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Beckington v. American Airlines, Inc.

United States Court of Appeals, Ninth Circuit

June 10, 2019

Bruce Beckington; John Jurik; James Van Sickle, Plaintiffs-Appellants,
American Airlines, Inc., Defendant-Appellee.

          Argued and Submitted March 27, 2019 San Francisco, California

          Appeal from the United States District Court for the District of Arizona D.C. No. 2:17-cv-00328-JJT John Joseph Tuchi, District Judge, Presiding

          Marty Harper (argued) and Andrew S. Jacob, ASU Alumni Law Group, Phoenix, Arizona, for Plaintiffs-Appellants.

          Robert A. Siegel (argued) and Chris A. Hollinger, O'Melveny & Myers LLP, Los Angeles, California; Paul D. Jones, American Airlines Inc., Forth Worth, Texas; for Defendant-Appellee.

          Before: A. Wallace Tashima, Susan P. Graber, and Jay S. Bybee, Circuit Judges.


         Labor Law

         The panel affirmed the district court's dismissal for failure to state a claim of an action brought by airline pilots, seeking damages under the Railway Labor Act against their employer for allegedly "colluding" with a union in the union's breach of its duty of fair representation.

         In 2005, U.S. Airways and America West Airlines merged to form a single carrier, which kept the name U.S. Airways. The Air Line Pilots Association represented both the U.S. Airways Pilots (the "East Pilots") and the America West pilots (the "West Pilots"). The East Pilots and the West Pilots engaged in a seniority dispute that went to arbitration. The East Pilots formed a new union, the U.S. Airline Pilots Association ("USAPA"), which became the bargaining representative for all the pilots. In Addington I, a group of West Pilots alleged that USAPA breached its duty of fair representation by failing to pursue implementation of the arbitration award, known as the "Nicolau Award." In Addington II, U.S. Airways sued USAPA and the West Pilots, seeking declaratory relief. In anticipation of a merger between U.S. Airways and American Airlines, the two airlines, USAPA, and the union for American's pilots negotiated a memorandum of understanding ("MOU") addressing pilot seniority. In Addington III, a group of West Pilots alleged that USAPA breached its duty of fair representation by including in the MOU Paragraph 10(h), which abandoned the

          Nicolau Award. The court of appeals reversed the district court's judgment after trial in part, holding that USAPA breached its duty of fair representation by inserting Paragraph 10(h) into the MOU. In arbitration pursuant to the MOU, the arbitration panel issued a decision declining to implement the Nicolau Award and using a different methodology for integrating the pilots' seniority lists.

         Former West Pilots filed Addington IV, seeking damages under the Railway Labor Act for U.S. Airways's "collusion" in USAPA's breach of its duty of fair representation. Affirming the district court's dismissal, and disagreeing with the Seventh Circuit, the panel held that employees aggrieved by a union's breach of its duty of fair representation during collective bargaining cannot sue their employer for "colluding" in the union's breach. The panel concluded that nothing in the Railway Labor Act's text or collective bargaining framework supported expansion of the doctrine that a union owes its constituents a duty of fair representation. The panel held that the pilots' suit was different from a hybrid suit, in which employees sue both their employer and their union, because the pilots made no allegation that their employer breached its own obligations under a collective bargaining agreement.



         The Railway Labor Act ("RLA"), 45 U.S.C. §§ 151 et seq., authorizes employees in the railroad and airline industries to select a union to act as their exclusive representative for collective bargaining with their employer. As exclusive bargaining representative, the union assumes a duty to "represent fairly the interests of all bargaining-unit members during the negotiation, administration, and enforcement of collective-bargaining agreements." Int'l Bhd. of Elec. Workers v. Foust, 442 U.S. 42, 47 (1979). If the union breaches its duty of fair representation, aggrieved employees have a cause of action against the union that is "judicially 'implied'" under the RLA. Id. (citation omitted). The question in this case is whether those employees may also sue their employer under the RLA for allegedly "colluding" with the union in the union's breach of duty. We conclude that the answer is no.



         We begin with some background on the RLA, which "cannot be appreciated apart from the environment out of which it came and the purposes which it was designed to serve." Burlington N. R.R. Co. v. Bhd. of Maint. of Way Emps., 481 U.S. 429, 444 (1987) (quoting Elgin, Joliet & E. Ry. Co. v. Burley, 325 U.S. 711, 751 (1945) (Frankfurter, J., dissenting)).

         Enacted in 1926, the RLA followed "decades of labor unrest" in the railroad industry that threatened "wasteful strikes and interruptions of interstate commerce." Id. at 444, 450 (citation omitted). Disputes over wages and working conditions led to boycotts and strikes capable of shutting down large swaths of the nation's railways. See Charles M. Rehmus, Evolution of Legislation Affecting Collective Bargaining in the Railroad and Airline Industries, in The Railway Labor Act at Fifty 1, 2-7 (Charles M. Rehmus ed., 1977). States were largely unable to regulate rail lines that extended beyond their borders, see Wabash, St. Louis & Pac. Ry. Co. v. Illinois, 118 U.S. 557, 577 (1886), and Congress's prior efforts at prescribing various dispute resolution mechanisms were unsuccessful, see Int'l Ass'n of Machinists v. Street, 367 U.S. 740, 755-57 & nn.11-12 (1961). The strikes in many cases turned into violent riots, which often led to sweeping strike injunctions and, in some cases, intervention by federal troops. Wayne L. McNaughton & Joseph Lazar, Industrial Relations and the Government 33, 95-109 (1954); see, e.g., In re Debs, 158 U.S. 564, 582-83 (1895); King v. Ohio & Miss. Ry. Co., 14 F. Cas. 539, 540-42 (C.C.D. Ind. 1877) (No. 7, 800); United States v. Ry. Emps.' Dep't of Am. Fed'n of Labor, 283 F. 479, 492-96 (N.D. Ill. 1922).

         By 1926, the major railroads and railroad unions recognized the need for a peaceful and effective framework for resolving labor disputes, and after a remarkable series of conferences and negotiations between them, both sides agreed on a bill that Congress enacted into law. Railway Labor Act, Pub. L. No. 69-257, 44 Stat. 577 (1926); see Tex. & New Orleans R.R. Co. v. Bhd. of Ry. & S.S. Clerks, 281 U.S. 548, 562-63 & n.2 (1930). Congress substantially amended the RLA in 1934, see Street, 367 U.S. at 759-60, and in 1936 extended its "benefits and obligations" to the "then small-but-growing air transportation industry," Int'l Ass'n of Machinists v. Cent. Airlines, Inc., 372 U.S. 682, 685 (1963); see 45 U.S.C. §§ 181-188.

         The RLA endeavors "to promote stability in labor-management relations by providing a comprehensive framework for resolving labor disputes." Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252 (1994). At "[t]he heart" of its framework is 45 U.S.C. § 152, First, which requires labor and management "to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes . . . in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof." Bhd. of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 377-78 (1969) (alteration in original) (quoting 45 U.S.C. § 152, First). To that end, the RLA subjects all labor-management "disputes to virtually endless 'negotiation, mediation, voluntary arbitration, and conciliation, '" Burlington N., 481 U.S. at 444 (citation omitted), with the precise procedure dependent on the nature of the underlying claims, see Alaska Airlines Inc. v. Schurke, 898 F.3d 904, 916-17 (9th Cir. 2018) (en banc), cert. denied, 139 S.Ct. 1445 (2019). And to implement this framework, the RLA prescribes a process of collective bargaining "between the carriers on the one hand and the employees through their unions on the other." Street, 367 U.S. at 760 (citation omitted).

         Accordingly, a fundamental component of the RLA's design is the right of employees "to organize and bargain collectively through representatives of their own choosing." 45 U.S.C. § 152, Fourth. Employers must "treat with" the employees' designated bargaining representative, [1] id. § 152, Ninth, which is chosen by a majority of the employees in a particular "craft" or bargaining unit, id. § 152, Fourth. Employers are prohibited from "interfer[ing] in any way with the organization of [their] employees"; using employer funds to "maintain[] or assist[] or contribut[e] to any labor organization [or] labor representative"; and influencing the "designation of representatives." Id. § 152, Third, Fourth. In certain circumstances, employees can sue their employer for violating these statutory commands. See, e.g., Virginian Ry. Co. v. Sys. Fed'n No. 40, 300 U.S. 515, 548-49 (1937) (refusing to bargain with designated union); Ass'n of Flight Attendants v. Horizon Air Indus., Inc., 280 F.3d 901, 904-06 (9th Cir. 2002) (interfering with right to organize); Barthelemy v. Air Lines Pilots Ass'n, 897 F.2d 999, 1015-16 (9th Cir. 1990) (per curiam) (providing financial assistance to union). And "willful" violations can result in criminal sanctions. 45 U.S.C. § 152, Tenth.

         Once a union is chosen by a majority of the employees in a bargaining unit, the union's bargaining power is "exclusive." Steele v. Louisville & Nashville R.R. Co., 323 U.S. 192, 194 (1944). The union "act[s] on behalf of all the employees" within its bargaining unit, a position that "operates to exclude any other from representing" the employees and prohibits employees from "bargain[ing] individually on behalf of themselves as to matters which are properly the subject of collective bargaining." Id. at 199-200 (emphasis added). The union's exclusivity, moreover, imposes on the employer an "affirmative duty to treat only with the [selected union], and hence the negative duty to treat with no other." Virginian Ry., 300 U.S. at 548 (emphasis added). Thus, by "empower[ing] unions to bargain exclusively for all employees in a particular bargaining unit," the RLA "subordinate[s] individual [employee] interests to the interests of the unit as a whole." Foust, 442 U.S. at 46.

         Of course, with great power comes great responsibility. Although the union is selected by a majority vote, the Supreme Court has held that, once selected, the union's authority as exclusive bargaining representative carries with it "a correlative duty 'inseparable from the power of representation'" to "represent fairly the interests of all bargaining-unit members during the negotiation, administration, and enforcement of collective-bargaining agreements." Id. at 46-47 (emphasis added) (quoting Steele, 323 U.S. at 204). The duty of fair representation thus acts "as a 'bulwark to prevent arbitrary union conduct'" against individual employees, id. at 47 (quoting Vaca v. Sipes, 386 U.S. 171, 182 (1967)), who otherwise would have "no means of protecting their interests" at the bargaining table other than to strike, a result the RLA was specifically designed to avoid, Steele, 323 U.S. at 200-01. To fulfill its duty of fair representation, the union is required "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." Air Line Pilots Ass'n, Int'l v. O'Neill, 499 U.S. 65, 76 (1991) (quoting Vaca, 386 U.S. at 177). A union therefore "breaches its duty of fair representation if its actions are either 'arbitrary, discriminatory, or in bad faith.'" Id. at 67 (quoting Vaca, 386 U.S. at 190); see Demetris v. Transp. Workers Union of Am., 862 F.3d 799, 805-08 (9th Cir. 2017).

         The Supreme Court has also held that employees have a "judicially 'implied'" cause of action under the RLA against their union for breaching its duty of fair representation. Foust, 442 U.S. at 47 (quoting Steele, 323 U.S. at 204). "[R]esort to the courts" is necessary in such circumstances, the Court has explained, because the RLA does not contain any administrative mechanism for aggrieved employees to remedy the breach or "secure separate representation for the purposes of collective bargaining"; without a cause of action against the union, the right to fair representation "would be sacrificed or obliterated." Steele, 323 U.S. at 206-07. Thus, employees can ...

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