Petition for Writ of Certiorari — May v. Shuttle, Inc.
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No. PT LGZA4APRD 1998
In The
Suprene Court of the United States
ais
October Term, 1997
JAMES MAY, et al.,
Petitioners,
VS.
SHUTTLE, INC., et al.,
Respondents.
On Petition for Writ of Certiorari to the United States Court
of Appeals for the District of Columbia Circuit
PETITION FOR WRIT OF CERTIORARI
THOMAS A. MAURO
Attorney for Petitioners
1050 Seventeenth Street, N.W.
Suite 1200
Washington, D.C. 20036
(202) 452-9865
145243 (800) 274-3321 + (800) 359-6859 aagetat
A DIVISION OF COUNSEL PRESS Services, INC.
QUESTIONS PRESENTED
1. Does the National Mediation Board acting at the request
of an employer-carrier have the power under the United States
Constitution and the Railway Labor Act to use procedures to
diminish and nullify existing contract and employment rights
of employees under the Railway Labor Act and state law when:
a. the Fifth Amendment to the United States
Constitution prevents the National Mediation Board, an agency
of the Federal Government, from interfering with or removing
petitioners’ collective bargaining agreement and contract rights;
b. the employer submits a petition to the National
Mediation Board for a single carrier status:
c. the National Mediation Board has exclusive
jurisdiction to determine only representational issues and where
the Railway Labor Act otherwise provides for an exclusive
remedy to maintain collective bargaining agreements:
d. the National Mediation Board does not have
jurisdiction to consider a petition by a carrier concerning
representational matters:
e. the National Mediation Board converted a petition
by a carrier wherein it had no jurisdiction into a petition wherein
it took jurisdiction when a union joined the proceeding; and
f. where the lower courts have sanctioned National
Mediation Board conduct which extended its exclusive power
from representational issues to cover contracts and contract
rights.
2. Did the lower court create reversible error when it ruled
State law claims of retired and furloughed workers were
iets Sie a i Se a a ae ie Ree
it
preempted by the Railway Labor Act and Employment
Retirement Income Security Act where the claims were outside
the purview of rules, rates of pay and working conditions and
not involved with regulation of retirement benefits?
3. Where nineteen petitioners were called upon to waive
rights in order to receive pension benefits, must the waiver
comply with 29 U.S.C. § 626 requirements?
4. Whether the loss of petitioners’ blue collar jobs at the
USAir Shuttle do not sustain causes of action under the
Employment Retirement Income Security Act and the Age
Discrimination ir. Employment Act because of a heightened
burden of proof standard newly adopted by the lower court in
this case but not provided for by any previous decision of this
Court, and whether the furloughs in this case sustain caused of
action under both ERISA and ADEA.
iil
PARTIES TO THE PROCEEDING
AND STATEMENT PURSUANT TO RULE 29.6
This petition is filed by the 86 individuals who were named
as plaintiffs in the complaint filed in this case, and were appellants
in the United States Court of Appeals for the District of
Columbia Circuit. They are:
Ronald Baldwin
Anthony Barone
Robert E. Battle
John P. Blakesley
George A. Bock
Enrique Bonilla
John A. Buttiglieri
Myron E. Carter
James J. Casale
William H. Casimir
Julio C. Colon
Paul J. Colucci
William Conard
Thomas G. Corbett
Ernest H. Cox
Rodney C. Cox
Joseph E. Cronin, Jr.
Ralph D’ Albis
Donald Delargy
Charles F. Dilustro
Dominick C. Dispigno
Michael Draughn
Walter J. Dungee
William Eifert
John Estevez
John L. Fiorvante
Richard Ford
James J. Galvin
Steven Giglio
Odell Gill
Joseph A. Gunn
Godgrey Harris
Dennis F. Hartnett
John J. Hassett
Richard Hess
Paul lacono
Robert L. Jackson
John C. James
Jesse Jones
Robert E. Jones
Gary D. Kanakis
William P. Kelly
William T. Kennedy
Matthew Leoncavallo
John P. Luti
Frank Marinaro
George B. Marshall
Seth H. Martin
William W. Maryland
James May
Ellis McBurrows
William J. McCarthy
Jerome S. McGowan
Richard A. Miller
iv
Arlene D. Mitchell
Duncan Moffat
Roy P. Morin
Carmine A. Namorato
Peter H. Ness
Frederic V. Nickell
Robert J. Niederhausen
Philip O’ Donnell
Judy A. Peterson
Natalie Petrone-Hackett
Anthony R. Primiano
Robert F. Riccuiti
Lance J. Riddick
Patrick M. Riordan
John A. Sabala
Carmen Saladino
Winnie Sales
Louis A. Scapicchio, Jr.
George P. Scheiner
Steven P. Schmidt
Thomas A. Serra, Jr.
Jennifer Sequiera
Tony N. Speziale
Vincent J. Squitieri
Wallace Tilford
Donald F. Tirrell
Thomas W. Turner
Kenneth Wall
William F. Warning
Francis F. Williams
James F. Williams
Harold Young
The respondents are corporations and a labor union who
were named as defendants in the complaint and who were
appellees in the United States Court of Appeals. They are
Shuttle, Inc., USAir, Inc., Citicorp, Citibank, N.A., and the
International Association of Machinists and Aerospace Workers,
AFL-CIO (“the IAM”). The National Mediation Board has been
granted leave to appear as amicus curiae.
The IAM is an unincorporated association and an
international labor union which represents employees for the
purpose of collective bargaining throughout the United States
and Canada. The IAM has no parent companies, subsidiaries or
affiliates that have issued shares or debt securities to the public.
VY
TABLE OF CONTENTS
i Page
nC PONCE i ee i
Parties to the Proceeding and Statement Pursuant to Rule
a EEE POE Pi ann Ra NG Gc Hi aly ees iil
Oe OM ee Oe \
Te OE ons ss os a V
os shires asco EE EEE ON TUE CN one e I
wrnioeneat GT dusiaticliod. 3.
Constitutional Provision, Statutes and Regulations
sethdupoldigen EC CR OEE a eR Oe 2
vena A Wie Cane iis ote 2
I<: TEMES ee 4
Reasons for CSPI SI UNE ee te 14
biter itataseaee TEE CM Oe 26
TABLE OF CITATIONS
Cases Cited:
Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 101
Bi Se POOP LN) ica, ee 3, 20
Contents
Page
Allentown Mack Sales & Service, Inc. v. National Labor
Relations Board, No. 96-795, argued October 15,
1997, decided January 26, 1996 .....csecccccnes 17
Allied Chemical and Alkali Workers of America, Local
Union No. | v. Pittsburgh Plate Glass Co., Chemical
Div, A U.S. 197, 92 BS GR. SBS CEFF) ce cae 20
Andes v. Ford Motor Co., 70 F.3d 1332 (D.C. Cir.
SOPs) 8 ik 6. ud ale 6 OARS OO Rees 24
Association of Flight Attendants v. USAir, 24 F.3d 1432
(As GRE SS Se Wave Sebanknesanncvaenenekoes i7
Atchison, Topeka and Sante Fe R. Co. v. Buell, 480 U.S.
TT St we Re ED CE? bkee cs oeksesa eee 19
Bhd. Of Ry. Trainmen v. Chicago River & Indiana R.
CoO, Sad Gad. Batu FF iu Rae Ee RAE heen esas 19
Burlington Northern R. Co. v. Brotherhood of
Maintenance of Way Employees, 481 U.S. 429, 107
B. OD, FR: CEST viva vtalevin enced eleeel eee 17
Chicago and North Western R. Co. v. United
Transportation Union, 402 U.S. 570, 91 S. Ct. 1731
CEPEES in eck ick LES UNA RAE eee 17
Consolidated Rail Corp. v. Railway Labor Executives
Ass'n, 431 U.S. 2906 U8 Bi GR FATT vce ir ens 19
Contents
Page
Elgin, J. & E. R. Co. v. Burley, 325 U.S. 71 i, Go. S. C2.
SO TAES ib ea ekae Aes ice tick pad 19
General Committee of Adjustment v. Missouri-Kansas-
Texas R. Co., 320 U.S. 323, 64 S. Ct. 142 (1943)
eS TS RN OE eR Pe Re NER Lie ani 17
Greene v. McElroy, 360 U.S. 474, 79 S. Ct. 1400
RENEE) CRATES Cd TOR ME OR Ca Wik bikie Caine cs 15
Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 114 S.
RAs Gee SOUR chav oka coker 3, 19
Hazen Paper Co. vy. Biggins, 507 U.S. 604, 113 S. Ct.
Fe SEND sb PEE ty wea cac Co Gn a he RY
Inter-Modal Rail Employees Ass'n v. Atchison, T. & S.
R. Co., _ U.S. _, 117 S. Ct. 1$13, 137 L. Ed. 20
POP AMERE pad) wi tee weludiiws giaecce aco ae 11, 24, 25
Leedom v. Kyne, 358 U.S. 184, 79 S. Ct. 180 (1958)
WALT SEW Wee Sy rib k COe wb e el Wal eae kD edie ke 17
Louisville Joint Stock Land Bank vy. Radford, 295 U.S.
DP y ae ais Mek MO REIN: co ue er ek ee 15
O'Connor v. Consolidated Coin Caterers Corp... US.
pia IE be Ma UMS Nae idl ys ia 3,40
Oubre v. Entergy Operations, Inc., No. 96-1291, argued
November 12, 1997 and decided January 26, 1998
Kei aad seen Wig WM es WO ie wow ae ae Su Gy 335 Bly aay oe
vill
Contents
Page
Railroad Retirement Board vy. Alton Railroad Co., 295
Shia Se ee es eee: PO EE 6s Fane on a hes 15, 20
Railway Labor Executives Ass'n v. National Mediation
Board, 29 F.3d 655, (en banc), as amended, 38 F.3d
1224 (D.C. Cir. 1994), cert. denied. 514 U.S. 1032
CER sdb Oe he che ORC ew od Chee eon 8, 9, 14, 18
Switchmen's Union of North America v. National
Mediation Board, 320 U.S. 297, 64 S. Ct. 95 (1943)
Cetin wisely dhske eke ar ER aks DER CRM eae 17
Varity Corp. v. Howe, 516 U.S. 489, 116 S. Ct. 1065
CRE © ik nb ys Ae a PA AE a ee PER 21
Statutes Cited:
a ae es REN lig a aa eee ee ye eet ale 2
Be We ee kk kA Oe Sia oe We ge A
Be Ses ee ES cas kk ee SUS ee Rete Kw ii
ee Gk EE sa abe ald bas en wieheets ap A 7m Ae
a cs ERS eae EC aOR EAS BA ene 22, 27
Be RA es Oe RO EEE RES Ree ap oe
SP Wieden Bes Oe es ea ales Waa Ca ire coheeek ene ae
ix
Contents
Page
PSP EG od Uo BE bees oot as hea 19
ee en eas CN Ss och eo ey ee 2, 10, 14
We OR ie Suse es see eee ee tid 5
United States Constitution Cited:
PE COMUNE cog Pet Ss ak 2 aa ats Co i; sks 2
Other Authorities Cited:
PMR MN i eS bc eee Mean hye 7
Pe ee ROOT os re ra NT tee. t ~s
men © 1G, oF Oe BIOs 20
NMB Representative Rule 11.201-1 ............... 9
APPENDIX
Appendix A — Judgment Of The United States Court Of
Appeals For The District Of Columbia Circuit Decided
he sit one cn sah 5 RO EE aa Re ene la
Appendix B — Memorandum Opinion Of The United
States District Court For The District Of Columbia
Dated September 5, 1996, Adopted F» The Court Of
Appeals By The Judgment Dated November 12. 1997
RENE ENENS CEN wae OCA Re ws Caen kk ee 4a
Contents
Appendix C — Order Of The United States Court Of
Appeals For The District Of Columbia Circuit Denying
Petition For Rehearing Filed January 9, 1998 .....
Appendix D — Order Of The United States Court Of
Appeals For The District Of Columbia Circuit Denying
Suggestion For Rehearing In Banc Filed January 9,
ee Lee ft Peper re tht er ere re rt ee ere
Appendix E — Relevant Statutes ..................
Appendix F — Constitution Of The United States Of
RS ee ee fe ee eer ee ba eee eee pee ae
Appendix G — 14 Nmb No. 103 Procedures For
Handling Representation Issues Resulting From
Mergers, Acquisitions Or Consolidations In The Airline
DUE Sch evecdnecbehd scwkean ea aseceuees
Appendix H — Letter From Morgan, Lewis & Bockius
To National Mediation Board Dated April 2, 1992
’ = 6-5. a S 6 6 3.6 oC oe Oe SSS Ss C8. 6 6: OOS Ot CS SSS 24S OA A ee
Appendix I — Interoffice Memorandum From Terry V.
Hallcom Dated October 5, 1992 ................
Appendix J — Contract Section 13, Job Security .
Appendix K — National Mediation Board Notice Of
miection And Sample Ballot ... 2... ..66sscccecccs
Page
35a
37a
39a
50a
Sla
6la
66a
68a
69a
Petitioners pray that a writ of certiorari issue to review the
judgment and opinion of the United States Court of Appeals
for the District of Columbia Circuit in James May, et al. v.
Shuttle, Inc., et al., No. 96-7233, entered on November 12,
1997. Petitioners seek review of the District of Columbia
Circuit’s novel and unconstitutional declaration of federal law
under the Railway Labor Act, 45 U.S.C. § 151, et seg. and its
incorrect and novel application of law under the Employee
Retirement Income Security Act, 29 U.S.C. § 1001, et seg., the
Age Discrimination in Employment Act, 29 U.S.C. § 621, et
seq., and the Age Act as amended by the Older Workers Benefit
Protection Act (OWBPA), 29 U.S.C. § 626(f), to bar petitioners
from proceeding to trial on their claims against the respondents.
OPINIONS BELOW
The judgment and opinion of the United States Court of
Appeals for the District of Columbia Circuit is not yet reported.
It is reprinted in the Appendix at App. A, at la-3a. The Order
and Memorandum Opinion of the United States District Court
for the District of Columbia, Hon. Norma Holloway Johnson,
Judge, dated September 5, 1996, May, et al. v. Shuttle, Inc., et
al., No 94 cv 01019, was not published. However, the District
of Columbia Circuit adopted the entire opinion of the District
Court and published it as if it were an opinion of that Circuit.
App. A, 2a. The Memorandum Opinion which is, therefore,
now the published opinion of the District of Columbia Circuit,
is reprinted in the Appendix as App. B, at 4a-34a.
STATEMENT OF JURISDICTION
The judgment of the United States Court of Appeals for
the District of Columbia Circuit, dated November 12, 1997,
was entered when petitioners’ timely motion for rehearing was
denied without opinion on January 9, 1998. App. C, at 35a-
2
36a. (Application to the In Banc Court was also denied without
opinion on January 9, 1998. App. D, at 37a-38a.) This Court
has jurisdiction to review the judgment of the District of
Columbia Circuit Court under 28 U.S.C. § 1254(1).
CONSTITUTIONAL PROVISION, STATUTES
AND REGULATIONS INVOLVED
The decision of the Court of Appeals for the District of
Columbia Circuit involves the Fifth Amendment to the United
States Constitution, (App. F, 51a) the application of Railway
Labor Act, 45 U.S.C. § 151, et seq., the Employee Retirement
Income Security Act, 29 U.S.C. § 1001, et seqg., the Age
Discrimination in Employment Act, 29 U.S.C. § 621, ef seq.,
and the Age Act as amended by the Older Workers benefit
Protection Act (OWBPA), 29 U.S.C. § 626(f). App. E, 39a-
50a. The decision also involves the Merger Procedures of the
National Mediation Board, published at 14 N.M.B. 388 (1987),
App. G, 52a-6la.
STATEMENT OF THE CASE
This petition seeks review of the District of Columbia
Circuit’s decision affirming and adopting as its own opinion
the grant of summary judgment by the district court in favor of
each of the respondents in this case, thus dismissing all of
petitioners’ claims without trial. The district court recognized
eighteen (18) federal and state law counts in petitioners’
complaint, which arise from petitioners’ loss of their employment
rights and jobs as fleet service workers on the USAir Shuttle.
¢ The court rejected petitioners’ claims under the Railway
Labor Act (RLA), holding that it had no jurisdiction to review
employee representation decisions of the National Mediation
Board (NMB) made in a representative proceeding brought
under Section 2, Ninth of the Act (45 U.S.C. § 152, Ninth) at
the request of an employer carrier. App. B, 24a. In so doing the
Circuit Court made new law and failed to consider the
unconstitutional result which ensued.
* The court rejected petitioners’ claims under the Employee
k-urement Income Security Act (ERISA), 29 U.S.C. § 1001,
et seq., and the Age Discrimination in Employment Act
(ADEA), 29 U.S.C. § 621, et seq., holding that petitioners’
evidence did not meet a new, heightened burden of proof
standard adopted by the Circuit Court in this case that petitioners
“must show specific evidence of unlawful motivation in order
to avoid having summary judgment entered against them.” App.
B, 10a. In so ruling, the court failed to consider or properly
apply the law as set forth by this Court in Jnter-Modal Rail
Employees Ass'n v. Atchison, T. & S. R. Co.. a Oa e
S. Ct. 1513, 137 L. Ed. 2d 763 (1997), Hazen Paper Co. vy.
Biggins, 507 U.S. 604, 113 S. Ct. 1701 (1993) and O'Connor
v. Consolidated Coin Caterers ee woe. £16 § Cy
1307 (1996).
* Petitioners asserted valid state law claims for breach of
contract, common law fraud, and breach of fiduciary duty
against all respondents. However, the court rejected the state
law claims, stating:
Plaintiffs bring numerous state law claims. The Court
rejects all of plaintiffs’ state law claims because such
claims are clearly preempted by the Railway Labor
Act or ERISA.
App. B, 28a. (Emphasis supplied.) In so ruling, the court failed
to apply the law as set forth by this Court in Hawaiian Airlines,
Inc. v. Norris, 512 U.S. 246, 114 S. Ct. 2239 (1994) and Alessi
v. Raybestos-Manhattan, Inc., 451 U.S. 504, 101 S. Ct. 1893
(1981).
4
¢ The district court recognized nineteen (19) retired
petitioners in this case by stating:
[AJround November 13, 1993, they were
furloughed from fleet service jobs. Shuttle gave these
plaintiffs a choice of either a retirement package...
or severance pay.
App. B, 22a. But in dismissing the claims of these petitioners
under the Older Workers Benefit Protection Act, 29 U.S.C.
§ 626(f), the court below failed to consider or apply the law as
set forth by this Court in Oubre v. Entergy Operations, Inc.,
No. 96-1291, argued November 12, 1997 and decided January
26, 1998.
A. Background Facts
The underlying action involved the loss of employment of
135 blue collar, airline ramp service workers and cleaners (fleet
service workers) who previously volunteered to leave the service
of Eastern Air Lines, Inc., and transfer to Trump Shuttle, Inc.,
based on promises of Donald Trump. Petitioners are 86 of those
workers. Trump promised to maintain Eastern Airline collective
bargaining rights at the Trump Shuttle, Inc. for these workers.
Upon further request, these workers increased job
responsibilities and utilization. In a bargained for exchange in
1989, petitioners received a promise of job security “for as long
as the airline was flying” at the Trump Shuttle and, in due course,
a matching “No Furlough” clause in their collective bargaining
agreement at Trump. (App. J, 68a.) The promises of Trump
and Trump’s collective bargaining obligations to petitioners
were assumed in their entirety by respondent Shuttle, Inc. when
Trump Shuttle was merged into Shuttle, Inc. in April 1992.
The collective bargaining agreement was thus governed by
Status-quo provisions of the RLA when Shuttle, Inc.
discontinued petitioners’ employment without notice in 1993.
ee
5
As further background, in 1992 when Donald Trump
threatened bankruptcy, a consortium of banks repossessed the
Trump Shuttle, negotiated and signed a management agreement
with USAir, Inc., and created and certified Shuttle, Inc. as a
new carrier d/b/a USAir Shuttle. Shuttle, Inc. filed its Articles
of Incorporation and Articles of Merger (with Trump Shuttle,
Inc.) stating it would honor all existing contracts, including
petitioners’ employment contracts at Trump Shuttle.
There was no actual merger of Shuttle, Inc. and USAir,
Inc. in this case. The respondents USAir, Inc. and Shuttle, Inc.
were separate and distinctly operating carriers at all times
pertinent hereto. Nevertheless, the new managing carrier, USAir,
Inc., by letter dated April 2, 1992, requested the NMB invoke
its Merger Procedures, 14 NMB 388 (1987) (App. G, 51a),
find USAir, Inc. and Shuttle, Inc. a single carrier for
representational purposes, and remove the respondent IAM (a
union) as petitioners’ voluntarily recognized representative on
Shuttle. (USAir, Inc. Petition, App. H, 61a.) On May 12, 1992,
the respondent IAM joined in USAir’s request at the NMB for
single carrier status but did not join in the request to remove
the petitioners’ representation on Shuttle. No one gave petitioners
notice under Section 6 of the RLA, 45 U.S.C. § 156, (App. E,
48a-49a) that USAir’s request seeking removal of IAM as
petitioners’ representative would result in a change or
elimination of petitioners’ collective bargaining agreement or
employment rights at Shuttle, Inc. On April 27, 1992, prior to
joining in the separate single carrier merger proceeding at the
NMB, the IAM also sought to organize approximately 8,000
ramp service workers at USAir, Inc. (also called fleet service
workers) who were unrepresented by any union. On the same
date, April 27, the United Steelworkers (a second union) also
requested an organizational election among the USAir fleet
service workers. The NMB scheduled the Organizational
representation vote at USAir, Inc. for August 11, 1992. The
6
Steelworkers union did not join in USAir’s merger requests for
Shuttle at the NMB. (The Circuit Court’s finding that the
Steelworkers petitioned the NMB to represent the petitioners,
App. B, 7a, is mistaken.) Additionally, there was no dispute
among Shuttle, Inc. fleet service workers (the petitioners) as to
their representation by IAM. There was no challenge to the
IAM’s incumbent representation on Shuttle by anyone at any
time.
The NMB was presented with an impossible task. It was
called upon under its Merger Procedures by USAir to decertify
the IAM at Shuttle. The IAM at Shuttle, Inc. was voluntarily
recognized. NMB rules clearly stated:
(1) NO IMPACT OF [THE MERGER]
PROCEDURES ON VOLUNTARY RECOG-
NITION AGREEMENTS.
App. G, 59a.'
1. Subpart F to the NMB’s Merger Procedures, entitled
“EFFECT OF PROCEDURES,” provides:
(1) NO IMPACT OF PROCEDURES ON VOLUNTARY
RECOGNITION AGREEMENTS OR PROGRESSION OF
GRIEVANCES
a. These procedures are not a bar to the
effectuation of voluntary recognitions otherwise
permissible under the Act. (Emphasis supplied.)
. =
(2) NO CHANGE IN EXISTING RIGHTS UNDER THE
RAILWAY LABOR ACT
(Cont'd)
7
The NMB was without power to decertify IAM
representation at Shuttle, Inc. because its rules prevented
interference with voluntary recognition.
At the same moment, the NMB was being called upon to
conduct a representational election at USAir between two unions.
When the ballots were counted one day after the ruling on
Single Carrier Status by the NMB, it was discovered that there
were inadequate votes for representation. The NMB did not
decertify the IAM at Shuttle because it had no power to
accomplish this task.
The lower court failed to analyze the NMB dilemma and
thereby reach the proper issue: whether the NMB had the power
to cause the loss of a Voluntarily Recognized Bargaining Agent.
Instead, the court ruled that petitioners lost their collective
bargaining agent when it concluded:
Shuttle could have been under no obligation to
engage in such bargaining in the absence of a
certified representative with which to bargain.
Therefore it is unnecessary for us to decide
whether any terms of a collective bargaining
agreement may survive the loss of representation.
App. A, 2a. Through the quoted statement of the Circuit Court
(Cont'd)
Existing rights under the Railway Labor Act shall not
be enhanced or diminished by these procedures. The
Board recognizes that when a dispute involves the
interpretation or application of an airline collective
bargaining agreement, Section 204 of the Railway
Labor Act, 45 U.S.C. § 184, provides that it be referred
to an appropriate adjustment board for resolution
through arbitration.
14 NMB No. 103 at p. 395. (App. G, 59a) (Emphasis supplied.)
8
it is demonstrated that a failure to understand voluntary
recognition existed. Moreover, the Circuit Court’s finding as to
the “absence of a certified representative” for petitioners has no
meaning because the IAM’s recognition was always voluntary;
it was never a “certified representative” at Shuttle. A lack of
understanding existed for the further reason that the focus was
on the NMB rulings, but those rulings could have “NO
IMPACT ON ... VOLUNTARY RECOGNITION.” Subpart
F, NMB Merger Procedures. App. G, 59a.
Petitioners offer this Court the facts that the NMB decision
could not affect voluntary recognition and the NMB was without
power to make change in existing rights: it could make “NO
CHANGE IN EXISTING RIGHTS UNDER THE RAILWAY
LABOR ACT.” NMB Merger Procedures, App. G, 59a. The
NMB could neither enhance nor diminish existing rights by
application of its Merger Procedures. /d.
The Amicus Brief of the NMB states that it was the finding
of the courts below, not the conduct of the NMB, which caused
the loss of the petitioners’ representation. The Amicus Curiae
brief of the NMB states:
There was no certification to extinguish regarding
the Shuttle fleet service employees, because their
recognition was voluntary. But, as the district court
found (Op. 21-22, E0494-495), the single carrier
determination followed by the representation
election [on USAir, Inc.] that the unions lost, meant
that “plaintiffs’ representation * * * terminated.”
Brief of Amicus Curiae, footnote, p. 12. (Emphasis supplied.)
But the dilemma was the result of confusion at the NMB, which
was without the power to change petitioners’ rights and, indeed,
was without power even to entertain USAjir, Inc.’s request that
those rights be changed. See the discussion of Railway Labor
9
Executives Ass'n. v. National Mediation Board, below. The
NMB thereby adopted an ad hoc approach to the problem it
created for itself when it decided to attempt to decertify the
petitioners’ voluntary recognition at Shuttle.
The NMB offered this explanation to the Circuit Court
below:
On June 30, 1992, the Board decided to send
challenged, i.e., provisional, ballots to the Shuttle
employees so they could vote in the election and
not be disenfranchised should the Board later rule
that Shuttle and USAir were a single carrier.
(Amicus Curiae brief below by National Mediation Board,
p. 8.) (Emphasis supplied.)
But the election for petitioners was fundamentally flawed
in numerous respects. The NMB ballots gave no guidance or
instruction to petitioners concerning the meaning of the ballots
at Shuttle, Inc. See Notice and Ballot, App. K, 69a-74a.
Petitioners felt secure because they knew they were represented
by the IAM at Shuttle, Inc., so they could attach no meaning to
the ballots. Further still, the ballots had no meaning to them
because they were issued on July 10, 1992 — before the NMB
single carrier decision on August 10, 1992 — and were required
to submit the ballots by mail in order that they arrive at the
NMB by August 11, 1992. App. K, 74a. The Single Carrier
ruling did not occur until August 10, thereby making it
impossible for petitioners to cast their vote while being fully
informed of the real issues facing them. Additionally, the ballots
were counted one day after the August 10, 1992 NMB merger
ruling, in direct violation of NMB procedures requiring a
minimum of 21 days to schedule a representation vote. (See
NMB Representation Rule 11.201-1). Unlike the USAir
10
employees who were unrepresented, petitioners were thrown
into a representational vote. The NMB gave no warning of
possible disenfranchisement. NMB offered below that the ballots
were “provisional” but failed to inform the 135 Shuttle fleet
service workers of the provisional nature of the ballots. The
NMB apparently intended the election to have two purposes.
One purpose was the representation election at USAir. The other
purpose was decertification at Shuttle. But the NMB failed to
inform the petitioners of this purpose at Shuttle, Inc. and failed
to conduct the decertification election at Shuttle in accordance
with its practice, which required the use of a straw-man
representative to represent the no-union position in a
decertification election under the RLA, § 2, Ninth. But in this
case, the ballots received by petitioners on July 10, 1992 for an
election resulted in the elimination of any representative for
petitioners on Shuttle. The NMB conduct violated requirements
of the NMB Representation Rules because this result (no
representative) was not possible under the then current NMB
decertification rules of practice for represented groups. The
Circuit Court’s finding of an absence of a representative after
the USAir election, therefore, demonstrates an additional failure
to understand NMB procedure and the requirements of RLA,
§ 2, Ninth for decertification elections applicable to represented
groups like the petitioners.
On the question of the petitioner’s representational status
after August 10-11, 1992, the NMB therefore took contradictory
positions in its Amicus Brief below, reflecting its dilemma. Its
Amicus Curiae brief submitted below states:
There was no certification to extinguish regarding
the Shuttle fleet service employees, because their
recognition was voluntary.
Brief of Amicus Curiae, footnote, p. 12. (Emphasis supplied.)
But as noted above, in justifying the issuance of “provisional”
eee
1]
ballots to the petitioners on Shuttle, the NMB stated that the
ballots were issued to the petitioners so that they would “not be
disenfranchised should the Board later rule.” (Further still, two
years later, the NMB declared that the IAM was reelected as
union representative for the petitioners following a 1994 election
at USAir.) The issue has been further confused by the lower
court decision in this case which seems to provide only for
unions to represent carrier employees, a restriction not set out
in the RLA and contrary to existing NMB rules.
Respondents contended, and the courts below agreed, that
petitioners had no representative union after events at the NMB
of August 10-11, 1992. Therefore, all of their contract rights at
the Shuttle were lost. App. B, 24a-27a. In November 1993,
Shuttle declared for the first time rights were eliminated. Shuttle
furloughed petitioners from their jobs. Petitioners have beer
without jobs since November 1993. USAir, Inc. and Shuttle
Inc. furloughed all of the fleet service workers at Shuttle, Inc.
in November 1993 in direct violation of the “No Furlough”
clause of their employment agreement at Shuttle and in violation
of the status-quo provision in the Railway Labor Act and of the
NMB Merger Procedures.
The petitioners’ work was contracted out to Hudson
General, a contractor, who employed workers represented by
the IAM. Like the railroad in /nter-Modal v. Achison, T. & S.
R. Co., supra, which also contracted out the petitioners’ jobs in
that case, the contracting out to Hudson General here caused
no change to Shuttle’s corporate structure or day-to-day
operation.
Shuttle employees were not provided with an opportunity
to integrate into the USAir work force even though they were
promised such integration by respondents IAM, USAir, Inc.
and Shuttle, Inc. in 1992 prior to the events of August 10-11,
12
1992, and even though their seniority would have allowed them
to displace USAir fleet service workers; thus, it appeared as
though the April 2, 1992 single carrier status Petition by USAir,
Inc. to the NMB was a sham device to remove petitioner’s jobs.
While recognizing that USAir, a carrier, applied to the NMB
for a determination of single carrier status, the courts below
determined that the NMB had jurisdiction because a union (the
IAM) later joined in the proceeding. Thus, a merger ruling made
by the NMB at the request of a carrier was held by the court to
cause the loss of contract rights. But the IAM’s joining in
USAir’s merger request for single carrier status did not confer
power on the NMB that those same merger rules stated it did
not have; nor did it confer jurisdiction on the NMB to consider
the request. Nor did the union’s acquiescence cure the
fundamental flaws in the process created by the NMB in this
case.
The issue of whether the NMB’s exercise of power it did
not have to cause the loss of a bargaining agent in a flawed,
merger decision of the NMB combined with a flawed union
election held on USAir, Inc. but imposed by the NMB under
the Railway Labor Act on the petitioners at Shuttle, Inc. caused,
in turn, the loss of collective bargaining and employment rights
on Shuttle is the subject of this Petition as to the application of
the Railway Labor Act.
Shuttle, Inc. offered retirement to nineteen petitioners old
enough to qualify. But in order to accept retirement, the nineteen
were required to waive the severance pay which was being given
to their younger co-workers. The waiver did not comply with
the requirements of the Older Workers’ Benefit Protection Act,
29 U.S.C. § 626(f), App. E, 39a-41a, which the courts below
failed to consider. Accordingly, the second subject of this
Petition is whether the case should be remanded to the Circuit
13
Court for further review in light of this Court’s recent decision
in Oubre v. Entergy Operations, Inc., No. 96-1291, argued
November 12, 1997 and decided January 26, 1998.
The evidence showed that when Shuttle, Inc. furloughed
all 135 fleet service workers in 1993, its President, Mr. Hallcom,
was engaged in a “re-engineering” of the Shuttle work force
because: (1) he thought the Shuttle work force was “old and
aging;” (2) he did not wish to continue to pay the petitioners’
medical, welfare and pension benefits, which were guaranteed
by contract and provided for by qualified ERISA benefit plans;
and (3) because he did not want the petitioners — all of whom
were vested under the qualified Shuttle ERISA pension plan
— to reach age 55 on the job when they would be entitled to a
special pension benefit under the Shuttle’s qualified pension
plan.
The court below rejected petitioners’ claims under ERISA
and ADEA by declaring that the contracting out of their jobs to
the Hudson General company was a “corporate organizational
change” and in light thereof the Circuit Court imposed a higher
burden of proof on petitioners than this Court has held otherwise
applies to ERISA and ADEA cases. App. B, 10a, 14a. Thus,
the issue of whether the loss of petitioners’ jobs do not sustain
causes of action under ERISA and ADEA because of a newly
adopted, heightened burden of proof standard in this case is the
third subject of this Petition.
Eighty-six Shuttle Fleet Service Workers joined in the
present legal action.
.
14
REASONS FOR GRANTING THE WRIT
A.
1. In this case a representation ruling (the single carrier
status ruling) made by the NMB pursuant to Section 2, Ninth
of the RLA, 29 U.S.C. § 2, Ninth, was held by the Circuit
Court to cause loss of a collective bargaining agreement and
employment rights under RLA. In Railway Labor Executives
Ass’n v. National Mediation Board, 29 F.3d 655, (en banc), as
amended, 38 F.3d 1224 (D.C. Cir. 1994), cert. denied. 514
U.S. 1032 (1995) (hereafter, “RLEA’”’), the D.C. Circuit ruled
that neither the NMB nor carriers could initiate representational
disputes. 29 F.3d 662. (This en banc ruling confirmed in all
respects the ruling of then Circuit Judge Ruth Bader Ginsburg
for the initial three judge panel in the same case.) “[T]he [NMB}]
has no threshold jurisdiction to act at all in the absence of a
request from the employees involved in a representation dispute.”
29 F.3d at 662. In direct violation of the RLEA ruling, the
Circuit Court in this case sanctioned a representational ruling
(the single carrier ruling) where the carrier USAir initiated the
proceeding and there was no showing of a representation dispute
among the fleet service employees (petitioners) at Shuttle.
Although the D.C. Circuit recognized the “status quo” under
the RLA as applicable to the petitioners while the NMB was
deliberating its single carrier ruling, the court then erroneously
proclaimed the parties (Shuttle and petitioners) were pursuing a
“major dispute” under the RLA, although the court did not
identify the dispute. Amplifying the decision of the district
court, the D.C. Circuit declared:
Shuttle could have been under no obligation to
engage in such bargaining in the absence of a
certified representative with which to bargain.
Therefore, it is unnecessary for us to decide whether
|
15
any terms of a collective bargaining agreement may
survive the loss of union representation.
The Circuit Court, however, did nullify the contract and
petitioners’ employment rights. Memorandum Opinion, App.
B, 25a-27a.
The decision created new law in the United States because
a single carrier status decision was ruled to cause the nullification
of a collective bargaining agreement and employment rights
under the RLA. In the history of the RLA, there has never been
a similar decision giving the NMB power over the status quo
provisions of the RLA or to make a ruling that violates the
Rules of the NMB.
2. The Fifth Amendment to the Constitution (App. F, 50a)
prevents the NMB from removing a property right (contract)
without due process. The Supreme Court declared an act of
Congress unconstitutional where it interfered with the contractual
pension rights of railroad workers. Railroad Retirement Board
v. Alton Railroad Co., 295 U.S. 330, 346-47, 55 S. Ct. 758,
761 (1935). Property rights cannot be removed by the
government without the Fifth Amendment grant of due process.
Louisville Joint Stock Land Bank vy. Radford, 295 U.S. 555, 55
S. Ct. 854 (1935). The right to follow a chosen profession is a
property interest protected by the Fifth Amendment. Greene vy.
McElroy, 360 U.S. 474, 79 S. Ct. 1400 (1959). Accordingly,
the Fifth Amendment specifically prevented the NMB here from
removing property rights without due process of law. Railroad
Retirement Board y. Alton Railroad Co., supra. The lower
courts, therefore, could not validly sanction the removal of such
property rights.
3. Petitioners, therefore, had a right to rely on the
provisions in the Railway Labor Act, enacted by Congress to
16
prevent interruptions in commerce, and on the NMB’s faithful
adherence to its own Rules and to the Acts’ requirements.
Petitioners could not anticipate that the NMB, while acting on
a representation application of an employer, would act in an
unconstitutional manner and outside of its own Rules, practice
and authority to deprive them of contractual rights. The courts
below acknowledged:
Eventually, the Shuttle fleet service was not
integrated with USAir, in part because of difficulties
resolving seniority disputes.
(App. B, 8a.) The court recognized that the Merger Procedures
of the NMB had been invoked. These rules of the NMB establish
procedures and limitations. In particular they provide at 14 NMB
393 that when the merger rules of the NMB are invoked there
shall be:
NO CHANGE IN EXISTING RIGHTS UNDER
THE RAILWAY LABOR ACT
App. G, 59a. The Circuit Court improperly inferred that NMB’s
“undeniable sole jurisdiction over representational matters”
extended its power to contract disputes under the Railway Labor
Act. The issue before the lower court was not a “representational
matter.” The issue before the court was “a dispute involving the
interpretation or application of an airline agreement,” specifically
a “No Furlough” clause and the “status-quo” provisions. Where
the NMB Rules specifically provide that “[e]xisting rights under
the Railway Labor Act shall not be ... diminished by these
[Merger Procedures],” App. G, 59a, the court below erred when
it dismissed petitioners’ claims and diminished petitioners’
employment rights under the Act. Petitioners had a right to due
process, especially when it involves such significant rights as
the appointment or election of employee representatives. See
17
Allentown Mack Sales & Service, Inc. v. National Labor
Relations Board, No. 96-795, argued October 15, 1997,
decided January 26, 1998; Leedom v. Kyne, 358 U.S. 184, 79
S. Ct. 180 (1958). The RLA’s overriding purpose is promoting
stability in rail and air labor relations. See Burlington Northern
R. Co. v. Brotherhood of Maintenance of Way Employees, 481
U.S. 429, 444-45, 107 S. Ct. 1841, 1850-51 (1987); Chicago
and North Western R. Co. v. United Transportation Union, 402
U.S. 570, 574, 91 S. Ct. 1731 (1971); Association of Flight
Attendants v. USAir, 24 F.3d 1432 (D.C. Cir. 1994). Stability
means workers can expect the provisions of the RLA and the
valid Rules of the NMB to be enforced and not discarded by
the courts.
4. The Circuit Court then erroneously concluded the
removal of a collective bargaining agent resulted in loss of a
contract. App. B, 24a-27a. Significantly, in light of its own
Merger Procedures which prohibit diminishing existing rights,
the NMB itself could not take such a position, and it refused to
do so, stating to the court below:
The Board takes no position on what effect this (the
single carrier status ruling) had on the existing
collective bargaining agreement.
(Amicus Curiae Brief of the NMB, footnote 12.) The Supreme
Court has repeatedly emphasized that the NMB’s power over
representational disputes is exclusive. Switchmen’s Union of
North America v. National Mediation Board, 320 U.S. 297,
64 S. Ct. 95 (1943); General Committee of Adjustment y.
Missouri-Kansas-Texas R. Co., 320 U.S. 323, 64 S. Ct. 142
(1943). This exclusivity has now been extended to the
nullification of contract and employment ri ghts, which the lower
court erroneously declared could not be reviewed. App. B, 25a-
26a. In this case, moreover, a carrier made application to the
NMB thus depriving the NMB of jurisdiction:
18
NMB’s conduct in revising its interpretation of RLA
to permit carriers or the Board to itself initiate
investigation of representation disputes among
carriers’ employees was a “gross violation” of RLA
and was judicially reviewable.
Railway Labor Exec. Assn v. NMB, supra, 29 F.3d at 655.
The generaly recognized purpose of the RLA is to promote
the full flow of commerce, to prescribe the legitimate rights of
both employees and employers in their relations affecting
commerce, to provide orderly and peaceful procedures for
preventing the interference by either with legitimate rights
of the other, to protect the rights of individual employees. 45
U.S.C. § 15la. Accordingly this Court is being called upon to
determine how an NMB decision on a representational matter
abolished a collective bargaining agreement and substantive
employment contract rights under the RLA.
B.
5. Finding no reviewable claims under the RLA, the lower
court ruled nonetheless that the RLA preempted all of petitioners’
state law claims. The holding left the petitioners no avenue to
present their evidence and vindicate their state claims that the
respondent carriers and union fraudulently mislead petitioners
as to the nature of the proceedings being pursued in their names,
made promises to them concerning their employment which
they did not intend to keep, breached their contract of
employment, and failed to represent them in good faith before
the NMB and thereafter. In holding petitioners’ states claims
preempted, the court failed to consider a 1994 Supreme Court
19
decision. An employee’s discharge was held not preempted by
the Railway Labor Act. Hawaiian Airlines, Inc. v. Norris, infra.
The decision established that claims related to rates of pay, rules
and working conditions are the only claims preempted by the
Act. Reversible error was committed here because the lower
court ruled RLA preemption applied to petitioners’ valid state
claims for breach of contract and fraud which are outside the
scope of rates of pay, rules and working conditions.
6. By declaring claims preempted by the RLA, the court
failed to recognize that preemption occurs only where state law
claims involve interpretation or application of the collective
bargaining agreement. Hawaiian Airlines, Inc. v. Norris, 512
U.S. 246, 114 S. Ct. 2239 (1994). The purpose of Congress in
passing the Railway Labor Act was to promote stability in labor/
management relations by providing a comprehensive framework
for resolving labor disputes. Atchison, Topeka and Sante Fe R.
Co. v. Buell, 480 U.S. 557, 107 S. Ct. 1410 (1987). To further
this goal, the RLA established a mandatory arbitral mechanism
for the “prompt and orderly settlement” of two classes of
disputes. The first class of disputes is “rates of pay, rules or
working conditions”. 45 U.S.C. § 15la. The second class of
disputes grows out of the first class of disputes and relates to
interpretation of contractual provisions governing rates of pay,
rules and working conditions. Bhd. Of Ry. Trainmen v. Chicago
River & Indiana R. Co., 353 U.S. 30, 77 S. Ct. 635 (1957).
Major disputes seek to establish rates of pay, rules and working
conditions which create contractual rights. Minor disputes seek
to enforce them. Consolidated Rail Corp. v. Railway Labor
Executives Ass'n, 491 U.S. 299, 302, 109 S. Ct. 2477, 2480,
citing Elgin, J. & E. R. Co. v. Burley, 325 U.S. 71 1, 723, 65 S.
Ct. 1282, 1289 (1945). Petitioners’ rates of pay, rules, and
working conditions were being adhered to in 1992, and in 1993
20
when the petitioners were furloughed. The Circuit Court here
erroneously declared a “major dispute” in progress in 1992
(which it did not identify) while the status-quo provisions of
the RLA were being observed. In view of the complete failure
of the lower courts to apply to petitioners the procedures and
limitations set forth in the United States Constitution, RLA and
NMB Rules, petitioners pray that this Court must consider the
following quoted passage where an NMB decision is used to
remove a collective bargaining agreement under the RLA:
The Constitution is not a statute, but the Supreme
Law of the Land to which statutes must conform,
and the powers conferred upon federal government
are to be reasonably and fairly construed .. . this
power must be exercised in subjection to the
guarantee of due process found in the Fifth
Amendment.
Retirement Board v. Alton, supra, 295 U.S. at 346-47.
7. The state claims of the nineteen retired employees,
moreover, could not be preempted by the RLA because retired
employees are not covered under the Act. In 1971 the Supreme
Court declared retired employees outside the National Labor
Relations Act because they are not employees who could affect
commerce under the Act. Allied Chemical and Alkali Workers
of America, Local Union No. | v. Pittsburgh Plate Glass Co.,
Chemical Div., 404 U.S. 157, 188, 92 S. Ct. 383, 402 (1971).
Similarly, the 19 retired petitioners in this case should have
been allowed to pursue their state claims.
8. Where the lower court here declared these petitioners’
State claims preempted by ERISA, the ruling was also in error
because ERISA only preempts state claims in the area of pension
plan regulation. Alessi v. Raybestos-Manhattan, Inc., supra,
451 U.S. at 523, 101 S. Ct. at 1906. If petitioners’ ERISA
§ 510 claims could not be heard because of the valid application
of a higher standard of proof than has heretofore been required
21
by this Court (see discussion below), then petitioners should
have been allowed to pursue in court their state claims for fraud
and breach of fiduciary duty or their equivalent. Cf. Varity Corp.
v. Howe, 516 U.S. 489, 116 S. Ct. 1065 (1996).
c.
9. As to the claims of the nireteen petitioners who were
required to waive their severance rights (which were provided
to their younger co-workers) on the day of their mass layoff in
return for receiving their retirement rights,” the district court
declared:
Shuttle gave these plaintiffs a choice of either a
retirement package or severance pay.
App. B, 22a. There was a failure to recognize that the 19 older
employees were forced to waive rights in order to receive the
retirement package. The waiver came under the provisions
contained in 29 U.S.C. § 626(f). App. E, 39a-41la. These
nineteen petitioners were required to make their decision on the
day they were furloughed in direct violation of the statute. In
addition, Shuttle provided them with none of the data or
advance disclosures Congress mandated they receive so as to
allow them to make an informed judgment under the statute,
again in plain violation of the statute. In Oubre v. Entergy
Operations, Inc., No 96-1291, argued November 12. 1997,
decided January 26, 1998, this Court held that a waiver involved
2. Although the district court found that the retirement benefits
offered to these workers were “enhanced” benefits, that fact was
disputed in the record and should not have been the subject of a
summary judgment decision. Petitioners contended and showed that
the retirement benefits they received on being laid off by the Shuttle
in November 1993 were the standard retirement benefits they had
already earned at the Shuttle.
22
with severance pay must satisfy the enumerated requirements
of 29 U.S.C. § 626(f)(1). The Circuit Court decision in this
case failed to decide the important waiver question presented
by petitioners, thereby directly conflicting with this Court’s
decision in Oubre. Petitioners pray that the Court send this matter
back for further proceedings in light of this Court’s decision in
Oubre.
D.
10. Questions of fact remained for the jury in regards to
petitioners’ claims under ERISA and ADEA. By requiring that
petitioners “must show specific evidence of unlawful motivation
in order to avoid having summary judgment entered against
them,” App. B, 10a, the Circuit Court holds petitioners to a
higher standard of proof than previously set forth by this Court.
The Circuit Court thus failed to consider and apply properly
the law as set forth by this Court.
11. Petitioners’ evidence in a summary judgment
proceeding was powerful and not fully set out by the courts
below. Because Donald Trump hired the most senior workers
at Eastern Airlines to staff the Trump Shuttle, the Shuttle
President Hallcom stated when he furloughed the petitioners in
November 1993 that the Shuttle was a five year old company
whose employees have 25 years seniority. Ms. Patricia Evers,
Director of Administration and Benefits at Shuttle, Inc., testified
in her deposition and by affidavit:
[S]huttle employees were an aged and aging group
and [Shuttle President Hallcom] acted with a view
toward reducing the age of the work force through
a “re-engineering” plan. When referring to the Shuttle
work force in general he would usually refer to it as
an “aging and old” work force.
23
By older workers I mean those workers such as the
Fleet Service employees [petitioners] whose
average age was relatively high. Mr. Hallcom was
obsessed with the aging work force at Shuttle and
the costs associated therewith. As president, Mr.
Hallcom took every Opportunity to reduce the age
of the Shuttle work force.
[Shuttle President Hallcom’s]} concern about the
older age of the work force also involved the higher
contributions Shuttle had to make to its [ERISA
benefit] Plans because of the age and aging of
[Shuttle] employees. He repeatedly complained
both about the high and increasingly higher level of
those contributions and about the related high and
increasingly higher level of insurance payments for
health plans hecause of the increasing age of [the
Shuttle] work force.
Mr. Hallcom made it plain to me that he did not
want to pay benefits and retirement costs associated
with Shuttle’s “old and aging” workforce.
I am talking about the fact that as these employees
aged and as more of them accrued years of service,
they were going to become entitled to the early
retirement supplement [pension benefit] that Shuttle
had to pay. It was for time at Eastern, but the Shuttle
was going to have to pay it. These were the costs
[Hallcom] didn’t like.
Evers Declaration, 10/20/95: Evers Dep., 172-73, 195. The
furlough was motivated by an illegal management desire to
reduce costs associated with the Shuttle’s “old and aging
workforce” and to prevent them from continuing to obtain their
24
medical, welfare and pension benefits, especially their special
pension benefit at age 55. Jnter-Modal Rail Employees Ass'n v.
Atchison, T. & S&S. &. Co., ... U.S Ly 97S. WS0S, . 137
L. Ed. 2d 763, 769-70 (1997).
12. The Circuit Court failed to consider these and other
disputed facts of the case on summary judgment; indeed, it
failed to address this Court’s decision in /nter-Modal. Instead,
the Circuit Court held that petitioners’ evidence did not meet a
new, heightened burden of proof standard adopted by the Circuit
when it defined the outsourcing here as a “corporate
organizational change” (as previously set out in Andes v. Ford
Motor Co., 70 F.3d 1332 (D.C. Cir. 1995)) thus avoiding the
impact of petitioners’ evidence in favor of summary judgment.
App. B, 10a, 14a. In so ruling, the court (1) seems to ignore
the direct and specific nature of petitioners’ evidence; and (2)
fails to apply or consider this Court’s decision in /nter-Modal
where this Court made it clear that it is unlawful to:
discharge, fine, suspend, expel, discipline or
discriminate against a participant or beneficiary of
an employee benefit plan for the purpose of
interfering with the attainment of any right to which
such participant may become entitled under the plan.
Inter-Modal Rail Employees Ass'n v. Atchison, T. & S. R. Co.,
supra 117 S. Ct. at ___, 137 L. Ed. 2d at 769-70. Although this
Court in /nter-Modal cited Andes favorably for a different
proposition,’ it did not adopt the Andes standard of proof in
Inter-Modal, even though in /nter-Modal this Court was
confronted with precisely the same outsourcing of the petitioner-
employees’ jobs as it is here. The Circuit Court in this case
failed completely to consider this Court’s decision in Jnter-Modal
3. Inter-Modal, Footnote, 137 L. Ed. 2d at 768.
OS
ea
25
when dismissing petitioners’ ERISA claims. Similarly, the
Circuit Court erred in failing to apply the traditional standard
of proof for petitioners’ Age Discrimination Act claims as set
out by this Court in O’Connor v. Consolidated Coin Caterers
Corp, supra, 116 S. Ct. At 1309. For these additional reasons,
petitioners pray that the matter be remanded for further
proceedings as to the applicable standard of proof in light of
the decision in Jnter-Modal.
13. Lastly, but not insignificantly, this case presents the
interrelationship between age and pension eligibility which the
Supreme Court anticipated in Hazen Paper Co. y. Biggins, 507
U.S. 604, 113 S. Ct. 1701 (1993). Petitioners’ evidence showed
that Shuttle’s President Hallcom, who made the decision to
furlough the petitioners, “target[ed] employees with a particular
pension status on the assumption that these employees are likely
to be older.” Hazen Paper Co. v. Biggins, supra, 507 U.S. at
612, 113 S. Ct. 1707-08. As Patricia Evers noted, all of the
petitioners were vested, had many years of seniority because of
their age and, because of their age, were candidates for a special
pension benefit at age 55, which Hallcom “didn’t like:” his
view was that the Shuttle work force was “old and aging” and
that he should “re-engineer” it to make it younger. This case,
therefore, raises the question posed by the Court in Hazen Paper
but not resolved: whether “the decision to fire the employee is
motivated both by the employee's age and by his pension
status,” /d. at 613, 113 S. Ct. at 1708, and whether, therefore,
there are sustained violations of both ERISA and ADEA.
Petitioners respectfully submit that: (1) the facts in this case
demonstrate that: (a) petitioners were targeted for furlough
because of their qualification to receive increasingly higher
pension benefits and a special pension benefit at age 55; and
(b) their furlough was motivated by both age and pension status;
and (2) such facts sustain causes of action under both ERISA
and ADEA. The lower courts failed to consider the evidence
and the issue. This Court should grant certiorari to resolve the
question in this case.
26
CONCLUSION
Congress granted exclusive jurisdiction to the NMB over
representational issues. Congress vested the Railway Labor Act
exclusive jurisdiction over collective bargaining agreements
dealing with rules, rates of pay and working conditions in the
railroad and airline industries. One hundred and thirty five
workers were denied status-quo protection and denied the benefit
of a “No Furlough” clause in their collective bargaining
agreement and employment contract.
The court below created new law when it ruled that a Single
Carrier Status Ruling by the NMB could violate the status-quo
provisions in the RLA and diminish existing rights. New law
was created when the lower court ruled the NMB was empowered
to remove a collective bargaining agreement under the RLA.
Congress granted the RLA exclusive jurisdiction and provided
status-quo provisions. Congress gave the NMB exclusive
jurisdiction over representational issues and the NMB rules
specifically provide for limitations and protections, and for
dispute resolution where the dispute results from invoking the
NMB Merger Rules, none of which were complied with or
applied in this case.
The Circuit Cour ailed to consider the Constitutional
deprivation of a “property” right through the action of the NMB,
a Federal Agency. The court failed to recognize the removal of
a contract is removal of a property right that requires due process
under the Fifth Amendment.
Congress intended contracts negotiated under the RLA to
continue in a status-quo posture until all of the steps provided
in the Act were satisfied. Congress declared the goal of the
Railway Labor Act to promote the free flow of commerce and
to provided legitimate rights for both employees and employers.
That did not occur in this case.
ee
. a ee eee ee ee
27
The lower court decision has the effect of rewriting the
RLA. It gives NMB power to interrupt the free flow of
commerce and the stability of labor relations in the transportation
industry by voiding a collective bargaining agreement in
violation of its own rules.
Retired workers are not under the RLA because they cannot
influence the flow of commerce. The Court ruled in error Stating
their claims were preempted by the RLA.
The Supreme Court should grant certiorari to decide the
important RLA issues raised by this case.
Nineteen (19) plaintiffs were forced into retirement and
required to waive benefits given to younger employees. Waiver
of the right to severance pay came under the purview of 29
U.S.C. § 626(f)(1). The waiver could not be deemed knowing
and voluntary unless it satisfied the enumerated requirements
of 29 U.S.C. § 626(f)(1). That statute was not applied here.
The case should be remanded for further review in light of this
Court’s recent ruling in Oubre v. Entergy Operations, Inc.
An alternative and significantly persuasive reason for the
Court to grant certiorari in this case is ti.c complete failure of
the lower courts to apply the law as set out by this Court in its
recent and important decisions regarding ERISA, ADEA, and
OWBPA and to adopt in this cause a new, heightened standard
of proof. Additionally, this case raises the issues of whether
these statutes otherwise preempt valid state causes of action;
and whether Shuttle’s conduct in this case violate both ERISA
and ADEA, a question which the Court anticipated in Hazen
Paper Co. v. Biggins but did not decide. The proper application
of these important federal laws, in the face of new and improper
uses thereof by the lower courts in this case, is now before the
Court.
28
Respectfully submitted,
THOMAS A. MAURO
Attorney for Petitioners
1050 Seventeenth Street, N.W.
Suite 1200
Washington, D.C. 20036 =
(202) 452 9865
ae
7
>
+
la
APPENDIX A — JUDGMENT OF THE UNITED STATES
COURT OF APPEALS FOR THE DISTRICT OF
COLUMBIA CIRCUIT DECIDED NOVEMBER 12, 1997
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 20, 1997 Decided November 12, 1997
—_>
No. 96-7233
James May, et al.,
Appellants
Vv;
Shuttle, Inc., et al.,
Appellees
Appeal from the United States District Court
for the District of Columbia
(No. 94cv01019)
Before: SiILBERMAN, WILLIAMS, and Rocers, Circuit Judges.
JUDGMENT
This cause came to be heard on the record on appeal from
United States District Court for the District of Columbia, and
was briefed and argued by counsel. On consideration thereof,
it is
Bills of costs must be filed within 14 days after entry of
judgment. The court looks with disfavor upon motions to file bills
of costs out of time.
2a
Appendix A
ORDERED and ADJUDGED, by this Court, that the
judgment of the District Court appealed from in this cause is
hereby affirmed. It is
FURTHER ORDERED, by this Court, that the district
court’s memorandum opinion in May v. Shuttle, Inc., No.
94cv01019 (D.D.C. Sept. 5, 1996) is hereby published as if it
were an opinion of our court. We note, however, that the
collective bargaining agreement between Trump Shuttle, Inc.
and the International Association of Machinists and Aerospace
Workers expired on December 31, 1989. Thereafter, the only
function the agreement could have performed would have been
to serve as the temporary “status quo” while the parties pursued
the “major dispute” collective bargaining procedures of Sections
5 and 6 of the Railway Labor Act. But for the reasons made
clear by the district court, Shuttle could have been under no
obligation to engage in such bargaining in the absence of a
certified representative with which to bargain. Therefore it is
unnecessary for us to decide whether any terms of a collective
bargaining agreement may survive the loss of union
representation (an issue which we previously addressed in
passing). See Association of Flight Attendants v. United Airlines,
Inc., 71 F.3d 915, 918 (D.C. Cir. 1995). It is
FURTHER ORDERED, by this Court, sua sponte, that
the Clerk shall withhold issuance of the mandate herein until
seven days after disposition of any timely petition for rehearing.
See D.C. Cir. R. 41(a)(1) (January 1, 1994). This instruction to
the Clerk is without prejudice to the right of any party at any
time to move for expedited issuance of the mandate for good
cause shown.
3a
Appendix A
Per Curiam
For the Court:
Mark J. Langer, Clerk
4a
APPENDIX B — MEMORANDUM OPINION OF THE
UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLUMBIA DATED SEPTEMBER 5,
1996, ADOPTED BY THE COURT OF APPEALS BY THE
JUDGMENT DATED NOVEMBER 12, 1997
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
Issued September 5, 1996
Civil Action No. 94-1019(NHJ)
James May, et al.,
Plaintiffs
Vv.
Shuttle, Inc., et al.,
Defendants
MEMORANDUM OPINION
Plaintiffs are eighty-six former USAir Shuttle fleet service
workers.' The five defendants are Shuttle, Inc. (“Shuttle’’),
USAjtr, Inc. (“USAir’), International Association of Machinists
and Aerospace Workers (“IAM”), Citicorp, and Citibank, N.A.
Before the Court are the motions for summary judgment filed
1. Two of the original plaintiffs, Raymond Heim and Pierre L.
Schrichte, have been voluntarily dismissed. One of the original
plaintiffs, Kenneth Wall, is now deceased and the administrator of
his estate has been substituted.
Sa
Appendix B
by all defendants, as well as the motion of plaintiffs for summary
judgment on the issue of the single carrier proceeding and the
motion of nineteen of the plaintiffs (“Barone et al.”) for summary
judgment on certain age discrimination issues. Shuttle has also
filed a cross-motion for summary judgment on the issues raised
by Barone et al. Altogether, there are seven motions for
summary judgment to be resolved at this time. The Court heard
oral argument from the parties on all seven motions on June
21, 25, and 27, 1996. Upon consideration of the motions, the
supporting and opposing memoranda, the oral argument of
counsel, and the entire record herein, the Court concludes that
it must grant the motions of all defendants and deny the motions
of plaintiffs.
Background
Most of the plaintiffs formerly worked at Eastern Air Lines
as fleet service workers for the Eastern Shuttle. The Eastern
Shuttle offered hourly, unreserved flights between New York
and Washington, and between New York and Boston. Plaintiffs’
basic job duties included handling baggage, cleaning aircraft,
and guiding aircraft to and from passenger gates. Plaintiffs were
represented by IAM, which had negotiated a collective
bargaining agreement with Eastern on plaintiffs’ behalf. In 1989,
in the midst of a prolonged strike, Eastern sold the Shuttle to
Donald Trump. He financed the purchase through a $380
million loan from a syndicate of twenty-two banks, including
defendant Citibank. The newly named Trump Shuttle began
operations on June 7, 1989. Trump hired plaintiffs to staff the
Trump Shuttle, and Trump Shuttle and IAM entered into a
collective bargaining agreement. Forty-nine plaintiffs worked
at LaGuardia Airport in New York, New York (“LaGuardia”),
twenty-three worked at Logan Airport in Boston, Massachusetts
6a
Appendix B
(“Logan”), and fourteen worked at Washington National Airport
in Arlington, Virginia (“National”).
By 1990, Trump Shuttle and Donald Trump were
experiencing serious financial difficulties. Trump Shuttle never
made a profit, in part because of the large debt incurred by
Trump to purchase and upgrade the Shuttle. By September
1990, the Trump loans were in default and the banks sought to
restructure the debt. The banks decided to assume ownership
of the Shuttle and began to search for a major airline to manage
it in order to avoid selling the Shuttle in the depressed airline
market. They decided to attempt to improve the Shuttle’s
operating performance, contemplating a sale at a later date.
After failed negotiations with Northwest Airlines, the banks
reached an agreement with USAir. The complex management
agreement with USAir provided that USAir would manage the
Shuttle for ten years, with an option to buy. Under the agreement,
USAir would be responsible for Shuttle operations, including
fares, financial record keeping, advertising, promotions, aircraft
maintenance, and labor relations. USAir would operate the
Shuttle under the name “USAir Shuttle.” Shuttle would continue
to operate as a separate airline under its own operating certificates
issued by the Department of Transportation (“DOT”) and the
Federal Aviation Administration (“FAA”) to allow the airline
to be sold if USAir decided not to exercise its option to buy the
Shuttle. On April 7, 1992, Trump Shuttle merged into a newly
created corporation, Shuttle, Inc., which became the corporate
successor of Trump Shuttle. On April 12, 1992, the USAir
management agreement closing occurred.
The DOT and FAA certificates required the Shuttle to
maintain responsibility for its own flight operations (including
Se ae ey aes Oe tot Orr Di Ghai ST IPT EWS | ae *
7a
Appendix B
pilots and flight attendants), but did not require Shuttle and
USAir to separate the ground service employees. USAir planned
to maintain separate groups of flight personnel but to integrate
the ground service employees of USAir and Shuttle, including
the fleet service workers, and treat them as a single workforce.
IAM had demanded that USAir agree to integrate the ground
service employees before IAM would approve the USAir
management agreement. Without the approval of IAM, it
appears that USAir could not have entered into the management
agreement. The large group of fleet service workers at USAir
(there were more than 8,000 USAir fleet service workers and
135 Shuttle fleet service workers) was not represented by a
union.
In order to integrate the two groups of employees, USAir,
IAM, and Shuttle had to resolve numerous issues, including
union representation. USAir and IAM agreed to resolve
representation questions by requesting the National Mediation
Board (“NMB”) to issue a ruling that, for purposes of
representation under the Railway Labor Act (“RLA”), USAir
and Shuttle were a “single carrier.” On April 2, 1992, USAir
filed a petition with the NMB seeking single carrier status. On
May 12, 1992, IAM joined USAir’s petition.
Both the United Steelworkers of America and IAM
petitioned to represent the fleet service workers. On August 10,
1992, the NMB ruled that USAir and Shuttle constituted a single
carrier for purposes of union representation, and an election
was held to decide which union, if any, would represent the
combined group of fleet service workers. When the votes were
counted, the NMB announced that less than a majority of the
fleet service workers had voted for union representation.
Accordingly, the result of the election was that the combined
8a
Appendix B
group of fleet service workers would not be represented by a
union.
After the election, the fleet service workers at Shuttle were
no longer treated as if they were represented by a union. Union
dues were no longer deducted from their paychecks after the
election. The IAM notified plaintiffs by letter dated August 31,
1992, that they were no longer represented by the union.
Eventually, the Shuttle fleet service was not integrated with
USArr, in part because of difficulties resolving seniority disputes.
In March 1993, after the NMB certified the election result,
Shuttle changed several conditions of plaintiffs’ employment,
including extending the work hours and limiting overtime pay.
Also in March 1993, Shuttle furloughed thirty individuals in
the fleet service group — twenty-two at LaGuardia, five at
Logan, and three at National. Ten of those individuals are
plaintiffs here. The decision to furlough those fleet service
workers was made by Terry V. Hallcom, President and CEO of
Shuttle, based on his conclusions that he could cut costs and
replace substandard work by using an outside contractor. Shuttle
contracted with Hudson General Corporation to perform the
work. In November 1993, eighty-eight individuals in the fleet
service group were furloughed or elected voluntary retirement
in lieu of furlough—forty-three at LaGuardia, twenty-four at
Logan, and twenty-one at National. Seventy-three of those
individuals are plaintiffs here.’ At that time, Shuttle subcontracted
all fleet service work to Hudson General. Hallcom reached the
decision to subcontract the remaining fleet service workers after
2. The remaining three plaintiffs were furloughed on the
following dates: John P. Luti (Logan) — September 22, 1992; Harold
Young (Logan) — September 22, 1992; and Lance J. Riddick
(LaGuardia) — July 3, 1993.
9a
Appendix B
determining that approximately $2 million a year could be saved
by subcontracting the work. Shuttie had no control over the
selection of employees by Hudson General.
Furloughing the fleet service workers was part of Shuttle’s
cost cutting strategy in its attempt to make the airline profitable
and recover Trump's debt. From April 12, 1992, to August 31,
1995, the total number of Shuttle employees was reduced from
972 to 553.
Discussion
There are eighteen counts in plaintiffs’ complaint. Plaintiffs
bring their federal statutory claims pursuant to the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001-
1461 (1994), the Age Discrimination in Employment Act
(“ADEA”), 29 U.S.C. §§ 621-34 (1994), the Worker
Adjustment and Retraining Notification Act (“WARN”), 29
U.S.C. §§ 2101-09 (1994), and the Railway Labor Act
(“RLA”), 45 U.S.C. §§ 151-88 (1994). Plaintiffs also bring
state law claims against all defendants and a claim against the
IAM for breach of the duty of fair representation. The Court
will first address the claims against USAir and Shuttle (parts I-
VI, below), and will then address the remaining defendants
separately (parts VII-VIII, below).
I. ERISA, 29 U.S.C. §§ 1001-1461 (1994), Counts 9-13
Section 510 of ERISA guarantees that no employee will
be terminated where the purpose of the discharge is the
interference with the employee’s pension rights. 29 U.S.C.
§ 1140 (1994). Plaintiffs claim that defendants violated ERISA
when defendants furloughed plaintiffs without allowing them
10a
Appendix B
to work up to age sixty-five (Count 9); when USAir did not
offer plaintiffs the same benefits it offered to non-Shuttle
employees (Count 10); when defendants furloughed plaintiffs
because defendants did not want to pay for greater health care
benefits as plaintiffs got older (Count 11); when defendants
furloughed plaintiffs because they did not want to assume the
increasingly greater risk that plaintiffs would suffer a long term
disability (Count 12); and when defendants furloughed plaintiffs
to keep plaintiffs from accruing further benefits under the 401(k)
retirement plan (Count 13).
This Circuit has recently noted that a “corporate
organization change,” such as the decision to sell a subsidiary,
is generally not the type of action that is prohibited by ERISA.
Andes v. Ford Motor Co., 70 F.3d 1332, 1336 (D.C. Cir. 1995).
Because plaintiffs were furloughed as part of a reduction in
force, and the entire fleet service group was eliminated and
replaced with an outside contractor, the Court considers their
furloughs to be a “corporate organizational change.”
Accordingly, plaintiffs must show specific evidence of unlawful
motivation in order to avoid having summary judgment entered
against them.
Even if the furloughs are not considered a corporate
organizational change, but are to be treated as the discharges of
individual employees, plaintiffs must still pass a high hurdle to
prove that this case should go to trial. Using the classic Burdine
framework, Texas Dep’t of Community Affairs v. Burdine, 450
U.S. 248 (1981), the Court must determine if piaintiffs have — -
established a prima facie case: (1) prohibited employer conduct;
(2) taken for the purpose of interfering (3) with the attainment
of any right to which the employee may become entitled. Berger
v. Edgewater Steel Co., 911 F.2d 911, 922 (3d Cir. 1990), cert.
ee ee TT
lla
Appendix B
denied, 111 S. Ct. 1310 (1991). If plaintiffs establish a prima
facie case, then defendants must articulate a legitimate,
nondiscriminatory reason for their actions. If defendants meet
that burden, then plaintiffs must prove that the proffered reason
is pretextual. McDonnell Douglas Corp. v. Green, 411 U.S.
792 (1973).
Defendants have presented evidence showing that the
motivation behind the furloughs and outsourcing of the fleet
service work was to save money. Hallcom Aff. {J 16-22. In his
affidavit, Terry Hallcom stated that Trump Shuttle never made
a profit and by early 1990 was in dire financial Straits because
of the large debt incurred to purchase and upgrade the Shuttle.
Hallcom Aff. ¥ 7. By late September 1991, Trump Shuttle was
nearly unable to generate sufficient revenues to pay its operating
costs. Hallcom Aff. J 9. After the banks took over and USAir
entered the management agreement, the Shuttle began to cut
costs and improve operations to enable it to become
economically self-sustaining. Hallcom Aff. { 9. In 1992, the
Shuttle increased its cost cutting measures, including job force
reductions in all classifications — management, pilots, fleet
service, mechanics, and flight attendants. Hallcom Aff. J 16.
From April 12, 1992, to August 31, 1995, Shuttle reduced its
number of employees from 972 to 553, as well as reducing the
number of aircraft and backup flight management, renegotiating
vendor and service contracts, and changing operations and
maintenance procedures. Jd. In March 1993, Shuttle outsourced
the overnight cleaning workers in order to cut costs and get
higher quality service. Hallcom Aff. {I 18-20. Pleased with the
Savings in money and the improvement in services, Hallcom
decided to outsource the remaining fleet service work to Hudson
General for a cost that was 50% less than the Shuttle’s existing
cost for the work. Hallcom Aff. J 22. According to Hallcom,
12a
Appendix B
since 1992 the Shuttle has saved more than $21 million a year
as a result of these cost cutting measures, which equals a 25%
reduction in total operating expenses. Hallcom Aff. ¥ 25. In
1989, the Shuttle lost over $66 million; in 1994, the Shuttle
generated a small profit and is presently an economically self-
sustaining business. /d. Hallcom states, “Shuttle’s reason for
discharging Plaintiffs was economic necessity. The furloughs
were effectuated by a company in financial distress and were
but one part of a massive cost reduction program applied to
every facet of the Shuttle’s operation in an attempt to reduce
costs sufficiently to allow the Shuttle to survive.” Hallcom Aff.
{ 26. Because the decision to furlough plaintiffs was motivated
by the desire to cut costs and save the airline, defendants claim
that there was no unlawful intent to deprive plaintiffs of pension
benefits.
In response to defendants’ evidence that the motivation for
the furloughs was to cut costs, plaintiffs complain about
documents they allegedly did not receive in discovery. Plaintiffs
claim, without any citations to the record, that they did not
receive notice of changes to the pension plan in 1991 and that
such changes were not reported to the Department of Labor.
Plaintiffs testified in their depositions that Gordon Linkon and
Terry Hallcom of Shuttle, as well as plaintiffs’ manager Joita
McGlynn, told them that no changes would be made when
USAir first took over the management of the Shuttle. Pls.’ Exs.
45-49. Plaintiffs also testified that representatives of USAir stated
that Shuttle fleet service workers would be integrated with USAir
fleet service workers with their full seniority. Pls.’ Exs. 52-53,
55, 59. Plaintiffs submit a memorandum from Hallcom to “All
Employees,” dated March 6, 1992, (five months before the
combined fleet service workers voted against union
representation) stating that “[e]ffective day one [of USAir’s
l3a
Appendix B
management of Shuttle] there will be no changes. Any changes
that may occur will be done systematically as we begin to get
established as the USAir Shuttle.” Pls.’ Ex. 69. Plaintiffs submit
evidence that the Shuttle’s pensions generally were
“underfunded” based on actuarial calculations of projected
benefits versus projected assets. Pls.’ Exs. 70-72.
Plaintiffs also cite to the affidavit and deposition testimony
of E. Patricia Evers, former Director of Administration at the
Shuttle. Evers testified that Hallcom referred to the Shuttle work
force as an “old and aging work force.” Evers Dep. at 195. She
testified that Hallcom talked with her about the cost of the
pension plan and was concerned that the annual contributions
Shuttle had to make to the plan based on the actuarial tables
was too high. /d. at 159-60; 171. She testified that Hallcom
was concerned about the amount of money Shuttle had to pay
to the pension plan for the time that employees had worked at
Eastern Airlines. Jd. at 173-74. She testified that, prior to the
decision to furlough the fleet service workers, Hallcom instructed
the Shuttle’s actuaries to compute the cost savings to the Shuttle
under different scenarios of the fleet service workers’ pension
plan, such as if the plan were “frozen.” Jd. at 186-94. She also
testified that she was not involved in the decision to furlough
plaintiffs and did not discuss the decision with Hallcom, who
made the decision. Evers Dep. at 79, 153-59. Hallcom did not
tell her why the fleet service workers were furloughed.
In response to Shuttle’s interrogatory, “Do you believe that
Shuttle ever acted with a motive to deprive you of any retirement,
health or other benefit associated with your employment? If so,
identify every statement, fact or document that supports your
belief,” every plaintiff uniformly answered, inter alia, “a ‘USAir
Shuttle spokesman’ advised People Magazine, that I was laid
l4a
Appendix B
off because the Shuttle wanted ‘an optimized cost-efficient
operation’,” and “President Hallcom advised People Magazine
that I was laid off because ‘the Shuttle management needed to
cut jobs to cut costs’,” and “President Hallcom informed Crain’s
New York Business in January 1994, that since November 1993
Shuttle has been paying off interest and principal on its
outstanding debt to Citicorp and Citibank. The cost ‘savings’
that allowed Shuttle Inc. to pay the bank resulted from my
layoff.” Pls.” Answers to Interrog. 10. Plaintiffs also testified in
their depositions that they believed they were furloughed to
cut the costs of their salaries, benefits, health plans, and pension
plans. See, e.g., DiSpigno Dep. at 105.
Under Andes v. Ford Motor Co., 70 F.3d 1332, 1338 (D.C.
Cir. 1995), in a case like this one, “the plaintiffs can satisfy
§ 510 only by showing that some ERISA-related characteristic
special to the unit (such as its having a clearly above-average
proportion of employees with pension rights about to vest) was
essential to the firm’s selecting the unit for closure or sale.” The
evidence shows that Shuttle was in dire financial straits and,
since 1992, has undergone dramatic cost cutting measures,
including reducing its number of employees by 419 persons —
over 40% of the workforce. It is hard to imagine, and plaintiffs
have failed to show, that defendants targeted these eighty-six
persons to furlough because of their pension costs. The problems
that Shuttle was facing were much larger than plaintiffs’ pension
costs — for example, the fact that Shuttle lost over $66 million
in 1989 and still had tremendous debts to repay. Although the
fleet service workers were an “aging” group of employees and
Halicom was concerned about the cost of the contributions that
Shuttle was making to their pensions, such evidence is not
enough to show a specific discriminatory intent. Plaintiffs must
show more than that Shuttle furloughed plaintiffs to save money.
At OT EIN ws an
-~
1Sa
Appendix B
As the Fourth Circuit explained:
[Plaintiff] tries to save his claim by citing statements
that [defendant] sought to meet its “financial need”
by terminating him, and that financial need
necessarily includes pension costs. [Plaintiff's]
Suggestion that [defendant] acted illegally because
it acted to save money proves too much. Under that
reasoning, any actions by an employer that result in
savings would be suspect. It is obvious that benefit
costs make up a large amount of the costs of an
employee to a company, and that pension rights are
a substantial component of benefit costs, but these
undeniable propositions are not sufficient standing
alone to prove the requisite intent by the path of
pretext.
Conkwright v. Westinghouse Elec. Corp., 933 F.2d 231, 239
(4th Cir. 1991).
With respect to plaintiffs’ furloughs, the undisputed
evidence shows that Shuttle furloughed plaintiffs in order to
cut costs and save the company. Plaintiffs have presented no
evidence to show that Shuttle was motivated by any other factor.
Because plaintiffs cannot show a specific intent to discriminate,
they have failed to establish a prima facie case. Even if they
had established a prima facie case, their claim would fail because
they did not show that Shuttle’s legitimate, nondiscriminatory
reason for the furloughs was a pretext.
With respect to plaintiffs’ claims that USAir did not offer
plaintiffs the same benefits as non-Shuttle USAir employees,
the Court notes that the planned integration of Shuttle fleet
l6a
Appendix B
service workers into the USAir work force never took place.
According to Hallcom, the integration plans failed because of
the difficulties encountered by the LAM in resolving an intra-
union dispute from attempting to combine the senior Shuttle
mechanics into the resistant USAir mechanic work force and
the parallel issue presented by the fleet service integration.
Hallcom Aff. J 14. Simply because defendants intended to
integrate the workers, and the integration plans failed, does not
give rise to a claim under ERISA. Plaintiffs have no claims to
USAir pension benefits because they were never members of a
USAir pension plan.
With respect to plaintiffs’ factually unsupported claims that
Shuttle violated ERISA by failing to disclose certain pension
plans to plaintiffs and the Department of Labor, plaintiffs cite
Varity Corp. v. Howe, 116 S. Ct. 1065 (1996). Varity does not
apply to the present case, however, because Varify was not an
ERISA § 510 case and all five ERISA counts in plaintiffs’
complaint come under § 510. Because plaintiffs have failed to
provide any evidentiary support for this claim, and have not
brought a count in their second amended complaint alleging
any failure of Shuttle to disclose the pension plan to plaintiffs
or the Department of Labor, the Court will reject these claims.
The Court will grant the motions of USAir and Shuttle for
~ summary judgment on the ERISA counts.
Il. ADEA, 29 U.S.C. §§ 621-34 (1994), Counts 16, 17, 18
The Court of Appeals for this Circuit has stated:
To make out a prima facie case of age discrimination
. a plaintiff must demonstrate facts sufficient to
create a reasonable inference that age discrimination
A I A hc
aK ee Pee. PA
17a
Appendix B
was “a determining factor” in the employment
decision. Such an inference is created if the plaintiff
shows that he (1) belongs to the Statutorily protected
age group (40-70), (2) was qualified for the position,
(3) was not hired, and (4) was disadvantaged in favor
of a younger person. Once a prima facie case has
been established, the employer has the burden of
producing evidence tending to show that the
applicant was denied employment for a legitimate,
nondiscriminatory reason. If the employer does so,
and if his evidence is credible, the plaintiff must
show by a preponderance of the evidence that the
employer's asserted legitimate reason is merely
pretextual... . The plaintiff, who at all times retains
the burden of persuasion, must then show by a
preponderance of the evidence that age was “a
determining factor” in the employer's decision.
Cuddy v. Carmen, 694 F.2d 853, 856-58 (D.C. Cir. 1982)
(citations omitted). The Supreme Court has clarified that there
is no disparate treatment under the ADEA when the factor
motivating the employer is some feature other than the
employee's age. Hazen Paper Co. v. Biggins, 507 U.S. 604
(1993). Plaintiffs must show that age was a factor in the decision
to furlough them. The Burdine framework discussed above
applies to ADEA cases.
Some of the plaintiffs were not forty years old at the time
of the furloughs. The ADEA provides that one must be at least
forty years old to bring an ADEA claim. 29 U.S.C. § 631(a);
see also O'Connor y. Consolidated Coin Caterers Corp., 116
S. Ct. 1307, 1310 (1996) (noting that the ADEA “limits the
protected class to those who are 40 or older”). Plaintiffs contend
18a
Appendix B
that employees who were not yet forty years old when they
were furloughed should be allowed to maintain ADEA claims
because they were associated with the aging group. Plaintiffs
have absolutely no legal support for this assertion. The Court
rejects their attempt to bring ADEA claims for employees who
were under forty years of age and will grant defendants’ motion
to dismiss their claims for failure to meet the first element of the
prima facie case.
With respect to the plaintiffs who were at least forty years
old at the time of the furloughs, their highest hurdle in the
prima facie case is showing that younger persons were treated
more favorably than they were. Plaintiffs argue that the average
age of Hudson General’s employees is younger than the average
age of Shuttle’s furloughed fleet service group. The defendants,
however, had no role in deciding who Hudson General would
hire as its employees. Because defendants had no control over
the selection of Hudson General’s employees, the average age
of Hudson General’s employees is irrelevant to this case.
Plaintiffs have failed to show that defendants treated younger
persons more favorably than plaintiffs. The Court will grant
defendants’ motion to dismiss their claims for failure to meet
the fourth element of the prima facie case.
Even if plaintiffs did establish a prima facie case of age
discrimination, they would still lose their claims at the summary
judgment level. Defendants have produced evidence showing
that plaintiffs were furloughed for a_ legitimate,
nondiscriminatory reason — to save money by outsourcing the
entire department. Plaintiffs must show by a preponderance of
the evidence that the defendants’ asserted legitimate reason is
merely pretextual and that age was “a determining factor” in
their furloughs.
“s a
SOE HOE
19a
Appendix B
Plaintiffs rely on the following evidence to show unlawful
motivation: (1) the affidavit and deposition testimony of E.
Patricia Evers; (2) statistics showing that the majority of the
plaintiffs laid off were over the age of forty; and (3) six
documents:
(a) A memorandum labeled at the top “Shuttle, Inc.
Corporate Objectives 1992.” that includes an objective to
reduce costs by developing meaningful early retirement
opportunities. Pls.’ Ex. 17:
(b) A letter from Joseph P. Martinico on USAir Shuttle
Stationery, dated June 5, 1992. to Thomas Reinert at
Morgan, Lewis & Bockius, Stating in its entirety, “Dear
Tom: As discussed, enclosed please find both a set of mailing
labels and a listing of the USAir Shuttle Fleet Service
employees. If there is anything else I can do to assist you,
please call me at [phone number].” Pls.’ Ex. 18:
(c) A newspaper article from the Washington Times, dated
November 13, 1993, in which the author wrote that Shuttle
President Terry Hallcom “said the shuttle is essentially a 5-
year-old company that has employees with 25-year-old
seniority.” Pls.’ Ex. 19:
(d) A memorandum from Terry Hallcom, dated November
5, 1993, to workers at the Shuttle regarding early retirement,
in which Hallcom announced that retirement eligible
employees had the option of selecting either an early
retirement package or the resignation offer, Pls.’ Ex. 20:
(e¢) An undated, unsigned document titled “Number of
Employees Reaching ‘Normal’ Retirement Age,” listing the
20a
Appendix B
number of mechanics and the number of fleet service
workers who presumably would reach retirement age in
the years 1991-2001, Pls.” Ex. 21; and
(f) A memorandum from Terry Hallcom, dated July 30,
1992, to “All Pilots,” regarding the company’s policies with
respect to pilots over the age of sixty.
The Court cannot discern unlawful motivation in the
evidence submitted by plaintiffs. E. Patricia Evers testified that
she was not involved in the decision and that Hallcom, who
was involved in the decision to furlough the fleet service
workers, did not tell her why they were furloughed. Evers Dep.
at 158-59. She stated that she “wasn’t privy” to Hallcom’s plans
to re-engineer the Shuttle, but that she would see things if they
were left in the copying machine sometimes. Evers Dep. at 152.
Although she stated that Hallcom used the phrase “old and aging
workforce,” Evers Dep. at 195-96, Evers could not testify if
age was a factor in the decision to furlough plaintiffs because
she was not involved in the decision. Evers’s testimony, at most,
shows that Hallcom knew the ages of the workers and how
much it cost Shuttle to keep them employed. Such evidence
does not show unlawful motivation. The remainder of plaintiffs’
evidence likewise fails to show discriminatory intent in the
decision to furlough the fleet service workers. The Court
concludes that plaintiffs have failed to create a genuine issue as
to whether their furloughs were more probably than not due to
age discrimination. The Court will grant the motions of USAir
and Shuttle for summary judgment on the ADEA claims.
Ill. WARN, 29 U.S.C. §§ 2101-09 (1994), Count 14
Plaintiffs claim that defendants violated the Worker
Adjustment and Retraining Notification Act (“WARN”) because
ae
2la
Appendix B
defendants failed to give plaintiffs sixty days advance notice
before furloughing plaintiffs and failed to offer plaintiffs an
Opportunity to retrain. Plaintiffs also allege that they were denied
their WARN rights because of their union activities.
Defendants argue that plaintiffs do not have a claim under
WARN because the termination of their employment did not
constitute a “plant closing” or a “mass layoff” as defined by the
statute. Under the WARN Acct, plaintiffs must show that there
was a reduction in force “of one or more facilities or operating
units within a single site of employment” which, during a thirty
day period, terminated the employment of at least thirty-three
percent of the employees and at least fifty employees. 29 U.S.C.
§ 2101(a) (1994).
The reduction in force took place at three different locations
— Washington National Airport, Boston’s Logan Airport, and
New York’s LaGuardia Airport. Each airport must be considered
separately as the three are not a “single site of employment.”
The only airport that even comes close to having a fifty person
layoff is LaGuardia. Plaintiffs claim that forty-four fleet service
workers and seventeen “additional” people were laid off at
LaGuardia in a thirty day period. These “additional” people
were not fleet service workers, but were flight attendants, inside
ticket agents, clerks, and a staff accountant.
Defendants claim that forty-three fleet service workers were
laid off, and that the “additional” people were not part of the
“operating unit” pursuant to WARN regulations, 20 C.E.R.
§ 639.3(j). Defendants also claim that the “additional” people
were discharged for cause or voluntarily resigned, and thus do
not come under the WARN definition of “employment loss,”
29 U.S.C. § 2101(a)(6).
22a
Appendix B
The Court agrees that these “additional” people cannot
count for the fifty person minimum layoff because they were
not part of the fleet service “operating unit,” as required by the
statute. Moreover, plaintiffs have failed to allege that at least
thirty-three percent of the employees at LaGuardia were
terminated during the same thirty day period. The Court will
grant the motions of USAir and Shuttle for summary judgment
on the WARN claim.
IV. Barone, et al. — option for retirement eligible plaintiffs;
Cross-Motion of Shuttle
Nineteen plaintiffs (Barone et al.) were fifty-five years of
age or older when they were furloughed. These plaintiffs claim
they were eligible to retire on November 1, 1993. They did not
retire, and around November 13, 1993, they were furloughed
from their fleet service jobs. Shuttle gave these plaintiffs a choice
of either a retirement package (enhanced medical benefits,
lifetime travel, etc.) or severance pay (15 weeks of pay).
Furloughed employees who were under fifty-five years old
received just the severance pay. Barone et al. claim they were
entitled to both the retirement package and the severance pay.
These plaintiffs claim that the denial of one of the two options
was made in violation of the ADEA. They have filed a motion
for summary judgment on this issue.
Shuttle has filed a cross-motion for summary judgment on
this issue. Shuttle’s main argument is that the Shuttle offered
enhanced benefit options to these older employees. Twenty-
one out of the twenty-two retirement eligible employees took
the retirement package, which Shuttle claims was far preferable
to the severance pay. Shuttle notes that retirement eligible
employees were not denied any benefits offered to other
23a
Appendix B
employees, but, on the other hand, were given the option of
taking the same exact thing (furlough and severance pay) ora
better option (retirement and benefits). Shuttle cites Hazen
Paper Co. v. Biggins, 113 S. Ct. 170] (1993), in which the
Supreme Court held that an employer does not violate the ADEA
when the factors wholly motivating the employer’s action are
something other than the employee’s age, “even if the
motivating factor is correlated with age, as pension status
typically is.” Jd. at 1706. According to defendants, plaintiffs
have failed to establish a prima facie case of age discrimination.
The Court concludes that the Barone et al. plaintiffs have
failed to present evidence creating a genuine issue as to whether
Shuttle’s treatment of them was more probably than not due to
age discrimination. Plaintiffs’ only evidence of age
discrimination in the retirement option matter is that retirement
eligible employees received a choice and younger employees
did not. For the reasons set forth above with respect to the
ADEA claims of all plaintiffs, and because Barone et al. have
presented no evidence that they were treated less favorably than
younger employees, the Court will deny the motion of Barone
et al. for summary judgment and grant the cross-motion of
Shuttle.
V. The Validity of the Single Carrier Proceeding
The main issue in USAir’s motion for summary judgment
and plaintiffs’ motion for summary judgment “on the issue of
the validity of the single carrier proceeding” is the validity of
the National Mediation Board’s single carrier proceeding under
the Railway Labor Act. Plaintiffs seek a declaration that the
proceeding is void and invalid as a matter of law.
24a
Appendix B
Plaintiffs claim that the single carrier proceeding before
the NMB was invalid because USAir invoked the jurisdiction
of the NMB. A decision in this Circuit, Railway Labor
Executives’ Ass'n v. National Mediation Bd., 29 F.3d 655 (D.C.
Cir.) (en banc), amended by 38 F.2d 1224 (1994), cert. denied,
115 S. Ct. 1392 (1995), invalidated the regulations of the NMB
that allowed carriers to bring labor dispute claims before the
NMB in the event of a merger (“the Merger Regulations”).
According to RLEA v. NMB, the NMB can hear a claim only if
it is brought by employees or unions.
The single carrier determination in the present case was
brought at the joint request of two unions—the Steelworkers
and [AM — and the carrier. On May 12, 1992, the IAM filed a
letter with the NMB, stating, “[t]he International Association of
Machinists and Aerospace Workers, AFL-CIO, (‘IAM’) joins
with USAir, Inc. (‘USAir’) in its letter of April 2, 1992, and
requests that the Board invoke its Merger Procedures and find
that USAir and Shuttle, Inc. (‘USAir Shuttle’) are a single carrier
for representational purposes under the Railway Labor Act.”
2nd Am. Compl. Ex. 8. In RLEA v. NMB, the carrier invoked
the NMB’s jurisdiction without being joined by any union.
The Court concludes that the NMB’s single carrier determination
was valid because the unions joined the petition to invoke the
NMB’s jurisdiction. Accordingly, the Court does not have
jurisdiction to review the single carrier determination.
Switchmen’s Union v. National Mediation Bd., 320 U.S. 297
(1943).
The next issue before the Court is whether, despite the loss
of union representation, plaintiffs were still protected by their
collective bargaining agreement. Plaintiffs argue that they were.
USA\ir argues that, under the RLA, loss of representation means
25a
Appendix B
loss of the collective bargaining agreement and any obligation
to maintain the status quo of the conditions contained in the
agreement. This case falls squarely within the reasoning of
International Bhd. of Teamsters vy. Texas Int'l Airlines, Inc.,
717 F.2d 157 (Sth Cir. 1983), in which the Court of Appeals
for the Fifth Circuit stated:
Given the Mediation Board’s undeniable sole
jurisdiction over representation matters, we infer
from the practical problems of divided jurisdiction
a congressional intention to allow that agency alone
to consider the post-merger problems that arise from
existing collective bargaining agreements. . . . After
a merger that makes the employee group hitherto
represented by the Union a minority of the craft, the
question of employee representation inevitably
arises. When this happens, resolution of that question
is the function cf the National Mediation Board.
Id. at 164. According to Texas Int'l Airlines, the issue of whether
plaintiffs were to be represented by a union was within the
exclusive, nonreviewable jurisdiction of the NMB. Although
the NMB lacks authority to enforce contracts between carriers
and unions, see Chicago & N.W. Ry. v. United Transp. Union,
402 U.S. 570 (1971), the NMB has exclusive authority to
govern “representational” disputes, including whether a majority
of the employees desire the union’s representation and whether
two related carriers will be treated as one for representation
purposes.
The danger that would arise if the Court were to accept
plaintiffs’ proposition that their Trump Shuttle-IAM collective
bargaining agreement remained in existence after the fleet service
i 26a
Appendix B
group voted against union representation is that the Court
would, in effect, recognize the union as the fleet service group’s
bargaining agent. A collective bargaining agreement “is not
merely a contract negotiated by an agent on behalf of a group
of principals, thereafter to be performed and enforced entirely
by the principals. It recognizes the Union as the employee’s
bargaining agent. It delegates to the Union the right to enforce
its provisions as the agent of the employees. By its terms the
agreement is a collective bargaining agreement not a series of
individual employment contracts. If the employees designate a
new collective bargaining representative, it succeeds to the status
of the former representative without alteration in the contract
terms. [citations] The agreement cannot survive, however,
without some bargaining agent.” /d. at 163-64.
The Court of Appeals for this Circuit has discussed Texas
Int'l Airlines in several cases, including Association of Flight
Attendants v. Delta Air Lines, Inc., 879 F.2d 906, 912-13 (D.C.
Cir. 1989), cert. denied, 494 U.S. 1065 (1990), and Association
of Flight Attendants v. USAir, Inc., 24 F.3d 1432, 1440 (D.C.
Cir. 1994). In Association of Flight Attendants v. United
Airlines, Inc., 71 F.3d 915, 918 (D.C. Cir. 1995), in the context
of discussing the Texas Int'l Airlines decision, the Court of
Appeals noted that, “of course, if the NMB were to subsequently
determine that the affected employees fell within a much broader
class or craft in which the union did not enjoy majority support,
the contractual relationship would necessarily terminate.” At
least some of the plaintiffs understood that if the combined
USAir/Shuttle fleet service group voted against union
representation, they would lose their union and their contract:
Question: What was your concern about no union winning
the election?
27a
Appendix B
Answer: Without a union, we have no contract.
DiSpigno Dep. at 186.
The Court concludes that, when plaintiffs were combined
with the much larger group of USAir fleet service workers and
the combined vote resulted in no union representation, plaintiffs’
representation and collective bargaining agreement necessarily
terminated. For the reasons set forth above and in the memoranda
and argument of USAir, the Court will grant USAir’s motion
for summary judgment on this issue, which was joined by
Shuttle, and deny the motion of plaintiffs.
Plaintiffs also bring an “anti-union animus” claim under
the RLA, § 2, Fourth. Section 2, Fourth prohibits carrier
interference with employee efforts to Organize unions. The
leading § 2, Fourth case in this Circuit is Air Line Pilots Ass'n
v. Eastern Air Lines, 863 F.2d 891 (D.C. Cir. 1988), cert.
dismissed, 501 U.S. 1283 (1991). According to that case, an
employer is limited to taking only measures that it would have
taken in the absence of any anti-union animus. /d. at 902.
“[UJnions should not be able to immunize their members from
market forces merely by engaging in conduct virtually certain
to provoke anti-union feeling.” Jd. at 902. In the present case,
plaintiffs Cite to a comment made by Terry Hallcom, Shuttle
President and a former Eastern pilot, to plaintiff James May
about how Hallcom might still be flying Eastern planes if the
union and Eastern had been able to reach a deal. May, who also
used to work for Eastern, agreed that Hallcom’s statement about
the Eastern situation was “quite possibl[y]” true. Plaintiffs also
cite to a memorandum written by Hallcom to a labor relations
employee at USAir in which Hallcom advocated a hard
bargaining position with the unions.
28a
Appendix B
Hallcom’s comment about Eastern does not show anti-
union animus. His comment also does not show a causal
connection between the alleged animus and plaintiffs’ furloughs.
The memorandum does not show anti-union animus, either. It
merely shows Hallcom’s position on bargaining with unions.
Hard bargaining, by itself, does not show anti-union animus.
Defendants have presented ample evidence that plaintiffs were
furloughed to save money; plaintiffs have presented no evidence
that their furloughs were caused by anti-union animus.
Accordingly, the Court will grant summary judgment for
defendants on this issue.
VI. State Law Claims
Plaintiffs bring numerous state law claims. The Court rejects
all of plaintiffs’ state law claims because such claims are clearly
preempted by the Railway Labor Act or ERISA. See 29 U.S.C.
§ 1144(1) (“the provisions of this subchapter . . . shall supersede
any aid all State laws insofar as they may now or hereafter
relate to any employee benefit plan described in section 1003(a)
of this title”); Ingersoll-Rand Co. v. McClendon, 498 U.S. 133
(1990).
VII. Motion of IAM
IAM is a defendant in Counts Seven (state law fraud),
Fifteen (breach of duty of fair representation), and Sixteen (Age
Discrimination in Employment Act). IAM contends that Count
Fifteen was filed after the limitation period and must be
dismissed as untimely. IAM argues that the state law claim is
preempted by the federal claim and must also be dismissed.
Finally, IAM claims that it is entitled to summary judgment on
the ADEA claim because there is no evidence that IAM caused
or attempted to cause the furloughs.
a ee en
29a
Appendix B
A. Breach of Duty of Fair Representation (Count 15)
Technically, the Railway Labor Act has no “duty of fair
representation” provision. In Steele v. Louisville & Nashville R.
Co., 323 U.S. 192, 199 (1944), however, as part of a series of
cases involving alleged racial discrimination by unions, the
Supreme Court recognized that the Railway Labor Act imposes
a duty on the union to represent all members of the bargaining
unit fairly. Under this doctrine, the union has a duty “to serve
the interests of all members without hostility or discrimination
toward any, to exercise its discretion with complete good faith
and honesty, and to avoid arbitrary conduct.” Vaca y. Sipes,
386 U.S. 171, 177 (1967) (quoted in Air Line Pilots Ass’n,
Int'l v. O'Neill, 499 U.S. 65, 76 (1991)).
IAM argues that this action must be dismissed against it
because plaintiffs filed this complaint outside the six month
limitation period. Plaintiffs do not challenge that the appropriate
limitation period is six months. That time period comes from
DelCostello v. International Bhd of Teamsters, 462 U.S. 15}.
155 (1983), in which the Supreme Court borrowed the six
month period from § 10(b) of the National Labor Relations
Act. The Fourth Circuit applied DelCostello to a case under the
Railway Labor Act in Triplett v. Brotherhood of Ry., Airline &
S.S. Clerks, 801 F.2d 700, 702 (4th Cir. 1986).
The limitation period began to run when plaintiffs knew
or-should have been aware of their injury. [AM argues that the
period began to run after the election, when plaintiffs lost their
union representation. The undisputed facts show the union had
no contact with plaintiffs after August I], 1992, other than
telling plaintiffs that it no longer represented them. Plaintiffs
were furloughed in March and November 1993, and filed this
lawsuit in May 1994.
30a
Appendix B
Plaintiffs’ only argument for tolling the limitation period
is that they believed the union would continue to represent them
after the vote to reject union representation. Although it was
clear that they were no longer represented by a union — IAM
sent them a letter telling them it no longer represented them;
plaintiffs stopped paying union dues to IAM; plaintiffs applied
for withdrawal cards and withdrew from the union, see, e.g.,
Pls." Answers to IAM’s Interrog. 2 — plaintiffs maintain that
IAM told them that it would continue to negotiate their
integration with USAjir regardless of the election results.
Plaintiffs claim that it was not until the second group of them
was furloughed on November 13, 1993, that they knew, or
should have known, that the IAM was not going to negotiate
the integration on their behalf. In support of this proposition,
plaintiffs cite the following facts:
(1) A letter dated April 23, 1992, from IAM General Vice
President John F. Peterpaul, which was posted at plaintiffs’
work stations. Peterpaul describes the background of the
single carrier proceeding (which had not yet been decided)
and then states that “[w]hen the National Mediation Board
approves the petition for the single employer, this will then
put us in a posture to sit down and negotiate a full
integration agreement with USAir containing the necessary
wages, hours and working conditions.” In the final
paragraph, Peterpaul tells the recipient of the letter, “[yJou
should also advise the Shuttle members that, no matter what
the final determination of the NMB, because USAir will
control the Shuttle operation and USAjir is within the
jurisdiction of District Lodge 141, in order to better service
our members, the Shuttle contract and our members will
be transferred into District 141 as soon as it is appropriate.”
Pls.’ Ex. 134.
3la
Appendix B
(2) An undated letier to Lou Schroeder from “A Group of
Flying Tiger Members” thanking Schroeder and the rest of
IAM District 141 for their help in an arbitration. The Flying
Tiger Members also thank IAM for allowing Airline
Coordinator Bill Scheri to testify for them. They conclude,
“We all hope that when the times and conditions are most
appropriate, the IAM will make a strong effort to reorganize
FedEx, and bring us under the banner of the IAM.” Pls.’
Ex. 136.
(3) An undated “Opinion and Award” in Seniority
Integration in the matter of the arbitration between Federal
Express Corporation, Federal Express Mechanics, and
former Flying Tiger Mechanics, Stock Clerks and Related
Employees. George Kavros, Assistant General Chairman.
IAM District Lodge 141, appeared for the Flying Tiger
Line Seniority Committee. The opinion notes the testimony
of Bill Scheri.
(4) The deposition testimony of Pierre Schrichte, a former
plaintiff in this action who has been voluntarily dismissed.
that he believed IAM “would do for us what they did for
the brother members at Flying Tiger.” Schrichte Dep. at
52.
The Court concludes that this evidence fails to raise a
genuine issue of material fact about whether IAM told plaintiffs
that it would continue to represent them even after it was voted
out. The April 23, 1992, letter does not discuss what IAM would
do if it lost the election, and nowhere states that IAM would
continue to negotiate for plaintiffs if it were no longer their
bargaining representative. The evidence about Flying Tiger and
the testimony of a voluntarily dismissed plaintiff that he thought
32a
Appendix B
IAM would do for him what it did for Flying Tiger simply
does not show that IAM misled plaintiffs into thinking that
IAM would continue to negotiate on plaintiffs’ behalf after it
lost the election. The undisputed evidence shows that plaintiffs
knew, shortly after the election, that IAM no longer represented
them. Having failed to present any evidence that IAM told
plaintiffs it would continue to negotiate on their behalf, the
Court finds as a matter of law that plaintiffs’ cause of action
with respect to IAM accrued as of the date they knew or should
have known that they were no longer represented by IAM,
August 1992, or, at the very latest, when the first group of
plaintiffs was furloughed in March 1993. Plaintiffs did not file
this lawsuit until May 9, 1994, well after the six month
limitation period. Accordingly, the Court will grant the motion
of IAM for summary judgment on Count 15.
B. State Law Fraud & Deceit (Count 7)
IAM argues that the state claim of fraud _and deceit is
preempted by the federal duty of fair representation under Vaca
v. Sipes, 386 U.S. 171, 177 & 188-95 (1967). In a Fourth
Circuit case with issues similar to the present case, the Court of
Appeals held that the federal duty of fair representation preempts
identical state law claims. See Nellis v. Air Line Pilots Ass'n, 15
F.3d 50, 51 (4th Cir.), cert. denied, 115 S. Ct. 56 (1994). At
oral argument, when asked to articulate how the state law claim
differs from the federal claim, counsel for plaintiffs stated:
“Because lying isn’t condoned under a collective bargaining
agreement. And if you do that, you are subject to state rules
concerning it. That’s the short answer, Your Honor.” Vol. III,
Tr. of Mot. Hrg., June 27, 1996, at 86. The Court finds no
merit in plaintiffs’ argument and agrees with IAM that plaintiffs’
state law claim is the same as the federal claim. Accordingly,
the state law claim must be dismissed.
33a
Appendix B
C. Age Discrimination (Count 16)
IAM argues that it is entitled to summary judgment on
plaintiffs’ age discrimination claim because there is no evidence
that the union caused or attempted to cause plaintiffs’ furloughs.
From August 1992, including through the March and November
1993 furloughs, plaintiffs were not represented by IAM. The
ADEA makes it “unlawful for a labor Organization . . . to cause
or attempt to cause an employer to discriminate against an
individual in violation of this section.” 29 U.S.C. § 623(c).
Because there is no evidence of record that IAM had anything
to do with plaintiffs’ furloughs, the Court will grant IAM’s
motion for summary judgment on Count 16.
D. Conspiracy
In its opposition memorandum. plaintiffs appear to bring
conspiracy claims against IAM that are not in the complaint.
Plaintiffs allege that the union acted against plaintiffs with anti-
union animus because IAM thought plaintiffs were “scabs.”
Section 2, Fourth of the Railway Labor Act, discussed above,
applies only to carriers. There is no cause of action for a union
that allegedly acted with anti-union animus. The Court also
notes that plaintiffs have failed to present any evidence that
IAM was part of a conspiracy against plaintiffs.
VIII. Motion of Citibank and Citicorp
Citicorp is a bank holding company. Citibank is a lender
and agent for a consortium of twenty-two financial institutions
which lent approximately $380 million to Donald Trump to
purchase Shuttle. Citibank is a shareholder of Shuttle. Plaintiffs
claim that John S. Reed, the Chief Operating Officer of Citicorp,
34a
Appendix B
and Wendy Silverstein, a vice president of Citibank and one of
the directors of Shuttle, were personally involved in the decision
to furlough plaintiffs.
The record overwhelmingly shows that Citicorp and
Citibank had no involvement in plaintiffs’ furloughs. Plaintiffs’
vast conspiracy theory has failed to materialize after discovery.
See Vol. Ill, Tr. of Mot. Hrg., June 27, 1996, at 4-46. Although
Citibank was actively involved in restructuring Trump’s loan
and creating Shuttle, Inc. in an attempt to recover some of the
money lent to Trump, it is clear that Citibank and Citicorp had
no role in managing the operations of the Shuttle. The evidence
shows that Citicorp and Citibank are not “carriers” under the
RLA, had no involvement in petitioning the NMB for the single
carrier determination, were not plaintiffs’ “employer,” had no
involvement in plaintiffs’ employee benefit plan, and had no
involvement in the decision to furlough plaintiffs. Because
plaintiffs have failed to raise any genuine issue of material fact
for trial with respect to Citicorp and Citibank’s involvement in
their employment or their furloughs, the Court will grant the
motion of Citicorp and Citibank for summary judgment on all
counts. :
Conclusion
For the reasons set forth above, the Court will grant the
motions for summary judgment of all defendants and deny the
motions of plaintiffs. An appropriate Order will issue.
NORMA HOLLOWAY JOHNSON
UNITED STATES DISTRICT JUDGE
35a
APPENDIX C — ORDER OF THE UNITED STATES
COURT OF APPEALS FOR THE DISTRICT OF
COLUMBIA CIRCUIT DENYING PETITION FOR
REHEARING FILED JANUARY 9, 1998
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT COURT OF COLUMBIA
No. 96-7233
September Term, 1997
94cv01019
James May, et. al..
Appellants
V.
Shuttle Inc., et al.
Appellees
BEFORE: Silberman, Williams and Rogers, Circuit Judges
ORDER
Upon consideration of appellants’ petition for rehearing
filed December 12. 1997, it is
ORDERED that the petition be denied.
36a
Appendix C
Per Curiam
FOR THE COURT:
Mark J. Langer, Clerk
BY: s/ Robert A. Bonner
Robert A. Bonner
Deputy Clerk
37a
APPENDIX D — ORDER OF THE UNITED STATES
COURT OF APPEALS FOR THE DISTRICT OF
COLUMBIA CIRCUIT DENYING SUGGESTION FOR
REHEARING IN BANC FILED JANUARY 9, 1998
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA COURT
No. 96-7233
September Term, 1997
94cv01019
James May, et al.,
Appellants
Shuttle, Inc., et al.,
Appellees
BEFORE: Edwards, Chief Judge; Wald, Silberman.
Williams, Ginsburg, Sentelle, Henderson, Randolph, Rogers,
Tatel and Garland, Circuit Judges.
ORDER
Upon consideration of appellants’ Suggestion for Rehearing
In Banc, and the absence of a request by any member of the
court for a vote, it is
ORDERED that the Suggestion be denied.
Per Curiam
38a
Appendix D
FOR THE COURT:
Mark J. Langer, Clerk
BY: s/ Robert A. Bonner
Robert A. Bonner
Deputy Clerk
Circuit Judges Randolph and Garland did not participate
in this matter.
39a
APPENDIX E — RELEVANT STATUTES
29 U.S.C. § 626
(f) Waiver
(1) An individual may not waive any right or claim under
this chapter unless the waiver is knowing and voluntary. Except
as provided in paragraph (2), a waiver may not be considered
knowing and voluntary unless at a minimum —
(A) the waiver is part of an agreement between the
individual and the employer that is written in a manner
calculated to be understood by such individual, or by the
average individual eligible to Participate;
(B) the waiver specifically refers to rights or claims
arising under this chapter;
(C) the individual does not waive rights or claims that
may arise after the date the waiver is executed;
(D) the individual waives rights or claims only in
exchange for consideration in addition to anything of value
to which the individual already is entitled:
(E) the individual is advised in writing to consult with
an attorney prior to executing the agreement;
(F) (i) the individual is given a period of at least 21
days within which to consider the agreement; or
(ii) if a waiver is requested in connection with an
exit incentive or other employment termination program
offered toa group or class of employees, the individual
40a
Appendix E
is given a period of at least 45 days within which to
consider the agreement;
(G) the agreement provides that for a period of at least
7 days following the execution of such agreement, the
individual may revoke the agreement, and the agreement
shall not become effective or enforceable until the
revocation period has expired;
(H) if a waiver is requested in connection with an exit
incentive or other employment terniination program offered
to a group or class of employees, the employer (at the
commencement of the period specified in subparagraph (F))
informs the individual in writing in a manner calculated to
be understood by the average individual eligible to
participate, as to —
(i) any class, unit, or group of individuals covered
by such program, any eligibility factors for such
program, and any time limits applicable to such program;
and
(ii) the job titles and ages of all individuals eligible
or selected for the program, and the ages of all
individuals in the same job classification or
organizational unit who are not eligible or selected for
the program.
(2) A waiver in settlement of a charge filed with the Equal
Employment Opportunity Commission, or an action filed in
court by the individual or the individual’s representative,
alleging age discrimination of a kind prohibited under section
623 or 633a of this title may not be considered knowing and
voluntary unless at a minimum —
4la
Appendix E
(A) subparagraphs (A) through (E) of Paragraph (1)
have been met; and
(B) the individual is given a reasonable period of time
within which to consider the settlement agreement.
(3) In any dispute that may arise over whether any of the
requirements, conditions, and circumstances set forth in
subparagraph (A), (B), (C), (D), (BE), (F), (G), or (H) of
Paragraph (1), or subparagraph (A) or (B) of Paragraph (2),
have been met, the party asserting the validity of a waiver shall
have the burden of proving in a court of competent jurisdiction
that a waiver was knowing and voluntary pursuant to paragraph
(1) or (2).
(4) No waiver agreement may affect the Commission's
rights and responsibilities to enforce this chapter. No waiver
may be used to justify interfering with the protected right of an
employee to file a charge or participate in an investigation or
proceeding conducted by the Commission.
(As amended Pub.L. 101-433, Title II, § 201, Oct. 16, 1990,
104 Stat. 983: Pub.L. 102-166, Title I, § 115, Nov. 21, 1991,
105 Stat. 1079.)
42a
Appendix E
29 U.S.C. § 1001, et seq.
§ 1140. Interference with protected rights
It shall be unlawful for any person to discharge, fine,
suspend, expel, discipline, or discriminate against a participant
or beneficiary for exercising any right to which he is entitled
under the provisions of an employee benefit plan, this
subchapter, section 1201 of this title, or the Welfare and Pension
Plans Disclosure Act [29 U.S.C.A. § 301 et seq.], or for the
purpose of interfering with the attainment of any right to which
such participant may become entitled under the plan, this
subchapter, or the Welfare and Pension Plans Disclosure Act. It
shall be unlawful for any person to discharge, fine, suspend,
expel, or discriminate against any person because he has given
information or has testified or is about to testify in any inquiry
or proceeding relating to this chapter or the Welfare and Pension
Plans Disclosure Act. The provisions of section 1132 of this
title shall be applicable in the enforcement of this section.
(Pub.L. 93-406, Title I, § 510, Sept. 2, 1974, 88 Stat. 895.)
43a
Appendix E
45 U.S.C. § 152
Ninth. Disputes as to identity of representatives; designation
by Mediation Board; secret elections. If any dispute shall arise
among a Carrier’s employees as to who are the representatives
of such employees designated and authorized in accordance with
the requirements of this Act, it shal] be the duty of the Mediation
Board, upon request of either party to the dispute, to investigate
such dispute and to certify to both parties, in writing, within
thirty days after the receipt of the invocation of its services, the
name or names of the individuals or Organizations that have
been designated and authorized to represent the employees
involved in the dispute, and certify the same to the carrier. Upon
receipt of such certification the carrier shall treat with the
representative so certified as the representative of the craft or
class for the purposes of this Act. In such an investigation, the
Mediation Board shall be authorized to take a secret ballot of
the employees involved, or to utilize any other appropriate
method of ascertaining the names of their duly designated and
authorized representatives in such manner as shall insure the
choice of representatives by the employees without interference,
influence, or coercion exercised by the carrier. In the conduct
of any election for the purposes herein indicated the Board shall
designate who may Participate in the election and establish the
rules to govern the election, or may appoint a committee of
three neutral persons who after hearing shall within ten days
designate the employees who may Participate in the election.
The Board shall have access to and have power to make copies
of the books and records of the Catriers to obtain and utilize
such information as may be deemed necessary by it to carry out
the purposes and provisions of this paragraph.
44a
Appendix E
45 U.S.C. $§ 155 AND 156
Sec. 155. Functions of Mediation Board
First. Disputes within jurisdiction of Mediation Board
The parties, or either party, to a dispute between an employee
or group of employees and a carrier may invoke the services of
the Mediation Board in any of the following cases:
(a) A dispute concerning changes in rates of pay, rules, or
working conditions not adjusted by the parties in conference.
(b) Any other dispute not referable to the National Railroad
Adjustment Board and not adjusted in conference between the
parties or where conferences are refused.
The Mediation Board may proffer its services in case any
labor emergency is found by it to exist at any time.
In either event the said Board shall promptly put itself in
communication with the parties to such controversy, and shall
use its best efforts, by mediation, to bring them to agreement.
If such efforts to bring about an amicable settlement through
mediation shall be unsuccessful, the said Board shall at once
endeavor as its final required action (except as provided in
paragraph third of this section and in section 160 of this title)
to induce the parties to submit their controversy to arbitration,
in accordance with the provisions of this chapter.
If arbitration at the request of the Board shail be refused by
one or both parties, the Board shall at once notify both parties
in writing that its mediatory efforts have failed and for thirty
45a
Appendix E
days thereafter, unless in the intervening period the parties agree
to arbitration, or an emergency board shall be created under
section 160 of this title, no change shall be made in the rates of
pay, rules, or working conditions or established practices in
effect prior to the time the dispute arose.
Second. Interpretation of agreement
In any case in which a controversy arises over the meaning
or the application of any agreement reached through mediation
under the provisions of this chapter, either party to the said
agreement, or both, may apply to the Mediation Board for an
interpretation of the meaning or application of such agreement.
The said Board shall upon receipt of such request notify the
Parties to the controversy, and after a hearing of both sides give
its interpretation within thirty days.
Third. Duties of Board with respect to arbitration of
disputes; arbitrators; acknowledgment of agreement; notice
to arbitrators; reconvening of arbitrators; filing contracts
with Board; custody of records and documents
The Mediation Board shall have the following duties with
respect to the arbitration of disputes under section 157 of this
title:
(a) On failure of the arbitrators named by the parties to
agree on the remaining arbitrator or arbitrators within the time
set by section 157 of this title, it shall be the duty of the
Mediation Board to name such remaining arbitrator or
arbitrators. It shall be the duty of the Board in naming such
arbitrator or arbitrators to appoint only those whom the Board
Shall deem wholly disinterested in the controversy to be
46a
Appendix E
arbitrated and impartial and without bias as between the parties
to such arbitration. Should, however, the Board name an
arbitrator or arbitrators not so disinterested and impartial, then,
upon proper investigation and presentation of the facts, the
Board shall promptly remove such arbitrator.
If an arbitrator named by the Mediation Board, in
accordance with the provisions of this chapter, shall be removed
by such Board as provided by this chapter, or if such an
arbitrator refuses or is unable to serve, it shall be the duty of the
Mediation Board, promptly, to select another arbitrator, in the
Same manner as provided in this chapter for an original
appointment by the Mediation Board.
(b) Any member of the Mediation Board is authorized to
take the acknowledgement of an agreement to arbitrate under
this chapter. When so acknowledged, or when acknowledged
by the parties before a notary public or the clerk of a district
court or a court of appeals of the United States, such agreement
to arbitrate shall be delivered to a member of said Board or
transmitted to said Board, to be filed in its office.
(c) When an agreement to arbitrate has been filed with the
Mediation Board, or with one of its members, as provided by
this section, and when the said Board has been furnished the
names of the arbitrators chosen by the parties to the controversy
it shall be the duty of the Board to cause a notice in writing to
be served upon said arbitrators, notifying them of their
appointment, requesting them to meet promptly to name the
remaining arbitrator or arbitrators necessary to complete the
Board of Arbitration, and advising them of the period within
which, as provided by the agreement to arbitrate, they are
empowered to name such arbitrator or arbitrators>
47a
Appendix E
(d) Either party to an arbitration desiring the reconvening
of a board of arbitration to Pass upon any controversy arising
Over the meaning or application of an award may so notify the
Mediation Board in writing, stating in such notice the question
Or questions to be submitted to such reconvened Board. The
Mediation Board shall thereupon promptly communicate with
the members of the Board of Arbitration, or a subcommittee of
such Board appointed for such purpose pursuant to a provision
in the agreement to arbitrate; and arrange for the reconvening
of said Board of Arbitration or subcommittee, and shall notify
the respective parties to the controversy of the time and place at
which the Board, or the subcommittee, will meet for hearings
upon the matters in controversy to be submitted to it. No
evidence other than that contained in the record filed with the
original award shall be received or considered by such
reconvened Board or subcommittee, except such evidence as
may be necessary to illustrate the interpretations Suggested by
the parties. If any member of the original Board is unable or
unwilling to serve on such reconvened Board or subcommittee
thereof, another arbitrator shall be named in the same manner
and with the same powers and duties as such original arbitrator.
(¢) Within sixty days after June 21, 1934, every carrier
Shall file with the Mediation Board a copy of each contract
with its employees in effect on the Ist day of April 1934,
covering rates of pay, rules, and working conditions. If no
contract with any craft or class of its employees has been entered
into, the carrier shall file with the Mediation Board a statement
of that fact, including also a statement of the rates of pay, rules,
and working conditions applicable in dealing with such craft
or class. When any new contract is executed or change is made
in an existing contract with any Class or craft of its employees
covering rates of pay, rules, or working conditions, or in those
48a
Appendix E
rates of pay, rules, and working conditions of employees not
covered by contract, the carrier shall file the same with the
Mediation Board within thirty days after such new contract or
change in existing contract has been executed or rates of pay,
rules, and working conditions have been made effective.
(f) The Mediation Board shall be the custodian of all papers
and documents heretofore filed with or transferred to the Board
of Mediation bearing upon the settlement, adjustment, or
determination of disputes between carriers and their employees
Or upon mediation or arbitration proceedings held under or
pursuant to the provisions of any Act of Congress in respect
thereto; and the President is authorized to designate a custodian
of the records and property of the Board of Mediation until the
transfer and delivery of such records to the Mediation Board
and to require the transfer and delivery to the Mediation Board
of any and all such papers and documents filed with it or in its
possession.
(May 20, 1926, ch. 347, Sec. 5, 44 Stat. 580; June 21, 1934,
ch. 691, Sec. 5, 48 Stat. 1195; June 25, 1948, ch. 646, Sec.
32(a), 62 Stat. 991; May 24, 1949, ch. 139, Sec. 127,
63 Stat. 107.)
Sec. 156. Procedure in changing rates of pay, rules, and
working conditions
Carriers and representatives of the employees shall give at
least thirty days’ written notice of an intended change in
agreements affecting rates of pay, rules, or working conditions,
and the time and place for the beginning of conference between
the representatives of the parties interested in such intended
changes shall be agreed upon within ten days after the receipt
49a
Appendix E
of said notice, and said time shall be within the thirty days
provided in the notice. In every case where such notice of
intended change has been given, or conferences are being held
with reference thereto, or the services of the Mediation Board
have been requested by either party, or said Board has proffered
its services, rates of pay, rules, or working conditions shall not
be altered by the carrier until the controversy has been finally
acted upon, as required by section 155 of this title, by the
Mediation Board, unless a period of ten days has elapsed after
termination of conferences without request for or proffer of the
services of the Mediation Board.
(May 20, 1926, ch. 347, Sec. 6, 44 Stat. 582; June 21, 1934,
ch. 691, Sec. 6, 48 Stat. 1197.)
50a
APPENDIX F — CONSTITUTION OF THE
UNITED STATES OF AMERICA
AMENDMENT V
No person shall be held to answer for a capital, or otherwise
infamous crime, unless on a presentment or indictment of a
Grand Jury, except in cases arising in the land or naval forces,
or in the Militia, when in actual service in time of-War or public
danger; nor shall any person be subject for the same offense to
be twice put in jeopardy of life or limb; nor shall be compelled
in any Criminal Case to be a witness against himself, nor be
deprived of life, liberty, or property, without due process of
law; nor shall private property be taken for public use, without
just compensation.
S5la
APPENDIX G — 14 NMB NO. 103 PROCEDURES FOR
HANDLING REPRESENTATION ISSUES RESULTING
FROM MERGERS, ACQUISITIONS OR
CONSOLIDATIONS IN THE
AIRLINE INDUSTRY
NATIONAL MEDIATION BOARD
WASHINGTON, D.C. 20572
14 NMB No. 103
FILE NO. C-5956
PROCEDURES
July 31, 1987
Procedures for Handling Representation Issues Resulting From
Mergers, Acquisitions or Consolidations in the Airline Industry
PREAMBLE
In the TWA/Ozark decision, 14 NMB 218 (1987), the Board
committed itself to establishing new procedures for handling
representation issues resulting from airline mergers, acquisitions
or consolidations. The board stated in TWA/Ozark that
“[e]xperience has shown that existing procedures are inadequate
to provide for a fair and orderly resolution of representation
matters put into flux by a merger.”
These procedures are issued pursuant to the Board’s
established authority Gnder Section 2, Ninth, of the Railway
Labor Act, 45 U.S.C. §152, Ninth.
The Board will utilize its traditional investigatory procedures
to determine the facts relevant to the many variations of mergers
52a
Appendix G
and acquisitions. So long as the form and purpose of such
mergers and acquisitions are not in derogation of employee
rights under Section 2, Ninth, the Board will not inhibit or
impede these developments or the full and thorough
consideration of the important questions involved. There are
factors that will make the Board’s role difficult, the competition
in the airline industry and the uncertainties of business planning.
The parties must recognize the NMB alone is vested with
the final decision-making authority over representation issues.
The merging or acquiring carriers are the initiators of the
contemplated change and it is their responsibility to keep the
NMB fully informed. These carriers will decide the nature and
scope of the change and the timing involved. The Board
recognizes that consistency in planning, however desirable, may
give way to business necessities. The Board’s efforts will be
advanced by prompt and complete information concerning
relevant developments and the reasons involved.
In most cases, the initiating carriers contemplate the creation
of a single carrier. This decision, wherm<communicated to the
Board in advance of a merger date, will invoke the Board's
rules on single carrier status with implications concerning
representation rights. The Board has had experience where
carriers have merged or attempted to merge and presented the
Board with representation issues at a date subsequent to the
merger. The difficulties involved with post-merger representation
questions are reflected in the Board's decisions.
Mergers that contemplate separate carrier status do not
involve the same rules and, in fact, may affect representation
rights. Accordingly, the NMB will require information on a
continuing basis related to such operations to determine whether
the separate status continues in fact.
53a
Appendix G
In summary, the creation, change, and the termination of
representation rights are within the province of the Board under
the Railway Labor Act. At the same time the airline industry's
proper growth and development as an essential component of
our Nation’s valuable transportation resources should be
advanced. There is no conflict in these objectives and the Board
intends to carry out its responsibilities through these procedures
to afford the industry a greater measure of predictability in this
important area.
The Board’s principal reliance in the development of these
merger procedures has been on the generous response of the
industry to a request for guidance in developing sound,
objective procedures for dealing with merger-related
representation issues.” These findings are based on a
comprehensive review of the carriers’ and Organizations’
submissions, prior Board decisions and experience in recent
mergers.
SUBPART A — GENERAL PROVISIONS
1) DEFINITIONS
a) The term “merger” as used herein shall mean a
consolidation, merger, purchase, lease operating contract
Or acquisition of control as provided by 49 U.S.C.
§1378(b).
* Pursuant to the NOTICE in this matter, 14 NMB 249 (1987),
the Board established an industry-wide proceeding. Participants were
provided an opportunity to submit Suggested procedures and then
to comment on the procedures suggested by other participants.
Eleven proposals and eight reply comments were received by the
Board. A broad diversity of views was represented in these
submissions.
AA Si ARR te ts, ei A ARERR Oa
54a
Appendix G
b) The term “carrier” means a common carrier by air as
_ defined in Title II, Section 201, of the Railway Labor
Act, 45 U.S.C. §181.
c) The term “organization” means a labor organization and
representative as provided by Section I, Sixth, 45 U.S.C.
§151, Sixth, and Section 2, Ninth, 45 U.S.C. §152,
Ninth of the Act.
2) APPLICABILITY OF THESE PROCEDURES
These procedures, effective August 1, 1987, shall apply to
all organizations and air carriers which intend to engage in or
may be affected by a merger which has not, as of that date,
received final approval by the United States Department of
Transportation.
SUBPART B — SINGLE
TRANSPORTATION SYSTEM
1) FILINGS WITH NMB
The carrier will notify the NMB in writing at the same time
it files with the Department of Transportation for approval of
its intent to merge. The submission to the NMB shall include a
complete copy of the carrier's merger application to the
Department of Transportation.
2) MERGER INVESTIGATION
The NMB’s investigation shall take the form required by
the circumstances such as: interrogatories; document requests,
on-site investigations; or hearings. The Board’s merger
55a
~ Appendix G
investigation will determine whether the carriers will operate as
a single transportation system. Applicable decisions regarding
such investigations include but are not limited to American/
AirCal, 14 NMB 379 (1987); Delta/Western, 14 NMB 291
(1987); TWA/Ozark, supra.; Northwest, 13 NMB 399 (1986);
and Republic/Hughes Airwest, 8 NMB 49 (1980).
3) MERGER DECISION: PROSPECTIVE EFFECT
a) After investigation the Board will issue a decision
concerning the status of the certifications on the merged
carrier. Findings concerning the craft or class lines at
the merged carrier may also be appropriate. The Board
will endeavor to issue its decision on or before the time
of the operational merger.
b) Where the Board finds that the certifications on the
acquired carrier should terminate, such termination will
be effective on or after the date of the Board decision.
4) REPRESENTATION APPLICATIONS FROM
INCUMBENT LABOR ORGANIZATIONS
a) Incumbent organizations on the affected carriers will be
allowed, absent unusual or extraordinary circumstances,
sixty days from the above-described decision to file a
representation application supported by a showing of
interest of no less than 35% of the combined craft or
class.
b) Evidence of showing of interest from incumbent
organizations on the affected carriers may be comprised
of, wholly or in part, authorization cards, dues check-
56a
n
Appendix G
off authorizations or seniority lists with a carrier involved
in the merger.
c) All other representation applications will be subject to
the standard showing of interest requirements contained
in the Board’s Regulations at 29 CFR §§ 1206.2 and
1206.5.
d) Failure to meet the above described 35% showing of
interest requirement by an incumbent organization will
result in dismissal. Such dismissal or withdrawal of an
application will not act to impose the one year election
bar contained in the Board’s Regulations at 29 CFR
§ 1206.4.
5) ELECTIONS
Elections authorized pursuant to Subpart B will be given
priority and progressed expeditiously through the balloting
process and the final representation decision.
6) SUBSEQUENT REPORTING TO NMB
The Board may require carriers and organizations to inform
it in writing of post-merger developments.
SUBPART C — SEPARATE
TRANSPORTATION SYSTEMS
1) FILINGS WITH NMB
The carrier will notify the NMB in writing at the same time
it files with the Department of Transportation for approval of
57a
Appendix G
its intent to merge. The submission to the NMB shall include a
complete copy of the carrier’s merger application to the
Department of Transportation.
2) NMB INQUIRY
The Board’s inquiry will request from the carriers and
organizations appropriate information concerning the separate
transportation systems.
3) CONTINUING DUTY TO REPORT
The Board may require carriers and organizations to inform
it in writing of subsequent developments.
SUBPART D — MERGER OF OPERATIONS
AT A LATER DATE
1) FILINGS WITH NMB
Carriers maintaining separate transportation systems, which
subsequently seek to complete a merger of operations, shall
notify the NMB at the earliest practicable date prior to the
operational merger.
2) APPLICABILITY OF SUBPART B
Such cases shall be handled pursuant to the procedures
established herein dealing with single carrier status at Subpart
B, paragraphs 1-6.
FOCI tee eee
58a
Appendix G
SUBPART E — SUPPLEMENTARY MATTERS
1) CARRIER INVOCATIONS
Consistent with TWA/Ozark, supra., at 14 NMB 241-242,
carriers involved in a merger can invoke the Board’s services
for a determinatior of the post-merger status of any NMB
certifications.
2) COMMENTS FROM INCUMBENT ORGANIZATIONS
Incumbent organizations on the affected carriers may make
relevant comments to the NMB in writing concerning the
Carriers’ submissions and any other pertinent matters.
3) DISTRIBUTION OF INFORMATION
Carriers and organizations will provide other participants
with copies of each submission to the NMB by verified
certificate of simultaneous service signed by counsel.
4) PUBLIC INFORMATION
The information submitted to the Board by carriers and
organizations will be public information.
5) ADMINISTRATIVE FILE NUMBERS
a) Representation applications filed by incumbent
organizations pursuant to Subpart B, paragraph 4, will
be assigned a file number in the MR-series.
59a
Appendix G
b) Carrier invocations of the Board’s services pursuant to
Subpart E, paragraph 1, will be assigned a file number
in the MT-series.
c) All other submissions under these procedures will be
assigned a file number in the M-series.
SUBPART F — EFFECT OF PROCEDURES
1) NO IMPACT OF PROCEDURES ON VOLUNTARY
RECOGNITION AGREEMENTS OR PROGRESSION
OF GRIEVANCES
a) These procedures are not a bar to the effectuation of
voluntary recognitions otherwise permissible under the
Act. See, TWA/Ozark, 14 NMB 218 at 234 (1987); and
Republic Airlines, 6 NMB 817 (1979).
b) These procedures shall not act to inhibit the processing
of pending grievances otherwise permissible under the
Act. See, Delta/Western, 14 NMB 291 at 302 (1987).
2) NO CHANGE IN EXISTING RIGHTS UNDER THE
RAILWAY LABOR ACT
Existing rights under the Railway Labor Act shall not be
enhanced or diminished by these procedures. The Board
recognizes that when a dispute involves the interpretation or
application of an airline collective bargaining agreement, Section
204 of the Railway Labor Act, 45 U.S.C. §184, provides that it
be referred to an appropriate adjustment board for resolution
through arbitration.
60a
Appendix G
By direction of the NATIONAL MEDIATION BOARD.
s/ Charles R. Barnes
Charles R. Barnes
Executive Director
Copies to:
Carriers and Labor Organizations in the Airline Industry.
CRB/dss
6la
APPENDIX H — LETTER FROM MORGAN, LEWIS &
BOCKIUS TO NATIONAL MEDIATION BOARD
DATED APRIL 2, 1992
Morgan, Lewis & Bockius
COUNSELORS AT LAw
1800 M Street, N.W.
WASHINGTON, D.C. 20036
TELEPHONE (202) 467-7000
Fax (202) 467-7176
PHILADELPHIA WASHINGTON
Los ANGELES New York
MIAMI HARRISBURG
LONDON SAN DiEGo
FRANKFURT BRUSSELS
Tokyo
THOMAS E. REINeErT, Jr.
DiaL Direct (202) 467-7084
April 2, 1992
VIA HAND DELIVERY
Mr. William A. Gill, Jr.
Executive Director
National Mediation Board
1425 K Street, N.W.
Washington, D.C. 20572
Re: USAir — Trump Shuttle Transaction
Dear Mr. Gill:
This notice is submitted by USAir, Inc. (“USAir’”) and its
holding company parent USAir Group, Inc. (“Group”) pursuant
62a
Appendix H
in Subparts A, B, and E of the Procedures for Handling
Representation Issues Resulting from Mergers, Acquisitions or
Consolidations in the Airline Industry, 14 NMB 388 (1987)
(“Merger Procedures’’).
Group and Citibank, N.A. (“Citibank”), a major creditor
of the Trump Shuttle, have entered an agreement in principle
that once consummated will appoint USAir as the manager of
the operations of the Trump Shuttle. Under a final management
agreement, which will have a ten year duration, USAir will
assume day-to-day operationatcontrol of the Shuttle, including
labor relations. While USAir conducts operations under the
mar ®gement agreement, Group will hold a non-voting equity
interest in the Shuttle corporation. Group will also have an
option to acquire the Shuttle after four and one half years.
As part of the transaction leading to USAir’s management
of the Shuttle, Trump Shuttle, Inc. will incorporate and then
merge into a new corporate entity, Shuttle, Inc. The Department
of Transportation has approved the transfer of section 401
certificate authority form Trump Shuttle, Inc. to Shuttle, Inc.,
based in part on the planned USAir management of the Shuttle
Operation. Trump Shuttle, Inc., DOT Order 92-3-57 (March
27, 1992). A copy of the DOT’s decision is appended for the
Board's information.
USAir and Group anticipate that the closing on the
management agreement and related corporate agreements with
Citibank and the other creditors of Trump Shuttle will occur on
April 10, 1992. USAir then will assume operational control of
the Shuttle on April 12, 1992. Under the management agreement,
USAir will operate the Shuttle as a USAir service held out to
the public as “the USAir Shuttle.”
——ee
63a
Appendix H
It is USAir’s and Group’s intent that, when USAir assumes
operational control of the Trump Shuttle on April 12, 1992,
USAir and the Shuttle will be managed as a single carrier for
purposes of the Railway Labor Act. Therefore, USAir and
Group invoke the Board’s jurisdiction under the Merger
Procedures to confirm that USAir and the Shuttle will constitute
a single carrier for purposes of Railway Labor Act representation.
USAir and Group request that the Board terminate any
existing certifications on the Trump Shuttle, based upon USAir’s
April 12, 1992 assumption of operational control of the Shuttle.
It is USAir’s and Group’s information that there are only two
existing certifications on the Trump Shuttle:
NMB R-5938
Mechanics and Related Employees
Aircraft Mechanics Fraternal Association
NMB R-6105
Dispatchers
Transport Workers Union
Trump Shuttle, 17 NMB 196 (1990); Trump Shuttle, 19 NMB
222 (1992). In addition, the following voluntary recognitions
are currently applicable on the Trump Shuttle:
Pilots
Air Line Pilots Association
Flight Attendants
Transport Workers Union
Fleet Service Employees
International Association of Machinists
64a
Appendix H
See Air Line Pilots Ass'n v. Eastern Air Lines, 701 F. Supp.
865, 869 (D.D.C. 1988). Pursuant to the Merger Procedures,
USAir and Group also request that the Board find that, as a
result of the assumpticn of operational control of the Trump
Shuttle by USAir, employees in these crafts or classes on the
shuttle are covered by the existing certifications or voluntary
recognitions, if any, on USAjir.
USAir and Group recognize that, given the timing of this
filing, the Board will not be able to complete its investigation
and issue a decision concerning this request for a single carrier
determination until after the April 12 effective date of the
management agreement. Until the Board issues a decision on
this request, USAir intends to continue to deal with the unions
that represent Trump employees and to forego any integration
of the USAir and Trump workforces.
USAir and Group are prepared to assist the Board in the
investigation of this transaction under the Board’s Merger
Procedures.
Respectfully submitted,
s/ Thomas E. Reinert, Jr.
Thomas E. Reinert, Jr.
Counsel to USAir and
USAir Group, Inc.
Cc?
James T. Lloyd, Esq. - USAir Group, Inc.
John P. Frestel, Jr. - USAir, Inc.
Betty Leach Hawkins, Esq. - USAir, Inc.
Gordon Linkon - Shuttle, Inc.
TN TMNT Te |
65a
Appendix H
Terry Hallcom - Trump Shuttle, Inc.
Wendy A. Silverstein - Citibank, N.A.
J. Randolph Babbitt - Air Line Pilots Association
Dee Maki - Association of Flight Attendants
John J. Kerrigan - Transport Workers Union
George J. Kourpias - International Association of Machinists
O.V. Delle-Femine - Aircraft Mechanics Fraternal
Association
66a
APPENDIX I — INTEROFFICE MEMORANDUM
FROM TERRY V. HALLCOM
DATED OCTOBER 5, 1992
USAIR SHUTTLE Interoffice Memorandum
To: All Employees
From: Terry V. Hallcom
Date: October 5, 1992
Subject: SINGLE CARRIER QUESTIONS
As you by now know, the IAM has this morning
commenced a job action against USAir. For your general
information — all employees that work for the Shuttle are
Shuttle employees and not employees of USAir. The recent
single carrier finding by the NMB addressed only representation
— which labor union represents Shuttle employees — this did
not impact your status as employees of the Shuttle, governed
by the various contracts and working conditions.
Please don’t be misled by those who do not work for the
Shuttle. USAir may have labor problems; however, do not
transpose those problems to the Shuttle! Their problems should
be viewed and treated like any other carrier’s problem. Our
only relationship to USAir is that we have a management
agreement with them. We maintain our own FAA and DOT
certificates under the name of Shuttle, Inc. d/b/a USAir Shuttle
and are owned by a consortium of banks.
Again, I reiterate and reemphasize — we are all Shuttle
employees — not USAir. Do not misconstrue their problems to
be our problems!
—————ee eae
67a
Appendix 1
Restrain from letting rumors cause you apprehension! Get
the facts. If you are confused or feel you are being misled please
call your supervisor or this office — we will try to answer or
explain any questions you may have.
Keep up the good work and thank you for your support
and cooperation.
TVH:prt
68a
APPENDIX J — CONTRACT SECTION 13,
JOB SECURITY
13. Job Security
In recognition of the union’s and employee’s cooperation
and contribution to the improvement of work practices and
implementation of efficient methods of job assignments enabling
individuals to perform tasks for which they are qualified without
regard to previous-traditional-job classification limitations
within the I.A.M. jurisdiction of work, as further elaborated in
paragraph | and 2 above, and because this cooperation permits
the cross-utilization of personnel within the unit, and provides
the Company with the flexibility to determine the identity and
extent of the work that will be performed by the employees
covered by this Agreement, the Trump Shuttle agrees as follows:
Each of the former Eastern employees reporting to work
on the first day of the Shuttle operations, in accordance with
their individual report to work verification, will be granted that
during the life of this Agreement he or she will not be subject
to a layoff for lack of work and/or a reduction in their assigned
job classification and rate of pay. Such individuals will be
identified by name and employee number, and classification, as
set forth in Attachment 2 to this Agreement.
This guarantee of employment is applicable only to the
individuals described above and does not expressly or by
implication establish a fixed level of employment within a
classification or within the unit or limit the Company’s right to
take disciplinary action for just cause.
69a
APPENDIX K — NATIONAL MEDIATION BOARD
NOTICE OF ELECTION AND SAMPLE BALLOT
[LOGO]
UNITED STATES OF AMERICA
NATIONAL MEDIATION BOARD
NOTICE OF ELECTION
CR-6452 Washington, D.C.
(NMB Case No.) (Location)
TO ALL CONCERNED:
This will notify you of an election presently being held
under the Railway Labor Act involving the following:
FLEET SERVICE EMPLOYEES
OF
USAIR, INC.
SOUGHT TO BE REPRESENTED BY:
UNITED STEELWORKERS OF AMERICA
AND
INTERNATIONAL ASSOCIATION OF MACHINISTS
& AEROSPACE WORKERS
AND PRESENTLY
UNREPRESENTED
This election is being conducted by Mediator
s/ F. M. Landers-Crawford (F. M. Landers-Crawford)
(Signature) (Print Name)
70a
Appendix K
Section 2, Fourth, of the Railway Labor Act,
provides that “The majority of any craft or class of
employees shall have the right to determine who
shall be the representative of the craft or class for
the purposes of the Act.”
The Railway Labor Act further provides that
elections shall be free from interference, influence
or coercion, and that it is unlawful for a carrier to
interfere with the organization of its employees.
Violations should be reported immediately to the
Board Representative in care of the NATIONAL
MEDIATION BOARD, Washington, D.C. 20572.
DATE OF MAILING OF BALLOTS Friday, July
10, 1992
DATE AND PLACE OF COUNT OF BALLOTS:
10:00 A.M.
EDT Tuesday, August 11, 1992
Washington, D.C.
THIS IS THE ONLY OFFICIAL NOTICE OF THE
ELECTION AND MUST NOT BE DEFACED BY ANYONE.
Tla
Appendix K
SAMPLE
[LOGO]
UNITED STATES OF AMERICA
OFFICIAL BALLOT OF
NATIONAL MEDIATION BOARD
CASE NO. CR-6452
Involving
FLEET SERVICE EMPLOYEES
Employees of
USAIR, INC.
July 10, 1992 to August 11, 1992
A dispute exists among the above named craft or class of
employees as to who are the representatives of such employees
designated and authorized in accordance with the requirements
of the Railway Labor Act. The National Mediation Board is
taking a SECRET BALLOT in order to ascertain and to certify
the name or names of organizations or individuals designated
and authorized for purposes of the Rail Labor Act.
INSTRUCTIONS FOR VOTING
No employee is required to vote. If less than a
majority of the employees cast valid ballots, no
representative will be certified. Should a majority
vote to be represented, the representative which
receives a majority of the votes cast will be certified.
72a
Appendix K
If you desire to be represented by: UNITED STEELWORKERS
OF AMERICA
Mark an “X” in this square...................
If you desire to be represented by : INTERNATIONAL
ASSOCIATION OF MACHINiSTS & AEROSPACE
WORKERS
Mark an “X” in this square.................0. |
If you desire to be represented by:
ANY OTHER ORGANIZATION OR INDIVIDUAL |
Write name of such organization or individual on the line below:
AND
Mark an “X” in this square....................
NOTICE
1. This is a SECRET BALLOT. DO NOT SIGN YOUR
NAME.
to
Marks in more than one square make ballot void.
3. Do not cut, mutilate, or otherwise spoil this ballot. If you
should accidentally do so, you may return the spoiled ballot
at once to the Mediator and obtain a new one.
73a
Appendix K
UNITED STATES OF AMERICA
NATIONA! MEDIATION BOARD
BALLOTING
ELIGIBILITY
SUPERVISION
OF ELECTION
RULES OF ELECTION
In the event the election is conducted by
United States Mail, official secret ballots
will be mailed by the Mediator to the
eligible voters. SHOULD ANY ELIGIBLE
VOTER FAIL TO RECEIVE A BALLOT
WITHIN A REASONABLE TIME AFTER
THE DATE OF THE MAILING OF THE
BALLOTS, SUCH VOTER MAY
REQUEST A DUPLICATE BALLOT
FROM THE NATIONAL MEDIATION
BOARD. This request must be signed by
the eligible individual and forwarded to
THE NATIONAL MEDIATION BOARD.
WASHINGTON, D.C. 20572. NO
REQUEST WILL BE HONORED IF
RECEIVED AFTER Thursday, August 6,
1992.
All employees in the craft(s) or class(es)
referred to in this NOTICE OF ELECTION
who appear on the payroll of the carrier
during the designated period and who retain
an employment relationship with the carrier
on the date the vote is taken are eligible to
vote.
Only the Mediator or Board Representative
and an individual voter will be allowed to
handle the ballot in order to maintain its
secrecy. The Mediator will interpret and
EL
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