposed upon Western conditions precedent to a

merger, and dictated that Western could engage in only those types

of corporate transactions where there was no legal or other impedi-

ment to the successor’s assumption of the Agreement.” Resp. C.A.

Br. 12 (emphasis in original). There is no dispute that an airline

merger can be arranged so as to permit a successor to assume a

collective-bargaining agreement; indeed, the parties here arranged

the first step of their merger transaction to accomplish such a result.

Of course, whether a court agrees with AFA’s interpretation of

the successor clause is not the issue. “Whether “arguable” or not,

indeed even if it appears to the court to be frivolous, the union’s

9

Petitioner argues (Pet. 12-14) that since injunctive

relief pending arbitration of AFA’s claim would be un-

available in light of 45 U.S.C. 152 Ninth, a damages

remedy must also be denied. There is no anomaly, how-

ever, in holding that a damages remedy is not barred,

although an injunction might impermissibly intrude

upon the NMB’s functions. Cf. W. R. Grace & Co. V.

Local Union 759, Int’l Union of United Rubber Workers,

461 U.S. 757, 769 n.13 (1983) (“Compensatory dam-

ages may be available to a plaintiff injured by a breach

of contract even when specific performance cf the con-

tract would violate public policy.”); Belknap, Inc. v.

Hale, 463 U.S. 491, 507 (1983) (‘‘We need not address

the [specific performance] issue * * * since respondents

seek only damages.”). Indeed, such a distinction is basic

to the law of contract remedies. See 3 Restatement (Sec-

ond) of Contracts § 365, Comment a. (1981).

An injunction that continues or extends the applica-

tion of a collective bargaining agreement, even to pre-

serve the status quo, can effectively determine the core

issue of representation in derogation of the NMB’s ex-

clusive authority. See, e.g., International Bhd. of Team-

sters v. Texas Int'l Airlines, Inc., 717 F.2d 157, 161 (5th

Cir. 1983).° Precluding such an injunction protects the

claim that the employer has violated the collective-bargaining agree-

ment is to be decided, not by the court asked to order arbitration,

but * * * by the arbitrator.” AT&T Technologies, Inc. v. Communi-

cations Workers, 475 U.S. 643, 649-650 (1986).

5 Texas Int’l Airlines explained how an injunction in aid of con-

tract rights can infringe upon NMB’s jurisdiction. There, after two

airlines merged, a union that had been recognized by the smaller of

the two carriers sued for a declaration that its collective bargaining

agreement remained valid and for an injunction ordering the Com-

pany to comply with the agreement until another representative was

certified. 717 F.2d at 158, 160. The court held that it hac no juris-

diction to enforce the collective bargaining agreement, explaining

that the union played an “indispensable role in administrating the

10

NMB’s unique role under the RLA, a role designed to

facilitate labor peace and to clarify representation

rights. No similar rationale, however, applies to the ar-

bitration of a grievance seeking only damages for a car-

rier’s pre-merger breach of a successorship provision.

Because such an arbitration does not interfere with the

NMB’s role in investigating and resolving representation

disputes, the principles developed with respect to injunc-

tive relief do not apply.

The conclusion that the NMB’s authority over repre-

sentation disputes is not threatened here is reinforced

by considering the interplay with other dispute-resolution

mechanisms created under the Railway Labor Act. Al-

though the NMB alone certifies representatives, the Act

does not call for the NMB to interpret or apply collective

bargaining agreements. Indeed, the NMB is not even

authorized to determine the arbitrability of minor dis-

putes under the Act, as to do so “would seriously inter-

fere with NMB’s neutrality in labor-management rela-

tions.” Ozark Air Lines, Inc. v. NMB, 797 F.2d 557,

564 (8th Cir. 1986). In minor disputes, resort to the

system boards of adjustment is mandatory. Jnterna-

tional Ass’n of Machinists v. Central Airlines, Inc., 372

U.S. at 687-689. The arbitral process was intended to

reduce tensions over contract-related grievances, which

might otherwise escalate and cause interruption of the

Nation’s transportation services. bid.

Consistent with the allocation of contract disputes to

the system boards of adjustment, the NMB refused to in-

ject itself into Delta’s processing of grievances from the

former Western unions in this case. Pet. App. 6la. The

agreement,” and that “[c]ontinuation of the contract in force un-

avoidably constitutes a determination of employee representation.”

Id. at 161. The court thus believed that “[g]iven the [NMB’s] unde-

niable sole jurisdiction over representation matters, we infer from

the practical problems of divided jurisdiction a congressional inten-

tion to allow that agency alone to consider the post-merger problems

that arise from existing collective bargaining agreements.” /d.

at 164.

11

NMB has also formalized its recognition of the limita-

tions on its jurisdiction under 45 U.S.C. 152 Ninth in its

“Merger Procedures” for the airline and railroad indus-

tries. In the procedures for airlines, the NMB identi-

fied the following express limitations on its authority

over representation disputes: (1) “These procedures are

not a bar to the effectuation of voluntary recognitions

otherwise permissible under the Act”; (2) “[t]hese pro-

cedures shall not act to inhibit the processing of pending

grievances otherwise permissible under the Act’; (3)

“{t]hese procedures shall have no effect on the survival

of existing collective bargaining agreements”; and (4)

“(t]he Board recognizes that when a dispute involves

the interpretation or application of an airline collective

bargaining agreement, Section 204 of the Railway Labor

Act, 45 U.S.C. § 184, provides that it be referred to an

appropriate adjustment board for resolution through ar-

bitration.” Merger Procedures, Subp. F—Effect of Pro-

cedures, 14 N.M.B. at 394-395. See also 17 N.M.B. at

55-56 (parallel limitations applicable to rail carrier mer-

gers). Those limitations reflect the RLA’s division of au-

thority between the NMB and the system boards. The

allocation of responsibilities under Merger Procedures is

entirely consistent with the court of appeals’ holding in

this case; both further the underlying goal of the Act to

promote the peaceful settlement of labor disputes in the

transportation industry.

Since the NMB clearly has no power to hear a claim

that Western breached the successorship provision or to

award damages, petitioner’s argument, if accepted,

would render that provision unenforceable in the pres-

6 See Procedures for Handling Representation Issues Resulting

from Mergers, Acquisitions or Consolidations in the Airline Indus-

try (Merger Procedures), 14 N.M.B. 388 (1987); Procedures for

Handling Representation Issues Resulting from Mergers, Acquisi-

tions or Consolidations in the Railroad Industry, 17 N.M.B. 44

(1989).

12

ent context. The invalidation of the provision of the

AFA-Western contract, however, is not justified here.

Although “a court may not enforce a collective-bargain-

ing agreement that is contrary to public policy,” the

public policy “must be well defined and dominant, and is

to be ascertained ‘by reference to the laws and legal

precedents and not from general considerations of sup-

posed public interests.’” W. R. Grace, 461 U.S. at 766;

United Paperworkers Int’l Union v. Misco, Inc., 108 8S.

Ct. 364, 373-374 (1987). Applying those principles, the

Court ruled in W.R. Grace that an arbitrator could hold

a company liable in backpay for laying off employees in

violation of a collective bargaining agreement, even

though the layoffs were conducted under the mandate of

a conciliation agreement that the company had entered

with the Equal Employment Opportunity Commission.

The Court explained: “The dilemma * * * was of the

Company’s own making. The Company committed it-

self voluntarily to two conflicting contractual obliga-

tions.” 461 U.S. at 767. See also Belknap, Inc. v. Hale,

supra (no preemption of state court damages action by

employees who were laid off as a result of settiement of

federal unfair labor practice complaint).

The same principles apply here. As in Grace, peti-

tioner points to no source of law that justifies invalidat-

ing Western’s contract. Its only argument is that the

decision of a system board would somehow conflict with

the NMB’s exclusive authority to resolve representation

disputes. As we have discussed, that is not so. Rather,

under AFA’s reading of the collective bargaining agree-

ment, Western simply made two conflicting contractual

commitments. Its agreement with AFA, the union con-

tends, constituted a commitment to remain a separate

carrier for representation purposes, while its merger

agreement with Delta committed it to form a singie

transportation system. Although AFA cannot obtain spe-

cific performance of its contract by requiring Delta to

“treat with’ AFA as representative of the flight attend-

13

ants, AFA may seek damages for the breach. Cf. W.R.

Grace, 461 U.S. at 768-769 & n.12."

b. We do not agree with petitioner’s contention (Pet.

15-22) that this case conflicts with decisions of other

courts of appeals considering merger or acquisition-

related issues under the RLA. Many cases, of course,

have found particular contract claims barred by the ex-

clusive jurisdiction of the NMB.° In those cases, how-

ever, a union sought to continue its representational

7 Of course, if an arbitrator were to enter an award that im-

permissibly strayed into areas reserved to the NMB under the RLA,

such a decision would be voidable in post-award judicial review. We

see no reason, however, to preclude the arbitral process at the outset

because of some remote possibility that an award could be held

improper.

8 See, e.g., Independent Union of Flight Attendants (IUFA) v.

Pan American World Airways, Inc., 664 F. Supp. 156 (S.D.N.Y.

1987), aff'd per curiam, 836 F.2d 130, 131 (2d Cir. 1988) (rejecting

union’s claim for arbitration of the question whether the collective-

bargaining agreement covered jobs on a newly acquired, but sepa-

rately operated, airline); Air Line Employees Ass’n v. Republic

Airlines, Inc., 798 F.2d 967, 968 (7th Cir.) (per curiam) (rejecting

claim by a union that the court should declare invalid an agreement

by the larger carrier in a planned merger to recognize rival unions

as the representative of the post-merger workforce), cert. denied,

479 U.S. 962 (1986) ; International Bhd. of Teamsters v. Texas Int'l

Airlines, Inc., 717 F.2d 157, 158 (5th Cir. 1983) (rejecting claim

by a post-merger minority union for a “declaratory judgment that

[the union’s] collective bargaining agreement is still in force and

will remain effective until another employee representative is certi-

fied”); ALPA v. Texas Int’l Airlines, Inc., 656 F.2d 16, 23-24 (2d

Cir. 1981) (rejecting claim by incumbent union for an injunction

requiring carrier to use union pilots on newly formed subsidiary in

accordance with collective bargaining agreement); International

Ass’n of Machinists v. Northeast Airlines, Inc., 536 F.2d 975, 977-

979 (1st Cir.) (rejecting claim that acquiring carrier was obligated

to bargain with a union representing the acquired carrier’s em-

ployees; but reserving question whether acquiring carrier had to

arbitrate grievance), cert. denied, 429 U.S. 961 (1976); Brotherhood

of Ry. & S.S. Clerks v. United Air Lines, Inc., 325 F.2d 576, 577

(6th Cir. 1963) (rejecting claim for a declaration that the acquiring

carrier was bound by the collective-bargaining agreement between

the union and the acquired firm), cert. dismissed, 379 U.S. 26

(1964),

14

status after a merger or acquisition, or to extend its

certification to cover additional jobs, through the medium

of an action purporting to enforce its collective-bargain-

ing agreement. The courts in those cases found that the

claims involved “representation disputes” because the

collective-bargaining agreements could not be enforced

without a determination of the unions’ representative

status. In that setting, the courts reasoned, a federal

court cecision would improperly resolve the very issue of

current and future representation reserved to the NMB.

Since the present dispute involves a claim solely for

damages for a pre-merger breach of the collective bar-

gaining agreement, it does not require an arbitrator (or

a court) to determine present representation rights.

AFA is not seeking prospective application of its

collective-bargaining agreement to Delta. Instead, AFA

is seeking damages on the basis of Western’s pre-merger

decision to merge with Delta in a way that assertedly

breached the successorship clause. Thus, the underlying

rationale of the cases cited by petitioner does not apply

here. Although the unions in some of the cited cases may

have expressly or implicitly sought damages in addition

to equitable relief, the heart of the claim in each in-

stance was a request for prespective relief affecting on-

going labor relations. As a result, none of the appellate

decisions cited by petitioner squarely considers or ana-

lyzes the implications of a request for damages alone.°

A recent decision of the Second Circuit did address a

union’s arbitration request for damages alone. In Flight

Engineers’ Int’l Ass’n (FEIA) v. Pan American World

®Only ALPA v. Texas Int'l Airlines, Inc., 656 F.2d 16, 23-24 (2d

Cir. 1981), even mentions damages, indicating in passing that the

complaint sought a judicial grant of “damages and injunctive re-

lief,” with an injunction and specific enforcement of the collective

bargaining agreement being the primary objective of the suit. /d.

at 17-18. The court’s holding, however, was simply that judicial

intervention was not warranted. Jd. at 24. As the court below noted

(Pet. App. 21a), given the limited role of the courts under the RLA,

a judicial award of damages is plainly impermissible for contract

claims. Andrews v. Louisville & N.R.R., 406 U.S. 320 (1972). An

arbitral award of damages stands on an entirely different footing.

15

Airways Inc., No. 89-7911 (Feb. 18, 1990), the court of

appeais refused to order arbitration of a claim that an

airline had breached a “scope” clause in a collective-

bargaining agreement. The scope clause required the

carrier or its subsidiaries to use union-represented em-

ployees for all of a designated type of work. FEIA as-

serted that the carrier had breached the clause by em-

ploying non-union personnel on a newly acquired re-

gional airline. After the decision in JUFA v. Pan Amer-

ican World Airways, Inc., supra, which held that a court

lacks jurisdiction to compel arbitration of an analogous

scope-clause claim seeking work reassignment, the union

amended its grievance to seek only damages. The court

of appeals found that FEIA’s claim was nonetheless gov-

erned by JUFA because both cases “implicated represen-

tation concerns within the exclusive jurisdicticn of the

NMB, i.e., whether the union’s certification applied to

the subsequently acquired Ransome subsidiary and

whether the two related airlines should be treated as a

single carrier for representation purposes.” FEJA, slip

op. 5.

The rationale of the Second Circuit’s holding in FEJA

is in some tension with the present decision. It might

be possible to recast the grievance in FEIJA as a claim

that the scope clause required Pan American to arrange

any airline acquisition so as to permit FEIA to perform

the work on the newly acquired carrier, and that Pan

American had breached the clause by failing to do so

when acquiring Ransome. So stated, the claim in FE/A,

like the claim in this case, would flow from a single pre-

merger act. Thus, under the theory accepted by the D.C.

Circuit, such a reformulated claim by FEIA might have

merit.

Nevertheless, the cases are significantly different on

their facts. As the district court in FEJA pointed out,

716 F. Supp. 110, 115 (S.D.N.Y. 1989), the damages

relief sought by the union in that case for breach of

the scope clause would be triggered “every time” the

acquiring carrier assigned work to an employee not rep-

resented by the union. Consequently, the Second Circuit

16

believed that “an award of the damages sought here—or

even a realistic threat of such an award—would have the

same practical effect” on representation rights as an in-

junction reassigning the work. Slip. op. 6. Here, in con-

trast, the basis of AFA’s damages claim is that a single

pre-merger action by Western—entering the merger

agreement with Delta—constituted a breach of the suc-

cessorship clause. A damages award for such a claim

would not be equivalent to an injunction governing fu-

ture representation rights. Moreover, the Second Cir-

cuit’s approach in scope-clause cases appears to derive in

part from a particular concern that arises in those cases.

A union’s claim that every assignment of work to non-

union employees constitutes a breach of an ongoing col-

lective agreement may well interfere with the inde-

pendent interests of those employees in retaining their

jobs and in choosing a representative.’ Such a concern

is not implicated, however, by a union’s claim that a

carrier is liable in damages, for breach of a successor-

ship clause in an agreement no longer in force, because

the carrier agreed to a merger that resulted in loss of

the union’s certification."

10 The district court in JUFA (whose reasoning the Second Cir-

cuit endorsed in affirming, see 836 F.2d at 131) stressed that “the

unrepresented flight attendants who worked Ransome’s flights in

the past and who now service the Pan Am Express flights have ‘a

representational stake’ in the matters raised.” JUF.A v. Pan Ameri-

can World Airways, Inc., 664 F. Supp. at 159. See also FEJA, slip

op. 6-7.

11 The Second Circuit itself distinguished the present decision by

pointing out that the NMB had already extinguished AFA’s certifi-

cation by the time of the D.C. Circuit’s decision; “thus, in view of

the NMB’s conclusive determination of the _representation issue,

a court order compelling arbitration of the damages claim would not

interfere with the NMB’s exclusive jurisdiction.” FEJA, slip op. 8.

While this is a factual distinction between the cases, we have some

doubt of its significance, at least in the context of a claim under a

successorship clause. Before the NMB decided the representation

dispute in this case, AFA’s damages might have been somewhat

indefinite, but the claim itself had no potential to interfere with

the NMB (whatever effect it might have on the parties’ willingness

~

17

Because there is no direct conflict, any tension in ra-

tionales does not, in our view, warrant review by this

Court. Nor does the decision below warrant review on

the theory that it conflicts with Justice O’Connor’s opin-

ion granting a stay in Western Airlines, Inc. v. Interna-

tional Bhd. of Teamsters, 480 U.S. 1301 (1987). That

opinion addressed only the question whether an injunc-

tion against the Delta-Western merger would impermis-

sibly determine a representation dispute reserved to the

NMB. This case, in contrast, raises the separate ques-

tion whether AFA may obtain arbitral damages based on

its claim that Western’s merger agreement with Delta

breached Western’s successorship clause.

Given the paucity of decided cases dealing with claims

solely for damages, we believe that further development

of the law in the lower courts would be desirable. The

rule governing claims for injunctive relief is well settled,

and there is no reason to believe that the courts of ap-

peals will diverge on damages claims like the present

one. To be sure, cases like FEJA present harder ques-

tions, and the correct application of recognized prin-

ciples in that context is as yet uncertain.’? This Court

would likely benefit from further ventilation of those

questions in the lower courts.

c. Petitioner also asserts (Pet. 26-30) that this

Court’s review is necessary because of the possible un-

certainties created by the prospect of damages in arbi-

tration. We disagree. Although the risk of damages for

breach of a successorship provision conceivably could in-

fluence the structure or viability of some airline mergers,

more likely it would simply affect the price at which a

transaction remains attractive. The union’s claim for

damages stands on the same footing as any claim against

the acquired company: the post-merger entity generally

to proceed). As we have noted, however, the two decisions are

distinguishable on other grounds.

12—In any event, a decision affirming in the present case, which

we believe would be the correct result, would not necessarily explain

the application of those principles to cases like FEIJA.

18

inherits the acquired company’s liabilities. Compare

John Wiley & Sons, Inc. v. Livington, 376 U.S. 5438, 550

n.3 (1964); NLRB v. Burns Int'l Security Services, Inc.,

406 U.S. 272, 305 (1972) (Rehnquist, J., concurring in

part and dissenting in part). And, to the extent that

companies seek to arrange their transactions to accom-

modate existing collective bargaining rights, that choice

is fully consistent with the policies expressed in the RLA.

What is more, the ultimate significance of the decision

is uncertain. Petitioner may successfully contend in ar-

bitration that the successorship clause was never in-

tended to govern a comprehensive operational merger

that destroyed the airline’s independent existence. And

even if liability for a breach is established, it is far from

clear what the measure of damages would be. Finally,

while we understand that successorship provisions may

currently be common in airline labor contracts, manage-

ment is free to bargain for more limited or precise pro-

visions in future agreements.

At all events, even if some airline mergers are affected

by the decision below, the policies of the Railway Labor

Act do not provide a basis for changing that result. If

Congress determines that the enforcement of successor-

ship clauses adversely affects air or rail systems, it can

provide a legislative remedy. Existing RLA provisions

should not be stretched beyond their proper bounds to

deny the claim asserted here.

2. The second question presented by the petition, re-

garding the asserted mootness of AFA’s damages claim,

also does not warrant review. Under well-established

principles, a claim for money damages in a labor dispute

is sufficient to prevail against a mootness argument, even

when prospective relief is no longer available because the

employer has left the business, Textile Workers Union Vv.

Lincoln Mills, 353 U.S. 448, 459 (1957), or the union

has been decertified, Ellis v. Brotherhood of Ry. Clerks,

466 U.S. 435, 441-442 (1984). In our view, therefore,

the decision below is correct. Petitioner’s arguments ( Pet.

22-26) that this case is moot because no damages could

19

conceivably be awarded are largely a reformulation of

the jurisdictional arguments discussed above.

Although we agree with petitioner that the decision

below conflicts with the Ninth Circuit’s disposition of the

parallel litigation involving other Western unions in

IBTCWHA, Local Union No. 2702 v. Western Air Lines,

Inc., supra, reso’ution of that technical conflict does not

call for this Court’s use of its limited certiorari resources.

The unions’ efforts in the Ninth Circuit litigation were

concentrated on injunctive relief to preserve their con-

tinued representational status pending arbitration. As

Justice O’Connor noted in her opinion granting a stay,

the unions claimed in the Ninth Circuit that “completion

of the merger would moot their claims under the collec-

tive bargaining agreement to System Board arbitration.”

Western Airlines, Inc., 480 U.S. at 1309. And one of

those unions (the Teamsters) also contended before the

NMB that a decertification order would enable petitioner

“to claim that the Teamsters’ legal case has been ren-

dered moot by intervening events.” Pet. App. 54a-55a.

Although the unions later attempted to salvage their

claims by recasting them to include the possibility of

damages, the Ninth Circuit did not discuss the impact of

a damages claim on mootness. Indeed, the court said

only that “the relief sought was an order compelling the

union to arbitrate and an injunction prohibiting the mer-

ger,’ and that since the merger had taken place “none

of the relief sought in the original complaint is now

available.” Pet. App. 65a. The opinion also hinted that

unspecified “post-merger” claims might require a differ-

ent analysis. 854 F.2d at 1178. In view of the substan-

tial uncertainty as to the meaning of the Ninth Circuit’s

per curiam disposition, and particularly in light of this

Court’s recent restatement of the basic principles govern-

ing mootness claims, see Lewis v. Continental Bank

Corp., No. 87-1955 (Mar. 5, 1990), the question of moot-

ness does not merit this Court’s attention.

20

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted,

JOHN G. ROBERTS, JR.

Acting Solicitor General *

STUART M. GERSON

Assistant Attorney General

DAVID L. SHAPIRO

Deputy Solicitor General

MICHAEL R. DREEBEN

Assistant to the Solicitor General

WILLIAM KANTER

MARC RICHMAN

Attorneys

MARCH 1990

* The Solicitor General is disqualified in this case.

wv U. &. GOVERNMENT PRINTING OFFICE; 1990 262203 805