# Petition for a Writ of Certiorari — Air Lines Dispatchers' v. Civil Aeronautics Bd. (No. 74-1174) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_0673%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for a Writ of Certiorari - **Published:** January 1, 1974 ## Text IN THE Supreme Court of the Ani OctToBeR TERM, 1974 No. 74-1174 Alk LINE DiIspaATCHERS’ ASSOCIATION, ET AU., Petitioners, v. CI vu. AERONAUTICS Boab, ET AL., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT WiLLiAM G. MAHONEY Suite 506 1015 Eighteenth Street, N.W. Washington, D. C. 20036 Attorney for Petitioners Air Line Dispatchers’ Association, et al. March 1975 Press or Byron S. ApaMs Patntinc, Inc., WasHINctoN, D. C. — TABLE OF CONTENTS Page — UU—I—U— ·˙·wwðĩ 2 S ˙ q — h’!Fff˖ b 3 QUESTIONS Enno 3 Statutory PROvISTONS INVOLIVyuhuhᷣ )) 3 STATEMENT OF THB CaãWa . 4 Reasons FoR GRANTING THE WRIT: I. By Authorizing the Respondent Carriers To Employ AIR Conference as Their Exclusive Collective Bargaining Representative, Respond- ent CAB Has, in Effect, Sanctioned a Material Alteration of the Scheme for Collective Bar- gaining Designed and Established by Congress for the Air Transport Industry .............. 8 II. By Approving the Creation of AIR Conference, Respondent CAB Has Empowered the Air Car- riers To Utilize a System of Collective Bargain- ing Which Effectively Forces Individual Unions To ngage in Involuntary Multi-Carrier Bar- ON ss ᷑ͤ . O . .. 10 III. By Approving Both the AIR Conference Agree- ments and the Latest Mutual Aid Pact, Re- spondent CAB Has Disrupted and Interfered With the Statutory Obligation To Exert Every Reasonable Effort To Make and Maintain Agree- 5 nnen es o inne 15 ii Table of Contents Continued INDEX TO CITATIONS Page CasEs: Airlines Negotiating Conference Case, 8 C.A.B. 354 / RS Sie 12 Brotherhood of Railroad Trainmen v. Atlantic Coast Line R. R., 127 U.S. App. D.C. 298, 383 F.2d 225 (1967), cert. denied, 389 U.S. 1047 (1968) were 10 Chicago & N. W. Ry. v. United Transportation Union, % 8 Srarurzs: Federal Aviation Act (49 U.S.C. §§ 1302, et seq.) . . 3, 6, 7 a Labor Relations Act (29 U.S.C. §§ 158, * im eq.) Railway Labor Act (45 U.S.C. §§ 151, et seq.)....3, 4, 8, 9, MISCELLANEOUS: United States Code, Title 28, Section 1254(1) ........ 3 Pe shy ee IN THE Supreme Court of the United States OoroBER TERM, 1974 No. Arr Line DispaTCHERS’ ASSOCIATION, ET AL., Petitioners, v. Cry. AERONAUTICS BOARD, ET AL., Respondents. 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 Handiers, Express and Station Em- 1 Respondents in this case are the Civil Aeronautics Board [here- inafter referred to as ‘‘CAB”’ or ‘‘Board’’] and intervenors below, the Airline Industrial Relations Conference [hereinafter, ‘‘ AIR- CON”’ or AIR Conference’’], and its members Alaska Airlines, Inc.; Aloha Airlines, Inc.; American Airlines, Inc.; Continental Air Lines, Inc.; Eastern Air Lines, Inc.; The Flying Tiger Line, Inc.; Frontier Airlines, Inc.; Hawaiian Airlines, Inc.; Hughes Airwest; National Airlines, Inc.; North Central Airlines, Inc.; Northwest Airlines, Inc.; Ozark Air Lines, Inc.; Pan American World Airways, Inc.; Piedmont Airlines; Reeve Aleutian Airways, Inc.; Texas International Airlines, Inc.; Trans World Airlines, Ine.; United Air Lines, Inc.; Western Airlines, Inc.; and Wien Consolidated Airlines, Inc. 2 ployes; Flight Engineers’ International Association ; International Association of Machinists and Aerospace Workers; and Transport Workers Union of America, respectfully request that a writ of certiorari issue to review the judgment of the United States Court of Appeals for the District of Columbia entered in this proceeding on December 17, 1974. OPINIONS BELOW The opinions issued by the lower tribunals in this case are not reported but appear in the Appendix vol- ume to this petition. The unreported per curiam judgment of the United States Court of Apr ls issued in this case on December 17, 1974, appears at pages la- 2a of the Appendix volume as Appendix A. That judg- ment affirmed Civil Aeronautics Board Order 73-6-96, decided June 22, 1973, which appears in the Appendix volume at pages 3a-8a, as Appendix B. Order No. 73-6-96 adopted and affirmed in large part the Initial Decision of the Administrative Law Judge issued in this case on December 1, 1972. That Initial Decision appears in the Appendix volume as Appendix C at pages 9a-87a. It approved with modifications the agreements establishing the ‘‘ Airline Industrial Rela- tions Conference.“ Appendix D, pages 89a-109a, is a copy of CAB Order 71-4-167, which deferred action on the agreements at issue and established a procedural schedule for their consideration. Order 71-11-23, issued November 3, 1971, Appendix E, pages 111a-13a, set this matter for a hearing, and Order 73-9-15, issued September 6, 1973, Appendix F, pages 115a-17a, con- cluded this matter before the Civil Aeronautics Board by approving the agreements as amended. * } j 3 : j i i 3 3 JURISDICTION The judgment of the Court of Appeals was entered on December 17, 1974, and this petition for a writ of certiorari was filed within ninety days of that date. This Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1). QUESTIONS PRESENTED 1. Whether the CAB is empowered to authorize © the airlines to engage in conduct which will alter materially the scheme for collective bargaining as de- signed and established by Congress for the air trans- port industry in the Railway Labor Act? 2. Whether the CAB has the authority to approve agreements among air carriers which effectively com- pel unions to engage in involuntary multi-employer bargaining ? 3. Whether the combination of the Mutual Aid Pact and the AIR Conference agreements present an unlawful threat to the duty to exert every reasonable effort to make and maintain agreements... ,’’ as re- quired by the Railway Labor Act? STATUTORY PROVISIONS INVOLVED Sections 1 Sixth, 2, 2 First to Fourth, and 201 of the Railway Labor Act (45 U.S.C. §§ 151 Sixth, 151a, 152 First-Fourth, and 181) and Sections 102, 204(a), 401 (k) (4) and 412 (b) of the Federal Aviation Act (49 U.S.C. §§ 1302, 1824(a), 1871(k)(4) and 1382(b)), are material to disposition of this petition and are re- printed as Appendix G, pages 119a-22a of the Appen- dix volume. 4 STATEMENT OF THE CASE Concerned by what they considered to be an inher- ent imbalance in the Congressionally enacted scheme for collective bargaining, twelve airlines* banded to- gether to form AIR Conference on March 17, 1971. The „imbalance'“ was caused, so the air carriers claimed, principally by the fact that the Railway Labor Act requires collective bargaining in the air transport in- dustry to be conducted between crafts or classes of employees and their individual employers instead of between all employees and all empleyers on an indus- try-wide bargaining basis, and partly by the fact that the unions chosen by the employees are generally unions which are national in scope. (See, e. g., J.A.E., 106, 133-34, 168-70.)* AIRCON is the latest in a series of efforts by the air transport industry to eliminate the disadvantage at which it believes Congress placed it by the enact- ment of the Railway Labor Act and, to place itself in a securely dominant position in its collective bargain- ing relationship with the representatives of its em- 2 The air carriers filing the initial agreement were Alaska Air- lines, Inc., American Airlines, Inc., Continental Air Lines, Inc., Eastern Air Lines, Inc., National Airlines, Inc., North Central Airlines, Inc., Northwest Airlines, Inc., Pan American World Air- ways, Inc., Piedmont Aviation, Inc., Trans World Airlines, Inc., United Airlines, Inc., and Western Air Lines, Inc. Following the filing of the original agreements with the Civil Aeronautics Board, additional air carriers joined AIRCON: Air West, Inc., Aloha Airlines, Inc., The Flying Tiger Line, Inc., Hawaiian Airlines, Ine., Ozark Air Lines, Inc., Reeve Aleutian Airways, Inc., Texas International Airlines, Inc., and Wien Consolidated Airlines, Inc. The separately paginated document, Exhibits to the Joint Ap- pendix, is a one-volume item which was filed with the Court of Appeals and transmitted to this Court; it is referred to herein as J. A. E.“ — 5 ployees.“ AIR Conference was designed to overcome the ‘‘craft or class representation’’ impediment to equal bargaining strengths by providing the carriers with a united front’’ against the numerous unions they must face in negotiating contracts. To achieve this united front,“ AIRCON would function as a clearing house for information as to the various posi- tions taken by the unions throughout the industry and, more importantly, AIRCON would, upon carrier au- thorization, ‘‘act as the exclusive representative of member carriers in collective bargaining, mediation, arbitration and conciliation ....’’ Article 1V(a), Articles of Association, Appendix D at page 102a (Emphasis added). According to the AIRCON witnesses, craft or class representation, as sanctioned by the provisions of the Railway Labor Act, has been the crux of the air car- riers’ bargaining difficulties since it required them to negotiate separately with several different unions, each of which represented only a fraction of a particular car- rier’s total work force. And since each union has the ability to call for a strike, even though it might repre- sent only a small portion of the carrier’s employees, the dangers of disruption of service due to a strike were in- creased. J. A. E. 134, 148, 173. Further aggravating the carriers’ problems, so they asserted, was their inability under our national labor policy to engage in multi- carrier bargaining without union acquiescence. Ace- *The first major effort by the air transport industry was its creation of the Mutual Aid Pact in 1958. The Pact did not have its desired effect and the benefit of the Pact were continually in- creased until, in its most recently approved version, it provides the struck carrier with a profit during the strike. The Board’s approval of the latest Mutual Aid Pact is the subject of a peti- tion for a writ of certiorari now pending before this Court as No. 74-709. 6 cording to the carriers, many of the unions confronting them represented employees on numerous air carriers. Such unions could engage in so-called ‘‘whipsawing’’ tactics which were described by AIR Conference wit- nesses as the means by which an unreasonable gain extracted from one carrier is utilized as a justification for securing similar, or even more, unreasonable gains from other carriers. The labor union parties challenged the accuracy of AIRCON’s contentions. Neither the Administrative Law Judge nor the Board confirmed AIRCON’s contentions. Appendix C at pages 23a-24a. By uniting behind one exclusive representative, the carriers hoped to undo the harm that they thought Congress had caused them. As Dr. Herbert Northrop, AIR Conference’s expert witness explained: Beyond this [dissemination of general informa- tion and advice to airline negotiators], the extent to which AIR Conference can improve the over- all position of the industry in collective bargain- ing will depend on the extent to which it succeeds in persuading the carriers to adopt a united front or a common strategy as to issues where they have a common interest. J. A. E. 496. By adopting that united front“ and by standing firm behind that position, the carriers could prevent the unions from obtaining ‘‘excessive gains“ from one carrier and building upon those ‘‘excessive gains“ in negotiations with other carriers. J. A. E. 37-38. As originally drafted and submitted to the Board for approval under Section 412 of the Federal Avia- tion Act, 49 U.S.C. § 1382, the AIR Conference Arti- cles would have AIRCON police that united front“ through irrevocable powers of attorney, enforced by an almost unlimited damage provision. Articles II(b) , CCC 7 and X, Artieles of Association, Appendix D at pages 99a-100a, 106a-107a. Those provisions, however, were removed from the agreements as finally approved since poth the Administrative Law Judge and the Board found that, on its face, an irrevocable power of attor- ney, especially when coupled with the damages provi- sion, would result in a breach of the duty to bargain in good faith. It was, they held, ‘designed to thwart the desire of the individual employer most intent on reach- ing agreement with his employees. Appendix C at page 38a. Once the irrevocable power of attorney and the pro- visions for damages for unauthorized revocation of that authority were removed, the Board found that the plan to make AIRCON the exclusive bargaining repre- sentative of the consenting carriers was consistent with both the national labor policy and the public interest. After the carriers submitted the required modifications, the CAB approved the agreements on September 9, 1973. Appendix F. Several of the union parties, including Petitioners herein, petitioned the United States Court of Appeals for the District of Columbia Cireuit, pursuant to Sec- tion 1006 of the Federal Aviation Act, 49 U. S. C. § 1486, for a review of the Board’s decision of June 22, 1973, which had upheld those agreements and, on December 17, 1974, the Court of Appeals denied that review, affirming the Board’s decision. Appendix A. This petition followed. 5 The Administrative Law Judge also found that the structure of AIRCON’s board of directors was adverse to the public inter- est and, while the CAB upheld that finding, it modified the method of correcting the adverse aspects of the composition of ATRCON’s board. REASONS FOR GRANTING THE WRIT I. By Authorizing the Respondent Carriers To Employ AIR Conference as Their Exclusive Collective Bargaining Rep- resentative, Respondent CAB Has, in Effect, Sanctioned a Material Alteration of the Scheme for Collective Bar- gaining Designed and Established by Congress for the Air Transport Industry. Unlike the National Labor Relations Act, which re- quires that employers and employees simply bargain in good faith, 29 U.S.C. § 158(d), the Railway Labor Act commands both parties ‘‘to exert every reasonable effort to make and maintain agreements... .’’ 45 U.S.C. § 152 First. As this Court has stated, the dic- tate of that Section is more than a mere statement of policy; it is, in fact, the heart of the Act. Chicago & N.W. Ry. v. United Transportation Union, 402 U.S. 570, 574 (1971). Because of the need ‘‘[t]o avoid any interruption to commerce or to the operation of any carrier engaged therein[,]’’ 45 U.S.C. § 151a (1), the Railway Labor Act extracts the higher obligation from those it covers to exert every reasonable effort,“ rather than the National Labor Relations Act’s mere duty to ‘‘confer in good faith.“ Moreover, in enact- ing the Railway Labor Act, Congress decided that the better way to achieve ‘‘agreements concerning rates of pay, rules, and working conditions“ was to utilize craft or class bargaining rather than the „bargaining unit“ scheme of the National Labor Rela- tions Act. Compare 45 U.S.C. § 152 Fourth, with, 29 U.S.C. § 159(b). In the case at bar, the carriers have specifically and emphatically expressed their dissatisfaction with the collective bargaining framework in which the Railway Labor Act requires them to operate (e.g., J.A.E. 133- AP ER IOL LEME NEL ðVCçãͥ0ũ LEI T8 9 34, 148-49; Appendix D at pages 94a-95a). They have designed AIRCON to mitigate the disadvantages which they see as stemming from that congressional scheme. Besides providing for a clearing house for collective bargaining information, a concept with which Petition- ers do not quarrel, the carriers have established a pro- cedure whereby a third party would act as the common exclusive bargaining representative for all. The only conceivable purpose for such a common bargaining representative is to provide all of the carriers who utilize AIRCON’s services with a united front“ against the employees of all of the carriers. Indeed, as the carriers freely admit, that is a primary purpose of AIRCON. E. g., J. A. E. 496. While it is clear that carriers have the right to choose outside individuals or groups as their bargaining rep- resentatives, 45 U.S.C. § 151 Sixth, those representa- tives must have the interests of their particular carrier at heart, and not the goals of some third party, such as the uniform position of other carrier members of AIR- CON. Moreover, deciding to take a uniform position and to stand firmly by it (e. g., J.A.E. 37-38) is con- trary to the express dictates of the Railway Labor Act ‘to exert every reasonable effort to make and main- tain agreements,”’ and on its face, evidences a desire to frustrate the entire purpose of negotiation —i. e., compromise. This clear threat to the congressionally designed scheme for air transport collective bargaining was apparent to the Board, but it chose to gloss over it by asserting that the CAB could not interfere with an employer’s choice of a bargaining representative. Ap- pendix C at pages 28a-34a, 75a. By thus determining that one provision of the Railway Labor Act the free eee eee 10 choice of a bargaining representative—controlled all other provisions of that Act, the Board, and a fortiori the reviewing Court, failed to give proper weight to the dual statutory duties of both labor and manage- ment ‘‘to exert every reasonable effort to make and maintain agreements’’ and to bargain on a eraft-by- craft and management-by-management basis. Because of this error, the Board and the lower Court in effect have authorized the carrier members of AIRCON to engage in collective bargaining conduct in contraven- tion of the statutory framework established by the Railway Labor Act. II. By Approving the Creation of AIR Conference, Respondent CAB Has Empowered the Air Carriers To Utilize a Sys- tem of Collective Bargaining Which Effectively Forces Individual Unions To Engage in Involuntary Multi-Carrier Bargaining. The Railway Labor Act permits carrier and em- ployee representatives to engage in multi-carrier bar- gaining, provided, the commitment by all to partici- pate in such industry-wide bargaining is voluntary. Neither side can compel the other to engage in that form of collective bargaining. Brotherhood of Rail- road Trainmen v. Atlantic Coast Line R. R., 127 U.S. App. D.C. 298, 383 F.2d 225 (1967), cert. denied, 389 U.S. 1047 (1968). Involuntary multi-carrier bargain- ing is prohibited because, while oftentimes efficient, it contains the inherent danger that individual parties may have to sacrifice their individual interests for a common good or common goal. During the hearings and in its brief to the Admin- istrative Law Judge, AIRCON recognized that multi- employer bargaining is a consensual matter under the law“ (Appendix Cat page 31a; J.A.E. 95-97). AIR SOLA AAS ARE e ene ORRIN eee NG EDIE OE RE CELE GHB TERT A 11 Conference contended that it did not at that time con- template group carrier bargaining in the absence of consent by all carriers to have AIRCON act as exclu- sive bargaining agent and consent by the unions to group bargaining which was unlikely. J ALE. 96-97. However, the founding carriers provided AIRCON with the machinery to achieve involuntary de facto multi-employer bargaining by providing for issu- ance of powers of attorney to AIR Conference mak- ing it the exclusive representative of all AIRCON members. Both the carriers’ and AIR Conference’s witnesses stated that a basic, primary purpose of AIR Conference was to provide a ‘‘ynited front“ against the unions. E. g., J A.B. 496; accord, Agreement to Establish AIRCON, Appendix D at page 95a. By as- suming a uniform position through a common represen- tative, the member carriers will effect de facto multi- carrier bargaining contrary to the wishes of the unions. AIRCON will merely take the same position with each union on behalf of each carrier if AIRCON develops as its sponsors desire and the provisions of its Articles permit. (J. A. E. 22-24, 97, 496.) The desire for a united front“, of necessity, would carry with it the concessions by carrier members of their individual interests to the common good.“ Such sacrifice is inherent in multi-employer bargain- ing since the common front must be maintained lest one carrier break ranks and settle for more than AIRCON deems wise, thereby subjecting the faithful carriers to whipsawing.“ J A. E. 92-95. From the evidence adduced at the hearing, it is clear that with or without irrevocable powers of attorney, the airlines vigorously will attempt to remain united once they utilize the powers of attorney provided for in their AIRCON agreements. J.A.E. 19, 92-95, 156. 12 Moreover, by assuming a united stance the carriers can effectively compel the unions, for the survival of their own interests, also to assume a united stance. As Mr. R. Conrad Cooper, President of AIRCON, explained from his experience in the steel industry, a united stance by the employers can force the employees to follow suit. J.A.E. 83. Fully aware of the pitfalls lurking in AIRCON’s exclusive representation features, the Board chose to ignore those dangers by relying upon a past CAB case, Airlines Negotiating Conference Case [hereinafter, ANC“, 8 C.A.B. 354 (1947), and upon decisions under the National Labor Relations Act, which the Board concluded gave employers under the Railway Labor Act the absolute right to determine the compo- sition of their own bargaining committee. Appendix C at pages 28a-30a, 43a-46a. The Board failed or refused to recognize that AIRCON’s avowed pur- pose of presenting a united front’’ to all unions distinguished this case from the ANC case. The Board also failed to adhere to this Court’s admo- nition that parallels between the Railway Labor Act and the National Labor Relations Act must be drawn with the ‘‘utmost care“ and with a full awareness of differences“ in their statutory schemes.“ Indeed, the Board erroneously sanctioned a course of conduct which will materially alter collective bargaining in the air transport industry and effectively will eliminate one of the differences in the statutory schemes delib- erately designed and established by Congress—the ‘eraft or class—individual employer“ versus the ‘bargaining unit—multi-employer”’ concept of collec- tive bargaining. * Chicago & N. W. Ry. v. United Transportation Union, supra, 402 US. at 579 1.11. 13 III. By Approving Both the AIR Conference Agreements and the Laten Mutual Aid Pact, Respondent CAB Has Disrupted and Interfered with the Statutory Obligation To Exert Every Reasonable Effort To Make and Maintain Agree- ments”. A few months before the Board issued its decision in this case, but after the Administrative Law Judge had issued his Initial Decision herein, the Board on February 27, 1973, by a 3-2 vote, approved certain amendments to the Mutual Aid Agreement [herein- after referred to as Mutual Aid Pact’’]. The Board in doing so, overruled the Administrative Law Judge who had heard the case and sanctioned an agreement which provides a member earrier with a profit dur- ing the course of a strike of its employees. See note 4, supra. 7 Nine of the ten carriers who were members of the Mutual Aid Pact in 1970 (CAB Order 70-11-110, at n.2), were among the twelve carriers who formed AIRCON (note 3, supra). AIRCON provides the earriers with a united front against the unions, and the Mutual Aid Pact provides them with a shield, not only to withstand the threat of strike, but also to en- dure a strike at a profit. As the Administrative Law Judge stated in his Ini- tial Decision in the case at bar: [T]he relative economic power of the two sides rests, on the one hand, on the ability of the em- ployees to back up their demands with an effec- tive strike and, on the other, of the air carrier to refuse to yield and withstand a strike and enforce also, as an alternative, a lockout of its employees. Appendix C at page 60a. 14 Clearly, Congress intended both sides to have economic sanctions available to help enforce their demands, but under the scheme of the Railway Labor Act, the use of economic weapons is limited by the Act’s purpose of „avoidſ ing] any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof.“ 45 U.S.C. § 152 First; see also, 45 U.S.C. § 153-60. It was for this purpose that Congress exacted that higher duty of carriers and employees to exert every rea- sonable effort to make and maintain agreements.”’ 45 U.S.C. § 152 First. By allowing airlines to participate in both AIRCON and the Mutual Aid Pact, the CAB has completely re- vised labor relations in the air transport industry. Once the carriers unite behind the exclusive represen- tation of AIRCON, they can with impunity refuse to compromise, for if a strike should be called for by the unions, Mutual Aid would allow the struck carriers to operate at a profit until the union and those they rep- resent were no longer financially able to maintain a strike and were compelled to capitulate to the carriers’ united front’’ demands. And, if the unions should call for a strike of the entire industry, Congress un- doubtedly would act, as it has so often in railroad in- dustry strikes, to prevent continuation of such a strike. The effects of AIRCON, therefore, when combined with those of the Mutual Aid Pact, nullify that strin- gent duty mandated by Congress to all parties subject to the Railway Labor Act ‘‘to exert every reasonable effort’’ to reach agreements. The AIRCON and Mu- tual Aid Pact agreements, when considered in the light of their collective effects, thus clearly contravene E . 5. 5 8 s — * 15 the National Labor Policy. By concluding otherwise, the Board has chosen to ignore the effects of its deci- sions. CONCLUSION For these reasons, a writ of certiorari should issue to review the judgment of the United States Court of Appeals for the District of Columbia circuit. Respectfully submitted, WILIA G. MAHONEY 1015 18th Street, N. W. Washington, D. C. 20036 (202) 833-2020 Attorney for Petitioners Air Line Dispatchers’ Association, et al. March 1975 ie COURT, U. = MAR 12 APPENDIX TO PETITION FOR] NE pon; WRIT OF CERTIORARI ) : IN THE Supreme Court of the United States Ocroser TERM, 1974 No. 7421174 Am Live Dispatcuers’ Association, ET AL., Petitioners, v. Crvm AknoxAUrTics Boarp, ET AL., Respondents. On Petition for a Writ of Certiorari ‘to the United States Court of Appeals for the Disirict of Columbia Circuit WuLIAu G. Manoney Suite 506 1015 Eighteenth Street, N. W. Washington, D. C. Attorney for Petitioners Air Line Dispatchers’ Association, et al. March 1975 Press or Byron S. ADAMS PRINTING, INC., WASHINGTON, D. C. — — Appendix H INDEX TO APPENDIX Judgment of the United States Court of Appeals for the District of Columbia Circuit of December 17, 1974 la CAB Order 73-6-96 decided June 22, T—!!. . 3a Initial Decision of Administrative Law Judge issued December 1, 1972 ...... 9a CAB Order 71-4-167 issued April 26, 7c 89a CAB Order 71-11-23 issued November PPTP T 11a CAB Order 73-9-15 issued September VVV 115 Statutory Provisions Involved: Railway Labor Act (45 U.S.C. $§ Sixth, 151a, 152 First-Fourth, and 1817 119a Federal Aviation Act (49 U.S.C. §§1302, 1324(a), 1371 (k) (4), and 1382 P! ͤ bees hee rab ess 121a Amendments to Article of Association % 123a Appendix I Bylaws of AIRCON Bylaws of AIRCON as proposed ..... 127a Bylaws of AIRCON as amended ..... 138a 1. 2. PR BIER CRATER, MOOR eee * PPP TNE EES PII EL Ge Ste? ERS NN Rha ey Se eR; emcee IN THE Supreme Court of the United States Octoper TERM, 1974 No. Am Live Dispatcuers’ ASssociaTION, ET AL., Petitioners, v. Crvm Ak RONAUTICS Boarp, et AL., Respondents. On Petition for a Writ of Certiorari to the United States Court of Appeals for the District of Columbia Circuit APPENDIX TO PETITION FOR A WRIT OF CERTIORARI Se la Appendix A Judgment of the United States Court of Appeals for the District of Columbia Circuit of December 17, 1974 I Filed Dec. 17, 1974] UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT September Term, 1974 [No Opinion] No. 73-1758 Am Live Dispatcuers’ AssociaTION, ET AL., Petitioners er Crvm Agaonavtics Boarp, Respondent TRE AmlixES InpustriAL RELATIONS CoNFERENCE AND Its Members Carriers, Intervenor No. 73-1759 Am Line Pors Association, INTERNATIONAL, Petitioner Cry Agronavutics Boarp, Respondent V. Tue AmIINES INDUSTRIAL RELATIONS CoxrEREN CR AND IIS Member Carriers, Intervenor Petitions for Review of an Order of the Civil Aeronau- tics Board. Before: Moonk,“ Senior Circuit Judge, and Wricut and Ross, Circuit Judges. * Of the Second Cireuit, sitting by designation pursuant to 28 U.S.C. § 294(d). 2a 0 JUDGMENT These causes came or to be heard on petitions for review of an order of the Civil Aeronautics Board and were ar- gued ‘by counsel. While the issue presented occasion on need for an opinion, they have been accorded full consid- eration by the court. See Local Rule 13(c). The factual findings of the Board are supported by sub- stantial evidence in the record taken as a whole, and the Board’ 8. conclusions are free from reversible legal error. See Universal Camera Corp. v. NLRB, 340, U.S. 474 (1951). We note that, in approving the AIR Conference agree- ments (GAB 22367 and CAB 22368), subject to modifica- tions and, conditions, the Board stated: On the other hand, the Board has a continuing responsibility under section 412 [49 U.S.C. § 1382 (1970)] to insure that a car- rier association approved by it is not operating in a man- ner violative of the Act or adverse to the public interest.“ We read this statement by the Board as a recognition of its responsibility of continuing oversight of the activities of the AIR Conference to make certain that it operates within the law and in the public interest, and to act promptly in the event it does not. On consideration of the foregoing, it is OrperED and Ap- JUDGED by this court that the order of the Civil Aeronau- ties Board sought to be reviewed in these proceeding is hereby affirmed. Per Curiam 8 For the Court Is] Hon E. Kure Hugh E. Kline Clerk APPENDIX B CAB Order 796-98 decided June 22, 1973 OTe i we iC ar se emo SAH Ry a aor LH aR P ‘ 2 ’ see 3a Appendix B CAB Order 73-6-96 decided June 22, 1973 Airline Industrial Relations Conference Investigation Order 73-6-96 UNITED STATES OF AMERICA CrviL AERONAUTICS BOARD WASHINGTON, D. C. Docket 23267 Agreements C.A.B. 22367 and 22368 Adopted by the Civil Aeronautics Board at its office in Washington, D. C. on the 22nd day of June, 1973 ORDER On December 1, 1972, Administrative Law Judge Mil- ton H. Shapiro issued his initial decision in the above case. He found that the Airline Industrial Relations Con- ference (“AIR Conference”) agreements are not adverse to the public interest or in violation of the Federal Avia- tion Act if modified to (1) exclude all provisions prohibit- ing revocation of a power of attorney granted by a mem- ber carrier to the Conference for collective bargaining purposes, (2) exclude all provisions for damages for an unauthorized withdrawal from the Conference or for other- wise causing a breach or termination of such a power of attorney, and (3) replace the tiered system of representa- tion on the Board of Directors of the Conference by a sys- tem granting each member carrier an equal voice on the Board. Petitions for discretionary review and answers 4a Airline Industrial Relations Conference Investigation Order 78-6-96 thereto were filed.“ By Order 73-4-28 the Board granted the petitions for review and ordered the issues on review to be the same as those in the proceeding before the ALJ. Briefs to the Board have been filed,” and oral argument held before the Board on June 18, 1973, Upon consideration of the record and the contentions of the parties, the Board hereby adopts as its own the reason- ing, findings and conclusions of the Administrative Law Judge as expressed in the initial decision in this case“ ex- cept to the extent inconsistent with this order. In disapproving the provisions of the agreement relating to the use of irrevocable powers of attorney we note that multi-employer bargaining has not been a pattern of the air transportation industry and consequently that the facts developed in this case do not present the question of the extent to which such powers of attorney might or might not be appropriate in a case in which the carriers and unions have entered into a multi-employer bargaining situation. Since no such situation is present here, we do not under. take to judge what the law or the public interest might re- quire under such circumstances. We agree with the Administrative Law Judge, for the reasons stated in his initial decision, that the tiered system ' and TWU), International Sled n (BT) and Allied Association. Answers filed AIR The Administrative Law Judge’s initial decision is attached here- to as an appendix. ; eae dal Sitti Mette APIA Re RL ee 5a Airline Industrial Relations Conference Investigation "Order 78-6-96 of representation contemplated by the agreements would be adverse to the public interest. However, the require- ment that each member be individually represented on the Board of Directors would result in a Board of unwieldy size and would appear unnecessary in order to protect the interests of the various members, their employees, and the public. Similar questions of carrier representation have previously arisen in connection with Board consideration of the activities and practices of the Air Transport Asso- ciation (“ATA”). Thus, in Order E-19260 (adopted Janu- ary 31, 1963) we conditioned our approval of the ATA agreements to require equal voting for all members, and to require that each of the various classes of members be represented on the ATA Board of Directors unless all the members of any class elect not to be represented on the Board of Directors for any particular year. We shall adopt that approach here. We have noted AIR Conference’s argument that the visi- tation condition imposed by the Administrative Law Judge would deprive it of the confidentiality necessary for col- lective bargaining and would discourage carriers from utilizing the Conference. On the other hand, the Board has a continuing responsibility under section 412 to insure that a carrier association approved by it is not operating in a manner violative of the Act or adverse to the public interest. In an effort to reconcile these two competing con- siderations, we have determined to confirm the right of visitation as a condition to our approval of the agreements; however, as a matter of discretion, the Board will not exer- cise this right as to matters of carrier bargaining strategy directly affecting pending negotiations. AIR Conference activities rélating to any particular pending negotiations will, of course, be fully subject to the right of visitation following the conclusion of such negotiations. 6a F Airline Industrial Relations Conference Investigation | Order 73-6-96 ACCORDINGLY, IT Is ORDERED THAT: | 1. Agreements CAB 22367 and 22368, hereinafter re- ferred to as “agreements”, be and they hereby are ap- proved, subject to the following modifications and condi- tions: a. Not later than 30 days after the effective date of this order as the order of the Board, there shall be filed with the Board amendments to the agreements conforming with the following required modifications: 1. All provisions which prohibit revocation in whole or in part of a power of attorney granted by a member carrier to AIR Conference to con- duct collective bargaining on its behalf, including related provisions for suspension or withdrawal of membership, assessment of damages, or other sanctions against such revocation, shall be elimi- nated; | 2. All provisions for assessment of damages against a member carrier for “an unauthorized withdrawal from the Conference” as defined in the agreements, or for otherwise causing a breach or termination of a power of attorney granted by a member carrier to AIR Conference to con- duct collective bargaining on its behalf shall be eliminated ; 8. The provisions for a tiered system of representation of member carriers on the Board of Directors of AIR Conference whereby each trunkline and Pan American Airways is repre- sented on the Board by its chief executive, or his designee, while all other member carriers com- ' 7a Airline Industrial Relations Conference Investigation Order 73-6-96 bined are permitted up to three representatives on the Board, are to be replaced by provisions for a system whereby (1) each member carrier of : AIR Conference shall have an equal vote in se- 3 lecting the Board of Directors; and (2) each of | the classes of AIR Conference members shall be : represented on the AIR Conference Board of Di- rectors, unless all the members of any class elect not to be represented on the Board of Directors for any particular year. : i b. The approval of the agreements shall not be Pe ee er ee deemed a determination as to the reasonableness of the financial provisions thereof for future ratemaking ; or other regulatory provisions under the Act. e. The approval shall not affect the rights and obligations of the parties, or of their employees, under q the Railway Labor Act. d. Copies of all powers of attorney granted pur- : suant to the provisions of the Articles of Association (Agreement CAB 22368) shall be filed with the j Board’s Docket Section and the Director, Bureau of { 4 Operating Rights, within five days after the grant thereof, and, except for powers of attorney granted by member carriers to AIR Conference to conduct col- lective bargaining on their behalf, no such power of attorney shall take effect until twenty days thereafter. e. The air carrier members of AIR Conference shall file with the Board within 15 days of adoption, } a copy of detailed procedures adopted for handling the arbitration of matters made subject to arbitration. 8a Airline Industrial Relations Conference Investigation Order 73-6-96 f. The air carrier members of AIR Conference shall file with the Board within 30 days of prepara- tion copies of written opinions and reports or actions of the Board of Directors and Advisory Board, or de- cisions of arbitrators which result in a refusal of membership, the expulsion of a member, or other dis- ciplinary action. g. AIR Conference and its air carrier members agree that the Board and its authorized agents shall have access to and authority to inspect all accounts, records, and memoranda, including all documents, papers, and correspondence belonging to or in posses- sion of AIR Conference; provided, however, that the Board shall not have access to and authority to inspect materials which are in fact legally privileged against disclosure by reason of an attorney-client privilege which AIR Conference (or, as to documents hereto- fore created, a member of AIR Conference) is entitled to assert. h. Jurisdiction in this proceeding be and it hereby is retained for the purpose of imposing such further conditions as the Board may from time to time find to be required in the public interest. By the Civil Aeronautics Board: EpwWIN Z. HOLLAND Secretary (SEAL) 9a Appendix C Air'ine Industrial Relations Conference Investigation Initial Decision of Milton H. Shapiro, Administrative Law Judge UNITED STATES OF AMERICA CIVIL AERONAUTICS BOARD WASHINGTON, b. c. Docket 23267 Served: December 1, 1972 The AIR Conference agreements are found not adverse to the public interest or in violation of the Federal Aviation Act of 1958, as amended, if modified to (1) exclude all pro- visions prohibiting revocation of a power of attorney granted by a member carrier to the Conference for collective bargaining purposes, (2) exclude all provisions for dam- ages for an unauthorized withdrawal from the Conference or for otherwise causing a breach or termination of such a power of attorney, and (3) replace the tiered system of representation on the Board of Directors of the Conference by a system granting each member carrier an equal voice on the Board. Amendments of the agreements making the required modifications shall be filed not later than 30 days after the effective date of this decision. Contingent on the filing of the said amendments, the AIR Conference agreements are approved subject to conditions. Appearances: Charles A. Miller and Russell H. Carpenter for the Air- line Industrial Relations Conference and its members. William G. Mahoney for the Air Line Dispatchers Asso- ciation, the Brotherhood of Railway and Airline Clerks, the 10a Airline Industrial Relations Conference Investigation The above requests for postponement of the start of the hearing are hereby denied. The parties will recall that on April 7, 1972, at the request of ALPA, joined in by other union parties and by the AIR Conference, and without ob- jection by any of the other parties, the hearing was post- poned for three weeks. In granting this postponement of the hearing to June 6, 1972, the examiner advised the parties that because of the Board’s direction that the hearing be expedited, they were then being put on notice that the June 6 hearing date would be treated as firm. The AIR Confer- ence has repeatedly advised the examiner and the other parties that it is prepared to go forward with its witnesses on the scheduled hearing date. No party has indicated that it would be unable to proceed with the hearing of the AIR Conference case on June 6, 1972. Under the circumstances, no postponement is warranted. Recognizing that the failure of the union parties to com- ply with the ground rules of the case may, in fact, necessi- tate a break in the hearing, it would be premature, however, to rule before the start of the hearing on the AIR Confer- ence request for a recess after the presentation of its own and the APA and AMFA direct cases. Whether such a re- cess will actually be necessary, and if so, for how long, are matters which will depend to a large extent on the progress and development of the hearing and on future compliance of the union parties with the ground rules and rulings of the examiner. Finally, the examiner hereby directs all parties to supply by June 12, 1972, any information sought by other parties in their Information Requests approved at the prehearing conference which they have not already provided. /s/ MILTON H. SHAPIRO Milton H. Shapiro Hearing Examiner lla Airline Industrial Relations Conference Investigation International Association of Machinists and Aerospace Workers, the Transport Workers Union of America and the Flight Engineers’ International Association. Henry Weiss, Robert S. Savelson and Stephen B. Moldof for the Air Line Pilots Association, International. Martin Seham, Daniel Freeman and Fred Klein for the Allied Pilots Association and the Aircraft Mechanics Frat- ernal Association. Angelo V. Arcadipane and Herbert A. Levy for the Inter- national Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America. Neil G. McBride for the Aviation Consumer Action Pro- ject. Joel H. Fisher and Marshall Sinick for Seaboard World Airlines, Inc. under Rule 14 of the Board’s Rules of Practice. Alexander N. Argerakis for the Bureau of Operating Rights. 12a INITIAL DECISION OF MILTON H. SHAPIRO, ADMINISTRATIVE LAW JUDGE Statement of the Proceeding This case stems from the efforts of a group of scheduled - air lines to coordinate the labor relations and collective bar- gaining of all scheduled U. S. air carriers, and the opposi- tion to those efforts of various types of unions representing air-line employees. On April 6, 1971, twelve scheduled air lines’ filed an agreement (CAB 22367) pursuant to section 412 of the Federal Aviation Act of 1958, as amended, (Act) entitled “Agreement to Establish the Airline Industrial Relations Conference” (AIR Conference) and a second agreement (CAB 22368) which constitutes the Articles of Association of AIR Conference. These agreements are intended to re- main in effect until December 31, 1975, and thereafter from year to year subject to withdrawal provisions as specified in the Articles of Association. By Order 71-4-167, April 26, 1971, the Board deferred action on the agreements and di- rected that the air carrier parties to the agreements file detailed comments justifying approval, and that other in- terested persons have an opportunity to file answers thereto. The Board by Order 71-11-23, November 3, 1971, set this matter down for hearing following opposition to the agree- 1 Alaska Airlines, Inc., American Airlines, Inc., Continental Air- lines, Inc., Eastern Air Lines, Inc., National Airlines, Inc., North Central Airlines, Inc., Northwest Airlines, Inc., Pan American World Airways, Inc., Piedmont Aviation, Inc., Trans World Airlines, Inc., United Air Lines, Inc. and Western Air Lines, Inc. ~ 13a Initial Decision of Milton H. Shapiro, Administrative Law Judge ments by a number of unions and requests by several of them for a hearing. The Board’s order also made the unions which had filed comments in opposition to the agreements,” AIR Conference, and each of its members, and the Depart- ments of Justice, Labor and Transportation parties to this proceeding. The Aviation Consumer Action Project (ACAP) sought and was granted leave to intervene. After notice, a hearing was held and briefs were filed by AIR Conference, ALPA, APA and AMFA jointly,’ BOR, the Five Union Parties (Five Unions) and IBT.* With the 2 Air Line Employees Association (ALEA); the Air Line Pilots Association (ALPA); the Allied Pilots Association (APA); the Aircraft Mechanics Fraternal Association (AMFA); the following unions, which have joined herein as the Five Union Parties: Air Line Dispatchers Association (ALDA), Brotherhood of Railway and Air- line Clerks (BRAC), Flight Engineers International Association (FEIA), International Association of Machinists and Aerospace Workers (IAM), Transport Workers Union of America (TWU); and the International Brotherhood of Teamsters (IBT). 3 Both are referred to hereinafter as APA. 4 The IBT brief asks the Administrative Law Judge to reconsider his ruling in the notice to the parties dated June 5, 1972, in which he denied the IBT motion to defer these proceedings pending the final determination of the IBT complaint for enforcement filed with the Board in Docket 24499 against AIR Conference for alleged bargaining problems AIR Conference is not “a person engaged in any phase of aeronautics” within the meaning of sections 408 and 409 of no way modified by the Board’s orders in the Airline Tariff Publishers (ATP) case, 41 C.A.B. 726 (1964), or the Consolidated Airline Purchasing Corporation (CAPCO) case, 40 C.A.B. 986 (1964), as contended by IBT. The a did not involve i tions engaged in labor related activities, and made no reference whatever to the ANC case. They dealt with corporations owned by a 14a Initial Decision of Milton H. Shapiro, Administrative Law Judge exception of BOR and IBT, the same parties also filed reply briefs. THE ISSUES The primary issues are whether the agreements under consideration should be approved pursuant to section 412 of the Act as not adverse to the public interest or in viola- tion of the Act, and if so, what conditions, if any, should be imposed on approval. In addition, the Board in its order instituting this investigation (Order 71-11-23, November 3, 1971) specified that the following issues, among others, are relevant in determining whether the agreements are consistent with the public interest and do not violate any provision of the Act: 1. Do the agreements by themselves, or in conjunction with the operation of the Mutual Aid Pact, violate any applicable provisions of the Railway Labor Act? 2. Will the operation of the agreements improve or im- pair labor-management relations in the industry? 3. Will the agreements discriminate in restraint of trade against certificated carriers not party to the agree- ments, or in any way violate anti-trust laws? 4. What effect, if any, will the agreements have upon the bargaining balance between labor and management? number of carriers which were engaged in commercial aspects of the air-line business. ATP was concerned with the preparation and publication of tariffs, while CAPCO was concerned with the purchase of equipment and supplies. In view of the foregoing, there is no reason to revise the previous ruling that AIR erence is not a person engaged in a phase of aeronautics and that no questions of control and interlocking relation- ships are raised within meaning of sections 408 and 409 of the Act. 5 As an issue relevant to this question, is the present tiered system of representation on the Board of Directors (one director for each trunk and Pan American, and up to three directors for all other certificated carriers combined) in the public interest? Saen. P . EE 15a Initial Decision of Milton H. Shapiro, Administrative Law Judge 5. What are the implications and effects of Phase II of the Wage-Price Freeze as it pertains to these agreements? At the instance of ACAP, the following was also included as an issue: What will be the effect of the agreements on the productivity and efficiency of labor? THE NATURE OF THE AGREEMENTS According to the preamble to the agreement to establish AIR Conference it was formed because the parties and other air lines have been subjected to and are threatened with extreme and unreasonable demands by representatives of certain of the classes and crafts of their employees; the competing interests and rivalries between certain of the employee collective bargaining representatives and between different locals of single international unions have made spiraling demands on the carriers in successive negotia- tions; the multi-carrier representation of some of the unions is used to formulate bargaining strategies resulting in excessive costs to the carriers; it is in the carriers’ and the public interest that the air carriers cooperate in handling labor relations and collective bargaining matters; and be- cause the labor-related costs of providing air transportation should be kept commensurate with the reasonable cost to the public of receiving such services. Any certificated scheduled United States air carrier is eligible to become a member of AIR Conference’, which is an unincorporated voluntary association. Membership may be terminated by a carrier at the end of any calendar year after giving not less than 90 days’ notice. A member which has given AIR Conference a power of attorney to represent it in collective bargaining negotiations which have begun may not revoke the power until those negotiations have 6 At the time the agreements were filed, 39 carriers were eligible. 16a Initial Decision of Milton H. Shapiro, Administrative Law Judge ended, whether or not the member has given a withdrawal notice. If a carrier has given a withdrawal notice, it will not be effective until ninety days after the negotiations are completed. Subject to the provisions of the bylaws and powers of attorney executed by member carriers, AIR Conference will act as the exclusive representative of members in collective bargaining, mediation, arbitration and conciliation with labor organizations specified by each member. AIR Conference is governed by a Board of Directors com- posed of the chief executive officer of each of the trunk car- riers and Pan American, or his designee, and the chief exe- cutives of up to three other carriers from the regional, local, territorial and all-cargo groups. In addition, provision has been made for an Advisory Board consisting of the chief industrial relations officer of each member carrier having its chief executive officer or his designee on the Board of Directors. The Advisory Board is to carry out the policies and objectives of the Conference as established by the Board of Directors. The president of the Conference, who is to be selected by a two-thirds majority vote of the Board of Directors, is Chairman of both the Board of Directors and the Advisory Board. All actions of the Board of Directors and the Advisory Board require a two-thirds affirmative vote of the members, and, except in certain limited situa- tions, the president has an unrestricted proxy to vote for each member not present. The Advisory Board, with the approval of the Board of Directors, determines the operating budget. The general expenses of the AIR Conference are borne by members on the basis of the ratio of each carrier’s operating revenues to the total operating revenues of all member carriers in the year prior to the assessment. | 17a i nce ir RAN lala ths meta eben bed e LU Nl hin Aah pantie vy Nene wane meee: Rts Oe Ab bh) YEN Roe Es ES wear a te ret ee 2 . rn Initial Decision of Milton H. Shapiro, Administrative Law Judge The specific objects and purposes of AIR Conference are planning and recommending a program to all member car- riers for promoting a more consistent position on issues in labor negotiations involving such carriers; collecting and distributing information regarding industrial relations matters and providing a forum for the discussion of such matters for all members, and at fees for eligible carriers which do not become members; determining the position of the member carriers on legislation involving labor relations and implementing such determinations in cooperation with the AIR Transport Association; furnishing general labor law research; representing members before courts, adminis- trative agencies, and boards as authorized by the Advisory Board; with the approval of a two-thirds majority vote of the Board of Directors, representing one or more member carriers in labor relations matters upon authorization by the carrier through a written power of attorney which will be revocable at a meeting of the Board, except for powers of attorney involving labor negotiations; and advising and consulting with the member carriers in order to promote uniformly good employee relations and minimize grievances. Any member of the association becomes liable to other members for damages if it withdraws from it except as pro- vided by the Articles, or if it enters into any “unauthorized agreement”, or breaches or terminates a power of attorney in violation of the Articles. The Articles define “an unau- thorized agreement” as any agreement or understanding negotiated by a member carrier on its behalf or any modifi- cation thereof, negotiated or voluntarily agreed to in any manner except in accordance with the power of attorney granted by the member to the AIR Conference. Besides the agreement to form the AIR Conference and the Articles of Association, the members of AIR Conference have adopted bylaws for the conduct of its affairs. Pursu- ant to the bylaws the officers of AIR Conference are elected 18a Initial Decision of Milton H. Shapiro, Administrative Law Judge by the Board of Directors and consist of the President, an _ Executive Vice-President, a Secretary-Treasurer and such other officers as may be designated by the Board. All the officers are to be full-time employees of AIR Conference. Most ‘of the efforts of AIR Conference during its first year of operation have been devoted to the Wage-Price Stabilization Program. It has also advised member car- riers on their collective bargaining problems and furnished information services, but as of the conclusion of the hearing had not been authorized to act or acted for any carrier as a bargaining agent. POSITIONS OF THE PARTIES AIR Conference: The Board is required by section 412 of the Act to ap- prove the instant agreements unless they are adverse to the public interest or in violation of the Railway Labor Act, as incorporated in the Federal Aviation Act. The agreements do not violate the Railway Labor Act but, as instruments of employer self-organization for bargaining, are affirmatively sanctioned by the national labor policy. That affirmative sanction is the controlling consideration in the Board’s pub- lic interest determination in the absence of compelling transportation considerations to the contrary. The issues as to the impact of these agreements on the Railway Labor Act and as to whether they are adverse to the public interest were resolved by the Board in the ANC case, supra, which approved the agreements establishing the ANC, an industry collective bargaining organization with similar powers and, purposes to those of AIR Conference. The decision in that ease requires approval of the agree- ments under consideration here. a a ee enn 19a Initial Decision of Milton H. Shapiro, Administrative Law Judge AIR Conference is far from being new and revolutionary. What the air lines are attempting to do through it is no more than what other transportation companies in the rail- road, shipping and trucking industries have been doing through their associations for years. The generous settlements the air-line unions have con- sistently won, which have kept their members ahead of all other American workers, graphically illustrate the need of the air line for help in collective bargaining. They also prove the heavy imbalance of bargaining power favoring the unions in this industry. The members of AIR Conference are unanimous that their interests will be served by pursuing coordi nated rather than independent courses of action. Such coordination is clearly in the public interest, not only in reducing the like- lihood of service disruptions and making air transporta- tion more economical for the public, but aiso in helping to arrest inflation in the national economy. The Unions in General: The agreements are structured to impose industry-wide bargaining on the unions without their consent. This ap- proach violates the Railway Labor Act and the Federal Aviation Act and prevents compliance with the obligation to bargain in good faith. The agreements also violate the anti-trust laws. They provide a means by which the few large carriers can control the collective bargaining of all other carriers by requiring the latter to surrender their freedom of action in negotia- tions. The structure of the Board of Directors of AIR Confer- ence providing for one director for each trunk and Pan American and up to three directors for all the other certifi- 20a Initial Decision of Milton H. Shapiro, Administrative Law Judge cated carriers combined is clearly against the public inter- est. This creates a situation in which the trunk carriers may dictate the AIR Conference position on issues which are of special concern to local service or regional carriers and their employees. There has been no evidence in the record to demonstrate any bargaining imbalance. Despite AIR Conference claims, union whipsawing and inter-union coordination have not been proven. If AIR Conference achieves its objective of a united front of air carriers which permits no carrier to break ranks, major confrontations will occur which will force the unions to coordinate their efforts and will result in either selective or nationwide strikes. The agreements will adversely affect the productivity and efficiency of labor because of the increased possibility of strikes of greater duration and breadth. Removing the irrevocable nature of the power of attorney provisions from the agreements will not correct the basic defects, nor will approval of the agreements without any power of attorney to conduct negotiations. As an unneeded and undesirable intrusion into air-line labor relations the AIR Conference agreements should be disapproved. Additional Individual Union Positions: ALPA: The carriers have established an organization which is unique in American industry. It has attempted to intro- duce radical changes in labor relations in the air-line in- dustry which ignore the relative distinctions between in- dividual carriers, as well as the needs and desires of their employees. It has provided a way to divest individual % d 1 | 4 SSE ne ne ee 2¹a Initial Decision of Milton H. Shapiro, Administrative Lau Judge carriers of control of collective bargaining in violation of law and the public interest. APA: If the Board should approve AIR Conference and its power to bargain for air carriers, it should prohibit AIR Conference from being designated the bargaining agent for negotiations with unions primarily identified with in- dividual carriers. AIR Conference has not demonstrated that the purported justifications for the association apply to APA in its dealings with American Airlines or to AMFA in its dealings with Ozark Airlines and Air West. Neither the Board, nor any other agency, has been granted authority to rectify the purported imbalance in collective bargaining relationships. By admitting that the purported imbalance in bargaining power of the airline industry results from the structure of collective bargaining in the industry, the carriers are really not complaining about the actions of the unions but about the system of collective bargaining ordained by Congress in the Railway Labor Act. Only Congress may alter the structure of col- lective bargaining under the Railway Labor Act. AIR Conference should be disapproved, but if approved, it should be with the specific proviso that it not be em- powered to bargain through a power of attorney for any carrier in any situation where the union involved objects. Five Unions: The agreements violate section 2, First, of the Railway Labor Act in that they permit a member carrier to turn over the negotiation of a collective bargaining agreement to AIR Conference, thus precluding itself from either re- voking that authorization or making its own agreement without the risk of damages. This would constitute aban- 22a Initial Decision of Milton H. Shapiro, Administrative Law Judge donment of its responsibility under that section to bargain in good faith. The agreements should be disapproved, but if approved, only on condition that the association shall not hargain or represent its members through powers of attorney for any purpose, and shall not be permitted to coordinate bargain- ing positions among air lines in order to maintain a united front which would necessarily impair labor relations in this industry. IBT: Labor and management in the air-line industry have de- veloped attitudes and habits which regularly lead them to peaceful settlement of collective bargaining issues. There- fore, it seems irresponsible to propose that these successful relationships should now be discarded in favor of a new and untried scheme. The Board cannot grant the authority sought by AIR Conference without aligning the United States with the collective bargaining objectives of management and against air-line employees. This role has been consistently avoided by the government. Challenges to the Pay Board made by AIR Conference with respect to eight Category III units on six air lines, if successful, would partially nullify existing collective bar- gaining agreements. These challenges were a clear diver- gence from the national labor policy compelling carriers to maintain agreements. BOR: Excluding the provisions for the grant of an irrevocable power of attorney to engage in collective bargaining, there are no functions of AIR Conference adverse to the public interest. Nothing in the AIR Conference agreements is 23a Initial Decision of Milton H. Shapiro, Administrative Law Judge intended to create labor turmoil, encourage strikes or cause member carriers to ignore their statutory mandate and the national labor policy by refusing to bargain collectively and in good faith. Approval of AIR Conference will be con- sistent with Board and legal precedent if the provisions regarding the irrevocable power of attorney to engage in collective bargaining and damages for termination of such a power are eliminated. AIR Conference may be useful to answer the pressing need for effective measures to control air-line labor costs. It may facilitate employer cooperation and coordination in an industry characterized by class and craft bargaining which requires individual carriers to negotiate with a num- ber of unions. Because AIR Conference members must deal with large national unions which exercise a high degree of centralized control over collective bargaining strategy, they have to seek industry coordination in labor matters. THE NEED For AIR CONFERENCE Much of this record reflects the efforts of AIR Conference to demonstrate an urgent need for the formation of the association as a response to various economic, financial and labor relations problems of the air lines which it alleges are union generated. Predictably, much of the rest of the record is filled with the unions’ rebuttal to these claims. While relevant, the reasons for the organization of AIR Confer- ence are not in themselves material to the disposition of the issues, nor is the outeome of the controversy between AIR Conference and the unions as to whether, and to what ex- tent, it has proved a need for the association. Since the ulti- mate issues are whether the AIR Conference agreements will be adverse to the public interest or violate the Railway 24a Initial Decision of Milton H. Shapiro, Administrative Law Judge Labor Act or the Federal Aviation Act, the focal considera- tions are the objectives, structure, probable operation, and impact of Air Conference. Accordingly, no findings are made herein as to whether AIR Conference has established the validity of its allegations concerning the need for the association. Still, to understand and evaluate these matters according to the criteria of the Act, a brief review of the AIR Conference statement of the need for the organization is required. According to AIR Conference, that need and its own role must be viewed from the perspective of the history and structure of collective bargaining in the air-line industry. Thus, it contends that the unions have excelled in their ability to secure improvements in wages and benefits for their air-line members; and that they have been able to achieve their gains through aggressive bargaining and by willingness to use their strike power to obtain settlements in excess of those considered fair and reasonable under “official and neutral standards.” It also claims that, apart from the impediments to the carriers’ ability to bargain resulting from the provisions of the Railway Labor Act, and the bargaining disadvantage of transportation employers, the carriers have not made effective use of whatever bar- gaining resources they do have. AIR Conference characterizes labor relations in the air- line industry since World War II as frequently turbulent because of strikes over exceptionally large demands and the intense rivalry among unions. It recalls that the first Presi- dential Board convened in an air-line dispute resulted from pay demands by ALPA for pilots flying four-engine air- craft. Since that Board was formed in 1946, it points out that a score more have been appointed in air-line disputes, and that the strike has been a common negotiating tactic of r ener F ee 25a Initial Decision of Milton H. Shapiro, Administrative Law Judge air transport unions. The association credits a strike by IAM against Capital Airlines in 1958, one of a number by IAM that year, as causing the formation of the Mutual Aid Pact. AIR Conference alleges that since 1966, the year of the strike against five trunk carriers by the IAM, there has been an inflationary spiral in the air-line industry contem- poraneous with “the less severe spiral” in the national economy which led ultimately to the 197 1 economic stabiliza- tion program and Phase II controls. In addition, it com- plains that since 1966 air-line labor relations have been marked by a substantial increase in jurisdictional disputes and raiding by the unions, and by strikes by both the raid- ing unions and the threatened incumbents. The air lines are also dissatisfied with the structure of bargaining in their industry, which they attribute to the Railway Labor Act. They say that, by providing for union representation by class or craft, the Act leads to dividing a carrier’s staff into as many as a dozen parts for representa- tion purposes, generally with a different union representing each part. Therefore, instead of engaging in system-wide or company-wide bargaining, the air lines are constantly in negotiation with one union or another and are constantly in danger of being struck. This pattern of bargaining in the air-line industry is contrasted by AIR Conference with the long-standing rail- road industry practice of industry-wide multi-employer bargaining on major national issues between an employer association and a group of unions. It refers also to the prac- tice of regional multi-employer bargaining in the maritime and trucking industries. 26a Initial Decision of Milton H. Shapiro, Administrative Law Judge 5 AIR Conference also justifies its formation as a defense against the allegedly strong centralized control exercised by industry-wide unions over their local units bargaining with individual carriers. The central unions are said to participate directly in negotiations with the individual car- riers and either make or dominate critical bargaining de- cisions. One example it cites of how a union coordinates its bargaining strategy is the technique described in the ALPA Negotiator’s Handhwok of seeking different con- cessions on different air lines so that the various conces- sions may later be incorporated into one agreement con- taining all of the union’s original objectives. This is supposed to be done by the negotiator’s insisting that all carriers match any concession granted by any one carrier in order to eliminate “inequity”. It also points to the lan- guage of the Handbook which describes this as a tech- nique of “playing off one air line against another” or “whipsawing”’. Besides these claims about intra-union coordination, AIR Conference also believes the unions enjoy more effective bargaining because of inter-union coordination involving meetings of the officials of the various unions with repre- sentation rights on a given carrier, the clearances made possible by the Industrial Union Department of the AFL- CIO, and observance of each other’s picket lines. It was to counter all of these purported advantages of the unions that the AIR Conference says it decided to im- prove the carriers’ own self-organization for collective bargaining purposes and determine how best to coordinate the collective bargaining of the air lines. On the other hand, as indicated, the unions challenge and attempt to refute almost every one of the above claims of AIR Conference. 27a Initial Decision of Milton H. Shapiro, Administrative Law Judge Do THE AGREEMENTS VIOLATE THE FEDERAL AVIATION ACT OR THE RAILWAY LABOR Act? The Duty to Bargain in Good Faith The question whether the agreements violate the Railway Labor Act arises because Title II of that Act is incorporated in the Federal Aviation Act by section 401(k) (4) thereof.’ Section 2, First, of the Railway Labor Act, which is the erux of the major legal arguments of the unions, makes it the duty of carriers “to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes, whether arising out of the application of such agreements or otherwise, in order to avoid any interruption to com- merce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof.” The unions insist that the agreements will prevent the carriers fom exerting every reasonable effort to make and maintain agreements and, accordingly, will prevent their bargaining in good faith as required by the Railway Labor Act. The Supreme Court has held that it is the basic premise of collective bargaining that the parties deal with each other in a serious, good faith effort to reach agreement and to enter into a contract ordering their industrial relation- ship.* It has also held that the duty to bargain in good Section 401 (k) (4) of the Act reads: It shall be a condition upon the holding of a certificate by any air carrier that such carrier shall comply with Title II of the Railway Labor Act, as amended.” „National Labor Relations Board v. Insurance Agents’ Interna- tional Union, 361 U.S. 477, 483 et seq. (1960). The Railway Labor Act does not define “collective bargaining” or “bargaining in good faith”. In the absence of Railway Labor Act authority, the meaning of good faith bargaining as defined in the cases involving the Na- tional Labor Relations Act may be considered relevant to the appli- cation of section 2, First, of the Railway Labor Act. 28a Initial Decision of Milton H. Shapiro, Administrative Law Judge faith is incorporated in section 2, First, of the Railway Labor Act, and is the “heart” of the Act.“ The unions’ objections that the agreements violate the good faith bargaining provisions of the Railway Labor Act are addressed to AIR Conference’s plans to coordinate the air-line members’ collective bargaining and to the means by which AIR Conference may seek to attain its objectives, including the possible introduction of multi-employer bar- gaining in the air-line industry. Therefore, these union charges of illegality are considered next. Coordination of Collective Bargaining AIR Conference maintains that the kind of coordination in collective bargaining that it is attempting to realize through its organization is not new in labor relations either on the part of unions or employers, and that, moreover, such coordination has been sustained in the courts, as, for example, in the so-called coordinated bargaining cases. The chief instance it cites is the arrangement approved in General Electric Co. v. N. L. R. B., % The specific holding of this leading case is that a union’s inclusion of members of other unions on its bargaining committee does not justify an employer’s refusal to bargain. It was the position of the unions in that case that the company had suceessfully followed the practice of divide and conquer by making a separate firm offer almost simultaneously to each union and then whipsawing one against the other. The unions’ re- sponse was to have eight of the unions involved join a committee on collective bargaining to coordinate bargaining with General Electric and Westinghouse, its chief com- Brotherhood of R. R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 377 (1969); Chi and N. W. Ry. v. United Trans- portation Union, 402 U.S. 570, 575 (1971). 10 412 F. 2d 512 (2d Cir. 1969). 29a Initial Decision of Milton H. Shapiro, Administrative Law Judge petitor, to formulate national goals and otherwise to sup- port one another. This is but one of a number of recent cases in which the courts have held that union efforts to join to- gether in bargaining with certain companies, particularly conglomerate corporations, by conducting coordinated bar- gaining are consistent with the provisions of the National Labor Relations Act.“ In the General Electric case the NLRB stated that the same right to determine the composition of its own bar- gaining committee exists for an employer as well as employees.“ AIR Conference finds further support for coordinated bargaining in cases where it has been held that multi- employer bargaining units should be favored as an instru- ment of national policy.’* In these cases and text mate- rial’* AIR Conference detects a steady trend toward broad- ening of collective bargaining units and increased coordina- tion among employers and unions particularly where the union has attempted to whipsaw individual employers. The unions’ rebuttal to the AIR Conference position on coordinated bargaining stresses the provision made in the agreements for an irrevocable power of attorney and for damages for withdrawal from membership. In addition ALPA claims that the weighted voting structure on the Board of Directors is also peculiar to AIR Conference and distinguishes it from other employer or union organiza- tions. While these objections are pertinent as to other 11 E. g. Minnesota Mining and Manufacturing Co. v. N.L.R.B., 415 F. 2d 174 (8th Cir. 1969); Standard Oil Co. v. N.L.R.B., 322 F. 2d 40 (6th Cir. 1963). 12 General Electric Co., 173 N. LR B. 253, 256 (1968). 13 Detroit Newspaper Publishers Association v. N.L.R.B., 372 F. 2d 569, 572 (6th Cir. 1967); N.L.R.B. v. Miller Brewing Company, 408 F. 2d 12, 15 (9th Cir. 1969). Yi ewes, to Collective Bargaining (The American Assembly 1967), pp. 13,.23-24. 30a Initial Decision of Milton H. Shapiro, Administrative Law Judge contentions of the unions, and are, therefore, considered at length later, they do not establish the illegality of the move to coordinate collective bargaining. In the light of the General Electric and related cases, supra, which interpose no bar to coordinated bargaining of employers or unions, and in the absence of any contrary authority or evidence, it is found that the collective bar- gaining coordination objectives and purposes of AIR Con- ference are not in violation of the Railway Labor Act nor, accordingly, of the Federal Aviation Act. Multi-Employer Bargaining No aspect of the AIR Conference agreements is more dis- tressing to the unions than the possibility that the collec- tive bargaining coordination aims of AIR Conference are nothing less than a Trojan horse harbering the forces of multi-employer and even industry-wide bargaining. As the unions see the threat, these forces can assume different shapes in order to intrude themselves on collective bargain- ing in the air-line industry. Although the AIR Conference witnesses granted that industry-wide bargaining in the for- mal sense involves the consent of the employees, the unions insist that there are other ways for industry-wide collective bargaining to become a reality. ALPA, for one, maintains that there is little difference between multi-employer bar- gaining and the negotiation of collective bargaining agree- ments for member carriers on a single carrier basis. The union predicts that AIR Conference will assume virtually the same positions in each negotiation in order to achieve its goal of common industry positions, and that the effect of such bargaining strategies will be the same as if conventional multi-employer bargaining were in fact employed. ALPA concludes that the attempt to impose industry-wide collec- tive bargaining on non-consenting unions, whether explicit or implicit, through the advocacy of common positions by 31a Initial Decision of Milton H. Shapiro, Administrative Law Judge a common bargaining agent in separate, negotiations is contrary to section 2, First, of the Railway Labor Act.“ Since AIR Conference has made it clear both on the rec- ord and in its arguments on brief that it is fully aware that multi-employer bargaining is a consensual matter under the law, there is no reasonable current prospect that it will attempt to impose such bargaining on the unions directly. | Putting to one side, for the moment, the controversial provisions of the agreements which make powers of attor- ney for bargaining negotiations irrevocable, and the re- lated provisions triggering an errant member carrier’s lia- bility for damages, and focusing on other powers of AIR Conference which may lead to multi-employer bargaining, there is Board authority in the ANC case, supra, indicating that, to this extent at least, the instant agreements do not violate the Railway Labor Act, and are not adverse to the public interest. In that case the Board approved two agreements estab- lishing ANC, an unincorporated, nonprofit organization formed by 18 certificated air carriers to act as representa- tive for each of its members to negotiate by collective bar- gaining and conclude agreements with employee repre- sentatives on matters concerning wages, working conditions and other conditions of employment. AIR Conference con- tends that the decision is controlling precedent requiring approval of the agreements. involved in this case largely because the agreements approved there over union opposi- U 15 This contention is based on the legal doctrine that, in the ab- sence of agreement of the parties to a multi-employer ai unit, or unless there is a history of multi-carrier bargaining, such = posed. B of R. R. Trainmen v. Atlantic Coastline R. R, 383 F. 2d 225 (D. C. Cir. 1967), cert. denied, 389 U.S. 1047 (1968). a 32a Initial Decision of Milton H. Shapiro, Administrative Lau Judge . tion involved an induatry collective bargaining organiza- tion with similar powers and si it a ac an Conference. The Articles of Association and ‘hans of ANC desig- nated it the exclusive representative of each of its members for negotiating collective bargaining agreements with pilots and empowered it to act in the same way for treating with representatives of other employees when requested by any member carrier and on approval of the Conference. IAM and ALPA opposed approval of the ANC agree- ments on grounds paralleling some of the more important ’ objections which they and other unions have against ap- proval of AIR Conference. The major complaint against the ANC agreements was that ANC would be used by the carriers to impose industry-wide or multi-carrier bargain- ing on pilots and other employees, and that under those agreements each member carrier would ‘turn over to an organization which was composed of officers of other and often competing air lines the control of a very important part of its business, possibly to the detriment of a particular carrier and, therefore, that the agreements were adverse to the public interest. The Board rejected these contentions, holding that the agreements disclosed no requirements for industry-wide bargaining and that it could not assume that the member carriers intended to violate the terms of the agreement or that ANC would function beyond its authorization in the agreements. It considered industry-wide or multi-carrier bargaining optional and dependent upon agreement of all parties involved in any dispute. It pointed out that the Railway Labor Act does not mention industry-wide bar- gaining and does not attempt to legislate as to the expedi- 33a Initial Decision of Milton H. Shapiro, Administrative Law Judge ency or value of any particular basis of bargaining. It went on to say: “In enacting the Railway Labor Act and in requir- ing certificated air carriers to comply with Title II of that act Congress has spoken as to the standards of public policy, or public interest, that should apply in the settling of labor dispv'.es between air carriers and their employees. We cannot substitute our opin- ions for the considered judgment of the Congress and since no specific basis upon which labor negotia- tions must be carried on has been established but this is left to the agreement of the parties involved, we cannot find the agreements now before us to be ad- verse to the public interest upon any consideration of whether or not the bargaining in which the con- ference may participate is on a single-carrier, multi- carrier, or industry-wide basis. Like the ANC arrangement, the instant agreements do not mention any particular form of collective bargaining. But, as discussed later, unlike the ANC agreement, they do contain unacceptable provisions designed to hold the line in collective bargaining. As might be expected, the unions do not view the ANC decision in the same light as AIR Conference. For example, APA argues that that case cannot. be controlling in this proceeding because the air-line indusiry has changed sub- stantially in the 25 years since it was decided. It wants the Board’s decision in the instant proceeding to be made on the basis of current conditions. But APA has offered nothing to show what difference the passage of time has made. 16 f C. A. B. 354, at 357 (1947). 34a Initial Decision of Milton H. Shapiro, Administrative Law Judge Accordingly, the Board’s rulings in the ANC case are found to be controlling here as to the legality of the AIR Conference agreements, with one major exception. It stems from the fact that the Board had no occasion to consider in the earlier case the legality of provisions akin to the irrevocability and related damage features of the instant agreements because the ANC agreements contained no such authority. With that exception, it is further found that the agreements do not violate the duty to bargain in good faith or otherwise offend the Railway Labor Act. Bargaining Pursuant to the Irrevocable Power of Attorney It is fair to say that those parts of the agreements relat- ing to the irrevocable power of attorney have been the chief target of the unions’ campaign to block approval because they appear to offer the most efficient apparatus in the agreements that AIR Conference can use to impose multi- employer bargaining on the air-line industry. The under- lying purpose of the irrevocability feature seems to be the effort of AIR Conference to maintain a united front in its bargaining and keep individual carriers from breaking ranks. This is part of the overall coordination strategy of the carriers which is really the guiding spirit of AIR Con- ference itself. AIR Conference considers it sufficient jus- tification for this type of authority if the carrier believes its bargaining interest will be served by irrevocability. Because AIR Conference had been operating little more than a year by the time of the hearing in this case, and had done no collective bargaining in that period, the unions’ opposition to it has been confined mainly to hypothetical arguments built around the bare framework of the lan- guage of the agreements, including, of course, the provisions as to the grant of an irrevocable power of attorney. AIR Conference challenges such opposition as being based on a 35a Initial Decision of Milton H. Shapiro, Administrative Law Judge notion that the agreements violate the Railway Labor Act per se, and argues that the courts have rejected attempts to establish per se violations of the duty to bargain in good faith pursuant to section 2, First, of the Railway Labor Act without consideration also of the events surrounding bargaining conduct in a particular negotiation. While the unions have not pressed their case explicitly in the terms characterized by AIR Conference, given the lack of bargaining experience of AIR Conference reflected in the record, they have, in fact, had no option but to chal- lenge the legality of the agreements on their face, if they were to question them at all. As a broad statement of law, the above legal defense of AIR Conference to this challenge is generally sound. But it overlooks the special, and possibly unique, nature of the irrevocability provisions of the AIR Conference agreements, which brings it within the precise and narrow confines of the rule defining per se violations stated by the Court in the case cited by AIR Conference which is most directly in point.“ The Kennedy case involved the legality of the Strike In- surance Plan adopted by the railroads. While rejecting the unions’ arguments that the Plan was a per se violation of section 2, First, and other parts of the Railway Labor Act, the Court said that the principle of per se illegality “is to be applied only to conduct which of necessity produces consequences violative of the statute. . . or produces proscribed consequences in. an over- whelming proportion of the cases. es 17 Kennedy v. Long Island R. R., 319 F. 2d 366 (2d Cir. 1963), cert. denied, 375 U.S. 830 (1963). 18 Id. at 370. 36a Initial Decision of Milton H. Shapiro, Administrative Law Judge Analysis of the irrevocability language of the instant agreements demonstrates that it meets this stringent test. As already noted, the sole purpose of the language is to maintain a united front of member carriers. Such a pur- pose is normally associated with multi-employer bargain- ing, and is reflected in the national labor policy. For, as AIR Conference itself points out, the national labor policy prescribes that after multi-employer negotiations have be- gun, withdrawal from bargaining by an employer without the employees’ consent is not allowed. However, holding the line in the case of single-employer bargaining has not been a part of the national labor policy for evident reasons. In short, the AIR Conference device is an anomaly.”° Thus, the irrevocability of the power of attorney will be invoked only when the air carrier which has engaged AIR Conference to bargain for it finds itself at odds with AIR Conference. And since at that point the association will be subordinating the employer’s wishes and interests to those 19 N.L.R.B. v. Dover Tavern Owners’ Association, 412 F. 2d 725 (3d Cir. 1969); N.L.R.B. v. John J. Corbett Press, 401 F. 2d 673 (2d Cir. 1968); N.L.R.B. v. Sheridan Creations, Inc., 357 F. 2d 245 (2d Cir. 1966), cert. denied, 385 U.S. 1005 (1967). In fact, the national labor policy renders the irrevocability language three multi-employer associations in the transportation industry cited as a model by the AIR Conference, namely, Labor Conference, Trucking Employers, Inc. time Association, prevents an em from withdrawing from the association after a short period of notice or exposes him to liability for damages for doing so. 37a Initial Decision of Milton H. Shapiro, Administrative Law Judge of other employer members of AIR Conference, what began as a one-to-one bargaining relationship with the representa- tive of the carrier’s employees, will, of necessity, be con- verted to bargaining on the basis of multi-employer interests as opposed to the interests of the single employer, and, presumably, on the facts of this record, without the consent of the employees’ bargaining representative. Once the em- ployer is subjected to the lock-step of the irrevocability provision, not only is he denied further control over his own destiny, including his normal freedoms to terminate bar- gaining, change his representative at will or reach an agree- ment, but his employees are also confronted with a com- pletely new bargaining relationship, controlled not by the employer with whom they started bargaining, but by AIR Conference. Therefore, the necessary consequence of in- voking the irrevocability feature is to set in motion a train of events in derogation of good faith bargaining and, there- fore, violative of section 2, First, of the Railway Labor Act. The cases cited by AIR Conference to emphasize the bear- ing of specific bargaining conduct on claimed per se viola- tions do not compel a different conclusion.” Since the 21 The AIR Conference argues in its brief, citing testimony of its Executive Vice-President on cross-examination, that a carrier may condition the power of attorney so as to negate the dare wih e feature. This argument and testimony sim i language of Article II (b) (1) of the icles of Association which is i of the negotiations covered by the power of attorney are concluded - No leeway is afforded the member carrier to modify this aspect of the 22 The instant case is readily ble from the in Piedmont Aviation, Inc. v. ALPA, 41 F. 2d 633 (4th Cir. 1969), cert. denied, 397 US. 926 (1970), cited by AIR Conference, that an ALPA bylaw did e as a reason to 38a Initial Decision of Milton H. Shapiro, Administrative Law Judge purpose of the irrevocability provisions is to keep individual employers from breaking ranks and entering into contracts considered by AIR Conference as not in the interests of the greater good of the employer group, they are peculiarly designed to thwart the desire of the individual employer most intent on reaching agreement with his employees. That is, restraint would be applied against the very em- ployer whose conduct in withdrawing in order to consum- mate his own agreement is entirely consistent with good faith bargaining. Under these circumstances, of necessity, the action of AIR Conference to keep close rein on the employer would result in a breach of the duty to bargain in good faith.“ Accordingly it is found that the provisions case ex a policy against jet crews of less than three pilots, and allowed the union Board of Directors by a two-thirds vote to exempt an aircraft from this policy. Piedmont argued that the union would not — 1 for a crew of less than three men because its bylaws for- over that subj union to bargain in good faith. 68. parent on its face. Nor did the Court clarify that point. It may well have been intended to express a safety policy, and the union need was not the bylaw, but the union's reliance on it as a reason for the issue of crew complement in the face of an the B-737 for two-man crews, that was not consistent with the ee eng e e eee In view of all of the foregoing, the Piedmont decision is in no sense of the issue of whether the irrevocability provision is a ae e en ge ee ployer bargaininz may suffer the same fate, one overriding distinction preserve the stability of the mult-employer bargaining unit (Reta preserve the stability ti-employer bargaining unit. i N. 8, 393 (1958)). The second dis- 39a Initial Decision of Milton H. Shapiro, Administrative Law Judge with respect to the irrevocability of powers of attorney violate the Railway Labor Act insofar as they involve collective bargaining.“ Since, through enforcement of the irrevocability pro- visions, AIR Conference can bargain on behalf of indi- vidual employers without the unions’ consent, it can realize the hold-the-line benefits of multi-employer bargaining by indirection. Under the circumstances, the readiness of AIR Conference to disclaim any interest in multi-employer bar- gaining in the conventional sense for the foreseeable future is understandable. AIR Conference need not wait for the consent of the employees which is not presently forthcom- ing if it can achieve its bargaining objective of holding the line without it. It should be evident from all of the foregoing that even if the irrevocability feature of the agreements were found not to violate the Railway Labor Act, it is adverse to the public interest. This conclusion is particularly compelled by the procedure allowing a carrier to renounce in advance of bargaining its right to control any decisions affecting its own interests such as whether it would be subjected to a strike, an inerease in the level of wages it must pay, or a change in work rules and fringe benefits of its em- ployees. Moreover, the arrangement is also adverse to the public interest to the extent that the effort to hold the line and prevent carriers from breaking ranks leads to 24 It would be idle for AIR Conference to suggest that the irre- vocability facet of the power of attorney does not necessarily violate the Railway Labor Act because the association might choose not to use it to exercise control over a carrier ing to 3 I , AIR Conference h alternative. Its failure to tive bargaining by maintaining a united front, and, indeed, at least to that extent, its raison d’etre. 40a Initial Decision of Milton H. Shapiro, Administrative Law Judge hard-line bargaining which tends to exacerbate the risk of strike action and interruption of service to the public. As noted above, the general rule is that members of multi- employer bargaining units ordinarily lose their freedom to leave the unit without the employees’ consent once bar- gaining has begun, or to refuse to accept the agreement negotiated by their bargaining representative.** None- theless, an employer may withdraw from negotiations with the union’s consent after impasse has occurred, or even without the union’s consent where there are unusual cir- cumstances.** Therefore, even in the conventional multi- employer bargaining situation, as in single-employer bar- gaining, the instant irrevocable power of attorney would mean an employer’s foregoing his right to withdraw in order to defend his own interests under certain circum- stances, including a case of urgent need, as in the Spun-Jee situation. The instant agreements compound the risk of holding a financially weak air carrier to a multi-employer bargaining unit by exposing it to an ill-definded liability for damages to other carriers if it should seek withdrawal from the bargaining unit. The carrier could well face the choice of an unfavorable labor agreement or exposure to an un- known amount of damages if it finds the agreement which r 5 Fae Cream, Frozen Custard Industry Employees, et al., N.L.R.B. 865 (1964) (no unfair labor practice where union executed r i ec tite dat Pan oot toon Uae Se 191 N.L.R.B. No. 121 (1971). ee Corp. and The James inc 171 N.L.R.B. 968), the N.L.R.B. held that because of the employer’s eco- 4la Initial Decision of Milton H. Shapiro, Administrative Law Judge is acceptable to the multi-employer unit potentially harm- ful to itself. While it may be the prerogative of an em- ployer to assume such risks in an industry unaffected with a public interest, air carriers do not have such an unre- stricted choice. The combination of the irrevocability and damages features of the instant agreements, unique in the field of labor relations, poses too great a danger to the preservation of efficient service to be deemed consistent with the public interest. In view of the foregoing it is found that in the multi-employer bargaining situation, as well as single-carrier negotiations, the irrevocable power of attorney contained in the agreements in issue is adverse to the public interest. The right of a carrier member of ANC to retain control over its own welfare and destiny was specifically commented on by the Board in the ANC case: “If any carrier believes that its best interest is not being served by the conference that carrier, under the terms of the agreements, may resign from the conference, which is required upon receipt of notice of resignation immediately to cease from repre- from ies have reached agreement. This provision was not referred to the Board. Like the rest of the agreement, it was subscribed to as a mutual undertakin —— wipes 235 mya eA hokonng the union involved. The agreement applied only to a single negotia- tion, a fact the Board expressly took note of. Nor did it expose parties to any liability for damages in the event of an attempt withdraw. It is also noteworthy that the Eastern case was published at about the time the national labor policy, as reflected in N.L.R.B. decisions, began to allow withdrawal from a multi-bargaining unit in 42a Initial Decision of Milton H. Shapiro, Administrative Law Judge senting such carrier. Thus no carrier places in the control of any other carrier or group of carriers final disposition of any matter that may adversely affect its separate welfare. Its choice of the con- ference as its representative to carry on labor nego- tiations is a free choice subject at all times to can- cellation.””* . The Board’s specific references to the above rights of ANC members carry with them a distinct implication that these were matters important to its approval of the agree- ment and that, without them, a different result might have been reached. The foregoing passage, therefore, underlines the importance of the differences embodied in the irrevoca- bility and related damage provisions of the AIR Confer- ence agreements withholding as they do the options which were open to the ANC members. | In view of the foregoing and all of the evidence of tecord it is hereby found that Article II(b) (1) of the Artieles of Association of AIR Conference violates Title II of the Rail- way Labor Act insofar as it provides that “if negotiations have commenced as to which a member, pursuant to these Articles, has granted to the Conference a power of attorney, such power shall not be revoked by the member until the negotiations covered by the power of attorney are concluded, whether or not a withdrawal notice has been given by the member and in the event a withdrawal notice has been given, it shall not be effective until ninety (90) days after such negotiations are concluded”. It is further found that, regardless of the foregoing finding of a violation of the Railway Labor Act, the said Article is adverse to the public interest within the meaning of section 412 of the Federal 2° 8 C.A.B. 354, at 357. 43a Initial Decision of Milton H. Shapiro, Administrative Law Judge Aviation Act. Accordingly, approval of the agceements in issue will be made contingent on AIR Conference’s modify- ing them to remove the unlawful and unacceptable provi- sions which prohibit a member carrier from revoking a power of attorney it has granted to the Conference to act as its bargaining agent in labor negotiations. Single-Employer Bargaining The elimination from the agreements of the provisions for irrevocable powers of attorney for bargaining purposes and the related liability for damages converts them to sub- stantially the same form as the agreements reviewed and approved by the Board in the ANC case. In the light of that decision and the agreements as modified, the various objections of the unions to AIR Conference’s bargaining for individual air lines are found to be without merit. The Five Unions contend that the agreements violate section 2, Ninth, of the Railway Labor Act which requires the carrier to “treat with each representative” of its em- ployees. The burden of the contention is that the record establishes that once powers of attorney are issued the carrier’s employees will treat with someone appointed by AIR Conference; that that representative may not under- stand the particular carrier-employee problems involved on the air line in question; and that, in short, the carrier will have no control over who represents its interests and who treats with its employees. Section 2, Third, of the Railway Labor Act makes it the duty of each party not to interfere with, influence, or coerce the other in its choice of bargaining representatives. In addition, section 1, Sixth, of that Act expressly provides that the representative selected may be an “organization” and may be the representative of more than one carrier. These rights granted by the Railway Labor Act are of 44a Initial Decision of Milton H. Shapiro, Administrative Law Judge overriding importance in establishing the freedom of both employees and employers from outside interference in organizing for collective bargaining purposes. On this very point the Board said in the ANC case: “The right to choose a bargaining representative without interference or coercion is basic under the Railway Labor Act and is a right over which we have no control and with which we have no right to interfere. The same right of free choice is guaran- teed to the employees with whom the carriers must negotiate and, . . . the representative chosen by either party need have no other qualification than that he be selected freely and independently by the group which he represents. Whether the choice is a wise one is not for us to decide. Were we to dis- approve these agreements because of any belief on our part that the choice of representative therein made were not wise we would be substituting our choice for that of the carriers and such action would be in contradiction of the unequivocal language of the Railway Labor Act. Clearly the agreements cannot be disapproved on that ground.“ The right to select an organization as a bargaining rep- resentative answers the contention of the Five Unions that the representative who would treat with the employees would not be the bargaining agent of the carrier principal or principals but the bargaining agent of AIR Conference which would have become a principal in its own right. As for the further argument of Five Unions that the repre- sentative meeting with the employees would not satisfy the definition of section 1, Sixth, because he would not be 8 C. AB. 354, at 357. 45a Initial Decision of Milton H. Shapiro, Administrative Law Judge someone “designated by a carrier or group of carriers” but someone designated by AIR Conference, such a con- struction would defeat the plain language of the Act giving free access to bargaining representatives, and must there- fore be rejected. While acknowledging that under section 2, Third, of the Railway Labor Act “neither party shall in any way inter- fere with, influence, or coerce the other in its choice of rep- resentatives”, APA contends that the General Electric case, supra, is distinguishable from the instant case in a funda- mental way. The difference, according to APA, is that General Electric's refusal to bargain with the union on the ground that its negotiating committee was made up in part of representatives of other unions was ruled unlawful because the outside representative explicitly renounced any intention to bargain for unions other than the electrical workers. Since no such declaration has been made by AIR Conference, APA argues that the agreements in issue con- template that when AIR Conference negotiators bargain they will be doing so not only for the particular carrier which has granted the power of attorney but also to co- ordinate that carrier’s settlement with the agreements of other carriers. This possibility APA deems inconsistent with the public interest and proposes, therefore, that AIR Conference not be permitted to bargain for an individual carrier unless it first makes clear that it is bargaining solely as a representative of the carrier whose power of attorney it is exercising. APA’s request is found to be unnecessary and unreal- ‘istic. While the AIR Conference bargaining agent may have a dual allegiance when acting on behalf of a member carrier in labor negotiations, his prior and primary fealty 46a Initial Decision of Milton H. Shapiro, Administrative Lau Judge is to the carrier which engaged the AIR Conference. This allegiance takes precedence over any coordinating design of the AIR Conference, but it is not adverse to the public interest or a violation of the Railway Labor Act for the agent to further that design if, to do so, does not conflict with the best interests of the member carrier, and does not depend on enforcing a power of attorney against its will. On the other hand, if there is a conflict of interest, and the carrier is prepared to accept a settlement adverse to the coordinating efforts of AIR Conference, it should be free to do so, as it would be under the terms of the condi- tion imposed herein barring the grant of irrevocable powers of attorney. Thus, while a particular negotiation may, or may not, advance the coordination objective of AIR Con- ference, it must.conform to the needs and wishes of the car- rier member for whom bargaining has been undertaken. The ALPA objections to the structure of AIR Confer- ence as a bargaining model in individual carrier negotia- tions are an elaboration of the APA and Five Unions’ position. In addition, ALPA’s claim that the control of - bargaining authority will be in the hands of AIR Confer- ence assumes an irrevocable power of attorney to bargain. As to ALPA’s contention that AIR Conference as the representative in negotiations, is not the party that must live with the consequences of such negotiations, it hardly needs to be noted that this is usually true of most bargain- ing representatives. In any event, the carrier which has granted the power of attorney and must bear the conse- quences of the negotiation, will be well aware of this fact when it selects AIR Conference as its negotiator. * 47a Initial Decision of Milton H. Shapiro, Administrative Law Judge The rest of the ALPA arguments that the use of AIR Conference as a bargaining agent necessarily involves bad faith bargaining are either speculative or unpersuasive. They turn largely on the objection that bargaining will be coordinated with industry objectives, a facet of the AIR Conference organization previously found compatible with the Railway Labor Act. The specter of the stalking horse conjured up by ALPA and other unions whereby ATR Conference determines to advance industry objectives by selecting one carrier as a model in collective bargainirg springs mainly from the disapproved provision as te irrevocability. Absent such a provision, the stalking horse figure loses whatever sub- stance it may have had under the agreement as submitted by AIR Conference. In view of all of the foregoing, and the evidence of record, it is found that ALPA has failed to demonstrate that, with- out the provisions for irrevocabie powers of attorney, the structure of AIR Conference as a model for collective bar- gaining on behalf of individual carriers violates the Rail- way Labor Act or the Federal Aviation Act. The AIR Conference Agreements in Conjunction with the Mutual Aid Pact AIR Conference denies that the Mutual Aid Pact affects the lawfulness of AIR Conference. It regards the Pact as a form of employer’s self-help sanctioned by the national labor policy, and as being similar to AIR Conference in that both seek to deal with problems raised because of the air lines’ collective bargaining position. It notes, however, that the AIR Conference agreements are concerned with the way in which carriers conduct their collective bargain- 48a 4 Initial Decision of Milton H. Shapiro, Administrative Law Judge ing while the Pact takes effect only after collective bar- gaining has failed and a strike has resulted. Its main argument is that the availability of protection such as Mutual Aid does not have any bearing on the ways in which carriers are permitted to organize themselves for collective bargaining purposes. BOR agrees with AIR Conference that its operation in conjunction with the Mutual Aid Pact does not violate the Railway Labor Act. But ALPA and the Five Unions op- pose the combination of AIR Conference and the Mutual Aid Pact as a violation of the duty to bargain in good faith. When the Board first approved the Mutual Aid Pact, it stated that the Pact did not purport to affect an air carrier’s duty under the Railway Labor Act to bargain in earnest.“ It was activated to protect carriers from some of the finan- cial loss attendant on a strike. On the other hand, AIR Conference is designed to improve the coordination of col- lective bargaining in the air-line industry at least insofar as the members of AIR Conference are concerned. A fur- ther notable difference between the two pacts is that the Mutual Aid Pact is now open only to trunk and local serv- ice certificated carriers whereas membership in AIR Con- ference is open to all certificated air carriers. One measure of the success of Air Conference, in terms of the public interest, would be the avoidance of strikes and thereby the reduction and possible elimination of depend- ence of air carriers on Mutual Aid. ALPA has constructed two scenarios to display the illegal interaction of AIR Conference with the Mutual Aid Pact, 31 Six-Carrier Mutual Aid Pact, 29 C.A.B. 168, at 171 (1959). 49a Initial Decision of Milton H. Shapiro, Administrative Law Judge and how both would be manipulated in violation of section 2, First, of the Railway Labor Act. One of the scenes rests on props from those parts of the Articles of Association which are disapproved herein. Thus, ALPA foresees that the weighted voting structure of the Board of Directors will enable the trunklines to choose a stalking horse from among the member carriers so that it might take a strike on behalf of the other carriers. It also predicts the stalking horse may or may not be a Mutual Aid Pact member, de- pending on AIR Conference’s interests. The rein on the stalking horse would be an irrevocable power of attorney. But, as already found, this portion of the Articles should be disapproved, and, therefore, the set of this projected scenario is destined to collapse. The other scenario conceived by ALPA assumes that an AIR Conference member carrier which is also a party to the Pact will be persuaded to become the industry's stalking horse and take a strike after being guaranteed by Pact members that it will not suffer financially. This assurance, says ALPA, can be given because the evidence in the most recent hearing on proposed amendments to the Mutual Aid Pact, held November 1971 (Docket 9977), indicates that struck carriers have actually shown profits during a strike owing to the bounty of payments from other Pact members. The assumptions supporting this scene are too conjec- tural to deserve serious weight. Even accepting ALPA’s figures as to the carriers’ profits during a strike period, other considerations would influence, and more likely, deter the decision of a carrier to take so drastic a step. The long-run financial impact of a strike might easily nullify the short-run financial gains of the actual strike period. Against the altruism it might display toward the rest of 50a Initial Decision of Milton H. Shapiro, Administrative Law Judge the member carriers, a carrier would have to weigh the damage to its own goodwill, the possibly permanent loss of its customers, the added expenses of resuming opera- tions after a lay-up, losses from turnover of employees, and other drains on its treasury that could transform it from stalking horse to sacrificial lamb. On the whole, therefore, while a voluntary stalking horse could conceivably present itself, the risk is too remote to conclude that the conjunction of the Mutual Aid Pact and AIR Conference foreordain violations of the duty to bargain in good faith. For that matter, if this variation of the stalking horse metaphor were a practicable scheme, it could be enacted without the intervention of AIR Conference at all. The Mutual Aid Pact members could handle the whole affair. In sum, therefore, whatever credible threat of violation of the Railway Labor Act might have been posed by the ability of AIR Conference to rely on the financial backing of the Mutual Aid Pact will be forestalled by the modifica- tions of the agreements required herein. In view of all of the foregoing and the evidence of record, there is no sub- stantial evidence to support a finding that the interaction of the modified AIR Conference agreements with the Mu- tual Aid Pact will violate the Railway Labor Act. ARE THE AGREEMENTS ADVERSE TO THE PUBLIC INTEREST The Impact on Labor-Management Relations With one voice, the unions foresee a serious impairment of labor-management relations resulting from the advent of AIR Conference and its participation in collective bar- gaining in the air-iine industry. They also largely echo each other’s reasons for these fears. One of their major arguments revolves about their assumptions with respect to the adoption of multi-employer or industry-wide bargain- err 5la Initial Decision of Milton H. Shapiro, Administrative Law Judge ing in one guise or another as the reason for the existence of AIR Conference. They fear that whatever form multi- employer bargaining takes it will result in a broadening of strikes and labor disputes and, accordingly, result in widespread service interruptions adverse to the public interest. Without exception, the witnesses for AIR Conference tes- tified that the Conference has no present intention of seek- ing or accepting bargaining authority for its members or of seeking multi-employer bargaining. It is significant, in view of the uniform opposition of the unions to multi- employer bargaining, that the officials of AIR Conference emphasized in their testimony that they were aware that multi-employer bargaining is feasible only with union consent. In any case, the exclusion of the irrevocability feature of powers of attorney to AIR Conference for col- lective bargaining purposes will foreclose the possibility of back-door imposition of multi-employer bargaining which the unions consider a major threat to stable labor-manage- ment relations. There is no persuasive evidence that a more consistent treatment by the carriers of similar issues among different parties will incite labor disruptions or even cause a higher incidence of strikes or broaden their scale. On the contrary, more consistent carrier bargaining positions might encour- age more consistent settlements, and thereby inhibit rival unions from raiding incumbent unions, reduce employee discontent as between carriers, and reduce the temptation of unions to try to play off one carrier against another in their efforts to obtain more favorable settlements. The Five Unions argue that if faced with a common in- dustry position, the unions will be forced to coordinate 52a Initial Decision of Milton H. Shapiro, Administrative Law Judge efforts to meet that position with the results that there will be major confrontations and general strikes. These broad assertions are not supported by convincing evidence. It should be evident that each side of the bargaining table has an overriding interest in avoiding such disruptive tactics.** The record offers no reasonable basis for any contrary inferences. Another fear expressed by the various unions is that the intrusion of the AIR Conference and its negotiators into air-line industry negotiations will upset a delicate balance which has been established over the years between the two sides and will tend to blur the individual variations among the different companies. ALPA contends that this can only harm peaceful labor-management relations and is, therefore, adverse to the public interest. There is no evidence that AIR Conference intends to ig- nore genuine differences among the carriers. In fact, the unions have not established that air carriers’ employees are any more diverse and need more specialized treatment than the employees of other transportation industries where employer associations are the typical means of bargaining. As for the unions’ concern over the effect of AIR Con- ference on the delicate bargaining relationship between the employees and representatives of the individual carriers which have been nutured during years of bargaining, it is difficult to understand why the problem should be more troublesome on the carrier side of the table than on the union side which has included central office representatives. For that matter, these relationships apparently have been 32 To illustrate, the IAM general vice- who testified was emphatic that he had no intention of 66 even if he were to find himself in a joint bargaining situation. 53a Initial Decision of Milton H. Shapiro, Administrative Law Judge hardy enough to withstand the turnover of individual bar- gaining representatives of carriers and unions alike, and of the unions chosen by the employees at various times to represent them. Finally, since both employers and em- ployees under the Railway Labor Act have the right to a bargaining representative of their own choosing without interference from each other or anyone else,** it is anoma- lous to suggest that the exercise of that right is adverse to the public interest. ALPA and the Five Unions also consider the AIR Con- ference agreements inimical to labor-management rela- tions insofar as they make it possible for AIR Conference to have irrevocable control of its members for collective bargaining purposes. Of course, any such threat is removed by the condition on approval requiring the elimination of this authority. The unions offer still othe [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_0673%3A1. Public record. Not legal advice.