# Petition for Writ of Certiorari — Independent Federation of Flight Attendants v. Trans World Airlines, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1990
- **Citation:** 493 U.S. 1044

## Text

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IN THE
Supreme Court of the United States

OCTOBER TERM, 1989

INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS, Qi
Petitioner,
Ve

TRANS WoRLD AIRLINES, Inc., GQ

Respondent.

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

WILLIAM A, JOLLEY

(Counsel of Record)

STEVEN A. FEHR

JOLLEY, WALSH, HAGER & GORDON
204 West Linwood Boulevard
Kansas City, Missouri 64111

On the Brief (816) 561-3755
Scott A. RAISHER Attorneys for Petitioner
JANAE L. SCHAEFFER Independent Federation
DALE L. INGRAM of Flight Attendants

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

@ «EEF c

a

QUESTIONS PRESENTED

1. In an action under § 2, First of the Railway Labor
Act, 45 U.S.C. § 152, wherein—

(a) it is claimed that the carrier breached its duty
to exert every reasonable effort to make agree-
ment; and

(b) the district court found that the carrier’s prin-
cipal stockholder (who established the carrier’s
bargaining objective) advised the Union that he
insisted on greater concessions from a predomi-
nantly female workforce because they were “‘sec-
ond incomes” rather than “breadwinners”; and

(c) the district court concluded that if the “bread-
winner” reference was “truly a basis for deci-
sion, IFFA [the Union] would doubtless be
right” that the carrier had violated its duty
under § 2, First—

may the carrier avoid a finding of a violation without
proving by a preponderance of evidence that it would
have taken the same action even if it had not relied on
gender-based stereotypes—as would be the case in an ac-
tion under Title VII of the Civil Rights Act of 1964
(Price-Waterhouse v. Hopkins, US. , 109 S.Ct.
1775 (1989) )?

2. Has a violation of § 2, First been established—
contrary to the Court of Appeals’ decision based solely on
the “clearly erroneous rule’”—when the district court
found that:

(a) the airline’s principal stockholder advised the
Union that he insisted on greater salary and
work rule concessions from a predominantly fe-
male workforce because they were “second in-
comes” rather than “breadwinners’” ;

(b) during the course of negotiations, the airline en-
gaged in many instances of unjustified refusal
to supply information or to answer questions;

(i)

ll

(c) the Union’s [other] various claims of misconduct
in bargaining [claims including, inter alia, writ-
ten agreement with another union concerning
concessions to be obtained by the carrier from
the Union, direct dealing with employees over
employment terms, insistence on predictably un-
acceptable proposals, threats to liquidate the air-
line if the Union prevailed and implementation
of changes in employment terms not subjected to
negotiation] may be generally accepted?

PARTIES

The Petitioner is Independent Federation of Flight
Attendants (“IFFA”-or “the Union’’), an unincorporated
labor organization designated as the bargaining repre-
sentative under the Railway Labor Act for employees of
Trans World Airlines, Inc. in the Flight Attendant craft
or class.

The Respondent is Trans World Airlines, Ine.
(“TWA”), a “common carrier by air’ within the mean-
ing of Title II (45 U.S.C. §§ 181, et seg.) of the Railway
Labor Act.

There are no other parties to the proceeding in the
Court of Appeals whose judgment is sought to be re-
viewed.

TABLE OF CONTENTS

Page
OPINIONS BELOW .........-...--..-::-.::1s-seeeseeseeeeeeesnssseeseeenees l
ZUIPREITIDIO TION qo xvc..cccxo..00ceeccneeeeesscrcerscencceescnnsnenssveceneonness 1
STATUTES INVOLVED ..................-..cccceseeeeeccssccnenenssnsees 2
STATEMENT OF THE CASE ...............-.-------...0---+- vali 2
Summary et sn tcansnannnteumnnnannhabans 3
The District Court Decision ...........................-----..---- 7
The Court of Appeals Decision ..............................-- 1l
REASONS FOR GRANTING THE WRIT ................... 11
I. DOES A FACTUAL FINDING THAT THE
CARRIER ESTABLISHED AND MAIN-
TAINED A BARGAINING POSITION AD-
VERSE TO ITS FEMALE EMPLOYEES,
FOR REASONS ASSERTEDLY INCLUDING
THE PERCEPTION OF SUCH FEMALE
EMPLOYEES AS “SECOND INCOMES”,
COMPEL A CONCLUSION THAT THE CAR-
RIER VIOLATED § 2, FIRST OF THE RLA,
UNLESS THE CARRIER PROVES THAT IT
WOULD HAVE TAKEN THE SAME AC-
TION IN THE ABSENCE OF SUCH CON-
a eeanedanhenianewaannauenens 13
A. The Decisions Below Are In Conflict With »
This Court’s Decision In Price-Waterhouse 13
B. The Decisions Below Upset The Harmony
Between Title VII And The Federal Labor
a ermeenennanineneonne 18

(iii)

iv

TABLE OF CONTENTS—Continued
Page

Il. DO FACTUAL FINDINGS—THAT A CAR-
RIER (TWA) UNDER THE RLA ENGAGED
IN MISCONDUCT, IDENTICAL TO THAT
HELD UNDER THE NLRA TO BE BAD
FAITH BARGAINING—COMPEL THE CON-
CLUSION THAT THE CARRIER’S MISCON-
DUCT BREACHED § 2, FIRST, CAUSED THE
IMPASSE AND PROMPTED THE STRIKE,
IN THE ABSENCE OF PROOF INTRO-
DUCED BY THE CARRIER TO THE CON-
WUNNUTE T ~uiiutinncsnlesejiiliccnipisessiaiesnamntadainiaelllicaiaiidincstbiene 20

A. The Lower Courts’ Holdings, That The RLA
Forbids “Surface Bargaining’ And “Little
Else”, Construes § 2, First As Imposing A
Lesser Bargaining Obligation Than The
NLRA: This Holding Misapplies The Stat-
ute And Presents A Conflict With The Sec-
ae A PS 20

B. The Decisions Below On The Issue Of Denial
Of Requested Information Are In Conflict
With This Court’s Decision In Truitt And
With Decisions Of Virtually Every Circuit,
Including The Eighth Circuit; On The Issue
Of Dealing With Other Than The Exclusive
Representative, They Are In Conflict With
This Court’s Decision In Virginia Railway. 23

1. TWA’s Refusal To Provide Information. 23

2. TWA’s Dealings With Other Than
ASRS SRE, Aore es pee ee rete 27

C. The Decisions Below Are Inconsistent With
This Court’s Decision In NLRB v. Transpor-
tation Management Corp. The Courts Below
Failed To Impose Upon TWA A Burden To
Prove That, Despite Its Proven Misconduct,
It Did Not Breach § 2, First, An Impasse
Would Have Been Reached And A Strike
Would Have Occurred ...................................... 28

Vv

TABLE OF CONTENTS—Continued

CONCLUSION .....................-. sdsilpisitribiiniliicagsionnnians 30

APPENDICES

APPENDIX A. Opinion And Judgment Of The
U.S. Court Of Appeals For The Eighth Circuit.. la

APPENDIX B. Order Of The U.S. Court Of
Appeals For The Eighth Circuit Denying Peti-
tion For Rehearing And Suggestions For Re-
eRe TD BIG ceicsinitincsiecichsinatentnitiiiatesiieaiiiinenn 6a

APPENDIX C. Revised Opinion And Judgment
Of The U.S. District Court For The Western

RES tne Sov aon CORTON 7a
APPENDIX D. Text Of Statutes Involved
II SINE BIE senenichcs nedinicsestendiencitntceeienaninions 69a
SD re BO OE BE secncittinceitin 7la
National Labor Relations Act -......................... 72a

Labor Management Relations Act .................... 75a

vi

TABLE OF AUTHORITIES

Cases Page
Alexander v. Gardner-Denver Co., 415 U.S. 36

CRIED cncsthneenesteneesuctsateuitindiiin eaten: 18
Boston Herald-Traveler v. NLRB, 223 F.2d 58 (ist

GEIR BIR IINUI: anetcctintiennscscesnainininietateisineienttnrinleaimaiaasiaia ia aa 24
BRAC v. Florida East Coast Railway Co., 384 U.S.

RRC SEE Ss 2 SEP AES eR 20
Chicago & N.W. Rwy. Co. v. United Transporta-

tion Union, 402 U.S. 570 (1971) own... 8, 21, 22

Chi., RI. & P. R.R. v. Switchmen’s Union, 292
F.2d 61 (2nd Cir. 1961), cert. den., 370 U.S. 986

GRTIIIIED . cctsaacpstsninenestansnianehienstebinebeenetneinetenenieiemiieniieis 22
Curtiss-Wright v. NLRB, 347 F.2d 61 (8rd Cir.

EE ee 24, 25
Detroit & Toledo Shoreline RR. v. United Trans-

portation Union, 396 U.S. 142 (1969) ................. 20
Elgin, Joliet & Eastern R.R. v. Burley, 325 U.S.

ARRAS og ot! 20, 21, 27
Emporium Capwell Co. v. Western Addition Com-

munity Organization, 420 U.S. 50 (1975) .......... 19
Fibreboard Paper Products v. NLRB, 379 U.S.

BE Ge ccccitabintscandisibtiddladiahsnpessaiabinmasaiamiceesi. 26
Franks v. Bowman Transportation Co., Inc., 424

Cae WS CUED cccncenicstinstilihbennrnsnnninntatainabies tale T asses 19

Frontiero v. Richardson, 411 U.S. 677°(1973) 8, 14, 18
General Electric Co. v. NLRB, 466 F.2d 1177 (6th

Cir. 1972) ....... seinapiatillaahiativiekoatedeiianiiaciaaaiaMiaaal ttt sea. 24
Hall v. Ledex, Inc., 669 F.2d 397 (6th Cir. 1982). 8
Independent Federation of Flight Attendants v.

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

Cir. 1987), cert. denied in part, —— U.S. ——,

108 S.Ct. 1219 (1988), rev'd in part, Trans

World Airlines, Inc. v. Independent Federation

of Flight Attendants, ——- U.S. ——, 109 S.Ct.

RD INES -chitscsdivacetinitstin ehitctadeiticcdaliastesdemeiaiaanaes _.. passim
Japan Airlines v. IAM, 588 F.2d 46 (2nd Cir.

1976), aff’g, 389 F. Supp. 27 (1975) ............... 22
Mastro Plastics Corp. v. NLRB, 350 U.S. 270

| REESE ssenntilsitictiiadbdiesebpeldidianesdmiemmadiindad ania 3

McDonnell-Douglas v. Green, 411 U.S. 792 (1973). 17

vii
TABLE OF AUTHORITIES—Continued

Page

NLRB v. Acme Industrial, 385 U.S. 482 (1967)... 24, 25
NLRB v. Billion Oldsmobile-Toyota, 700 F.2d 454

en 29
NLRB v. Herman Sausage, 275 F.2d 229 (5th

RR FE ccicrtnntinathnninnevcenninamennnaniannninedinndnannnann 29
NLRB v. Montgomery Ward, 183 F.2d 676 (9th

GL: TRIED ecssiscrntcterpmennainapennnncanndinatimcdsemppiianennens 29
NLRB v. Transportation Management Corp., 462

fe 2 a a 16, 28, 29

NLRB v. Truitt Mfg. Co., 351 US. 149 (1956)... 23, 24
NLRB v. Whitin Machine, 217 F.2d 598 (4th Cir.

1954), cert. den., 349 U.S. 905 (1955) .............. 24, 25
NLRB v. Yawman and Erbe, 187 F.2d 947 (2nd

a ren 24
Newspaper Guild v. NLRB, 548 F.2d 863 (9th Cir.

TITITIIEE cenisnctesetneniosinectabapeienebunsamnniianhasnnianaiibecnaipeaien 24, 25, 26
Price-Waterhouse v. Hopkins, —— U.S. ——, 109

Se GD ceccrniniinnsincntntsnnivinniiincansanniiennalil passim
Proctor & Gamble Mfg. Co. v. NLRB, 603 F.2d

SD BE Ga, TED cceecneentencrsticmnntmnenqunestttantinnnntn 24, 25
Queen Mary Restaurants v. NLRB, 560 F.2d 403

IS GE, TR seccencencenscncesnennteeniinrnsineematbangiannianss 29
Railroad Trainmen v. Jacksonville Terminal Co.,

ld 8 21
Seattle-First National Bank v. NLRB, 638 F.2d

ff. ) | 11

Teamsters v. United States, 431 U.S. 324 (1977). 19
Textile Workers v. Lincoln Mills, 353 U.S. 448

RID wececescnnenssvsccesesnsencnnadenceenehennneennueniaetichaanienenmns 18
Trans World Aivlines, Inc. v. Hardison, 432 U.S.
GID cvenreescesetesetestenceecsinctenecntnnhennneennintinentinne 19

Trans World Airlines, Inc. v. Independent Federa-

tion of Flight Attendants, 809 F.2d 483 (8th

Cir. 1987), aff'd by equally divided court, 485

U.S. 175 (1988), reh’a denied, US. —,

8 EE Re ere 2
United Air Lines v. Evans, 481 U.S. 553 (1977)... 19

viii
TABLE OF AUTHORITIES—Continued

United Packinghouse Union v. NLRB, 416 F.2d

1126 (D.C. Cir.), cert. den. 396 U.S. 9038

SEIT aiins lucien teiertaennnamssitininichaeamaiiaiaicaaaidataamiaiial 18, 29
Virginia Railway v. System Fed. No. 40, 300 US.

| ERT Cae reese seer ee Seer 23, 27
Wal-Lite Div. of U.S. Gypsum v. NLRB, 484 F.2d

I I ees 29-30
Wright Line, 251 NLRB 1083 (1980), enf’d, 662

F.2d 899 (1st Cir. 1981), cert. den., 455 U.S.

Statutes

Rules

SUEY UII a tarscriccinetnissltsintsdiubatiggnabiesnindinnebeabiniiaiacdsinnennds 29
ENE IRE ee 2
I a ee = 7
28 U. s. C. § 2201 A es APN is lee a ator aD 7
Civil Rights Act of 1964, Title VII, 42 U.S.C.

IN TIE III: ncenpsarniahanemnnenegnbenabaseiienmddiiebennnbees passim
Labor Management Relations Act, 29 U.S.C.

EERSTE SSS TRAE a SR Ae Oe 20
National Labor Relations Act, 29 U.S.C. §§ 151 et

Re I Ot a 9 SR oe passim

Section 8 (a) (5), 29 U.S.C. § 158 (a) (5). ......... 21
Section 8(d), 29 U.S.C. § 158(d) -..................... 22
Railway Labor Act, 45 U.S.C. §§ 151 et seq. passim
Section 2, First, 45 U.S.C. § 152, First —..... passim
Section 2, Ninth, 45 U.S.C. § 152, Ninth... 27
Rule 41(b) Federal Rules of Court Procedure _. 7

Other Authorities

Cox, The Duty to Bargain in Good Faith, 71 Harv.
I II OI oo sane eeRRSISSSNNNNNION 22

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

No.

INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS, Gi

. Petitioner,
TRANS WorLD Arrives, INc., Gi
Respondent.

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

The Petitioner, IFFA, respectfully prays that a writ of
certiorari issue to review the judgment and opinion of
the United States Court of Appeals for the Eighth Cir-
cuit entered August 16, 1989.

OPINIONS BELOW

The opinion and judgment of the U.S. Court of Ap-
peals for the Eighth Circuit, reported at 878 F.2d 254,
are reprinted as Appendix A' hereto. They affirm a
judgment and opinion of the U.S. District Court for the
Western District of Missouri, reported at 682 F.Supp.
1003, which is reprinted as Appendix C hereto.

JURISDICTION

The judgment of the Court of Appeals was entered on
June 28, 1989. On July 21, 1989, IFFA timely filed a
Petition for Rehearing and Suggestion for Rehearing En
Banc. On August 16, 1989, the court below entered an
order (reprinted as Appendix B) denying the petition,
and also denying petition for rehearing en banc by rea-

1 The pages of the appendices to this petition are referred to as
“se ,

2

son of the lack of a majority of the active judges voting
to rehear the case en banc. This petition is filed within
ninety (90) days of that date. The jurisdiction of this
Court is invoked pursuant to 28 U.S.C. § 1254(1).

STATUTES INVOLVED

The relevant provisions of the Railway Labor Act
GMMMBN” or “the Act”), as amended, (45 U.S.C. §§ 151,
et seq.), Title VII of the Civil Rights Act of 1964 (‘Title
VII’) (42_U.S.C. §§ 2000e, et seg.) and the National
Labor RelafMMMBAct (“NLRA”), as amended, (29 U.S.C.
§§ 151, et seg.) are reprinted as Appendix D hereto.

STATEMENT OF THE CASE

This is the third case to come before this Court aris-
ing out of IFFA's efforts (thus far unsuccessful) to reach
an amended collective bargaining agreement with TWA.
The first case, “TWA I’, involved the unilateral imple-
mentation of changed terms by TWA upon release to self-
help. “TWA II” involved the failure of TWA to rein-
state certain strikers at the end of an unsuccessful strike
resulting from TWA’s unilateral changes. This case cen-
ters upon the failed negotiations themselves, and TWA’s
conduct in those negotiations.

In TWA I, the Eighth Circuit held that TWA’s actions
in implementing changes about which it had not bar-
gained, including the elimination of the contractual union
security provisions, violated the RLA (809 F.2d 483);
that decision was affirmed by an equally divided court,
485 U.S. 175 (1988). In TWA II, the Eighth Circuit ruled
that TWA violated the RLA by denying reinstatement
to full-term strikers improperly replaced by (a) trainees
who had not yet become Flight Attendants and (b) cross-
over Flight Attendants who, during the course of the
strike, returned to work (819 F.2d 839). This Court de-
nied certiorari as to the unlawful “trainee” replace-
ments, U.S. ——, 108 S.Ct. 1219 (1988), but re
versed as to the “crossovers”, —— U.S. , 109 S.Ct.
1225 (1989).

aati. aaNet

3

As this Court noted, the “trainee” and “crossover” case
was predicated on the assumption that striking Flight At-
tendants were “economic” (rather than unfair labor prac-
tice) strikers. However, as the Court also noted (109
S.Ct. at 1229), foreshadowing this Petition, this case
advances the Union’s claim that (1) the IFFA strike was
not an economic strike, but rather was caused or prompted
by TWA’s breach of its § 2, First obligation to ‘exert
every reasonable effort to make agreement”, and (2)
strikers are therefore “unfair labor practice” strikers,
uncer principles enunciated in Mastro Plastics Corp. v.
NLRB, 350 U.S. 270 (1956), who are not subject to per-
manent replacement but rather are entitled, inter alia, to
their jobs upon their unconditional offer to return to
work.

Summary Of Facts

IFFA is the duly certified bargaining representative
of TWA Flight Attendants. 85% of the Flight Attend-
ants are female. The International Association of Ma-
chinists (“IAM’’) represents TWA’s 10,000 ground em-
ployees, 85% of whom are male, including mechanics,
helpers, janitors, ramp and fleet service personnel and
employees in the dining and commissary units. The Air
Line Pilots Association (“ALPA’) represents TWA’s
cockpit crew employees, who are overwhelmingly male.

In the summer of 1985, Carl Icahn gained controlling
stock ownership of TWA. To offset the acquisition costs,
Icahn determined to obtain concessions from its em-
ployees, including those represented by unions (17a).

Icahn first reached agreement with ALPA. Notable in
that written agreement was a provision committing Icahn
to “best efforts to achieve aggregate cost savings in pay
and benefits at 20 to 22%” from IFFA-represented em-
ployees (17a).?

2 Unless otherwise indicated, appendix references refer to the
district court decision.

4

Icahn next reached agreement with the IAM. The court
characterized the new IAM contract as a 15% wage cut
(17a). Undisputed, in fact, is the clear record evidence
that the agreement with the IAM, calling for no work
rule changes or headcount reductions, consisted of
yearly concessions-of-$49 Million (in hourly wage reduc-
tions and reduced contributions to a supplemental retire-
ment plan) * from the IAM’s 10,000 members. The IAM
concessions represented a 15% reduction of total IAM
payroll cost ($336 Million), or 11% of IAM aggregate
labor costs of $465 Million.

Icahn’s negotiations with IFFA were scheduled to go
last (17a). In the first individual bargaining meeting be-
tween Icahn and IFFA representatives, Icahn insisted,
over IFFA objections, that IFFA grant concessions
greater than those accepted from the IAM (18a). When
asked why, by IFFA’s principal negotiator, Icahn re-
sponded, inter alia, that those represented by the IAM
were “breadwinners” with families at home to support,
while “you girls are second incomes” who “don’t need the
money” (18a, 62a) .*

Upon IFFA’s refusal to accede to his demand, Icahn
learned of a pending (pre-Icahn) TWA bargaining pro-
posal to IFFA inconsistent with his own demands. He
ordered the withdrawal of that pending proposal (ac-

3 Also undisputed is that both the IAM and ALPA agreements
contained a “snapback” returning salaries and benefits to pre-
concession levels at the end of the contract term; Icahn and TWA,
at all times, refused to grant IF FA a snapback.

4The district court also found that Icahn repeated the “bread-
winner” comments up to the point of the strike (19a). It spe-
cifically credited the “[f]irm trial testimony” of IFFA’s principal
negotiator (18a) and “generally” credited that of all of IFFA’s
principal witnesses (47a). That testimony, though not noted in the
decision, reflects that Icahn repeatedly said, “[I]t is just like I
told you all along . . . some of these women, they got rich hus-
bands, .. . they don’t need this job, anyway”; and “|T]|hey should
have married a pilot, should have married a rich husband.” These
statements further reflect Icahn’s (and thus TWA’s) stereotyped
perception of women’s role as “second incomes”’.

oi 5

complished in October, 1985) and the introduction of a
new more onereus proposal seeking greater concessions.
The new proposal, made in December, 1985, “effectively
restarted negotiations by demanding concessions that
more than doubled the demands made . . . by TWA in
May” (20a).

The December, 1985 TWA bargaining proposals [which
were in fact later implemented on March 7, 1986 and
described by TWA as “fewer people [jobs lost] perform-
ing more work for less pay”] were valued by TWA’s
chief negotiator as representing the airline’s desired sav-
ings of $88 Million annually. Icahn valued the demanded
concessions at $110 Million annually (2la).5 These
later-to-be implemented demands were “predictably un-
acceptable to IFFA and its members” (54-55a). Undis-
puted record evidence is that a 22% salary reduction rep-
resented $44 Million of the total Concessions sought; nu-
merous work rule changes (fewer employees performing
more work) represented the remainder.

Between TWA’s introduction of the new and more
onerous bargaining demands in December and the ex-
piration of the 30-day countdown on March 7, 1986,
IFFA requested information and data. IFFA sought,
both verbally and in writing, the value or savings TWA
placed on each of its proposals (including numerous in-
dependent proposals included within some 22 generally
numbered proposals), TWA’s method of calculation of
such values, and also the nature and extent of conces-
sions made by other employees.* But those requests fell
on deaf ears. TWA “generally” supplied “basic” esti-
mates as to its generally numbered proposals; requested

5 Thus, the December TWA proposal, ultimately implemented by
TWA, represented concessions of twice as much ($88-110 Million)
from roughly half as many (6,000) Flight Attendants as compared
to the $49 Million accepted from 10,000 IAM employees.

6 In addition to the concessions accepted from ALPA and IAM,
supra, undisputed record evidence establishes that TWA imposed
concessions, in salary only, on its non-union employees, of between
14% and 15%.

6

details, calculations and breakdowns on the proposals were
available but not supplied (25a). There were “many
instances .. . in which TWA failed or refused to supply
information or to answer IFFA’s questions” (48a).

Though not specifically related in the district court
decision, uncontroverted evidence’ revealed other TWA
misconduct between December, 1985 and the March 7,
1986 exercise of self-help. This misconduct included
threats to liquidate the airline if IFFA prevailed; written
comments, to all TWA employees, disparaging IFFA and
its leadership; and, in advance of the self-help date, is-
suance of directives and instructions to departmental per-
sonnel to implement TWA’s demands on the self-help
dates.

Upon the failure to reach agreement by midnight,
March 6, 1986, TWA implemented its December proposals
(34a). IFFA commenced a strike in response. The strike
ended with IFFA’s unconditional offer to return to work
on May 17, 1986 (TWA II, 109 S.Ct. at 1228). In the
interim TWA made other changes in employment terms,
and insisted on additional demands, not previously raised
in the RLA bargaining process (34-35a). TWA’s post-
strike conduct included “altering adversely work rules
that were never in negotiation” and “further stiffening
of demands” as a condition of agreement (47a). In addi-
tion, TWA implemented further changes which were not
the subject of negotiation with IFFA, but instead the
result of direct discussion with rank-and-file employees
represented by IFFA.*

The painstakingly slow process of reinstatement of
some 5,000 full-term striking Flight Attendants, assumed
thus far to be “economic” strikers, is recited in this

™This evidence consisted of written documents authored by
TWA, TV’A bargaining notes, videotape recordings of public state-
ments by Car! Icahn, and the generally credited testimony of IFFA
witnesses.

8 Although this also was not specifically noted by the district
court, it is amply demonstrated by undisputed record evidence
consisting of TWA-authored memoranda.

7

Court’s decision in TWA II. Suffice it to say that 197
of the strikers were returned to their jobs at the conclu-
sion of the strike. All others remained subject to recall
as vacancies later arose. It would be more than three
years before the last striker was offered the opportunity
to regain her job.

The District Court Decision

IFFA commenced this action by filing a complaint on
March 4, 1986 in the district court claiming that TWA
had breached its duty under § 2, First of the Act,® and
seeking to enjoin the threatened March 7 unilateral im-
plementation of changed terms and conditions. However,
IFFA’s request for preliminary injunction was denied,
the changes were implemented, and the strike commenced.
Through subsequent amendments to the complaint, IFFA
requested, inter alia, a declaration that full-term strikers
were “unfair labor practice” strikers entitled to full
reinstatement retroactive to IFFA’s unconditional offer
to return to work on May 17, 1986, backpay from that
date forward, and restoration to all Flight Attendants
(strikers and non-strikers) of pre-self-help employment
terms.

The district court found that this was a case of first
impression, noting that: “Never before this case has a

court been asked to examine... a scenario of bargaining
sessions, for the purpose of finding an employer violation
[of the RLA] . .. imposing . . . severe sanctions...

applicable to an ‘unfair labor practice strike’ under the
NLRA” (37a).

IFFA presented its evidence over 31 trial days, con-
cluding in mid-March, 1987. At that point the court
recessed the trial, having invited TWA to file a motion to
dismiss under Rule 41(b) F.R.Civ.P. Nearly one year

® The jurisdiction of the district court was invoked pursuant
to 28 U.S.C. §§ 1331, 1837, and 2201, as the case arose under a law
of the United States regulating commerce, the Railway Labor
Act, 45 U.S.C. §$ 151, et seq.

8

later, after lengthy briefs and oral argument, the court
granted TWA’s motion on March 3, 1988 and revised its
decision on March 9, 1988. TWA had presented no live
testimony and virtually no evidence, other than portions
of deposition transcript designated after IFFA had com-
pleted its case.

The court rejected IFFA’s claims that a carrier’s vio-
lation of § 2, First may be established by proof of individ-
ual acts of misconduct, themselves constituting per se
violations '° of that Section’s mandate. The court held,
“(I]t is clear ... that the RLA is to be construed as
forbidding ‘surface bargaining’ and little, if anything,
further”, citing Chicago & N.W. Rwy. Co. v. United
Transportation Union, 402 U.S. 570 (1971), (41a).

As to IFFA’s allegation that TWA breached its § 2,
First obligation by insisting on disproportionately greater
and more onerous concessions from Flight Attendants
than from male work groups, because they were perceived
as “second incomes” rather than “breadwinners”’, the dis-
trict court found virtually all facts as alleged by IFFA.
Thus it found that (1) Icahn made the statements at-
tributed to him (18a and 62a); (2) Icahn’s statements
“tend to disclose his thinking” and “may well reflect the
basis of TWA’s position . . . through the strike” (61a) ;
and (3) if the breadwinner reference were “truly a basis
of decision, IFFA would doubtless be right” because
“(I]f a private employer were to establish a wage scale
favoring men because of such a theory, it would doubtless
violate Title VII of the Civil Rights Act of 1964” ™ (62a,
emphasis supplied). The court nonetheless rejected
IFFA’s claim of unlawful motivation on its own initia-
tive and without any requisite showing by TWA that it

10 E.g., bargaining with the motivation or intent to discriminate
on the basis of sex; persistent refusal to provide relevant and
necessary information in bargaining; establishing Flight Attendant
terms of employment through dealings with other than IFFA rep-
resentatives.

11 Citing Frontiero v. Richardson, 411 U.S. 677, 681 (1973) and
Hall v. Ledex, Inc., 669 F.2d 397, 399 (6th Cir. 1982).

9

would have taken the same action absent such considera-
tions. Instead, it simply concluded that the “second in-
come” and “breadwinner” remarks constituted “mere ra-
tionalization” (63a) or “a diabolical alternative” (20a,
emphasis supplied). Also without proof by TWA, the dis-
trict court further concluded that the “real reasons for
the IAM differential . . . must have been” (1) the IAM’s
ability to inflict greater strike damage“ and (2) a per-
ception of greater skill of those in the IAM as compared
with newly hired Flight Attendants (64a, emphasis sup-
plied). The district court went on to summarize its rea-
soning and its basis for decision by stating:

IFFA’s theory, that the breadwinner reference re-
veals Icahn’s motivation would signify that he is a
devotee of the Marxist or utopian distribution sys-
tem, “to each according to his needs.” While even
normally doctrinaire capitalists may be influenced by
such motivations occasionally ... , it is entirely im-
plausible that a hard-boiled “corporate raider” (to
use the label of the Court of Appeals) would sub-
scribe to that method of setting wages for middle in-
come personal (65a, emphasis supplied) ."

Thus the district court neither imposed nor shifted any
burden of proof upon TWA to show, by preponderance of
evidence or otherwise, that it would have taken the same
action in the absence of the “second income” considera-
tion. The court simply concluded, instead, that: “There
has been no persuasive showing that sex stereotyping gov-
erned or influenced Icahn’s economic demands...” (65a).

12In support of this finding the district court cited, not testi-
mony or proof adduced by TWA, but only (1) a trial concession
by an IFFA witness and (2) testimony heard in another case,
between TWA and the 1AM, that the latter was capable of crippling
the airline (64a). While both tended to establish IAM power,
neither provided proof that Icahn and TWA took their action
against Flight Attendants because of IAM power or that they
would have taken such action irrespective of the expressed “second
income” perceptions.

13 Not surprisingly, this Marxist-capitalist speculation was not
based on any facts or argument advanced by TWA.

10

As to IFFA’s other claims concerning TWA’s breach of
its § 2, First obligation to exert every reasonable effort
to make agreement, the court similarly found facts as ai-
leged by IFFA. Thus, the “many instances” .. . “in
which TWA failed or refused to supply information or
to answer IFFA’s questions” were “unjustified” (48a,
emphasis supplied). Nevertheless—the district court con-
cluded that IFFA had not proven that TWA acted in bad
faith, reasoning that “the potential [of undisclosed infor-
mation] for shaping an agreement between the parties
has not been demonstrated . . . except in the abstract”
(25a), and that no information sought “would have filled
the chasm” between TWA demands and IFFA offers
(27a). The court reached this conclusion despite:

(a) “generally credited” testimony concerning the im-
pact of the denial of information on IFFA’s ability to
understand the effects of the proposals or to present coun-
terproposals less offensive to its members;

(b) the fact that the information requests dealt with
mandatory subjects of bargaining, including salaries,
hours and working conditions; and

(c) the obvious disparity between TWA’s announced
desire for savings of $88 Million annually and those de-
mands which (by Icahn’s assessments) were worth $110
Million.

Likewise, the court found that Icahn had in fact agreed
with ALPA as to the level of concessions to be obtained
from IFFA. Although noting that the ALPA-Icahn
agreement was against public policy “in that it tended
to create rigidity in TWA’s bargaining stance [with
IFFA]” (5la), the court nonetheless rejected the argu-
ment that this action established a breach of the bargain-
ing obligation under § 2, First.

As to the other “various claims of misconduct in bar-
gaining by. TWA prior to the strike’, the court concluded
that they “may . .. be generally accepted” (28a, empha-
sis supplied). Again, however, the court determined that
these facts did not demonstrate that TWA had failed to

11

exert “every reasonable effort” to reach agreement. The
court felt there was no bad faith because, “[e] ven assum-
ing there were numerous instances of bullying and occa-
sional devious behavior by TWA bargainers and support-
ing staff, such misconduct would [only] have been di-
rected toward tricking or coercing IFFA into making a
bad bargain” (28a, emphasis supplied). Apparently it
did not matter what TWA had done.

The court held it “cannot conclude from the evidence
presented that TWA’s bargaining was in bad faith .. .”
(54a). Noting with approval Seattle-First National Bank
v. NLRB, 638 F.2d 1221 (9th Cir. 1981), the court
stated its belief that it was prohibited from “sitting in
judgment upon the substantive terms of a proposed col-
lective bargaining agreement” (55a). In spite of that
stated belief, however, the court determined that “the
sole cause of the impasse was the wide divergence” be-
tween TWA demands and IFFA concessionary offers
| (28a, emphasis supplied) and, that being the case, “the
) basic factual issues are whether TWA’s ultimate de-
mands have been shown to be beyond the range of reason-
ableness . . .” (29a)—an issue resolved by the court in
TWA’s favor (30a).

ae

The Court of Appeals Decision

The Court of Appeals assumed that NLRA concepts
may be applied to claims of relief for unfair labor prac-
tice strikers in RLA proceedings (5a). Beyond that, how-
ever, the Eighth Circuit did not specifically address the
issues raised. Instead, despite the district court findings
of fact, the Eighth Circuit affirmed, in a short per curiam
opinion, stating that the district court’s decision “rests on
findings of fact that are not clearly erroneous” (5a).

REASONS FOR GRANTING THE WRIT

IFFA files this petition not merely to correct error
below, although the decision is clearly in error. IFFA
files this petition not merely to correct manifest injustice,
although manifest injustice has been done to 5,000 em-

| cae nneemeeeieille

12

ployees, predominantly female, who exercised their statu-
tory right to strike in order to oppose the imposition of
massive adverse changes maintained in bargaining
through the course of conduct detailed herein and, indeed,
found by the district court. Instead IFFA files this peti-
tion so that this Court may exercise its supervisory power
over lower federal courts and pass upon questions, having
wide impact under the employment laws of the United
States regulating collective bargaining and prohibiting
discrimination. The resolution of these questions will
have immediate importance and impact upon unionized
employees—female and male alike—in a deregulated air-
line industry, where airlines are targeted for corporate
takeover and their employees targeted for recoupment of
the debt incurred in the financing of those takeovers.

IFFA, as it did in the Court of Appeals, embraces the
facts as found by the district court. Those facts, coupled
with the conclusions reached by the courts below, stand
for propositions wholly untenable and_unprecedented un-
der what has been, until now, a harmonious scheme of
federal labor legislation. The decisions below establish,
in the Eighth Circuit at least, that:

(1) An employer, which establishes adverse terms of
employment on an individual basis, at least inter
alia on gender-related stereotyped considerations,
may not escape a finding of violation without
proof that it would have taken the same action
in any event (Price-Waterhouse, infra)—while
an airline employer, which establishes adverse
employment terms through RLA collective bar-
gaining and which asserts at the time it decided
to take such action that it did so at least inter
alia on the basis of gender-related stereotype,
may nonetheless escape a finding of violation
without any proof that it would have taken the
same action in any event;

(2) The obligations imposed upon an employer under
$2, First of the RLA requiring exertion of
“every reasonable effort to make agreement” rep-
resents a lesser burden than that imposed by the

13

NLRA prohibition of refusal “to bargain collec-
tively with the representatives of his [the em-
ployer’s}] employees.”

I. DOES A FACTUAL FINDING THAT THE CAR-
RIER ESTABLISHED AND MAINTAINED A
BARGAINING POSITION ADVERSE TO ITS
FEMALE EMPLOYEES, FOR REASONS AS-
SERTEDLY INCLUDING THE PERCEPTION OF
SUCH FEMALE EMPLOYEES AS “SECOND IN-
COMES”, COMPEL A CONCLUSION THAT THE
CARRIER VIOLATED § 2, FIRST OF THE RLA, UN-
LESS THE CARRIER PROVES THAT IT WOULD
HAVE TAKEN THE SAME ACTION IN THE AB-
SENCE OF SUCH CONSIDERATION?

A. The Decisions Below Are In Conflict With This
Court’s Decision In Price-Waterhouse.

The elimination of employment discrimination based
upon sex is central to this nation’s employment policy as
embodied in Title VII of the Civil Rights Act of 1964.
Section 2000e-2(a) makes unlawful (1) discrimination
“against any individual with respect to his compensation,
terms, conditions or privileges of employment, because of
such individual’s . . . sex” and (2) limitation, segregation
or classification of employees “in any way which would
deprive or tend to deprive any individual of employment
opportunities or otherwise adversely affect his status as

an employee, because of such individual’s . . . sex”.

Title VII's reflection of the all-important policy of
eliminating employment discrimination does not exist in
isolation. In unionized work environments, where employ-
ment terms are established collectively under the NLRA
or the RLA, the elimination of and protection from em-
ployment discrimination, on grounds enumerated in Title
VII, is no less a national priority. Section 2, First re-
quires that an air carrier “exert every reasonable effort”
to make agreement. The establishment of employment
terms, out of gender-based stereotype or other discrimina-
tory motivation, through a § 2, First collective bargaining
process, is no less at odds with national policy than in an

| tatiana

ee

- ee

14

individual, non-collective employment relationship. Cer-
tainly this is what the district court meant in saying that
if the “breadwinner” reference reflected motivation,
“IFFA would doubtless be right” (62a)."* Yet, in a Title
VII case, an employer shown to have based adverse em-
ployment action, at least inter alia, on invidious percep-
tions of gender stereotype has the burden to prove that
it would have taken the same adverse action in any event.
Under the holdings below, on the other hand, an air car-
rier operating under the obligations imposed by § 2, First
and likewise shown to have based adverse action on in-
vidious stereotype perception will have been immunized
from any such burden.

At the time when Icahn announced that he would insist
on more onerous and disproportionate concessions from
Flight Attendants, he was directly asked why. Icahn ex-
plained that Flight Attendants were “second incomes”
rather than “breadwinners”; he repeated like remarks
until the time for self-help came. The district court spe-
cifically determined that if Jcahn’s second income /bread-
winner reference were “truly a basis of decision, IFFA
would doubtless be right” (supra, p. 8); but nonetheless
dismissed Icahn’s own, asserted reason as a “diabolical
alternative” and “mere rationalization” (supra, p. 9),
concluding instead that the “real reasons” for the dis-
parate treatment “must have been” a male workforce’s
(IAM’s) ability to inflict greater damage and a percep-
tion of its greater skill (supra, p. 9). The court went on
to explain that this must be so because a contrary reason,
Icahn’s own reason, would signify acceptance of the
“Marzist or utopian distribution system” on the part of
a ‘hard-boiled corporate raider’’—something that would
be entirely “implausible” (supra, p. 9).

Needless to say, the record is devoid of evidence that
sex-biased discrimination signifies acceptance of Marxist

14 Denial of benefits to women because of their perceived status
as second incomes, rather than breadwinners, is, of course, dis-
crimination on the basis of sex. Frontiero v. Richardson, 411 U.S.
677 (1973).

15

principles, or that such acceptance is implausible on the
part of a capitalist.

That Icahn may [and if put to proof, might], in addi-
tion to the “second income” perception, have taken into
account factors based on skill and economic power should
not lessen the direct admission that sex-biased considera-
tions were a substantial motivating factor in the deci-
sion. As this Court noted in Price-Waterhouse v. Hopkins,
—— US. ——, 109 S.Ct. 1775 (1989), a Title VII case:

It is difficult for us to imagine that, in the simple
words “because of,” Congress meant to obligate a
plaintiff to identify the precise causal role played by
legitimate and illegitimate motivations in the em-
ployment decision she challenges. We conclude, in-
stead, that Congress meant to obligate her to prove
that the employer relied upon sex-based considera-
tions in coming to its decision. (109 S.Ct. at 1786,
emphasis supplied. )

Assuming, arguendo, that the action taken may have been
“the product of a mixture of legitimate and illegitimate
motives”, “it simply makes no sense to ask whether the
legitimate reason was ‘the’ ‘true reason’ for the decision”’.
(Id. at 1788). Upon a showing that gender played a
motivating part in the decision, the employer—

... may avoid a finding of liability only by proving
that it would have made the same decision even if
it had not allowed gender to play such a role. This
balance of burden is the direct result of Title VII's
balance of rights. (/d. at 1787-88, emphasis sup-
plied. )

As this Court made clear:

In saying that gender played a motivating part in an
employment decision, we mean that, if we asked the
employer at the moment of the decision what its rea-
sons were and if we received a truthful response, one
of those reasons would be that the applicant or em-
ployee was a woman, In the specific context of sex
stereotyping, an employer who acts on the basis of a
belief that a woman cannot be aggressive, or that

16

she must not be, has acted on the basis of gender.
(Id. at 1790-91, emphasis supplied. )

This employer was asked, at the moment of decision, what
its reasons were; the employer responded that women
were not breadwinners, but were second incomes. In
such circumstances this Court determined, in Price-
Waterhouse, that while plaintiff retains the burden of
persuasion on the issue of whether gender played a part
in the employment decision, “the employer’s burden is
most appropriately deemed an affirmative defense: the
plaintiff must persuade the fact finder on one point, and
then the employer, if it wishes to prevail, must persuade
it on another” (Jd. at 1788.)

The decisions below cannot be harmonized with Price-
Waterhouse.’® Section 2, First requires that a carrier
“exert every reasonable effort” to reach agreement. It is
inconceivable that establishing, maintaining and imple-
menting adverse employment terms out of the invidious
and unlawful perception of women as “second incomes”
is consistent with this duty. Certainly an admission by
the decision-maker that he was acting (at least in part)
on the basis of such an invidious perception is prima facie
proof that the carrier did not “exert every reasonable ef-
fort” to reach agreement. Surely under such circum-
stances the employer, as it would in a Title VII case,
should shoulder the burden of proving that its efforts were
“reasonable” despite the admitted discriminatory animus,
and that its actions would have been the same in the
absence of a discriminatory attitude and motivation.

15 Citing NLRB v. Transportation Management Corp., 462 U.S.
393, 400 (1983).

16 This case was argued before the Court of Appeals on April 12,
1989; this Court’s decision in Price-Waterhouse was issued on
May 1, 1989. We did, however, bring Price-Waterhouse to the
attention of the Eighth Circuit Panel, by letter dated May 18, 1989
and prior to the Panel decision on June 28, 1989. Moreover, Price-
Waterhouse was the principal focus of our Petition for Rehearing,
which apparently garnered some (but not enough) votes.

17

Indeed, if anything, the words “exert every reasonable
effort” in § 2, First are even more demanding than the
words “because of” which are used in Title VII. Under
the RLA, the focus is not on causation but rather on the
duty which both the carrier and union bear. The issue
is not so much what caused what, as it is whether TWA
could possibly have exerted every reasonable effort when
its principal owner said he was acting for sexually dis-
criminatory reasons. Accordingly, if anything, the em-
ployer should be held to a more stringent burden under
the RLA, not a lesser one.

This case, like Price-Waterhouse, involves “smoking
gun” rather than indirect or circumstantial evidence. If
anything, the situation here is even more compelling. The
evidence consists of statements directly attributed to the
decision-maker himself, Carl Icahn. In Price-Waterhouse
the evidence was based upon statements made by partners
favorable to plaintiff's cause. To be consistent with
Price-Waterhouse, TWA should have had imposed upon
it the burden, by way of affirmative defense, to prove that
it would have made the same decision and taken the
same action even in the absence of the clearly asserted,
unlawful gender-based stereotype as to second incomes.

Accordingly, the RLA should require the employer to
meet a standard at least as high as that in Title VII, and
the facts showing unlawful motivation here are stronger
than those which produced the Price-Waterhouse ruling.
Under these circumstances it makes no sense to say that
an employer—shown to have been acting at least in part
due to a discriminatory animus—should be held to one
standard under Title VII and a much different (and
lesser) one under the RLA. This Court should therefore
grant this Petition in order to harmonize the law under
these two important federal labor statutes.

Moreover, the decisions below establish a principle that
turns on its ear this Court’s decision in McDonnell-Douglas
v. Green, 411 U.S. 792 (1973). McDonnell-Douglas estab-
lishes that in a pretext case, (a) a federal court may
look beyond spoken or asserted lawful motivation to (b)

18

determine the existence of unasserted unlawful motiva-
tion. In this case, on the other hand, the courts have
established that in a direct evidence case, (a) federal
courts may look beyond spoken or asserted unlawful
motivation in order to (b) find the existence of wnas-
serted, lawful motivation—and indeed even in the absence
of proof. &

B. The Decisions Below Upset The Harmony Between
Title VII And The Federal Labor Laws.

The establishment of less beneficial or more onerous
working conditions and benefits for women, because of
the perception of their status as “second incomes” rather
than “breadwinners” is discrimination on the basis of sex.
Frontiero v. Richardson, supra. Federal labor policy pro-
hibits this discrimination. 42 U.S.C. § 2000e, et seg.
“Title VII was designed to supplement, rather than sup-
plant, existing laws... relating to employment discrimi-
nation.” Alexander v. Gardner-Denver Co., 415 U.S. 36
at 48-49 (1974). The various statutes comprising fed-
eral labor policy need be interpreted, not in isolation, but
in harmony. Textile Workers v. Lincoln Mills, 353 U.S.
448 (1957).

TWA’s imposition of adverse employment terms for
reasons explained as a “second income” perception, though
clearly contrary to the national labor policy eradicating
sex discrimination as expressed in Title VII, arose in the
context of collective bargaining under § 2, First of the
RLA. Quite clearly, had TWA’s actions been taken in
an individual context with one unrepresented employee,
prohibited sex discrimination would have been shown;
and the court would have placed, upon TWA, the burden
to prove that such adverse action would have been taken
in any event. Price-Waterhouse, supra. The decisions of
the court below, however, stand for the proposition that
no such burden exists in a like case arising in a collective
bargaining context and brought under § 2, First.’”

17 As the district court noted—citing United Packinghouse Union
v. NLRB, 416 F.2d 1126, 1133 and n.11 (D.C. Cir.), cert. den.,

19

Congress '* and this Court have consistently recognized,
in the development of the remedial scheme of Title VII,
the unique status of collective bargaining as being at the
core of our national labor policy. TWA v. Hardison, 432
U.S. 63, 78-79 (1977). This Court has consistently recog-
nized the primary role of the collective bargaining repre-
sentative in decisions involving the interaction between
Title VII and federal labor laws. Emporium Capwell Co.
v. Western Addition Community Organization, 420 U.S.
50 (1975); Teamsters v. United States, infra n.18;
United Air Lines v. Evans, 481 U.S. 553 (1977); and
TWA v. Hardison, supra. The district court decision, as
affirmed by the Court of Appeals, ignores the primary
role of collective bargaining and subjugates rights of col-
lectively-represented employees to those whose tenure and
terms are established on an individual basis. Collectively-
represented employees, as a result of the decisions below,
have lesser protection against invidious sex-motivated em-
ployment conditions; at the same time air carriers, using
§ 2, First as a sword rather than a shield, enjoy a lesser
burden of proof (indeed a non-existent burden) in im-
munizing themselves from a finding of employment dis-
crimination.

396 U.S. 903 (1969)—exclusive primary jurisdiction of IFFA’s
claim does not lie with the EEOC (60a). Indeed, IFFA’s claim
that TWA violated the bargaining obligation by insisting on em-
ployment_ terms illegal under Title VII—and seeking a declara-
tion that TWA’s bargaining conduct caused or prompted the strike,
entitling striking Flight Attendants not only to reinstatement
and backpay, but restoration of the terms and conditions of em-
ployment as they existed prior to the strike and TWA’s imple-
mentation of adversely changed terms—can be resolved only under
§2, First. Simply put, a district judge sitting in a Title VII
action filed by individuals is not going to reform unilateral changes
in employment terms that were made pursuant to the RLA bar-
gaining process.

18 See discussion of Congressional record in Teamsters v. United

States, 431 U.S. 324, 350-352 (1977); and Franks v. Bowman
Transportation Co., Inc., 424 U.S. 747, 759-762 (1976).

20

II. DO FACTUAL FINDINGS—THAT A CARRIER
(TWA) UNDER THE RLA ENGAGED IN MISCON-
DUCT, IDENTICAL TO THAT HELD UNDER THE
NLRA TO BE BAD FAITH BARGAINING—COM-
PEL THE CONCLUSION THAT THE CARRIER’S
MISCONDUCT BREACHED §2, FIRST, CAUSED
THE IMPASSE AND PROMPTED THE STRIKE, IN -
THE ABSENCE OF PROOF INTRODUCED BY THE
CARRIER TO THE CONTRARY?

As the district court noted, this is a case of first im-
pression (37a). By ruling that § 2, First forbids surface
bargaining and little else (41a) the district court made
an unprecedented determination, with far-reaching con-
sequences, that the RLA imposes a lesser bargaining ob-
ligation than that required by the NLRA.

A. The Lower Courts’ Holdings, That The RLA For-
bids “Surface Bargaining” And “Little Else”, Con-
strues § 2, First As Imposing A Lesser Bargaining
Obligation Than The NLRA: This Holding Mis-
applies The Statute And Presents A Cenflict With
The Second Circuit.

_ The NLRA and the RLA reflect consistent national
policies as expressed by Congress in similar legislative
language. Compare the NLRA, 29 U.S.C. §151 and
LMRA, 29 U.S.C. §141(b) with RLA, 45 U.S.C.
§151(a). Like the NLRA, the RLA was enacted to
encourage collective bargaining and to prevent costly
strikes. Detroit & Toledo Shoreline R.R. v. United Trans-
portation Union, 396 U.S. 142, 148 (1969). Agreements
under the RLA are the “product of years of struggle and
negotiation”; any power to change or revise them must
be clearly confined and supervised. BRAC v. Florida East
Coast Railway Co., 384 U.S. 238, 246 (1966).

Thus, one of the statute’s primary commands, judi-
cially enforceable, is found in the repeated declara-
tion of a duty upon all parties to a dispute to nego-
tiated for its settlement. This duty is not merely
perfunctory. Good faith exhaustion of the possibility
of agreement is required to fulfill it. (Elgin, Joliet

21

& Eastern R.R. v. Burley, 325 U.S. 711, 721, n.12
(1945), emphasis supplied).

The § 2, First obligation is “the heart of the Railway
Labor Act.” Railroad Trainmen v. Jacksonville Terminal
Co., 394 U.S. 369, 378 (1969). Strictest formal compli-
ance is meaningless if one party goes through the motions
with a desire not to reach agreement. Chi. & N.W. Ry.
Co. v. UTU, 402 U.S. 570, 578-579 (1971). The duty
imposed by § 2, First is judicially enforceable. Elgin,
supra; Chi. & N.W. Ry. Co., supra.

The statutory language of § 2, First, imposing the obli-
gation “to exert every reasonable effort” to reach agree-
ment, is expressed in far more forceful language than
that adopted by Congress in enacting 29 U.S.C. § 158
(a) (5), which merely prohibits an employer from refus-
ing “to bargain collectively with the representatives of
his employees.” Collective bargaining and prevention of
strikes in a national airline or rail system have never
been held to be of lesser national interest than in indus-
tries regulated by the NLRA. No court has, until now,
held that § 2, First imposes a lesser obligation than that
imposed by the NLRA. In this case however, after
lengthy consideration (36-4la), the district court con-
cluded, “It is clear from C & NW that the RLA is to be
construed as forbidding ‘surface bargaining’ and little, if
anything, further” (41a). On the contrary this Court’s
decision in Chi. & N.W. Ry. Co., supra (including n.11
thereof, given special emphasis by the district court at
36-37a) provides no support for the court’s determina-
tion. Indeed, this Court stated:

While we have no occasion to determine whether
§ 2, First requires more of the parties than avoid-
ance of “bad faith” as defined by Judge Magruder in
Reed & Prince, supra, we note two caveats... [Slec-
ond, great circumspection should be used in going
beyond cases involving “desire not to reach an agree-
ment” .... See n.19, infra. (Chi. & N.W. Ry. Co.
v. UTU, at 579, emphasis supplied).

22

Note 19, in turn, refers to § 8(d), 29 U.S.C. § 158(d) of
the NLRA [prohibition against compelling agreement to
a proposal or the making of a concession]—absent from
the RLA *—and § 8(d)’s reflection of concern that the
NLRB had intruded too deeply into collective bargaining
under the guise of enforcement of the duty to bargain in
good faith. Jd. at 583.

Both before and after Chi. & N.W. Ry. Co., the Second
Circuit has interpreted § 2, First as imposing a greater
duty to endeavor to reach agreement than that required
by the NLRA. Chi., RJ. & P. R.R. v. Switchmen’s Union,
292 F.2d 61, 70 (2d Cir. 1961), cert. den., 370 USS.
936 (1962) ; Japan Airlines v. IAM, 538 F.2d 46 (1976),
affg 389 F. Supp. 27 (1975). In this case, the courts
below did not read § 2, First as imposing a greater or
even an equal burden; they interpreted it as imposing
a lesser standard of bargaining, subject to lesser scru-
tiny. The NLRA has consistently been construed as pro-
hibiting at least two types of misconduct: (1) per se
violations—refusals to bargain in fact which, considered
alone and irrespective of other bargaining conduct are
inherently destructive of the bargaining process; and (2)
“surface bargaining” requiring an analysis of various
conduct or actions which, though not considered unlawful
in and of themselves and on an individual basis, demon-
strate a state of mind evidencing lack of good faith in
bargaining, when considered together.” The decisions be-
low failed to recognize the inherently destructive effect on
the bargaining process and IFFA’s ability to reach agree-
ment arising from conduct consistently held by This and

19 Whether 8(d) can be imported wholesale into the RLA is
debatable, but immaterial. IFFA does not base its claimed § 2,
First violation on TWA’s failure to either agree to a proposal or
to make a concession. Its absence from the RLA, however, rein-
forces the already clear determination that the RLA does not
impose a lesser standard of bargining than the NLRA.

20 See, e.g., Cox, The Duty to Bargain in Good Faith, 71 Harv.
L.Rev. 1401, 1418-26 (1958).

23

other courts as per se violations of the duty to bargain
under the NLRA. Moreover, they:

(1) relegated § 2, First to an impermissibly low
standard of bargaining;

(2) reflected an erroneous view of the law upon
which critical and erroneous findings (that TWA
did not engage in bad faith, that the impasse
was caused by the divergence of position, and
that TWA did not cause the strike) were based;
and

(3) formed the underpinnings for the court’s failure
to require proof by TWA that its misconduct
(found by the court) did not cause the im-
passe and the strike.

B. The Decisions Below On The Issue Of Denial Of
Requested Information Are In Conflict With This
Court’s Decision In 7'ruitt And With Decisions Of
Virtually Every Circuit, Including The Eighth Cir-
cuit; On The Issue Of Dealing With Other Than
The Exclusive Representative, They Are In Conflict
With This Court’s Decision In Virginia Railway.

The district court ruling that § 2, First forbids surface
bargaining and little else (41a) constitutes a clear legal
conclusion, unprecedented, that there is no such thing as
a per se violation of § 2, First.

1. TWA’s Refusal To Provide Information.

The failure of the courts below to conclude that the
numerous instances of “unjustified” refusal to provide
requested information constituted a violation of TWA’s
bargaining obligation—a refusal in fact to exert every
reasonable effort—is contrary to decisions of this Court
and those of virtually every circuit having occasion to
pass upon the issue. Over 30 years ago, this Court stated,
in NLRB v. Truitt Mfg. Co. 351 U.S. 149, 152-53
(1956) :

Good-faith bargaining necessarily requires that
claims made by either bargainer should be honest
claims... [i] f such an argument is important enough

24

to present in the give and take of bargaining, it is
important enough to require some sort of proof of its
accuracy.

Truitt itself has been said to have established the denial
of information as a per se violation, as noted in Justice
Frankfurter’s separate opinion, at 157. This Court has
since said, “There can be no question of the general ob-
ligation of an employer to provide information that is
needed by the bargaining representative for the proper
performance of its duties.” NLRB v. Acme Industrial,
385 U.S. 432, 435-36 (1966) (citing Truitt).

Various circuit courts have likewise held a refusal to
provide relevant information a per se violation, or have
otherwise defined such a refusal to be a violation, of the
NLRA. “Once relevance is determined, an employer’s
refusal to honor a request is a per se violation of the Act.”
Curtiss-Wright v. NLRB, 347 F.2d 61, 67 (3rd Cir. 1965).
See also Boston Herald-Traveler v. NLRB, 223 F.2d 58
(lst Cir. 1955); NLRB v. Yawman and Erbe, 187 F.2d
947, 949 (2nd Cir. 1951); NLRB v. Whitin Machine, 217
F.2d 593, 594 (4th Cir. 1954), cert. den. 349 U.S. 905
(1955); General Electric Co. v.. NLRB, 466 F.2d 1177
(6th Cir. 1972); and Newspaper Guild v. NLRB, 548
F.2d 863 (9th Cir. 1977).

Even the Eighth Circuit has previously held that re-
fusal to provide information is a per se violation of the
statutory duty to bargain. “Once relevance is established,
a refusal to furnish the requested information is per se
a violation of the Act.” Proctor & Gamble Mfg. Co. v.
NLRB, 603 F.2d 1310, 1315 (8th Cir. 1979).

Relating as it did to TWA’s demands for changes in
wages, hours and working conditions, the information
sought by IFFA was indeed relevant. The district court,
in concluding TWA’s refusal to be “unjustified”, appar-
ently so found. The court refused to find TWA’s refusal
a violation of its statutory duty not because the informa-
tion sought was irrelevant, but because it would not have
helped in shaping an agreement (25a).

25

Universally established, in the Eighth Circuit and vir-
tually all other circuits, is the principle that information
pertaining to wages, hours and conditions of empioyment
is presumptively relevant. Proctor & Gamble, supra, at
1315; Curtiss-Wright, supra, at 69; NLRB v. Whitin Ma-
chine, supra, at 594; and Newspaper Guild, supra, at
867. The standard for relevance is a “liberal, discovery-
type standard.” NLRB v. Acme Industrial Co., supra,
385 U.S. at 437.

IFFA’s denied requests for information dealt with the
issues in bargaining. They dealt with TWA’s own de-
manded changes. Those demands—for salary cuts and
work rule changes resulting in reduced headcount (job
loss) *'—were said by TWA’s chief negotiator to repre-
sent desired savings of $88 Million annually. But Icahn
had valued the demands at $110 Million annually (21a).
The demands rendered the requested information as ab-
solutely essential. Without it, IFFA was denied the op-
portunity to understand the impact of the demands; the
opportunity to ferret out $22 Million in “fluff” ($110
Million in savings as opposed to a desired objective of
$88 Million; the opportunity to bargain away those de-
mands having little dollar or job-loss impact, but viewed
adverse to IFFA’s membership; the opportunity to meet
TWA’s stated goal of $88 Million without agreeing to all
demands; the opportunity to agree to some but not all of
TWA’s demands; the opportunity, in fact, to bargain.

Providing information is bargaining; its refusal is a
refusal to bargain in fact. The furnishing of requested
information relevant to the issues presented in bargaining

21 Prior to TWA’s implementation of changed work rules, the
Flight Attendant workforce numbered approximately 6,000. Though
not recited by the district court, but based upon unrefuted trial
testimony, Icahn told IFFA that with the new work rules, TWA
could operate with 3500 Flight Attendants. The “basic financial
estimates” supplied by TWA to IFFA revealed reduction in head-
count (lost jobs) resulting from its proposals. IFFA’s requests
were designed to reveal how many jobs could be lost from each of
TWA’s demands and each of their sub-proposals.

> Ce
is essential to make the mandated bargaining process
work—or to give it a chance to work by enabling the union

to understand the proposals, as well as their effects upon
represented employees.

In this case TWA’s refusal to provide relevant infor-
mation was held not violative of § 2, First, because the
information would not have yielded agreement (27a, 50a).
Until now, no court has so held! Until now, no court has
determined that “good faith” bargaining and “every rea-
sonable effort” will not work, if given the chance. Worse
yet the decisions below allow such a result without em-
ployer proof! “In those cases [where presumptively rele-
vant information has been denied], the employer has the
burden to prove a lack of relevance” or otherwise justify
its action. Newspaper Guild, supra at 867.

The courts’ misapprehension of these judicial prin-
ciples led them to conclude that TWA had not breached
its § 2, First obligation and did not cause the strike. The
district court reasoned, “[t]he potential [of undisclosed
information] for shaping an agreement between the par-

ties has not been demonstrated . . ., except in the ab-
stract” (25a); “[n]o information sought . . . could likely
result in . . . accepting the work rules concessions that

would have filled the chasm .. .” (27a); and, therefore
the court reached the “confident conclusion that informa-
tion concealment (and claimed misinformation) did not
cause or prolong the strike...” (50a).

The decisions below impermissibly put the courts into
the bargaining process, thereby alleviating TWA’s re-
quired burden of proof. As this Court has noted:

It is contended that when an employer can effect cost
savings... there is no need to... provide...an op-
portunity to negotiate a mutually acceptable alterna-
tive. ... The short answer is that . . . national labor
policy is founded upon the congressional determina-
tion that the chances are good enough to warrant sub-
jecting such issues to the process of collective negotia-
tion. Fibreboard Paper Products v. NLRB, 379 U.S.
203, 214 (1964).

27

National labor policy is founded on the assumption that
the bargaining process can work if allowed to do so. Good
faith exhaustion of the possibility of agreement is required
by § 2, First. Elgin, supra, 325 U.S. 721, n. 12. The
decisions below establish, for the first time: (1) the as-
sumption that, even if allowed to work, the collective bar-
gaining process will not work; and (2) that the union has
the burden to prove the information, if provided, would
have yielded an agreement.

2. TWA’s Dealings With Other Than IF FA.

Read together, the decisions below establish a legal
principle, at least in the Eighth Circuit, contrary to this
Court’s decision in Virginia Railway v. System Fed. No.
40, 300 U.S. 515 (1937). Therein, this Court noted that
§ 2, First, aided by the amendment of the RLA adding
$2, Ninth (300 U.S. at 544), “imposes the affirmative
duty to treat with only the true representative, and hence
the negative duty to treat with no other”. (Id. at 548,
emphasis supplied.) The decision of the district court, as
affirmed, that Icahn’s written agreement with ALPA to
use “best efforts to achieve ... savings . . . [of] 20-to
22%” from IFFA (17a) did not breach its RLA obliga-
tion isa clear departure from Virginia Railway. The lower
court’s conclusion was reached despite its finding that the
ALPA-Icahn agreement was arguably against public pol-
icy by creating rigidity in TWA’s bargaining stance
[with IFFA] (5la). This rigidity, created by agreement
with others, is precisely what is condemned by the RLA.
Icahn committed to ALPA his best efforts to extract from
IFFA terms established in the ALPA-Icahn agreement.
TWA could hardly be said to have exerted “every rea-
sonable effort to reach agreement” with JF FA.

28

C. The Decisions Below Are Inconsistent With This
Court’s Decision In NLRB v. Transportation Man-
agement Corp. The Courts Below Failed To Im-
pose Upon TWA A Burden To Prove That, Despite
Its Proven Misconduct, It Did Not Breach § 2, First,
An Impasse Would Have Been Reached And A
Strike Would Have Occurred.

The courts’ failure to require TWA, by way of affirma-
tive defense, to prove that it would have taken its same
action in the absence of reasons unlawful under Title VII
has been sufficiently addressed. In addition, however, the
courts below failed to impose upon TWA a like burden in
connection with all the other numerous incidents of mis-
conduct found by the district court. The decisions below,
in the face of the court’s own findings of such misconduct
and TWA’s failure to prove otherwise, represent an un-
precedented departure from “burden of proof” principles
previously enunciated by this Court.

IFFA maintains that: the § 2, First requirement of
“every reasonable effort” is indeed higher than an obliga-
tion to “bargain collectively” or “bargain in good faith”;
the many instances of misconduct found by the district
court are, in and of themselves, definitionally inconsistent
with “every reasonable effort”; a violation of § 2, First
has therefore been established; and TWA has the burden,
by way of affirmative defense, to prove otherwise. At the
very least, however, “every reasonable effort” is a ques-
tion of intent, animus, or state of mind—as is “bargain-
ing collectively” or “bargaining in good faith” under the
NLRA. Even under this interpretation of “every reason-
able effort” as required by § 2, First, the lower court de-
cisions impermissibly immunize TWA from its required
burden of proof. In NLRB v. Transportation Manage-
ment Corp., supra, this Court held that where “a discharge
or other adverse action” (462 U.S. at 401, emphasis sup-
plied) has been shown to have been based in whole or in
part on anti-union animus, the employer bears the bur-
den, by way of affirmative defense, to show that it would
have acted in the same manner for wholly legitimate rea-

29

sons. Citing with approval the NLRB’s decision in Wright
Line, 251 NLRB 1083 (1980), enf’d, 662 F.2d 899 (1st
Cir. 1981), cert. den., 455 U.S. 989 (1982):

It thus became clear, if it was not clear before, that
proof that the discharge would have occurred in any
event and for valid reasons amounted to an affirma-
tive defense on which the employer carried the burden
of proof by a preponderance of the evidence (462
U.S. at 400, emphasis supplied).

The failure to require TWA proof that its misconduct
did not cause impasse * and did not prompt the strike
formed the impermissible underpinnings for numerous
principles never before enunciated: e.g., bargaining mis-
conduct, bullying and devious behavior do not breach the
bargaining obligation because it is designed only toward
tricking or coercing the union into a bad bargain (28a) ;
and relevant information need not be provided in the ab-
sence of proof by the union that it would have yielded an
agreement (25a, 27a and 50a). Worse yet, assuming § 2,
First prohibits only surface bargaining, the failure to re-
quire TWA proof has resulted in a first-time departure
from universal precedent as to proof in a surface bargain-
ing case. It has long been accepted that, in contrast with
a per se case, surface bargaining requires consideration
of the totality of conduct in assessing the question of re-
quisite intent. See NLRB v. Billion Oldsmobile-Toyota,
700 F.2d 454 (8th Cir. 1983); NLRB v. Montgomery
Ward, 133 F.2d 676, 687 (9th Cir. 1943); NLRB v, Her-
man Sausage, 275 F.2d 229 (5th Cir. 1960). Surface
bargaining cannot be resolved on consideration of a single
factor. This is why analysis of the employer’s proposals
themselves cannot be considered as indicia of bad faith in
the absence of other factors and circumstances evidencing
bad faith. E.g., Queen Mary Restaurants v. NLRB, 560
F.2d 403, 411 (9th Cir. 1977); Wal-Lite Div. of US.

*2 As to the issue of strike causation, no lawful impasse can be
said to occur when the deadlock is caused, as obviously the case
herein, by one party's bad faith bargaining. United Packinghouse
Union v. NLRB, supra at 1131.

30

Gypsum v. NLRB, 484 F.2d 108, 111 (8th Cir. 1973).
Judicial authority on surface bargaining has been turned
inside out by the single-issue resolution of what is a
multi-issue “totality of conduct” case.

Until now, no court has rejected a surface bargaining
claim, in the face of numerous findings of bargaining mis-
conduct, on the basis of its analysis of the employer’s pro-
posals themselves. Ignoring its numerous findings of
TWA’s misconduct, the district court determined “the sole
cause of the impasse” to be the wide divergence in posi-
tions (28a); it therefore defined as “the basic factual
issues .. . whether TWA’s ultimate demands have [ez-
ceeded] reasonableness” (29a). It effectively disposed of
the case by resolving that issue in TWA’s favor (30a). If
let stand, this case represents a radical departure from
consistently applied judicial authority not only on the na-
ture of proof, but the very definition, of surface bar-
gaining.

CONCLUSION

The question is whether bad faith bargaining exists un-
der the RLA. If it does, it exists in this case. The writ of
certiorart should be granted to review the decision of the
Eighth Circuit.

Respectfully submitted,

WILLIAM A. JOLLEY

(Counsel of Record)

STEVEN A. FEHR

JOLLEY, WALSH, HAGER & GORDON
204 West Linwood Boulevard

Kansas City, Missouri 64111
On the Brief (816) 561-3755
Scott A. RAISHER Attorneys for Petitioner
JANAE L. SCHAEFFER Independent Federation

DALE L. INGRAM of Flight Attendants

APPENDICES

la
APPENDIX A

Opinion and Judgment of the
U.S. Court of Appeals for the Eighth Circuit

UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

No. 88-1984

THE INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS,
an unincorporated labor organization; VALERIE COL-
LINS-COADY, MARGARET A. HARTZ, Cuky P. HARVEY,
BRUCE KENNETH PALMER, BEONCA ES LANDA RIST,
NANCY WRIGHT, individually and as a class; ELIZA-
BETH RICH-LOUKLELIS, individually and as a class;
and MICHAEL ALEX MCDERMOTT, individually and as a
class, Appellants,

v.

TRANS WORLD AIRLINES, INC.; and THE TWA GROUP
BENEFITS PLAN for FLIGHT ATTENDANTS: CONNECTI-
CUT GENERAL LIFE INS. Co.; TOTAL HEALTH CARE:
N.J. STAFFORD, WILMA RIGHTER, CRAIG MUDGE,

Appellees.

Appeal from the United States District Court
for the Western District of Missouri

Submitted: April 12, 1989
Filed: June 28, 1989

2a

Before FAGG, Circuit Judge, FLOYD R. GIBSON, and
TIMBERS,”* Senior Circuit Judges.

PER CURIAM.

The Independent Federation of Flight Attendants
(IFFA) brought this class action on behalf of its mem-
bers against Trans World Airlines, Inc. (TWA) seeking,
among other things, reinstatement, backpay, and other
benefits for former strikers. After lengthy proceedings on
this aspect of IFFA’s complaint, the district court issued
a comprehensive decision granting TWA’s motion under
Federal Rule of Civil Procedure 41(b) to dismiss this
claim at the close of IFFA’s evidence. See Independent
Fed’n of Flight Attendants v. Trans World Airlines, Inc.,
682 F. Supp. 1003, 1006 (W.D. Mo. 1988). IFFA ap-
peals, and we affirm.

Since 1978, IFFA has been the collective bargaining rep-
resentative for approximately 6000 TWA flight attend-
ants. Renegotiation of the parties’ collective bargaining
agreement began in 1981 and eventually proceeded under
supervision by the National Mediation Board (NMB).
The NMB released the parties from formal bargaining
in February 1986. IFFA filed this action seeking an in-
junction under the Railway Labor Act (RLA), 45 U.S.C.
§§ 151-188 (1982), to prevent TWA from implementing
its proposed wage and work rule changes. Continued ne-
gotiations eventually failed, and the flight attendants
went on strike. TWA operated in the interim with re-
placement workers. Two months later, IFFA offered to
return to work, unconditionally accepting TWA’s pro-
posals. TWA reinstated some, but not all, of the former
strikers.

*The HONORABLE WILLIAM H. TIMBERS, Senior United
States Circuit Judge for the Second Circuit Court of Appeals, sit-
ting by designation.

3a

Legal questions in this case have twice before reached
our court and the United States Supreme Court. See
Independent Fed’n of Flight Attendants v. Trans World
Airlines, Inc., 819 F.2d 839 (8th Cir. 1987), rev’d, 109
S. Ct. 1225 (1989) (Court reviewing only effect of senior-
ity on striker reinstatement); Trans World Airlines,
Inc. v. Independent Fed’n of Flight Attendants, 809 F.2d
483 (8th Cir. 1987) (effect of strike on union security
clause), aff'd by an equally divided Court, 108 S. Ct. 1101
(1988) (per curiam). The present appeal comes to us
following thirty-one days of trial in which IFFA pre-
sented its evidence.

In broad terms, IFFA’s theory in the district court
was that TWA bargained in bad faith. IFFA claimed
TWA consequently failed to carry out its obligation un-
der the Railway Labor Act “to exert every reasonable
effort to make and maintain agreements concerning rates
of pay, rules, and working conditions, and to settle all
disputes,” 45 U.S.C. § 152 First. See Chicago & N.W.
Ry. v. United Transp. Union, 402 U.S. 570, 577, 581
(1971). IFFA made a number of specific allegations of
TWA’s bad-faith bargaining, including: failing to pro-
vide requested information concerning bargaining pro-
posals; dealing with a union other than the flight attend-
ants’ authorized bargaining representative; making im-
permissible agreements with flight attendant trainees be-
fore the strike; bargaining to impasse on a nonmandatory
subject of bargaining; adopting a negotiating posture
that showed bad faith, intent not to reach agreement,
and sexual discrimination; and maintaining that nego-
tiating posture in a manner that prolonged the strike.

IFFA further asserted that because TWA’s prohibited
conduct caused and ultimately prolonged the strike, IFFA
members were unfair labor practice—rather than eco-
nomic—strikers. See Mastro Plastics Corp. v. NLRB,
350 U.S. 270 (1956). On this basis, IFFA contended the
flight attendants were entitled to relief analogous to that

on a

4a

available for unfair labor practice strikers under the
National Labor Relations Act (NLRA), 29 U.S.C. §§ 141-
188 (1982). TWA defended its negotiating conduct and,
in addition, argued that NLRA concepts relating to un-
fair labor practice strikes did not provide a source of
relief under the RLA.

After “attentively listen[ing] to the evidence and ora!
arguments * * * comprising some 7,000 pages of tran-
script and * * * immers[ing] itself in documents and
designations from depositions not read into evidence,”
Independent Fed’n of Flight Attendants, 682 F. Supp. at
1006, the district court rejected all of IFFA’s contentions.
In doing so, the court assumed without deciding that
NLRA principles concerning unfair labor practice strikes
applied to IFFA’s claim. See id. at 1022.

The district court’s decision contains several key de-
terminations. First, the court held the disparity between
the parties’ bargaining positions, and not missing or
misstated information, was the real barrier to agreement
and the sole cause of the strike. See id. at 1013-16, 1024-
25. In addition, the court ruled that economic considera-
tions, rather than sexual discrimination, were the cause
of the bargaining positions TWA took. See id. at 1010-
11, 1029-32. The court also held TWA did not engage in
sham or surface bargaining. See id. at 1016, 1029. Fi-
nally, the district court determined TWA’s general bar-
gaining tactics were not in bad faith, see id. at 1025-27,
and that its poststrike conduct did not prolong the strike,
id. at 1017. Based on these determinations, the district
court granted TWA’s rule 41(b) motion to dismiss and
denied IFFA’s claim for general reinstatement. Jd. at
1006.

IFFA’s arguments on appeal essentially express its
dissatisfaction with the district court’s decision to evalu-
ate the evidence in a manner that does not coincide with
its own. In considering a rule 41(b) motion in a bench

5a

trial, however, the district court is entitled “to assess the
credibility of witnesses and the evidence and to determine
that the plaintiff has not made out a case.” Continental
Casualty Co. v. DLH Servs., Inc., 752 F.2d 358, 356 (8th
Cir. 1985). On review of a decision to grant the motion,
we “may not try the case de novo or pass on the credi-
bility of witnesses, but may only reverse the trial court’s
findings of fact if they are clearly erroneous.” Jd. (ital-
ics omitted).

Initially, we decline in this case to express a definitive
view of TWA’s contention that NLRA principles of relief
for unfair labor practice strikers are not available in
RLA proceedings. Like the district court, we instead as-
sume for purposes of reviewing this case that NLRA
concepts may be applied in these circumstances. On that
basis, we have carefully reviewed IFFA’s contentions in
light of the district court’s thorough decision, the record,
and the parties’ arguments. Having done so, we conclude
the district court’s decision rests on findings of fact that
are not clearly erroneous, and no reversible error other-
wise appears.

Thus, we affirm the district court’s decision granting
TWA’s rule 41(b) motion. We also deny TWA’s motion
to strike portions of the appendix IFFA filed in connec-
tion with this appeal.

A true copy.
Attest:

Clerk, U.S. Court of Appeals, Eighth Circuit.

6a
APPENDIX B

Order of the U.S. Court of Appeals for the
Eighth Circuit Denying Petition for Rehearing
and Suggestions for Rehearing En Banc

UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

No. 88-1984-WM

THE INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS
an Unincorporated Labor Organization, et al.,
Appellants,
. vs.

TRANS WORLD AIRLINES, INC., et al.,
Appellees.

ORDER DENYING PETITION FOR REHEARING
AND SUGGESTION FOR REHEARING EN BANC

Appellant, Independent Federation of Flight Atten-
dants’ suggestion for rehearing en banc has been con-
sidered by the court and is denied by reason of the lack
of a majority of the active judges voting to rehear the
case en banc.

Petition for rehearing by the panel is also denied.
August 16, 1989
Order Entered at the Direction of the Court:

/s/ Robert D. St. Vrain
Clerk, United States Court of Appeals, Eighth Circuit.

Ta
APPENDIX C

Revised Opinion and Judgment of the U.S. District Court
for the Western District of Missouri

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
ST. JOSEPH DIVISION

No. 86-6030-CV-SJ-6

THE INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS,
an Unincorporated Labor Organization,
Plaixti ff,
Vv.

TRANS WORLD AIRLINES, INC., et al.,
Defendants.

REVISED OPINION*
[Filed Mar. 9, 1988)

This lawsuit was filed two years ago by the union rep-
resenting some 6,000 flight attendants (IFFA) then em-
ployed by the defendant airline (TWA). It sought an
injunction under the status quo provisions of the Railway
Labor Act (45 U.S.C. § 152, Seventh) against implemen-
tation by TWA of proposed wage reductions and adverse
changes in work rules. TWA was presumptively author-

* This opinion supersedes the memorandum filed March 3, 1988,
and contains minor revisions and corrections. The prior order
denying general reinstatement of full-term strikers remains in
effect, for purposes of determining appeal time.

8a

ized to implement the changes, however, after March 6,
1986, the end of a cooling-off period scheduled by the
National Mediation Board at the conclusion of contract
negotiations. 45 U.S.C. § 155, First.

The court denied a temporary restraining order after
hearing presentations from counsel for the parties, and
urged the parties to attempt to resolve their differences
on the remaining day before the parties were planning
self-help. Such last minute settlements are not uncom-
mon; in this instance, however, there were apparently un-
bridgeable differences between the parties, particularly
regarding work rules governing the lifestyle of flight
attendants. Further attempts to negotiate an agreement
failed, and implementation by TWA, accompanied by a
flight attendants’ strike, occurred on March 7, 19886.
After a brief reduction in service, TWA was able to
maintain full operations by hiring an adequate number
of substitute flight attendants as permanent replacements
and by using crossover flight attendants. IFFA offered
unconditionally in mid-May to return to work under the
new conditions imposed by TWA. Fewer than 200 of
the full-term strikers were accepted back by TWA. Prac-
tically all of the pre-strike work force was displaced.'
Wages have been reduced by 22% (some $44 million),
and the total saving achieved by TWA may be roughly
estimated at $100 million annually.

1 TWA advises, however, that some 743 full-term strikers were
rehired from April-July 1987. This court has, moreover, ordered
TWA to reinstate some 463 full-term strikers, whose places were
filled by employees still in training school at the end of the strike.
The Court of Appeals has directed reinstatement of perhaps double
that number of full-term strikers having seniority over “junior
crossovers.” Persons interested in a full review of the background
of this case and related litigation should examine TWA v. JAM,
629 F.Supp. 1554 (W. D. Mo. 1986); TWA v. IF FA, 640 F.Supp.
1108 (W. D. Mo. 1986), affirmed 809 F.2d 483, cert. granted 107
S.Ct. 3183, affirmed by equally divided vote, March 2, 1988; and
IFFA v. TWA, 643 F.Supp. 470 (W. D. Mo. 1986), affirmed in
part, reversed in part ,819 F.2d 839, cert. pending.

9a

The present case has been tried sporadically, as soon
as the parties were ready, from November 1986 to March
1987, on Count I of the Third Amended Complaint, filed
in mid-July 1986. Briefing and argument on TWA’s mo-
tion to dismiss at the end of plaintiff's proof extended into
September 1987. Although Count I contains some allega-
tions serving a dual purpose, and seeks some relief be-
yond a general reinstatement of full-term strikers, the
main thrust of the Count and of the trial deals with a
contention that the strikers were “unfair labor practice
strikers” who are entitled to return to their jobs after
the strike, displacing all replacements, and enjoying back
pay entitlement (at a rate that might be estimated at
perhaps $2 million per week) from the offer to return in
May 1986, by analogy to rules established under the Na-
tional Labor Relations Act. Bad faith in bargaining is
the general allegation.

At the conclusion of plaintiff IFFA’s presentation of its
evidence, defendant TWA moved for dismissal of the
claim, pursuant to Rule 41(b), Fed. R. Civ. P. Unlike
the appraisal made at that stage in a jury case, the
court’s duty is to evaluate the evidence presented with
the same critical analysis that would be made by the
ultimate trier of fact at the conclusion of the case. Lang
v. Cone, 542 F.2d 751 (8th Cir. 1976); Palmentere v.
Campbell, 344 F.2d 234, 237 (8th Cir. 1965); White In-
dustries v. Cessna Aircraft Co., 657 F.Supp. 687, 694
(W.D. Mo. 1986). For reasons stated below, TWA’s mo-
tion will be granted. IFFA’s claim for general reinstate-
ment will be denied.

I. FACTS

A. A general statement of factual findings, from the
evidence already adduced, will be set forth in this section
of the opinion, with the understanding, however, that
other factual statements made throughout the opinion are
deemed pertinent to the conclusions. The parties have
supplied over 800 pages of proposed findings and marra-

10a

tive statements and arguments concerning the facts, em-
phasizing their conflicting conclusions. This court has
attentively listened to the evidence and oral arguments
now comprising some 7,000 pages of transcript and has
immersed itself in documents and designations from dep-
ositions not read into evidence. It is deemed unnecessary
and inexpedient to further delay a ruling by articulating
comparable detailed discussions largely directed toward
rehearsing the negotiating postures and contentions of the
parties. To the extent the Court of Appeals may wish
to probe deeper into certain factual issues, the materials
supplied by the parties as proposed findings will be use-
ful as a guide or index to the evidence.

It is this court’s view that the great bulk of the ma-
terials would be most pertinent to an “interest arbitra-
tion” proceeding, in which a neutral party would make
a determination from all material supplied what appro-
priate changes should have been made in wages, fringe
benefits and work rules. While not irrelevant to a deci-
sion on the reasonableness of bargaining positions and
tactics and the ultimate issue of intent_to enter into a
new collective bargaining agreement, it is believed that
a summary review will suffice for present purposes.
While there were of course different ways to try this case
I am not critical of the parties for presenting so much
detail, given the importance of the result. Another month
of trial time could be foreseen, if TWA were to fully de-
velop its defenses.

IFFA has been the exclusive bargaining representative
of TWA flight attendants since April 1977. Other unions
represented the flight attendants since the 1940s. The
first IFFA-TWA contract was signed in October 1978.
The first agreement was subject to amendment beginning
in 1981, but negotiations continued into 1983, when the
parties agreed on a 31% wage increase over three years,
retroactive for two years. The printed replacement con-
tract, referred to in litigation as the “Red Book,” is the

lla

latest completed contract between the parties. It was
scheduled to remain in effect at least until July 31, 1984
(generally referred to by the parties as the ‘“amendable
date’’).

TWA sought mid-term concessions valued at $33 mil-
lion but the parties were unable to reach agreement.
Bargaining on Red Book changes began after TWA
served a notice of intended changes in February 1984.

From the beginning of negotiations TWA made known
that it was seeking work rules changes that would create
a “new life-style” for its flight attendants; it also initi-
ally sought salary concessions.

IFFA counsel Jolley prepared a memorandum to his
clients sugesting negotiating strategy, acknowledging that
concessionary bargaining by IFFA would be the major
subject matter of negotiations and stating that IFFA’s
posture should be one of “close and cautious scrutiny.”
He urged IFFA to adopt a stance of “cautious willing-
ness to listen and entertain, but which places the burden
of persuasion on TWA.” He noted the possibility that
“at some point [IFFA may] be forced to file a lawsuit to
compel TWA to provide us with . . . necessary and rele-
vant information.” IFFA’s president, Victoria Franko-
vich, is the only member of the negotiating committee who
seems to have personally reviewed the Jolley memoran-
dum.

IFFA’s general goal was to postpone adverse changes
in the contract for as long as possible, and to obtain some
improvements in the agreement. It was generally sup-
posed that “time is on our side” (Exh. 22, p. 060337)
since the contract was considered to be favorable and
TWA’s economic prospects were believed by IFFA to be
improving.

Having failed to obtain mid-term concessions, TWA’s
initial bargaining technique in early 1984, under the im-

12a

mediate direction of its chief negotiator, J. W. Hoar, was
designed to hurry the process toward agreement by July
31, 1984. TWA at that time had a maximum objective
or ‘wish list” of changes in work rules and wages that
would result in a 25% reduction in flight attendant costs
for an annual saving of some $64 million.

During April 1984, IFFA sent a questionnaire to its
members itemizing TWA proposals for work rules
changes and obtained results showing widespread opposi-
tion to such changes. In the early negotiations IFFA con-
tinuously sought detailed explanations of the proposed
changes and generally received responsive replies in oper-
ational terms but frequent resistance from Hoar to ques-
tions seeking financial and economic estimates and de-
tails. For example, on one occasion the candid notes of
TWA negotiating team member Murphy (acknowledged
to be careful and legible, Doc. 218, n.29) reflect Hoar’s
statement: “I do not intend to get into what relationship
one proposal has on the other, or what each individual
proposal will yield what $ savings or headcount. Recall
in the past, this exercise led to wrong conclusions. These
approx. figures are subject to changes. We will give you
no more figures than that [referring to an $8 million
insurance cost].” Exh. 22, pp. 060046-7. In another ex-
change typical of the early negotiations, Hoar said,
“Xcept IAM, whom we intend to ask, all other groups
have given.” Frankovich asked, “By 25%?” Hoar re-
plied, ‘“U are seeking an issue for PR to F/As.” Id., pp.
060058-9.

On May 8, 1984, Hoar stated that because the positions
of the parties were so divergent, TWA had applied for
mediation. A mediator was appointed in July.

In June 1984, TWA’s president C.E. Meyer, Jr., made
a presentation to the negotiating committee, tending to
show that TWA had suffered an operating loss of $72
million in the first quarter of 1984, placing it ‘dead
last” among major carriers. He also presented informa-

13a

tion tending to show that TWA’s flight attendant costs
were the highest in the industry and over 23% above the
industry average for the major airlines, a dollar value
of some $44.2 million annually. While IFFA continues
to question this and other economic data supplied by TWA
(Exh. 78, a handout on 7/19/84) it has not presented
contrary materials on these points or anything to dispute
TWA’s good faith belief in the Meyer presentation.’

Meyer also stated that between 1978 and 1984 TWA’s
total flight attendant pay and benefits annual cost per em-
ployee increased from about $20,000 to $44,000, or 120%,
during a period when pilot costs had increased by 49%
and mechanic costs had increased by 79%. Without con-
ceding or disproving the accuracy of these points, IFFA
contends that the comparisons are irrelevant in that
flight attendant benefits lagged behind the other groups
prior to 1978. A TWA publication in April 1984, re-
porting these figures (not shown to have been protested
by IFFA) acknowledged that “it might be said with
some justification that some have moved faster because
they felt they had farther to go.” Exh. 69.

There was no significant progress in negotiations until
early 1985. Based in part upon TWA’s profit of $30
million for 1984 a management decision was made to “go
for a deal” by significantly reducing demands. A new
comprehensive proposal was presented on February 22,
1985. Apparent leadership in this major move was pro-
vided by then-executive vice presiden’ Richard D. Pear-
son who became president later in 1985 but began losing

2 An IFFA consultant reported to it in August 1984, that avail-
able comparative figures showed TWA’s international flight at-
tendant costs were 349% above the industry average and domestic
costs were 21% higher. Exh. K at 2. The figures disregard People
Express and Southwest. Jd. at 4. While there are reasons to ques-
tion the industry figures, nothing better is available.

14a

influence as Carl Icahn’s ownership interest strengthened
during 1985,.*-

The proposal by TWA in February 1985 reduced the
value of its demands by approximately one-half. The
new proposal completely eliminated a demand for a 16%
wage reduction (worth approximately $32 million an-
nually without considering fringe benefits) and deleted
some 17 proposals for work rule, fringe benefit and con-
tract changes. Pearson “felt” that the proposal went
“about as far as we can go” and told Frankovich it should
serve as a “framework” for an agreement. Some TWA
officials believed the reduction in its demands went too
far; Pearson defends the reduction and characterizes
some of the withdrawn demands as “very harsh” and
probably beyond the range of demands that IFFA repre-
sentatives could agree to and obtain membership ap-
proval.

IFFA did not react favorably to the greatly moderated
demands by TWA. During the final month of negotia-
tions in the spring of 1985, IFFA representatives made
minimal requests for further information. The last spe-

3 Pearson is a significant actor in this litigation. Evaluation of
his testimony is elusive. IFFA introduced his post-employment
deposition and apparently relies on some of his appraising com-
ments as admissions. He left TWA’s employ some months after
the Icahn takeover and seems to have had no significant role during
the critical period in 1986. Differences of opinion and judgment
within TWA’s management are obvious, and Pearson now has at
least a psychological incentive to defend the comparatively generous
position of TWA negotiators in early 1985. TWA questions his
experience in flight attendant work rule issues. While there is no
reason to doubt the general credibility of his testimony, some self-
serving emotional bias doubtless affects his commentary during the
deposition testimony. Comments during his tenure with TWA in
private discussions with IFFA representatives should also be some-
what discounted in that there was apparent role-playing between
Hoar as the hard-liner and Pearson as a moderator. Pearson’s gen-
eral moderation in 1985 seems to have had some influence in causing
IFFA to miscalculate TWA’s “bottom line” demand in 1986.

15a

cific and generalized requests seem to have been on April
11. Exh. 22, pp. 060442, 060447-455. Instead, IFFA stood
firm in resisting TWA’s proposals. Revealing statements
made during this period included the following: ‘The
changes you are demanding will not be accepted by our
work force.” Exh. 22, p. 060474. “We like what we have
and we want to keep it.” Jd., p. 060461. “As TWA rises
in the industry, the need to grant concessions will become
more difficult. You have previously rejected, by design/
miscalculation our previous offers.” Id., p. 060465. Re-
sponding to one of the more important proposals, regard-
ing “Flex Cap” (scheduling and overtime flexibility),
when TWA argued that an IFFA counter-proposal was
addressed to domestic flights only, whereas TWA claimed
it had demonstrated inefficiencies in international flights,
IFFA responded, “We did not want to move at all. We
moved on Domestic even though we did not want to do
so. Those are our answers.” I/d., p. 060460. Previously
the statement was made, “We think Intl is fine the way it
is. Int] FAs like it.” Jd.

The negotiating stance of IFFA during the last month
of bargaining in early 1985 is reminiscent of Hoar’s
brusque disregard of IFFA’s concerns in early 1984. De-
spite the apparent deadlock, Pearson believed the parties
had reached “manageable” differences where persuasion
by the mediator might bring about an agreement, pre-
sumably within the “framework” of TWA’s February
proposals.

IFFA sought release from further negotiations in May
1985. Such a release by the National Mediation Board
would have started a 30-day countdown and the possibil-
ity of a strike during the summer season of 1985, the
“best possible time” to exert pressure on TWA because
of its dependence on profitable overseas travel. Such a
contingency had been forecast by Frankovich in March.
In May 1985, IFFA sought and received from its mem-
bers “overwhelming authorization to strike.”

16a

Simultaneously with the request for a release from ne-
gotiations, IFFA prepared and sent to TWA a lengthy
request for detailed financial information about TWA’s
proposals. Exh, 131. The negotiation record of the pre-
vious month makes it entirely unlikely that IFFA was
urgently or primarily concerned in late May 1985 with
obtaining information. There is no specific evidence that
IFFA had been communicating with Meyer or Pearson
or the mediator to make good on earlier pledges that
Hoar would provide requested information. At least one
_major motivation for the blanket request seems to have
been the creation of a record for possible litigation (if
the release was not timely granted) or exertion of some
presures or legal worries during a countdown. This find-
ing does not deal with the legitimacy of the various re-
quests, but has a bearing on the issue of causation of the
March 1986 strike.

In May 1985 United Airlines pilots struck. In the same
month, Carl Icahn made a bid for TWA. Apparently
recognizing that those events rendered a release inadvis-
able, the NMB merely recessed talks. Talks were not
resumed until December. One of the three best prospects
for settlement was thereby missed.*

B. The next period of negotiations began with confer-
ences with Carl Ichan, a private individual, for whose
conduct from June through September 1985, TWA is not
legally responsible. The course of negotiations is impor-
tant, however, in appraising the renewed sessions with
TWA officials in December 1985 and thereafter, after
Icahn became the controlling stockholder in TWA.

Takeover attempts began in May 1985. Separate at-
tempts were made by Icahn and Frank Lorenzo of Texas
Air, whose takeover of Continental Airlines and subse-

4 As will appear, in retrospect the other opportunities were in
August 1985 (negotiations with Icahn) and December 1985 (using
Pearson’s remaining influence).

ae tl Odes

17a

quent avoidance of collective bargaining agreements
through use of the bankruptcy laws had made him notor-
ious with airline unions. After some false starts, the
three major unions, ALPA, IAM and IFFA, began to
deal with, Icahn as a prospective “white knight.” At a
meeting in June, Icahn told the unions that he needed a
20% reduction in labor costs, then considered to be ap-
proaching $1.5 billion, in order to attract lenders needed
for his acquisition of stock; he also urged a speedy reso-
lution (apparently so that his plans would not be endan-
gered by stock market fluctuations). Icahn asked a 20%
reduction from each of the unions. While initially speak-
ing of labor costs comprehensively, to achieve a saving of
$300 million, he clarified his request to concessions in
wages and benefits, saying he did not understand work
rules and productivity issues.

ALPA, representing pilots, agreed immediately, and
was later persuaded to accept a 26% reduction. The
average pilot wages amounted to $90,000. The wage sac-
rifice by pilots would thus have averaged some $23,000.
In order to obtain ALPA agreement, Icahn agreed con-
tractually to use his “best efforts” to obtain 20-22% con-
cessions from others.

IAM was initially opposed to any concessions, but after
negotiations with IAM representative Peterpaul, Icahn
came to believe on Friday, August 2, 1985, that he could
reach agreement on a 15% concession that weekend.
IFFA negotiations were scheduled to occur last. Icahn
called Frankovich on August 2, however, and urged that
she remain available for weekend negotiations that he
hoped would complete contract commitments from the
three unions and permit him to move immediately to com-
plete stock purchases assuring him of control of TWA.

Frankovich had remained in New York on several oc-
casions in July without being invited into negotiations
(except for one evening session of informal] visiting which
she declined because she would be “outnumbered’’). She

18a

was scheduled to be hostess at a class reunion party in
California on Saturday night, the 3rd, but told Icahn she
or other IFFA representatives could be available during
the weekend. The matter was not thereafter pursued
by either party. A meeting later Friday with Icahn was
scheduled and held; this was the first individual bargain-
ing meeting between Icahn and IFFA representatives.

Icahn asked IFFA to agree to the 20% reduction pre-
viously sought; IFFA insisted it would not go beyond the
15% that Icahn expected from IAM. Arguments turned
bitter over the question whether IFFA was entitled to
parity with IAM. Generally accepting for this ruling
the firm trial testimony of Frankovich, insofar as it de-
parts from the deposition testimony of Icahn, which seems
somewhat unsure as to exact dates and statements, and
at one point in phrasing seems calculated, Icahn made
various arguments: (1) the mechanics were a “skilled
work force”; (2) the mechanics’ pay was “competitive
with the industry”; (3) IFFA had enjoyed disparate in-
creases, as compared with IAM; (4) Frankovich was
“missing the point” in that Icahn was talking about the
marketplace and “I can get people to do your job for a
lot less than you want. . . See that girl on the street out
there? That is a stewardess”; (5) responding to Frank-
ovich’s statement that janitors were in the IAM bargain-
ing unit, “A janitor is a breadwinner [who] probably
has got a family at home to support [while] you girls
are second incomes and you don’t need the money”; and
(6) after vehement argument, “Well, what are you to do
about it? Are you going to blow up the airplanes? Are
you going to burn down the airline?” Tr. 3943-8.

Accepting for this motion the essential soundness of the
Frankovich testimony, it is concluded that Icahn’s basic
points were that “the marketplace” put flight attendants
in a weak position because they could be replaced in-
expensively and he did not believe the flight attendants
were capable of stopping airline operations and thereby

19a

imposing noncompetitive salaries. In discussing the legal
issues additional factual observations will be made but it
is concluded that points (4) and- (6) were reasons or
suppositions that would be and were controlling in con-
ventional economic terms. The rhetoric that miscarried
was a clumsy effort to persuade that degenerated into
wise-cracks.

A calculating businesman is quite unlikely to adjust
middle income wages to the “needs” of his workers, al-
though he may try to persuade them to accept his pro-
posals by contending they do not need any more than is
proposed. Icahn’s subsequent inquiries and comments
about the “breadwinner” issue during the months ahead
simply show he was brooding over the debating point
that boomeranged. When his terminology became con-
troversial, weeks and months before the strike, he was
well aware that many or most flight attendarts were pri-
mary breadwinners.

An agreement with IAM was completed over the week-
end and Icahn bought stock on Monday, in reliance on the
two agreements. This is a further indication that Icahn
concluded he could afford to gamble with IFFA but that
the pilots and mechanics were necessary to his prospects.
On Tuesday he met with Frankovich and again was un-
able to reach agreement although they were tantilizingly
close. Frankovich offered a 17% concession at a time
when Icahn was still willing to agree on 20%, and Icahn
testified credibly that he thought perhaps on Sunday IAM
might have agreed to 17%, thus making the IFFA offer
compatible with his perceived needs that day. In light
of the pilots’ offer of 26%, he could afford to yield 3% to
both IAM and IFFA and still achieve his goal. It is
speculative, however, what would have occurred if there
had been joint or concurrent sessions on Sunday, just as
it is speculative (looking forward to December) whether
Pearson could have struck a bargain at 20%, despite re-
luctance at that time by Ichan, if such a proposal had
been pushed by IFFA.

20a

After Icahn’s stock ownership gave him effective con-
trol over labor contracts, he learned that TWA still had
a pending proposal for work rules changes but a pay
pause. This being inconsistent with his individual bar-
gaining, he directed that the pending proposal be with-
drawn, as it was in October, and that new proposal be
made which would contain both a reduction in wages and
work rules changes. The new proposal, made in Decem-
ber, effectively restarted negotiations by demanding con-
cessions that more than doubled the demands made by
Icahn in June and by TWA in May.

My best appraisal of the causes of the major increase
in TWA demands from IF FA would be (1) a personality
and experience difference tending to produce bold, nearly
reckless moves by Icahn and more moderate, accommodat-
ing and conventional proposals by Pearson, (2) sharply
adverse business conditions at TWA, personally felt by
Icahn in his financing opportunities, which allowed him
to assert material adverse changes to renegotiate his pur-
chase offer to minority stockholders and probably caused
new concerns about TWA’s future and the value of his
investment; and (3) awarenes that IFFA had become
contractually isolated from potential allies and was per-
ceived to have little economic clout. The more diabolical
alternatives of Icahn’s sexist bias or his desire for a
confrontation and strike seem quite unlikely, as a matter
of common experience and in the factual context dis-
cussed here and subsequently.

According to Icahn deposition testimony, designated
and not contradicted (pp. 262-3), “the projections were
coming in way, way off what we thought and we weren't
able to raise the money through Paine Webber. Every-
thing that hit the industry was hitting it. I was looking
at the number and saying, my God, I should have asked
for a lot more from the pilots and IAM, but I had deals
with them ... When I got into the company we had the
bombing at the airport, the fare wars were going on, the

2la

projections were coming in eight or ten times over. The
loss was eight or ten times over what we thought it was
going to be.” Projections for the fourth quarter loss in
1985 increased from $12 million to $120 million. Dep.
pp. 222-3, 262. The anticipated profit for the year ($50
million—Exh, 22, p. 060477) had turned into a loss ex-
pected to exceed $125 million. A later calculation of the
1985 loss was $193 million. Exh. 288. Cash reserves fell
from $400 million in April 1985 to $50 million by De-
cember. While many of the losses were not likely to
recur in 1986 and later years, terrorism and fare wars
could easily be recurring problems. Presumably without
taking into account such unpredictable factors, a 1986
profit of $225 million was forecast. This assumed $200
million in increased revenues.

While TWA had traditionally compared itself with cer-
tain major airlines (Pan Am, Northwest, Eastern,
United—Pearson Depo. 126), Continental and People Ex-
press were becoming formidable competition for TWA.
Tr. 2226, 1646-7. There is no reason to believe that Icahn
expected that high cost, high fare routes would be safe
from low cost discounters, or that he desired to keep
TWA in its traditional mode.

The December 2, 1985, comprehensive proposal by
TWA (Exh. 48) sought a 22% reduction in pay, major
changes in work rules and other cost-reduction items.
Most of the work rule proposals of February 1984 were
reintroduced, but there were some modifications, including
several IFFA proposals. Hoar valued the changes at $88
million annually; Icahn made an estimate of $110 million.
TWA told the negotiators that Icahn had achieved $200-
220 million out of a $300 million objective in reduced
labor costs from all sources. Exh. 22, pp. 060478-9. That
calculation would require picking up an additional $80-
100 million from IFFA. TWA internal documents gen-
erally show comparable valuations. See Exh. 529, with a
few different estimated values, proposing $90 million in

22a

flight attendant savings, and Exh. FFF, the apparent
source of the negotiation estimates. Frankovich in a Feb-
ruary pre-strike “road show” presentation, said it is
“pretty obvious” where the differences yielding $110 mil-
lion come from, correctly noting that a crew complement
proposal was not given a bargaining table value by TWA.
Exh. 512, p. 5. Her trial testimony suggested that Icahn
may have treated the unvalued B-scale provision as a
source of predictable savings.

Hoar supplied a breakdown per item of the company
proposal. Exh. 22, pp. 060495-6. He failed to mention
two overtime savings estimates on Flex Cap and Bidding;
adding the disclosed items together would show omissions
and apparent error in that the totals would not reach $88
million otherwise. IFFA was aware that significant over-
time savings were anticipated from the two proposals in
question. Tr. 3658-9.

Frankovich also told flight attendants that there was
more than the disclosed $80,000 saving in having them
“doing ticket agent job in terminal.” Exh. 512, p. 5.
Exh. 529, an internal document, does show a saving of
$2.5 million for tieket lift. Another internal document
(Exh. FFF) estimates only $80,000, however, TWA offi-
cial Borden testified that the larger sum did not represent
a saving, but an avoidance of additional cost of hiring
more passenger agents. Borden Depo., pp. 161-2. While
it might be expected that TWA would give some credit
for additional flight attendant work likely to avoid some
future expenses, it would not misrepresent the facts to
say that TWA did not expect the proposal to reduce cur-
rent costs. This was similar to the TWA handling of B-
scale salaries for new hires, potentially probably a more
significant matter.

The saving on TWA’s proposal to move flight attend-
ants to less valuable rest seats was variously estimated
at $1 million and $3.5 million in internal documents.

ee. a

23a

Exhs. FFF, 529. While it might be supposed that TWA
could have made more accurate and consistent estimates,
such a conclusion is a supposition only and pretrial dis-
covery has not established lack of good faith in making
these estimates. It is apparent from inconsistencies in
TWA’s own internal figures that placing dollar values on
predictions is an inexact science, as those who follow Fed-
eral deficit predictions should already be aware.

From early December until March, after release of the
parties from formal bargaining, there was no dramatic
change in bargaining positions of either side. Most of
the significant activity was in private sessions. Franko-
vich did not appear at the bargaining table during this
period, but was engaged in several private discussions
with Pearson and Icahn and, in February, in addressing
flight attendants to rally them for an anticipated strike.

IFFA’s posture with its members and at the bargaining
table was to show “anger and determination . . . STEAD-
FAST RESISTANCE.” Its spokesperson at the table did
acknowledge that “IFFA, recognizes TWA’s difficulties.
We see satellites as a significant area where you can be
helped.” Exh. 22, p. 060500. At a later date it was esti-
mated by IFFA that a statellite program would be worth
$4-5 million. Exh. 22, p. 060553, Tr. 2046. IFFA’s com-
missioned study of satellites (accommodations to residen-
tial disbursement of crew members) had already shown
they would provide little economic relief to TWA. Exhs.
WW, XX. Hoar’s conduct at the bargaining table was
at least equally unhelpful, and apparently often abrasive.

Frankovich and attorney Jolley met with Pearson, still
TWA’s president, in December, before and after meeting
with Icahn. Pearson suggested that IFFA would have to
grant TWA concessions of at least 20% in order to ob-
tain an agreement. Frankovich expressed interest in that
figure (3% more than her highest offer to Icahn in Au-
gust), and Pearson may have said he had “half a mind”
to see what he could do with the TWA board of directors.

24a

Vol. II, Pearson Depo., p. 37. Neither side made a definite
offer, and Pearson implicitly acknowledged he might not
be able to persuade Icahn or a majority of the Board that
such a settlement should occur. He told the IFFA repre-
sentatives that he had a “limited life expectancy” with
TWA. Neither party pursued the concept. It is unclear
whether the discussion related to a percentage of wages
or total costs.

After a preliminary meeting in January between Jolley
and Hoar at which it appeared that the parties were very
far apart,® Frankovich and Icahn met under the auspices
of the NMB on January 22 and 23, 1986, at a time when
the NMB was considering releasing the parties for self-
help. IFFA made another proposal for a temporary 15%
reduction in wages and a B-scaie (new hire) proposal
somewhat above the rate TWA proposed to use.® This
was rejected by TWA, and the NMB notified the parties
on February 4, 1986, of their release from formal bar-
gaining, thus beginning a 30-day countdown before self-
help would be authorized. Exh. 151.

By letter dated January 30, 1986, IFFA asserted that
it had received inadequate information from TWA in ne-
gotiations on December 4, 1985, almost eight weeks ear-
lier, and requested data on the flight attendant, mechanic
and pilot work forces, concessions made by the IAM and

5 Hoar confirmed his pessimism in an internal note dated Febru-
ary 10, 1986, stating he had agreed to a bargaining committee
meeting “for political/lezal reasons” but that “it is too early in
the cooling off period” to have “high expectations.” The letter does
implicitly indicate some hope for a settlement later in the count-
down. Exh. 292.

6It may be noted, however, that although the “average head
cost” of experienced flight attendants was calculated at $41,785
annually (Exh. 529) IFFA had no serious quarrel with a B-scale
for new hires at about $1,000 per month. Exh. 49, p. 3. Frankovich
recognized that figure as the market rate at which people could be
hired. Tr. 4634. The starting monthly salary under a 1985 Pan Am
contract was $784. Exh. Z, p. 18.

25a

ALPA, and detailed cost information on each TWA pro-
posal, separately presented by subpart. It also asked for
an explanation of all calculations made in valuing the
proposed savings. Exh. 50. A preliminary response was
made by TWA on February 4. Exh. 151. Further re-
sponses were made at a meeting on February 13. Exh.
22, pp. 060523-7. An additional written response was
made on February 24, 1986. Exh. 140.

TWA declined at that time to supply information about
other work groups. This was unreasonable, as the parties
had continuously discussed issues relating to other work
groups, either as an accommodation or to advance some
argument. While no such argument is controlling, some
are of considerable significance; for example, TWA’s trial
contention that it was generally seeking work rules no
more onerous than had been agreed to by the pilots, the
other members of a flight crew.’

Basic financial estimates regarding the TWA proposals
have generally been supplied. To the extent details, cal-
culations and breakdowns on the proposals and counter-
proposals were available and were not supplied, such ma-
terials and theories have been explored after filing of
litigation in March 1986. Such information has led to
some further quarrels between the parties, but their
potential for shaping an agreement between the parties
has not been demonstrated or asserted by IFFA, except
in the abstract.

Hoar testified in designated portions of his deposition
that Jolley told him, in their meeting in January 1986,
not to be “concerned about the numbers.” Hoar Depo.,

7 There is no reason to believe, however, that IF FA lacked access
to ALPA agreements or could not learn from pilots the work rules
under which they operated and the success of such operations.
Frankovich viewed such an argument as degrading to flight at-
tendants, because of other pilot benefits, but stated that at one
time IFFA did not resist arguments for conforming to the pilots’
work rules. Tr. 5198.

26a

pp. 611, 615-6. Apparently Jolley was referring to the
details, not the general parameters of an agreement.
While Jolley had not known authority to waive IFFA
demands for information, the testimony tends to confirm
that the issue of missing information was not the real

impediment to agreement. —

While Frankovich was aware, from the Jolley memo-
randum, that a claim of denial of information could lead
to litigation, and would thus be helpful to IFFA, and she
referred to such denial in her February 1986 “road show”
presentation (Exh. 512, p. 1), the reference was confined
to the first period of negotiations ending in May of 1985
and not to the period after valuations were given for the
December 1985 proposals. The 15 page outline of her
presentation contains a considerable array of knowledge
and contentions about the pertinent numbers, as of Feb-
ruary 1986.

A mediator designated by the NMB attended almost
every bargaining session where requests for information
were made. A primary function of a mediator in assist-
ing parties to reach agreement would normally be to ob-
tain appropriate information that may lead to agree-
ments. Tr. 4378. Unless TWA simply did not wish to
reach an agreement (a matter considered below) and thus
rejected appeals from the mediator in the confidential
sessions, any failure to supply information would indicate
(1) nonexistence of hard figures or (2) lack of insistence
from the mediator, on the theory that the parties were
too far apart in their concepts to make economic details
meaningful.®

8 On March 1, 1986, the mediator stated that “The Co. has pro-
vided answers (numbers) to Union Qs. I suggest any outstanding/
follow-up Qs be dealt with now. Does the Union have Qs.” Franko-
vich responded thai she would like to “start at the beginning.” The
mediator urged her to “keep to the substantial ones.” Exh. 22,
p. 060534. After an hour’s recess, IFFA listed and the parties
summarily discussed 21 topics. /bid., pp. 060534-44. After a brief

SN ence

27a

Trial testimony confirms that no informational dis-
closures obtained through discovery could have materially
affected the negotiations, if known earlier. There was no
convincing response to questions from the bench seeking
identification of problem areas where more information
could have broken the deadlock. See, e.g., Tr. 4458, et seq.,
4758-9. A list of TWA priorities, for example, seems not
to have existed. Dollar values assigned by TWA would
show how concessions tempting to TWA might be struc-
tured. No information sought from TWA could likely
result in flight attendants accepting the work rules con-
cessions that

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_0612%3A1. Public record. Not legal advice.