Petition for Writ of Certiorari — Allied Pilots Ass'n v. Civil Aeronautics Board

MICHAEL RODAK, JR.,

Supreme Court of the Hnite j | Fey:

OcroBeR TERM, 1974

vo. TH-709 |

Arr LINE DISPATCHERS’ ASSOCIATION, ET AL.

Petitioners,

Vv.

Orv, AERONAUTICS Boarp,

Respondent.

and

AMERICAN AIRLINES, INC., ET AL.,

ae Intervenors.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

WM G. Manoney

1015 18th Street, N.W.

Washington, D.C. 20036

Counsel for Petitioners

; December, 1974

5 oy Brnon S. Anams Panrrine, Inc., Wasmmoron, D. C.

>,

LE Le TR EE IE OOD LIE ie? eb

TABLE OF CONTENTS

Page

Cens DOW isis asda locas ahve sketescseusaeseess 2

SURMIOTUE ons oon3'esd bia eRicds adas eeaea hoe eees 3

QUESTIONS PRESENTED .........--cceeeeeesscescrees 3

Statutory Provisions INVOLVED .........-00eeee eee 3

STATEMENT OF THE CABE 2... ccc cescestccccncesescces +

Reasons For GranTinc WRIT .......-.00-cscccceces 10

I. The Respondent Has Arrogated To Itself The

Authority To Alter Collective Bargaining Re-

lationships In The Air Transport Industry.... 10

I]. The Respondent Erred in Permitting Finan-

cially Weak Carriers To Determine Whether to

Become Obligated Under the Pact ........... 14

TIL. The Restoncent’s Interference In And Dis-

ruption of tne Scheme of Labor Relations Be-

comes More Pronounced Upon Consideration

of Its Decision In The Air Conference Case... 16

CONE onc Conk vx snecaeeds teh eecenedeeeehenene 1°

TABLE OF AUTHORITIES

CASEs:

Brotherhood of Railroad Trainmen vy. Atlantic Coast

Line Railroad Co., 127 U.S. App. D.C. 298, 383

F.2d 225 (1967), cert. den. 389 U.S. 1047 (1968)... 17

H. K. Porter Co., Ine. v. NLRB, 397 U.S. 99 (1970)... 12

NLRB v. lnsurance Agents’ International Union, 361

U8, 477, 40T-496 (1000). 6 cos cecnccevensescacns 12

Six-Carrier Mutual Aid Paet, 29 C.A.B. 168, 173

(1959), recon. den. 30 C.A.B. 90 (1909) ....-..-- 4,13

Tinta Mgt beater Nae ik i NA AL ali a

PU ere ee oo

fasta a

rare stent saciear socandtiniininsisiationiow i

ii Index Continued

STATUTES:

Federal Aviation Act

49 U.S.C. Sees. 1301 et seq. 2.2...

49 U.S.C. See. 1302

49 US C. See. 1371(k) (4)

49 ULS.C. See. 1376

49 U.S.C. See, 1382

ee

Railway Labor Act

45 U.S.C. Sees. 151 et seq. ..........

ee

“se ee ww ee

Page

OT eTe rr Tey.

eveevess 11,15, 15

Sa cecseendee 11

eee es 10, 11, 12

.. +0, 4, 10, 11, 17

_—— - “ A NR Re ne ee Tah a FC EET A MSIE TONE IO AO 8M

Supreme Court of the Tnited States

OcroBeR TERM, 1974

No.

Air LINE DISPATCHERS’ ASSOCIATION, ET AL.

Petitioners,

v.

Civit AERONAUTICS BOARD,

Respondent.

and

AMERICAN AIRLINES, INC., ET AL.,

Tntervenors.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

Petitioners, Air Line Dispatchers’ Association,

Brotherhood of Railway, Airline and Steamship Clerks,

Freight Handlers, Express and Station Employees,

Communication Workers of America, Flight Engi-

neers’ International Association, International Asso-

ciation of Machinists and Aerospace Workers, and

Transport Workers Union of Ameriea, respectfully

pray that a Writ of Certiorari issue to review the

judgment of the United States Court of Appeals for

the District of Columbia Cireuit entered on August

8, 1974.

ids 4 Bx yiislipieien SU SLA 6 ee

Bic pie atv a A OA ea ae Ite SOY ‘

. — sewer LAE PIE LTA to WOM,

a eee. “

OPINIONS BELOW

The opinion of the Court of Appeals is reported at

— U.S. App. D.C. —, 502 F.2d 453 (1974), and appears

in the Appendix volume on page iv thereof as Appendix

A." Order No. 70-7-114 of the Civil Aeronauties

Board, issued July 23, 1970, approving, without an

evidentiary hearing, the Mutual Aid Pact is not re-

ported and is reprinted as Appendix I at page 142a

of the Appendix veiume. Order No. 70-11-1410 of the

Civil Aeronautics Board, issued November 23, 1970,

vacating Order No, 70-7-114 and remanding the pro-

ceeding for evidentiary hearing is not reported and

is reprinted as Appendix J at page 221a of the Ap-

pendix volume. Order No, 73-2-110 of the Civil Aero-

nautics Board, issued February 27, 1973, approving

the Mutual Aid Pact is not reported and is reprinted

as Appendix K at page 225a of the Appendix volume.

Also vvinted in che Appendix volume are the de-

cisions and orders of the Civil Aeronautics Board which

preceded the Order from which this appeal is taken and

which approved the original Mutual Aid Pact and all

but one of the ameudments thereto: Order E-13899 is

reported at 29 C.A.B. 168 (1959) and is reprinted as

Appendix B at page 5a; Order E-14563 is reported at

30 C.A.B, 90 (1959) and is reprinted as Appendix C€ at

page 35a; Order E-15413 is reported at 31 C.A.B. 977

(1960) and is reprinted as Appendix D at page 41a;

Order F-21044 is reported at 40 €.A.B. 559 (1964) and

is reprinted as Appendix E at page 44a; Order E-24213,

disapproving inclusion of local service carriers in the

Mutual Aid Pact, is not reported and is reprinted as

*The Appendix, separately printed, will be referred to sub-

sequently in this Petition as *‘App. p. —’’.

3

Appendix F at page 130a; Order E-26000, issued No-

vember 17, 1967, is not reported and is reprinted as

Appendix G at page 134a; and, Order 70-1-100, issued

January 20, 1970, is not reported and is reprinted as

Appendix H at ‘sage 138a.

JURISDICTION

The judgment of the Court of Appeals was entered

on August 8, 1974. This Court's jurisdiction is in-

voked under 28 U.S.C. See. 1254(1).

QUESTIONS PRESENTED

1. Whether the Civil Aeronautics Board may ap-

prove agreements under Section 412(b) of the Federal

Aviation Act as not adverse to the publie inter-

est beeause such agreements alter the balance of col-

lective bargaining power in the industry and when it

has found that such agreements ‘‘may well’ tend to

prolong interruptions to air commerce ?

» Whether the Civil Aeronautics Board violates

its Congressional mandate to foster sound economic

eonditions in the air transport industry by permitting

financially weak carriers to determine for themselves

whether to join the Mutual Aid Pact and thereby be-

come subject to the additional financial drains of sup-

porting opposition to strikes on other carriers?

STATUTORY PROVISIONS INVOLVED

Those provisions of the Federal Aviation Act, 49

U.S.C. Sees. 1301 ct seq., and the Railway Labor Act,

45 U.S.C. Sees. 151, et seq., which are material to the

disposition of this Petition are reprinted as Appendix

L beginning at page 331a of the Appendix volume.

- LAI A: EY BABB NCD TEL Sa

4

STATEMENT OF THE CASE

The original Mutual Aid Pact was executed on Oc-

tober 30, 1958, effective October 20, 1958, between

American, Capital, Eastern, Pan American, TWA,

and United airlines. The Pact provided mutual as-

sistance in the event that the flight operations of any

party thereto was shut down by reason of (1) a strike

ealled to enforce union demands in excess of or opposed

to the recommendations of a Presidential Emergency

Board appointed under Section 10 of the Railway

Labor Act; or (2) a strike ealled before exhaustion of

the procedures of the Railway Labor Act in disputes

between carriers and employees; or (3) a strike which

is “otherwise unlawful”’.* The assistance provided

was in the form ef an agreement by the air carriers to

pay to the strike-bound carrier tie irereased revenues

of the other carrier parties which were attributable to

the strike, less applicable added direct expenses. These

were called ** windfall paymeuts”’.

The Pact was amended from time to time over the

years until it culminated in its present form which was

approved by tae Respondent Civil Aeronauties Board

decisions now presented to this Court for review.

The history of the Mutual Aid Pact is one of con-

tinual extension and expansion from an agreement

which was approved by the Respondent Board beeause

it did not hinder achievement of the objectives of Sec-

tion 102 of the Federal Aviation Act, 49 U.S.C. See.

1302, Sir-Carrier Mutual Aid Pact, 29 C.A.B. 168, 173

(1959) (App. p. 10a), recon. den. 30 C.A.B. 90 (1959)

(App. p. 35a), to an agreement which has been ap-

*The 1960 amendments to the Pact, approved by Respondent

in 1964 (App. pp. 44a, ef seq.), extended payment coverage to

all strikes not in contravention of recommendations of a Presi-

dential Emergency Board. (App. p. 45a.)

Pel ve rise f ; ie

4)

proved precisely because it alters labor-management

collective bargaining balance in favor of management

and places additional “restraints [upon employees |

consistent with collective bargaining’. ( Respondent’s

Majority Opinion, App. pp. 233a-234a, 251a.)

The latest amendments approved by the Respondent

did not inerease the level of ‘windfall payments”’ but

provided a maximum level of supplemental payments

to a struck carrier of 50 of its normal operating ex-

penses during the first two weeks of a strike, 45°. for

the third week of the strike, 40°( for the fourth week,

and 35¢; for any period thereafter. The amendments

also increased the annual maximum liability of any

one participating air earrier for supplemental pay-

ments by doubling its liability from 14° to 1% of that

‘arrier’s air transport gross operating revenues for the

carrier's previous calendar year.

The October 1969 amendments to the Mutual Aid

Pact also permitted any trunkline carrier to join the

Pact by November 15, 1969, without a waiting period

or back payment period. Tn addition, the amendments

permitted withdrawal by any carrier party effective

at the end of any caJendar year beginning December

31, 1972, on oue year’s notice; and, the Pact was modi-

fied to provide that disputes concerning the amount of

any payment would be subjiect to arbitration.

Although the Petitioners opposed approval of the

1969 amendments on the ground that there had been no

evidentiary hearing thereon, the Respondent approved

the agreement as amended. (App. p. 142a.) The

Petitioners filed a timely petition for reconsideration

of that order and the Respondent then determined that

since the agreement, as amended, had not been sub-

jected to evidentiary hearing, it should be remanded

for such hearing. (App. P- 221a.)

*

FESR WN FS eet

spin S OU MARAR Ke

St ite SRS gel iat Os

;

4

4

:

6

Before such a hearing could be undertaken, however,

the earriers once again broadened their agreement by

unending it te permit local service carrier participa-

tion therein. As thus amended, the Mutual Aid Pact

was approved by the Respondent on February 27, 1973

(App. p. 125a), following an oral hearing before Ad-

ministrative Law Judge Arthur 8S. Present who recom-

mended disapproval of the amendments. (App. p.

271a.)

The Administrative Law Judge held that the in-

creased level of Mutual Aid Pact payments created

perils which might undermine the objectives of the

Federal Aviation Act. (App. p. 295a.) He also found

that carriers could “utilize the higher leve! of pay-

ments”’ as a consideration in determining the most op-

portune time to settle a strike (App. p. 296a), citing the

record example of TWA which ‘‘was financially better

off during the two-day strike it incurred in 1970 than

if it had fully operated on those days”* and Mohawk

which had operated at a profit during a strike period

with Mutual Aid benefits but which operated at a net

loss without a strike even though it had received $592,-

000 in governmental subsidy payments during the lat-

ter period. (App. p. 297a.) The Administrative Law

Judge concluded that the *thigher level of mutual aid

payments may sway a carrier's decision as to when it

should settle a strike, to the detriment of the public

utilizing air transportation’. (App. p. 297a.)

The Administrative Law Judge also disapproved

the increase in a earrier member's liability from 12%

to 1% of its prior year’s operating revenue ov his eon-

clusion that such an increase could impair the finan-ial

condition of certain carriers. (App. p. 299a-300a.)

=. BROWS

=

$

7

The Administrative Law Judge cited the reduction of

United Air Lines’ working capital from an estimated

$47,225,000 to $17,520,000 beeatise of its Mutual Aid

Pact liability and the payment by Pan American of

$9,404,000 in 1970 on the basis of a year in which its

rate of return was negative (1969)—70°; of those pay-

ments being **supplemental”’ payments. (App. p.-

“00a.) The Administrative Law Judge found that of

the 187,485,000 paid out under Mutual Aid Pae from

1958 through June 1971, 40°, or S84.368,250, was at-

tributable to but four strikes since the incention of the

1969 amendments and that 27°C of the total Mutuai

Aid Pact payments sinee 1958, or $49,688,000 were re-

feeted in the “supplemental” payments made in con-

nection with four strikes in the 20-month period be-

tween October 1969 and June 1971. (App. Pp. 300a.)

The Administrative Law Judge also eoneluded that

local service carriers should be exeluded from the Mu-

tual Aid Pact beeause their participation would be

inconsistent with the publie interest and inconsistent

with the statutory scheme as reflected in Section 406

of the Federal Aviation Act, 49 U.S.C. 1576. These

eonelusions were based upon a mimber of findings.

(See, e.g.. App. pp. 308a, 804a, 305a, 306a, 307a.)

The Civil Aeronautics Board by a three-to-two vote

reversed the Administrative Law Judge and appreved

the amendments ti foto. In deciding to appreve the

Pact, as amended, the Board determined the primary

issue to be:

“Whether the mutual aid puyments so shifted

the bargaining balance in favor of earriers as to

ereate a serious likelihood that a earrier might re-

sist settlement of a strike on a reasonable basis in

Be

2 if SAA ARBRE SIAR

ta

a!

Poc

Se cee i et I RF. 1 lege ete MMP A RACER - |

8

a circumstance where such a settlement was pos-

sible.’ (App. pp. 233a-234a.) *

The three-member majority of the Board found that

the increased payments provided by the Mutual Aid

Pact were for the purpose of increasing a ‘‘carrier’s

willingness or ability to resist union demands which

the carrier considers to be unreasonable’? (App. p.

235a) but that such purpose was not adverse to the

public interest since other economic pressures existed

which would prevent the carrier from being ‘‘signifi-

‘antly influenced’’ by reason of mutual aid payments

‘‘to resist what it considered to be a reasonable settle-

ment, or to try to force unreasonable concessions on

the part of labor.”’* (App. pp. 235a-236a.)

The Majority held that the operating profit received

by the members of the Pact during strikes because of

augmented mutual aid payments provided by the

amendments to the Pact ‘‘fali far short of real profits”

because of ‘‘anticipated profits’? which they [the struck

carriers] otherwise would have achieved, as well as

post-strike losses.’’ (App. pp. 238a-239a.) The Ma-

* This issue was specifically rejected by the Board in its original

decision as irrelevant in the consideration of the approval of the

Mutual Aid Pact. (App. pp. 10a-10b, i4a-14b.)

* Regarding these findings of Respondent, Petitioners submit

that the dissenting opinion accurately and effectively demonstrates

its basic invalidity (App. p. 260a, n. 5):

According to the majority, it is only ‘unreasonable’ union

demands which will thus be resisted. But one man’s unrea-

sonable demand is another’s reasonable request; as we have

already pointed out, it is both futile and contrary to the

Board’s proper role as a neutral in labor conflicts to attempt

to analyze the effects of the mutual aid amendments in these

terms.”’

9

jority rejected the conclusion of the Administrative

Law Judge that the interim profit payments under the

>act amendments created a dangerous tendency to pro-

long a strike upon its finding that in the National Air-

lines strike the carrier had accepted a proffer of arbi-

tration but such proffer had been rejected by the un-

ion; the union rejected arbitration in the Northwest

strike before the company had indicated whether it

was willing to arbitrate ; and, in the Mohawk strike the

union would not agree to arbitration only on part of

the issues as the carrier desired but would only agree

to arbitrating on all of the issues in dispute.’ (App. pp-

939a-240a.) The Majority held that the Pact pro-

vided ‘substantial protection from financially erip-

pling strike losses, at a cost which is reasonable’’ even

though the amended Pact might result in imposing ‘‘a

certain financial burden on earriers which may be fi-

naneially weak.’? (App. Pp. 244a-245a.)

The Majority concluded its opinion by expressing

the tacit belief that absent the amendments to the Mu-

tual Aid Pact, the employees of carriers could compel

their employers to accept all requests made by the em-

ployees. (App. Pp. 250a.)

The dissenting members of the Board at the outset

of their opinion found it necessary to comment upon

the obviously partisan character of the Majority’s

ovinion. (App. pp. 9550-2572.) The Majority had

stnied the issue in the case in terms of shifting the

bargaining balance in favor of carriers. See supra,

5In each of these contrary situations—Labor’s refusal to arbi-

trate all issues ». the National Airlines strike and Management’s

refusal to arbitrate all issues in the Mohawk strike—Respondent

places the onus on Labor for prolonging the strike by refusing

to arbitrate in the manner desired by Management.

Rakes eee Ged ratte oe

pa Se ala tus

10

pp. 7-8. The dissenting members strenuously disap-

proved of the Majority’s injection of the Civil Aero-

nauties Board into the bargaining structure of the in-

dustry (App. pp. 255a-257a) and rejected the issue as

phrased by the Majority (App. pp. 233a-234a) :

“‘In our view, the issue is not whether the

strengthening of airline management’s bargaining

position which obviously results from the 1969 mu-

tual aid amendments is a good thing per se—a

judgment which in our view the Board need not

and should not make—nor is it whether airline em-

ployees retain effective bargaining power, which

they patently do. The issue, rather, is whether

under some significant sets of circumstances the

1969 amendments may give carrier management

an incentive to act irresponsibly in prolonging a

strike.”’

On March 5, 1973, the Petitioners filed a timely pe-

tition for review of the Respondent’s decision with the

United States Court of Appeals for the District of

Columbia Circuit. A decision adverse to Petitioners

was rendered by that Court on October 8, 1974, and

this Court granted Petitioners an extension until De-

cember 6, 1974, in which to file their Petition For a

Writ of Certiorari.

REASONS FOR GRANTING THE WRIT

L

The Respondent Has Arrogated to Itself the Authority To

Alter Collective Bargaining Relationships in the Air Trans-

port Industry.

Section 412 of the Federal Aviation Act, 49 U.S.C.

See. 1382, requires the Respondent to disapprove an

agreement between air carriers if it is ‘‘adverse to the

public interest, or in violation of this Act....’’ Vio-

Nae ~|

11

lations of provisions of the Railway Labor Act are de-

termined to be violations of the Federal Aviation Act,

49 U.S.C. See. 1371(k) (4).

In approving the Mutual Aid Pact as amended in its

most recent form, the Respondent found the Pact was

not adverse to the public interest because the

Pact strengthened the bargaining power of air carriers

and placed additional ‘syestraints [upon employees]

consistent with collective bargaining.”’” (App. PP-

933a-234a, 251a.) Section 412(p) does not authorize

the Respondent to approve agreements which contra-

vene the design for collective bargaining and labor re-

lations designed for the air transport industry by the

Congress in its enactment of the Railway Labor Act.

To the contrary, in passing upon agreements sub-

mitted to it pursuant to the provisions of Section 412

(b), the Respondent is restricted to interpreting the

publie interest in terms of elements related to

those listed in Section 102 of the Federal Aviation Act,

49 U.S.C. See. 1302; and, it seriously encroaches upon

the powers conferred by Congress on other govern-

mental agencies under the terms of the Railway Labor

Act when it approves an agreement under Section 412

(b) which ‘‘may well” tend to prolong interruptions

to air commerce. (App. Pp. 235a.) °

The Respondent, or at least a bare majority of its

members, may be of the opinion that the Congressional

design for collective bargaining has left the air car-

6 Sertion 2 of the Railway Labor Act, 45 U.S.C. See. 15ia, sets

forth two of the general purposes of that Act to be: ‘*(1) To avoid

any interruption to commerce or to the operation of any carrier

engaged therein; * * * (4) to provide for the prompt and orderly

settlement of all disputes concerning rates of pay, rules, or working

conditions; ...-”

AEA LL

PRAT IE SOR IE BAe

Bus os

12

riers at the merey of the unions representing their

employees (App. pp. 234a, 250a); however, it is not

the prerogative of the Respondent to approve agree-

ments under Section 412(b) of the Federal Aviation

Act because they will correct real or imagined

imbalances in collective bargaining power. Such ae-

tions by Respondent run directly counter to principles

enunciated by this Court in NZRB vy. Insurance

Agents’ International Union, 361 U.S. 477, 490, 497-

498 (1960) ; see also, H. K. Porter Co., Inc. v. NLRB,

397 U.S. 99 (1970). In the Insurance Agents’ case,

this Court held that not even the National Labor Re-

lations Board couid base its conclusions upon an at-

tempted equalization of ‘‘disparities of bargaining

power between employer and union’’. If such is the

case with respect to the agency created by Congress as

expert in the field of labor relations, then a fortiori,

an agency which has no special expertise in that field

cannot validly base a decision upon its determination

of ‘‘whether the mutual aid payments so shift the bar-

gaining balance in favor of carriers as to create a se-

rious likelihood that a carrier might resist settlement

of a strike on a reasonable basis in circumstances

where such a settlement was possible.’? (Emphasis

supplied.) (App. pp. 233a-234a.)

In the instant case the Respondent arrogated to it-

self authority to interpret the publie interest under

Section 412(b) of the Federal Aviation Act solely in

terms of the adjustment of the balance of collective

bargaining power in the air transport industry. In

doing so, it is respectfully submitted, the Respondent

violated principles enunciated by this Court and set

a dangerous precedent establishing Respondeiut’s eon-

trol of and interference in collective bargaining affairs

in the air transport industry.

=— Pah DOTS

13

The Court below failed to address itself to this issue,

determining instead to view the matter negatively as

a refusal by the Respondent to interfere with the par-

ties’ choice of economic weapous. (App. pp. Vviii-x.)

Such a view ignores the affirmative holding of Re-

spondent that the Pact was not inconsistent with the

public interest for the very reason that it shifted the

balance of power in collective bargaining to manage-

ment.

More significantly, the Court below impliedly

endorsed the Respondent’s stated concept that an ad-

ministrative agency, if unsatisfied with the law as writ-

ten by Congress, ¢an take whatever steps it believes are

necessary to change it. At page 25 of its majority

opinion (App. Pp. 250a) the Respondent appeared to

acknowledge the exclusive role of Congress in formu-

lating our national policy with regard to work stop-

pages in the air transport industry, but immediately

stated its intent to take such steps as it believes neces-

sary to correct a situation ‘whether by law or undue

economie pressure’ carriers are compelled ‘‘to accept

all requests of employees.””* ( Emphasis supplied.)

The Respondent based its decision upon an issue

about which it had no expertise—the determination of

when a shift in the balance of bargaining power be-

comes adverse to the public interest. The Re-

spondent’s original Mutual Aid Pact decision in 1959

was decided upon the proper issue—whether the Pact

hindered the achievement of the objectives of Section

102 of the Federal Avistion Act, 49 U.S.C. 1302.

(Six Carrier Mutual Aid Pact, 29 C.A.B, 168 at 173

(1959), recon. den. 30 C.A.B. 90 (1959) ; App. pp. 10a,

7 There is no evidence of record nor was there a claim by air

carriers that any carrier was ever compelled to ‘‘accept all re-

quests of employees’’.

a

wrod

ohh Bape

~ MI X

Bux 620.0 CNRS BARR, pag tentateah shoe

\

14

35a.) Application of that general issue in terms ap-

propriate to the instant proceeding was phrased

properly by the dissenting members of Respondent

(App. p. 26la):

“The issue, rather is whether under some sig-

nificant sets of circumstances the 1969 amend-

ments may give carrier management an ineceutive

to act irresponsibly in prolonging a strike.’’*

The Respondent did not act within the framework

of the limited authority granted it by Congress in the

Federal Aviation Act. The Respondent, instead, acted

within a framework of its own creation: self-authorized

to pass upon interearrier agreements in terms of their

effect upon the balance of collective bargaining power

within the air transport industry. In so acting, the

Respondent exceeded its authority and the Court below

erred in failing to confront and deal with that issue.

Il.

The Respondent Erred in Permitting Financially Weak Car-

riers To Determine Whether To Become Obligated Under

the Pact.

Under the Pact as approved by Respondent, a

member carrier is liable to a payment of up to 1%

of its prior year’s air transport operating revenue ta,

support a struck carrier. Both the Administrative

Law Judge and the dissenting members of Respondent

coucluded that the basic defect in the provision was

5 Respondent recognized that the Mutual Aid Pact amendments

**may well’’ tend to prolong strikes but only when the unions act

‘‘unreasonably’’. (App. p. 235a; but see footnote 4, supra, at page

8.) The Court below upheld the Respondent's decision citing

the fact that fewer strikes had occurred sinee the amendments.

The Court, however, did not address itself to the cause of the

extended length of those strikes. (App. pp. lla and 12a.)

I RAE LED Rite OME POLED: OE LALA BCE me CIE

eh c OE ABO . idl ear r

a re wae we ee ET LA EA LILLE CLD DN DOE EDS Hic 0 IN PLE

j

15

that it took ‘‘no account of the current financial con-

dition of a paying carrier.” (App. p. 264a.)

Obviously, such payments could seriously weaken a

earrier’s ability to serve the public if its current

financial condit’ +i hed deteriorated from its eondi-

tion during the :aior y ix. The dissenting members

of Respondent noted, for example, that while the

evidence disclosed that Pan American had paid out

over ¥10 million in mutual aid payments in 18 months,

that carrier’s financial condition had been cousiaered

so precarious by the Respondent that it had receztly

rejected the acquisition of Caribair Airlines by

Eastern Airlines becsse of a possible diversion of

lexs than $10 milion from Pan American if the ae-

quisition tour place." (App. D- 2652.) The con-

tinuing financial deterioration of Pan American is a

matter of public knowledge yet that ‘arrier remains

obligated under the Pact.

The Respondeut, in considering this aspect of the

Pini, permits a carrier to make its own choice as to

whether to chance liability for such payments (App.

p. 246a) despite its conclusion that **the higher pay-

ments’? may well ‘impose a certain financial burden

on carriers that may be financially weak’’. (App. p.

245a.)

The Respondent thus has acted in derogation of the

mandate contained in Section 102 of the Federal

Aviation Act (49 U.S.C. See. 1302) to regulate “‘air

transportation in such manner as to... foster sound

economic conditions in such transportation... .”

® Pan American has paid out at least a net of $21,846,000 under

the Pact. (App. p. 300a.)

VMs Atte

Basics ms Re ere Cat eas {lak ae aN ds

16

The Court below simply adopted, without analysis,

the findings and conclusions of Respondent, including

the Respondent’s reference to Pan American’s pay-

ment of only .48° of its operating revenues for the

period of January 1, 1970, to June 30, 1971, as support

for those findings and conclusions."" (App. pp.

Xvi-xvii; 243a-244a.)

It is respectfully submitted that so substantial a

departure from its responsibilities under the Federal

Aviation Act warrants thorough review and reversal

by this Court.

III.

The Res ,ondent’s Interference in and Disruption of the Scheme

of Labor Relations Becomes More Pronounced upon Con-

sideration of Its Decision in the Air Conference Case.

At the time the Respondent approved the amended

Mutual Aid Pact, there was pending before it agree-

ments submitted by the Airlines Industrial Relations

Conference (AIRCON), an association comprising

most of the air cairiers in the United States.”

AIRCON would establish an organization through

which its carrier members could take consistent posi-

tions in bargaining with each union on each of the

carrier members thereby effectively imposing upon

unions multi-employer bargaining in violation of the

As noted, supra, at page 15, the 48% of Pan American's op-

erating revenue amounted to over $16 million; an amount the Re-

spondent had previously considered as a threat to the already

precarious financial condition of that carrier.

™ The AIRCON agreements have now been conditionally ap-

proved by the Responaent. (Board Order No. 73-6-96 of June 22,

1973.) The Board's order has been appealed to the United States

Court of Appeals for the District of Columbia Cireuit. That

Court has scheduled December 12, 1974, as the date for hearing

oral arguments in that case.

17

provisions of the Railway Labor Act. Brotherhood of

Railroad Trainmen v. Atlantic Coast Line Railroad

Co., 127 U.S. App. D.C. 298, 383 F.2d 225 (1967),

cert. den. 389 U.S. 1047 (1968).

The result of the combined existence of AIRCON

and the Mutual Aid Pact is the confrontation by the

employees of the industry with industrywide consistent

bargaining positions on the one hand and the carriers’

ability to operate at a profit during a strike on the

other. (App. pp. 287a, 261a.) The combined

operation of these agreements totally reforms labor

relations in the air transport industry from those de-

signed by Congress \in its enactment of the Railway

Labor Act. \

The Respondent refused to consider the combined

effects of these agreements. That refusal was both

arbitrary and eapriciqus and justified the setting aside

of its decision. The Court below, however, did not

address itself to that issue.

There would seem to be little doubt that the decision

of the Court of Appeals in the AIRCON case will be

the subject of a petition to this Court for a writ of |

certiorari. In light of that fact; because of the close

relationship of these eases as reformations of labor

relations in the air transport industry; and, because

their combined effect upon those relations are more

pronouneed than their individual isolated effect, it is

respectfully suggested that this Court may wish to

defer action upon this petition until this case and the

AIRCON ease can be considered together.

MYLO LET OS IE LEG OOP EO, DE EOI

NRG rR eee ont SS vo ee >

| een Sabla Se eed A Viel bad o¢

18

CONCLUSION

The Respondent cannot be permitted to base its

decisions upon considerations which have been reserved

by Congress to other tribunals or, indeed, to itself.

The Respondent cannot be permitted to determine in

what manner aud to what extent the balance of bar-

gaining power in the air transport industry may be

shifted. Nor may Respondent be permitted to

abdicate its responsibility to the public and to the in-

dustry by permitting financially weak earriers to

decide for themselves whether they should undertake

the burden of financially supporting other carriers

during strikes.

The petition for writ of certiorari should be granted

or, in the alternative, this Court may wish to defer

action thereon pending presentation to it of a petition

for such a writ in the AIRCON ease.

Respectfully submitted,

Wituiam G. MAHONEY

1015 18th Street, N.W.

Washington, D.C. 20036

Counsel for Petitioners

Of Counsel:

Hicusaw & MAHOYEY

1015 18th Street, N.W.

Washington, D.C. 20036

December 6, 1974