Opposition Brief — May v. Shuttle, Inc.

No. 97-1674 ) wal

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1997

JAMES MAY, ef ai.,

Petitioners,

Vv.

SHUTTLE, INC., ef ai.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF OF USAIR, INC. AND

SHUTTLE, INC. IN OPPOSITION

BETTY LEACH HAWKINS JEFFREY I. KOHN

US AIRWAYS, INC. (Counsel of Record)

2345 Crystal Drive O'MELVENY & MYERS LLP

8th Floor Citicorp Center

Crystal Park Four 153 E. 53rd Street

Arlington, VA New York, NY 10022

(703) 872-5216 (212) 326-2000

Counsel for Respondents

USAir, Inc. and Shuttle, Inc.

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QUESTIONS PRESENTED FOR REVIEW

1. Whether the courts below, applying the

Railway Labor Act, properly declined to disturb the National

Mediation Board’s representational determination resulting

in Petitioners’ loss of union representation and properly

interpreted such loss of representation as terminating any

Status quo obligation to continue prior collective bargaining

agreement terms.

he Whether state law claims arising from Peti-

tioners’ loss of union representation and loss of collective

bargaining rights, including employee benefit provisions, are

preempted by the Railway Labor Act and the Employee

Retirement Income Security Act.

3. Whether an employee’s claim for retirement

benefits and severance pay presents any issue under the valid

written release requirements of the Older Workers Benefit

Protection Act, 29 U.S.C. § 626, where the employer did

not seek any waiver of severance claims from the employee

upon retirement.

4. Whether, in applying the standards of Texas

Dep’t of Community Affairs v. Burdine and McDonnell

Douglas Corp. v. Green to a summary judgment motion

against claims under the Age Discrimination in Employment

Act and the Employee Retirement Income Security Act

relating to a corporate transaction, the court may give weight

to the business justification for the transaction.

PARTIES TO THE PROCEEDING

Pursuant to Rule 29.6 of the Rules of this Court,

Respondents state the following: Effective February 1997,

Respondent USAir, Inc. changed its corporate name to US

Airways, Inc. US Airways, Inc. is a wholly-owned subsid-

iary of US Airways Group, Inc., a publicly-traded company,

which prior to February 1997 was named USAir Group, Inc.

For purposes of simplicity and continuity with the record

below, the name USAijir is used in this brief.

On December 30, 1997, Respondent Shuttle, Inc. was

purchased by and is operated as a wholly-owned subsidiary

of US Airways Group, Inc.

All other parties appearing before this Court and the

courts below are identified in the Petitioners’ Petition for

Writ of Certiorari. Ae,

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ...... i

PARTIES TO THE PROCEEDING ........... ii

Sue Se At ewe. ; ili

Senan ee Pes fo oh Se ee vi

eI 5 a we ]

STATEMENT OF JURISDICTION ........... 2

eee ee nD oe ee ek Se cs 2

PEM SmeeneTE AMY TE CADE Sie Ske. 3

A. The USAir-Shuttle Transaction ......... 4

B. The NMB Proceedings ..... pee, 6

C. Changes in Petitioners’ Employment Status .. 9

D. The District Court Decision........... 11

iv

TABLE OF CONTENTS (continued)

REASONS FOR DENYING THE WRIT ........

I

II

Petitioners’ Railway Labor Act and Fifth

Amendment Challenge to Their Loss of Union

Representation and the Resulting Loss of

Collective Bargaining Agreement Rights Seeks

to Invalidate a National Mediation Board Rep-

resentational Determination and Present a Fifth

Amendment Issue Not Developed Below ...

1. No Constitutional Issue is Presented .. .

2. Petitioners’ Challenge to Loss of Union

err ery a eee te a

3. Petitioners’ Challenge to Loss of Union

CNS as So ae EWES ee Se

4. Petitioners’ Challenge to Findings of

PE iss CURR 6 BN

This Case Is Not an Appropriate Vehicle for

Reviewing Preemption under the Railway

Labor Act or the Employee Retirement Income

PO BE SS CW ew os SR

12

12

13

15

17

I tS SO SR CN Ae, POOR APs LEN,

TABLE OF CONTENTS (continued)

Page

IfI Petitioners Present an Issue under the Older

Workers Benefit Protection Act, 29 U.S.C.

Section 626(f), and Oubre v. Entergy Opera-

tions, Inc., Concerning the Validity of an Al-

leged Waiver, Which Also Was Not Developed

cu EES POE OU GACH OLB AiG Mia g ue oon ae 20

IV Petitioners’ Assertion That the Courts below

Applied a Heightened Burden of Proof Stan-

dard Newly Adopted by the Lower Court Is

Unsupported and Presents No Issue under the

Age Discrimination in Employment Act or the

Employee Retirement Income Security Act. . 22

AMOR 6 cash eteek kel 24

vi

TABLE OF AUTHORITIES

Cases Page

—

Adkins v. General Motors Corporation,

946 F.2d 1201 (6th Cir. 1991),

cert. denied, 504 U.S. 908 (1992) ........... 19

Alessi v. Raybestos-Manhattan, Inc..,

Ok a ee EE als Gas Xk om ote ae 18

Alitalia Airlines, 10 NMB 331 (1983) .......... 14

Andes v. Ford Motor Co.,

FOF. eee Gee Si ke ie ea ees 23

Association of Flight Attendants v. USAir, Inc.,

24 F.58 14668 GC A 1D) ik ha 15-16

Berger v. Edgewater Steel Co.,

911 F.2d 911 (3d Cir. 1990),

cert. denied, 499 U.S. 920 (1991) ........... 22

Brotherhood of Ry. and S.S. Clerks v.

Association for the Benefit of Non-Contract Employees,

ee ae Oe 3 ho oo oe We 8b wena ees 14-15

Cuddy v. Carmen,

Cs Fae Se D.C. 1568) oii. cs wiles 23

Detroit & Toledo Shore Line Co. v.

United Transp. Union,

PE ks ba te bbe we we le 17

a Se See WSL ee ade in dee eee Cee et eer eee ee ee te weed ‘i

Vii

TABLE OF AUTHORITIES (continued)

Page

General Comm. of Adjustment of Bhd. of

Locomotive Eng’rs v. Missouri K-T-R. Co.,

Pe ee ee ne 6a 6 6 A ke we wk 15

Hawaiian Airlines, Inc. v. Norris,

Be ee RE eM OK 3 Se Ue Mil ace 18

Hazen Paper Co. v. Biggins,

ee Bie Te CSE 08k PS ek Saco cas 5 ee

International Bhd. of Teamsters v. Brotherhood

of Ry., Airline and S.S. Clerks,

402 F.2d 196 (D.C. Cir.),

cert. denied, 393 U.S. 848 (1968) ........... 14

International Ass’n of Machinists v. Northeast Airlines,

Inc

536 F.2d 975 (1st Cir.),

cert. denied, 429 U.S. 961 (1976)........... 16

International Bhd. of Teamsters v. Texas Int’l Airlines,

Inc.,

Die Fae bot Gee CO Oe bo sk Ske kids 15

Jet Am. Airlines, Inc., 13 NMB 96 (1986) ....... 14

McDonnell Douglas Corp. v. Green,

ORE Wes: TORRID ov EOUlis Beane. Soom 22

Viii

TABLE OF AUTHORITIES (continued)

Page

Oubre v. Entergy Operations, Inc..,

LB od PE a ee ROD: alt ne Nee 20-22

O’Connor v. Consolidated Coin Caterers Corp..,

SET U.S. Be Cio a ei eee a Vis 23

Perry v. United States,

Re Shas ENE i A ee CRA Oe 8S 13

Pittsburgh & Lake Erie R.R. Co. v. Railway Labor Exec-

utives’ Ass’n,

SAL EF. Me ENO ew 6 ER OS PRLS SS 17

Railroad Merger Procedures, 17 NMB 44 (1989) ... 14

Railway Labor Executives’ Ass’n v. National Mediation

Bd.,

29 F.3d 655 (D.C. Cir. 1994) (en banc),

cert. denied, 514 U.S. 1032 (1995) ........ 14-15

Russell v. National Mediation Bd. ,

714 F.2d 1332 (Sth Cir. 1983),

cert, denied, 467 U.S. 1204 (1984) .......... 14

Switchmen’s Union v. National Mediation Bd. ,

Pe Res ee ae se a ke ae ew aac 15

Texas Dep’t of Community Affairs v. Burdine,

See Se: SEE oo Sw ees wae eee 22-23

a a

$064 Wt C4 ee '_ ee me Cob ‘SS etek” ~

TABLE OF AUTHORITIES (continued)

Page

USAir, Inc., 15 NMB 369 (1988).............. 3

USAir, inc., 20 NMB 162 (1993).......... 4,8, 42

USAir/Shuttle, 19 NMB 388 (1992) ......... 8, 13

Varity Corp. v. Howe, 516 U.S. 489 (1996) ...... 20

Western Airlines Inc. v. Int’l Bhd. of Teamsters,

Te itis BOE CIMT vob os Cee oe a, 15

Constitution and Statutes

Employee Retirement Income Security Act of 1974,

29 U.S.C. §§ 1001, et seg... . 3, 11, 18, 20, 22-23

Age Discrimination in Employment Act,

29 U.S.C. § 621, et seg. (1994) ..... 2, 3, 11, 21-23

Older Workers Benefit Protection Act,

ee I ee es ya S 20-22

Railway Labor Act,

le Beall Ee,” ce passim

United States Constitution, Sth amend. .... > ie ey

Workers Adjustment Retraining and Notification

Act, 29 U.S.C. § 2101, et seg. (1994) .... 3,4, 11-12

TABLE OF AUTHORITIES (continued)

Miscellaneous

Procedures for Handling Representation Issues Resulting

from Mergers, Acquisitions or Consolidations in the Air-

line Industry, 14 NMB 388 (1987) ............. 7

No. 97-1674

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1997

JAMES MAY, et ai.,

Petitioners,

Vv.

SHUTTLE, INC., ef al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

BRIEF OF RESPONDENTS USAIR, INC.

AND SHUTTLE, INC. IN OPPOSITION

OPINIONS BELOW

The November 12, 1997 judgment and opinion of the

United States Court of Appeals for the District of Columbia

Circuit is reported at 129 F.3d 165. It is reprinted in the

Appendix to the Petition for Writ of Certiorari, at 1a-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 on November

12, 1997 and published it as if it were an opinion of that

Circuit. (Pet. App. 2a). The Memorandum Opinion which

is, therefore, now the published opinion of the District of

Coiumbia Circuit is reprinted in the Appendix to the Petition

for Writ of Certiorari, 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. (Pet. App.

35a-36a). This Court has jurisdiction to review the judgment

of the District of Columbia Circuit Court under 28 U.S.C.

§ 1254(1).

STATUTES INVOLVED

The decision of the Court of Appeals for the District of

Columbia Circuit involves the application of the Railway

Labor Act, 45 U.S.C. § 151, et seg., the Employee Retire-

ment Income Security Act, 29 U.S.C. § 1001, et seg., and

the Age Discrimination in Employment Act, 29 U.S.C.

§ 621, ef seq.

a Lae A Dt Blt PSB NN NE MEN IL Ms a EO MONG oe Seay! Yee -

STATEMENT OF THE CASE

Petitioners, eighty-six former airline “fleet service”

employees’, challenge their loss of union representation it

August 1992, the resulting loss of their collective bargaining

agreement in August 1992, and their loss of employment in

March or November 1993.

Petitioners initiated and pursued this litigation against

Shuttle, Inc. (“Shuttle”), USAir, Inc. (“USAir”), the

International Association of Machinists and Aerospace

Workers, AFL-CIO (“IAM”), and Citicorp and Citibank,

N.A.*? However, the Petition appears directed at only

USAir and Shuttle. Petitioners’ second amended complaint,

filed on October 12, 1994, pled eighteen counts under the

Railway Labor Act (“RLA”)*, the Age Discrimination in

Employment Act (“ADEA”)*, the Employee Retirement

Income Security Act (“ERISA”)*, the Workers Adjustment

* Employees in the “fleet service” craft or class perform

aircraft cleaning, baggage handling, and ramp functions. USAir,

Inc., 15 NMB 369, 389-90 (1988).

* ~ Petitioners failed to name the National Mediation Board as

a party, but the NMB participated as amicus curiae before the

court of appeals.

* 45 U.S.C. § 151, et seg. (1994).

* 29 U.S.C. § 621, et seq. (1994).

* 29 U.S.C. § 1001, et seg. (1994).

Retraining and Notification Act (“WARN”)°, and myriad

state law claims against the five defendants. Each of the

claims directly or indirectly challenged the status of their

union representation, labor contract, or employment.

To assist the Court in understanding the nature of

Petitioners’ claims, Respondents briefly review the corporate

history of Shuttle and the transaction with USAir which gave

rise to this litigation, the related representation decisions of

the National Mediation Board (“NMB”), and the employ-

ment actions involving Petitioners.

A. The USAir-Shuttle Transaction

Petitioners’ employer, Shuttle, was created in 1992 as

the successor to Trump Shuttle, Inc. (“Trump Shuttle”).

Trump Shuttle was formed by Donald Trump in 1989 to

acquire the assets used by Eastern Air Lines in operating the

Eastern Shuttle. The Eastern Shuttle operation consisted of

hourly, non-reservation air service between New York,

Washington and Boston. (Pet. App. 5a). The majority of

Petitioners are former Eastern and Trump Shuttle employees

who worked at LaGuardia Airport in New York, Washington

National Airport in Arlington and Logan Airport in Boston.

(Id.)

While working at Eastern, Petitioners were represented

by the IAM, which also represented the Eastern mechanics.

(Pet. App. 5a). When Trump Shuttle commenced operations

in 1989 it voluntarily recognized the IAM as the represen-

tative of the mechanic and fleet service groups and, on July

6 29 U.S.C. § 2101, et seg. (1994).

13, 1989, entered into a collective bargaining agreement with

the IAM governing these classifications. (/d.) This 1989

Trump Shuttle Agreement is the claimed source of Petition-

ers’ contract rights.

Trump Shuttle encountered financial difficulties, never

made a profit, and by early 1990 was in dire financial

straits. (Pet. App. 6a). Donald Trump and Trump Shuttle

financed nearly 100% of Shuttle’s purchase price and

upgrade costs by borrowing $380 million from two bank

groups (the “Banks”) for which Citibank acted as agent.

(Id. at Sa). By 1991, Trump Shuttle confronted imminent

liquidation, sale of its assets and layoff of all of its employ-

ees. Rather than sell or liquidate Trump Shuttle in a

depressed airline market, the Banks agreed to reorganize

Trump Shuttle and attempt to improve its operating results

in contemplation of selling the company at a later date. (Id.

at 6a). As part of this effort, the Banks sought an estab-

lished airline to manage the Shuttle. (/d.)

On April 10, 1992, USAir, Trump Shuttle, and the

Banks entered into a complex restructuring resulting in

Donald Trump transferring his ownership interest in Trump

Shuttle to the Banks. Trump Shuttle was merged into a

newly created corporation — Shuttle, Inc. — with Shuttle,

Inc. being the surviving entity. Shuttle entered into a

Management Agreement with USAir whereby USAir would

manage Shuttle, with an option to purchase Shuttle after four

and one-half years. In April 1992, USAir and Shuttle began

operating the former Eastern Shuttle and Trump Shuttle

service as the “USAir Shuttle.”’ (Pet. App. 6a).

B. The NMB Proceedings

The USAir-Shuttle Management Agreement presented

difficult and novel labor relations problems. The [AM,

which represented the USAir mechanics and Shuttle fleet

service employees, conditioned its approval of the manage-

ment transaction on USAir agreeing to operate Shuttle and

USAir as a “single carrier” for purposes of representation

under the RLA. While agreeing to operate the two airlines

as a “single carrier,” and planning to integrate the ground

employees (mechanics, fleet service, passenger service),

USAir intended to maintain separate groups of flight person-

nel (i.e., pilots, flight attendants and dispatchers). (Pet.

App. 5a-6a). The flight personnel would be separated

because Shuttle would continue to operate as a separate

airline under its own operating certificates issued by the

Department of Transportation and the Federal Aviation

Administration (id.), and to facilitate sale of the airline in the

event USAir did not exercise its option to purchase the

Shuttle.

In order to operate USAir and Shuttle as a single carrier

for representational purposes, a ruling from the NMB was

7 Well after the events giving rise to this litigation, Shuttle’s

corporate structure and public identity again changed. In February

1997, USA‘: changed its corporate name to US Airways, Inc. On

December 30, 1997, US Airways Group, Inc. acquired Shuttle and

it began conducting the operation under the name “US Airways

Shuttle” during the first quarter of 1998.

ons

required. The IAM and USAir understood that if the NMB

ruled that USAir and Shuttle constituted a single carrier, the

IAM’s representation of the Shuttle fleet service employees

would terminate because the larger group of fleet service

employees at USAir was not represented by any union. (Pet.

App. 7a). The IAM was attempting to organize the USAir

fleet service employees and if the IAM won an anticipated

election, it would represent the combined USAir and Shuttle

fleet service employees. Both USAir and the [AM anticipat-

ed that the combined USAir fleet service group would vote

to be represented.

USAir filed for single carrier status with the NMB on

April 2, 1992. (Pet. App. 7a). The petition was filed

pursuant to 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”). In this filing,

USAir requested that the NMB find that, as a result of the

assumption of management control of Shuttle by USAir,

employees in the crafts or classes on Shuttle would be

covered by the existing certifications or voluntary recogni-

tions, if any, on USAir. The IAM, in a May i2, 1992

submission to the NMB, joined in invoking the NMB’s

representation jurisdiction under the Merger Procedures.

(Pet. App. 7a).

On April 27, 1992, the United Steelworkers of America

(“USWA”) petitioned the NMB to represent the fleet service

personnel at USAir. Pet. App. 7a; see Case No. R-6138,

USAir, Inc., 20 NMB 162 (1993). On the same date, the

IAM filed an application seeking to represent USAir’s fleet

service employees. Ballots were mailed to eligible USAir

fleet service employees on July 10, 1992. Shuttle fleet

service employees (including Petitioners) were sent “chal-

lenge ballots,” which were segregated pending the outcome

of the single carrier proceeding. Jd.

On August 10, 1992, the NMB ruled that USAir and

Shuttle constituted a “single transportation system” for

purposes of union representation under the RLA. USAir/

Shuttle, 19 NMB 388, 421 (1992) (“single carrier deci-

sion”). As a result of this determination, all existing

certifications on USAir were extended to Shuttle and all

existing certifications on Shuttle were extinguished. The

NMB also determined that the Shuttle fleet service employ-

ees would be eligible to vote in a then-pending election

involving the USWA and the IAM. 19 NMB at 408, 417-

18, 421.

The votes in the fleet service election were counted on

August 11, 1992. Petitioners’ “challenge ballots” were

included in the count. Less than the majority of the eligible

voters needed for certification voted. Consequently, no

union was certified to represent the USAir/Shuttle fleet

service employees. See USAir, Inc., 20 NMB 162 (1993).

USWA filed an objection to the conduct of the election. On

January 28, 1993, the NMB rejected this challenge and

dismissed the election applications. Jd.

After the August 10, 1992 single carrier decision and

the August 11, 1992 fleet service election, USAir, Shuttle

and the IAM regarded the fleet service personnel at Shuttle

as no longer represented by the IAM. Shuttle treated the

fleet service group as non-contract employees and stopped

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payroll deductions for their union dues in August 1992. On

August 31, 1992 the IAM notified Petitioners that their union

representation had terminated. Most of the Petitioners

signed union withdrawal cards and Petitioners paid no union

dues after August 1992. (Pet. App. 8a).

C. Changes in Petitioners’ Employment Status

After August 11, 1992, Shuttle took no immediate action

to change Petitioners’ wages, benefits or day-to-day working

conditions. In March 1993, several weeks after the NMB’s

January 28, 1993 decision certifying the August 11, 1992

election result, Shuttle began making significant changes in

Petitioners’ employment terms including increasing hours

and reducing wages. (Pet. App. 8a). These changes to the

employment terms of the fleet service group were not

bargained with the IAM and no objections were made, or

grievance filed, by the Petitioners.

In 1993, USAir and Shuttle decided that Shuttle’s

ground service employees would not be integrated into

USAir unless and until USAir exercised its option to

purchase the Shuttle. Integration was deferred because of

difficulties encountered by the IAM concerning integrating

the seniority of the very senior Shuttle mechanics and the

resistant USAir mechanics. (Pet. App. 8a).

Following completion of the USAir-Shuttle Management

Agreement in April 1992, Shuttle aggressively pursued

humerous cost-cutting measures and service improvements.

An essential part of the cost-cutting measures involved job

force reductions in all classifications — management, pilots,

fleet service, mechanics and flight attendants. From April

10

1992 to August 31, 1995, the total number of Shuttle

employees was reduced from 972 to 553. (Pet. App. 8a-9a).

As a part of its cost-cutting efforts, in March 1993

Shuttle contracted with Hudson General Corporation, a

nationally recognized airline services firm whose workers

were represented by the IAM, to provide overnight airplane

cleaning services. (Pet. App. 8a-9a). As a consequence of

this, 30 Shuttle fleet service employees who had previously

performed overnight cleaning services were furloughed on

the basis of seniority.

In November 1993, Shuttle outsourced the remaining

fleet service work to Hudson General, and all of Shuttle’s

remaining fleet service employees at all locations were

furloughed. A total of 88 fleet service group employees

were furloughed or elected retirement in lieu of furlough.

(Pet. App. 8a-9a). The cost of Hudson General providing

the fleet service work was 50% less than the Shuttle’s cost

to perform such services itself. Outsourcing the fleet service

work saved Shuttle more than $2.4 million in 1994 and

similar amounts annually thereafter. (Jd.)

The Shuttle retirement plan applicable to fleet service

employees contained an early retirement program which

allowed all fleet service workers who were 55 years of age

or older to elect to retire early. In November 1993, eligible

fleet service workers were given the option of either (1)

retiring under this existing program (with a one-time

opportunity for certain enhanced benefits instituted by

Shuttle) in lieu of being furloughed or (2) electing to be

furloughed on the same terms as the younger fleet service

employees who were not eligible for early retirement. The

11

early retirement program had certain benefits over the

furlough including lifetime medical insurance and travel

passes. The furlough program, conversely, had certain

benefits over the retirement program (primarily additional

severance pay). Eligible fleet service workers could choose

either early retirement or furlough. The early retirement

option was selected by nearly all of the persons eligible. All

remaining fleet service workers were furloughed, provided

with two weeks’ pay in lieu of notice, and paid severance in

accordance with the severance policy for non-contract

employees.

D. The District Court Decision

On September 29, 1995, after extensive discovery,

Shuttle, USAir, and the other defendants below filed

comprehensive motions for summary judgment. Petitioners

cross-moved for partial summary judgment. The district

court heard oral arguments on all dispositive motions on

June 21, 25, and 27, 1996. The district court concluded in

its September 5, 1996 opinion that Petitioners’ challenge

under the RLA to their August 1992 loss of union represen-

tation and collective bargaining agreement was meritless as

a matter of law. The court also concluded that Petitioners

had failed to present a triable issue under ERISA, ADEA,

WARN or state law with respect to their claims against

Shuttle and USAir.

E. The Court of Appeals Decision

Continuing their blunderbuss litigation Strategy, on

October 29, 1996 Petitioners appealed from the district court

decision on all claims under the RLA, ADEA, ERISA,

12

WARN, and state law. After argument on October 20,

1997, the court of appeals on November 12, 1997 issued its

decision. In an unusual action, the court of appeals panel

adopted in its entirety the district court opinion (Pet. App.

2a), writing briefly only to clarify the status of Petitioners’

collective bargaining agreement. Jd. Petitioners’ request for

reconsideration and suggestion of rehearing en banc was

denied on January 9, 1998.

REASONS FOR DENYING THE WRIT

I Petitioners’ Railway Lubor Act and Fifth Amendment

Challenge to Their Loss of Union Representation and

the Resulting Loss of Collective Bargaining Agree-

ment Rights Seeks to Invalidate a National Mediation

Board Representational Determination and Present a

Fifth Amendment Issue Not Developed Below.

1. No Constitutional Issue is Presented

In order to pique the Court’s interest, Petitioners attempt

to present this case as a constitutional issue under the Fifth

Amendment. This is not a constitutional case. Neither the

circuit court opinion (Pet. App. la-3a), nor the district court

opinion (Pet. App. 4a-34a) which was adopted by the circuit

court, makes any reference to constitutional issues. The

complaint asserts no constitutional claims. The Petitioners

have never challenged the constitutionality of any statute.

The only reference to the Fifth Amendment in the

extensive briefing in this case is a single paragraph in the

Reply Brief of the Appellants, filed September 19, 1997 in

the District of Columbia Circuit, at 20-21. There, Peti-

13

tioners argued that the National Mediation Board’s August

10, 1992 “single carrier decision” was invalid because it

could impact existing collective bargaining agreement rights:

As Judge Sporkin and Amicus recognize, it is

banned by the Constitution itself. United States

Constitution, Sth Amendment; see Perry v. United

States, 294 U.S. 330 (1935). . . . Upholding the

district court’s contrary conclusion will negate the

limitations imposed on the NMB by Congress and

by the Constitution.

This obtuse passing reference on appeal was not sufficient to

raise a constitutional issue below and does not present an

issue worthy for constitutional review on petition for

certiorari.

2. Petitioners’ Challenge to Loss of Union Repre-

sentation

The focus of Petitioners’ case below was an attempt to

invalidate under the RLA the National Mediation Board’s

representational determinations which resulted in Petitioners’

loss of union representation. Petitioners lost their union

representation in August 1992, as a result of the NMB’s

August 10, 1992 single carrier decision, USAir/Shuttle, 19

NMB 388, which combined the USAir and Shuttle employ-

ees for purpose of representation, and the August 11, 1992

election among the combined USAir/Shuttle fleet service

group. USAir, 20 NMB 162 (1993). Because the unions

lost that election, after August 11, 1992 the IAM and

14

USAir/Shuttle treated the Shuttle fleet service employees,

including Petitioners, as unrepresented.* (Pet. App. 8a).

Petitioners asserted below that the NMB lacked jurisdic-

tion to issue the single carrier decision because USAjir, a

Carrier, initiated the merger-related case. Petitioners

premised their case entirely upen the court of appeal’s

decision in Railway Labor Executives’ Ass’n v. National

Mediation Bd., 29 F.3d 655 (D.C. Cir. 1994) (en banc),

cert. denied, 514 U.S. 1032 (1995) (“RLEA v. NMB”). In

that case, the D.C. Circuit invalidated the NMB’s Railroad

Merger Procedures, 17 NMB 44 (1989), to the extent those

procedures permitted carrier-invoked representation proceed-

ings. But the district court properly found as a matter of

fact and law that RLEA v. NMB had no application to this

case, because “the unions joined the petition to invoke the

NMB’s jurisdiction.” (Pet. App. 24a) .

Once the carrier-invocation issue of RLEA v. NMB was

removed from this case by this finding of fact, the district

court was constrained by the general nonreviewability of

® Under NMB proced.res, when the majority of a craft or

class does not vote for some representative, the Board dismisses

the representation application, and the entire craft or class remains

or becomes unrepresented. Jet Am. Airlines, Inc., 13 NMB 96

(1986); Alitalia Airlines, 10 NMB 331 (1983); see Brotherhood of

Ry. and S.S. Clerks v. Association for the Benefit of Non-Contract

Employees, 380 U.S. 650 (1965); Russell v. National Mediation

Bd. , 714 F.2d 1332 (Sth Cir. 1983), cert. denied, 467 U.S. 1204

(1984); International Bhd. of Teamsters v. Brotherhood of Ry.,

Airline and S.S. Clerks, 402 F.2d 196 (D.C. Cir.), cert. denied,

393 U.S. 848 (1968).

15

NMB representation determinations. The Court has repeat-

edly emphasized that the NMB’s jurisdiction over representa-

tion disputes is exclusive and its certification decisions are

nonreviewable, including representation determinations

related to corporate transactions. Switchmen’s Union v.

National Mediation Bd. , 320 U.S. 297, 303 (1943); see also

Western Airlines Inc. v. Int’l Bhd. of Teamsters, 480 U.S.

1301, 1305 (1987); Brotherhood of Ry. and S.S. Clerks v.

Association for the Benefit of Non-Contract Employees, 380

U.S. 650 (1965); General Comm. of Adjustment of Bhd. of

Locomotive Eng’rs v. Missouri K-T-R. Co., 320 U.S. 323,

336 (1943). Therefore, the district court correctly deter-

mined that it had no jurisdiction to review the Petitioners’

loss of union representation pursuant to the NMB’s represen-

tation procedures.

3. Petitioners’ Challenge to Loss of Union Contract

Petitioners alternatively have attempted to attack the

NMB’s representational decision because of its impact on

their collective bargaining agreement. They allege that the

NMB’s decision resulted in the “nullification of a collective

bargaining agreement and employment rights.” (Pet. 15).

The district court did conclude correctly 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.” (Pet. App.

27a). That principle — no union / no collective bargaining

agreement — is well-established under the RLA. Jnterna-

tional Bhd. of Teamsters v. Texas Int’l Airlines, Inc., 717

F.2d 157, 163-64 (Sth Cir. 1983). See also Association of

16

Flight Attendants v. USAir, Inc., 24 F.3d 1432 (D.C. Cir.

1994); International Ass’n of Machinists v. Northeast

Airlines, Inc., 536 F.2d 975 (ist Cir.), cert. denied, 429

U.S. 961 (1976).

The court of appeals clarified this portion of the district

court’s decision by examining the precise status of Petition-

ers’ collective bargaining agreement prior to the NMB’s

decision:

We note, however, that the collective bargaining

agreement between Trump Shuttle, Inc. and the

International Association of Machinists and Aero-

space 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 proce-

cures 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).

(Pet. App. 2a). Petitioners did not have contractual rights

immediately prior to August 11, 1992 — they had a statutory

right to the temporary continuation of their expired contract’s

17

terms pending negotiations under Section 6 of the RLA. 45

U.S.C. §156.°

This analysis by the circuit court dooms any attempted

Fifth Amer sient challenge to Petitioners’ loss of their

collective bargaining agreement. Petitioners did not have a

“property right” in a collective bargaining agreement: they

had a temporary statutory protection of rates of pay, rules,

and working conditions while their union negotiated on their

behalf. Once their union lost representation status through

the NMB’s procedures, the statutory protection of the RLA

“status quo” necessarily disappeared.

4. Petitioners’ Challenge to Findings of Fact

Petitioners’ arguments under the RLA and the Constitu-

tion ultimately are premised on a denial of two central

findings of the lower courts: (1) that the unions invoked the

NMB’s jurisdiction to determine the representational status

of Petitioners and other USAir/Shuttle employees, and (2)

that the Petitioners’ collective bargaining agreement had

expired by its terms on December 31, 1989. Such factual

challenges do not belong before this Court and vitiate

Petitioners effort to present an issue under the RLA, or the

Fifth Amendment justifying certiorari.

* The Section 6 “status quo” requirement mandates that the

parties continue an agreement’s terms until they exhaust the RLA’s

negotiation procedures, thus extending the terms of a collective

bargaining agreement beyond its stated duration. See Detroit &

Toledo Shore Line Co. v. United Transp. Union, 396 U.S. 142,

150-153 (1969). See also Pittsburgh & Lake Erie R.R. Co. v.

Railway Labor Executives’ Ass'n, 491 U.S. 490, 504-12 (1989).

18

Il_ This Case Is Not an Appropriate Vehicle for Review-

ing Preemption under the Railway Labor Act or the

Employee Retirement Income Security Act.

Petitioners attempt to present RLA and ERISA preemp-

tion issues, asserting that they raised “valid state law claims

for breach of contract, common law fraud, and breach of

fiduciary duty” (Pet. 3) and that the lower courts failed to

apply the preemption standards of Hawaiian Airlines, Inc.

v. Norris, 512 U.S. 246 (1994), and Alessi v. Raybestos-

Manhattan, Inc., 451i U.S. 504 (1981).

The district court’s discussion of preemption, adopted by

the court of appeals, is terse: “The Court rejects all of

plaintiffs’ state law claims because such claims are clearly

preempted by the RLA or ERISA.” (Pet. App. 28a). The

lack of full exposition by the district court or the court of

appeals on this issue alone is sufficient grounds for denial of

certiorari.

The reason for the lower courts’ summary rejection of

Petitioners’ state law claims as preempted relates to the

nature of the claims: as "resented by the Petitioners.

Petitioners’ state law claims were simply an effort to

circumvent their loss of union representation and collective

bargaining agreement by operation of the RLA, and to assert

under common law that they had “no furlough” protection

equivalent to their expired collective bargaining agreement.

(Pet. App. 68a). That Petitioners’ state law claims were

artfully pled issues relating to collective bargaining, and

controlled by the RLA, is suggested by Petitioners’ descrip-

tion of those claims:

19

that the respondent carriers and union fraudulently

mislead petitioners as to the nature of the proceed-

ings 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.

(Pet. 18). Clearly, Petitioners through these claims were

raising issues of duty of fair representation by the union,

duty to bargain in good faith by the carriers, and breach of

the collective bargaining agreement, which are all controlled

by the RLA.

Respondents argued to the lower courts that Petitioners’

state law claims were a preempted effort to circumvent the

RLA, citing Adkins v. General Motors Corporation, 946

F.2d 1201, 1210 (6th Cir. 1991), cert. denied, 504 U.S. 908

(1992) (“The purpose of the doctrine of complete preemption

is to prevent one set of rights and obligations from issuing

from a colle«tive-bargaining agreement under federal law

while contradictory rights and obligations flowed from state

law ... . Plaintiffs cannot be permitted to revive rights

deemed extinguished under federal labor law by relying on

state common law.”). The district court and the court of

appeals implicitly accepted Respondents’ argument under

Adkins and rejected Petitioners’ state law claims as preempt-

ed by the RLA.

Petiticaers’ state law claims also were pled with

repeated references to the alleged denial of pension benefits.

For example, the Fourth Claim (“Breach of Covenant of

Good Faith and Fair Dealing”) alleged that Respondents

violated state law by “reducing and interfering with Plain-

20

tiffs’ pension rights and benefits to which they were entitled

under a plan governed by ERISA.” (Second Amended

Compl. Paragraph 140). It is not surprising that the district

court summarily applied ERISA preemption to such state law

claims."

There is no basis in the record of this case to conclude

that the lower courts adopted or applied an inappropriate

standard of either RLA or ERISA preemption. Consequently,

this case does not present an appropriate vehicle for the

Court to examine or give guidance on the appropriate scope

of RLA or ERISA preemption.

Ii] Petitioners Present an Issue under the Older Workers

Benefit Protection Act, 29 U.S.C. Section 626(f), and

Oubre v. Entergy Operations, Inc., Concerning the

Validity of an Alleged Waiver Which Also Was Not

Developed below.

Petitioners attempt to present a validity of written

waiver issue under the Older Workers Benefit Protection

Act, 29 U.S.C. Section 626(f), and the Court’s decision in

Oubre v. Entergy Operations, Inc., _ U.S. ___, 118 S. Ct.

838 (1998). This is another issue that was not pled or devel-

oped below.

© As the district court recognized, Petitioners reliance on

Varity Corp. v. Howe, 516 U.S. 489 (1996), is also misplaced.

(Pet. App. 16a). Varity dealt with a claim of breach of fiduciary

duty by an employer; Petitioners’ claims were all pled under

Section 510 of ERISA. And Varity provides no basis for limiting

ERISA preemption in this case.

21

There is no issue in this case concerning the validity of

a written waiver. No issue under Section 626(f) was ever

pled by Petitioners below. There is no discussion of Section

626(f) in the district court or court of appeals decisions.

And there was no issue below related to the Oubre question

of the retention of settlement benefits.

The only reference to Section 626(f) in this case, once

again, was in a passing reference in the Reply Brief of the

Appellants filed September 19, 1997 in the District of

Columbia Circuit, at 5. Therein, in discussing those

retirement-eligible Petitioners who were offered a choice of

retirement in lieu of furlough, Petitioners made a single

reference to Section 626(f):

The period was not thirty days, but hours. They

had to make their ‘choice’ on the day they were

furloughed. . . . This violated the OWBPA in at

least two aspects: (1) they were not given 45 days

to consider their choice (21 days if not part of an

exit interview); (2) they were not told in writing to

consult an attorney. 29 U.S.C. §§ 626(f)(F), (E).

This subgroup of Petitioners (Barone, et al.) had raised

below an issue under the ADEA: they claimed that they were

wrongfully denied both retirement benefits and the same

severance pay given to junior employees. The issue litigated

below was not the form of their election under Section

626(f), but Petitioners’ claim that they were entitled to dual

benefits. Respondents never argued that Petitioners signed

written waivers that precluded them from pursuing litigation

claims for retirement benefits and severance pay.

22

The district court addressed the dual benefits issue

presented and concluded that Petitioners were not discrimi-

nated against on the basis of age because the retirement

eligible employees were not treated more adversely than

junior employees. (Pet. App. 22a-23a). The district court

did not opine on Section 626(f), because there was no

written waiver issue presented.

Thus, this litigation does not present amy issue under

OWBPA Section 626(f) and Oubre, let alone one that

warrants consideration by the Court on petition for certiora-

ri.

IV Petitioners’ Assertion That the Courts below Applied

a Heightened Burden of Proof Standard Newly

Adopted by the Lower Court Is Unsupported and

Presents No Issue under the Age Discrimination in

Employment Act or the Employee Retirement Income

Security Act.

Petitioners assert that the district court decision adopted

by the court of appeals applied a “new, heightenec burden

of proof standard” (Pet. 24) unsupported by this Court’s

prior decisions. Petitioners’ argument plainly mischaracteri-

zes the lower court decisions.

The district court in granting summary judgment on the

ERISA claims expressly applied the standards of Texas Dep’t

of Community Affairs v. Burdine, 450 U.S. 248 (1981),

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

and Berger v. Edgewater Steel Co. 911 F.2d 911 (3d Cir.

1990), cert. denied, 499 U.S. 920 (1991). (Pet. App. 10a-

lla). In granting summary judgment on the ADEA claims,

the district court applied Burdine, Hazen Paper Co. v.

23

Biggins, 507 U.S. 604 (1993), O’Connor v. Consolidated

Coin Caterers Corp., 517 U.S. 308 (1996), and Cuddy v.

Carmen, 694 F.2d 853 (D.C.Cir. 1982). (Pet. App. 16a-

17a).

What Petitioners apparently are challenging is the

district court’s citation to Andes v. Ford Motor Co., 70 F.3d

1332 (D.C. Cir. 1995), as part of its ERISA analysis. (Pet.

App. 10a, 14a). In Andes, the D.C. Circuit opined that in

a corporate transaction such as a closure or sale, the plain-

tiffs’ burden of proof requires them to show that they were

selected based upon “some ERISA-related characteristic

special to the unit.” Jd. at 1338. Andes does not articulate

a new standard under ERISA — it applies the Burdine

standard to the facts of a corporate transaction. Andes

recognizes that in such circumstances, the employer can

articulate a strong business justification for the transaction,

which the plaintiff bears the burden of rebutting by showing

the corporate justification to be pretextual. Petitioners have

identified no division in the circuits concermimg the Andes

analysis of ERISA claims in a corporate transaction context.

Because the district court applied controlling standards

under ERISA and ADEA, and Petitioners have identified no

need for clarification by the Court on this issue, there is no

basis for certiorari.

een IN

24

CONCLUSION

For the foregoing reason, the petition for writ of certio-

rari should be denied.

Respectfully submitted,

JEFFREY I. KOHN

(Counsel of Record)

O’MELVENY & MYERS LLP

Citicorp Center

153 E. 53rd Street

New York, NY 10022

(212) 326-2000

BETTY LEACH HAWKINS

US Airways, INC.

2345 Crystal Drive, 8th Floor

Crystal Park Four

Arlington, VA 22227

(703) 872-5216

Counsel for Respondents

US Airways, Inc. and Shuttle, Inc.