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2nd Circuit Finds No Private Right to Contest Concessions to Airline
New York Law Journal
September 23, 2009
Two provisions of the Railway Labor Act do not create a private right of action for flight attendants to challenge the reworking of their labor agreement to avoid an American Airlines bankruptcy, a federal appeals court ruled Tuesday.
Addressing a case of first impression, the 2nd U.S. Circuit Court of Appeals said the first and seventh provisions of the act, 45 U.S.C. §152, do not empower individual flight attendants to challenge the validity of a Restructuring Participation Agreement reached between their union, American Airlines and its parent company AMR Corp. in 2003.
The appeal in Lindsay v. Association of Professional Flight Attendants (pdf), 08-4122-cv, was decided by Judges Reena Raggi and Peter W. Hall and, sitting by designation, Eastern District Judge Joseph F. Bianco. Raggi wrote for the court.
Upset that the agreement voided the existing collective bargaining agreement that was signed in 2001, Jill Lindsay and several fellow flight attendants in the Eastern District sued their union, former union President John Ward, AMR Corp, and American Airlines Inc. citing the Railway Labor Act, which was passed in 1926 to encourage collective bargaining and discourage strikes that could interrupt interstate commerce.
The first provision of §152 states, "It shall be the duty of all carriers, their officers, agents and employees to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules and working conditions, and to settle all disputes, whether arising out of the application of such agreements or otherwise, in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof."
The seventh provision states, "No carrier, its officers, or agents shall change the rates of pay, rules, or working conditions of its employees, as a class, as embodied in agreements except in the manner prescribed in such agreement or in §156 of this title."
Eastern District of New York Judge Nina Gershon granted summary judgment for the defendants on July 22, 2008 on their claims under the Railway Labor Act and state claims including breach of contract. She also ruled in favor of the Association of Professional Flight Attendants on the plaintiffs' claim of breach of the duty of fair representation.
At the circuit, Raggi wrote, "No party has pointed us to any case law addressing whether these sections provide for a private right of action by individual, nor have we identified any."
Raggi said the U.S. Supreme Court has found a private right of action by a union implicit in the act, but has not commented on the right of individuals to sue.
And other circuits, she said, have recognized an implied private right of action for individual employees under the third and fourth provisions of §152, which respectively, bar labor and management from interfering with a person's choice of representative and prevents management from interfering with the right to organize or join a union.
But as for the first and seventh provisions, Raggi said, "Because both provisions focus on the regulated parties, we discern no intent to confer privately enforceable rights."
RISK OF DISRUPTION
The judge said Congress "expressly contemplated that [the act] would be enforced through arbitral panels" and its "failure to provide similarly for private enforcement signals caution in inferring any such right of action."
So "[h]owever dissatisfied individual employees may be with these modifications to the 2001 Collective Bargaining Agreement, allowing them to sue American Airlines under §152 [First provision] to set aside a Restructuring Participation Agreement agreed to by their union and ratified by the union membership would risk the very disruption in commerce that [the act] seeks to avoid," she said.
The plaintiffs' dispute, she said, was not with American Airlines, "but rather with the union, which negotiated for the modified collective bargaining agreement terms that now bind American Airlines and form the basis of the plaintiffs' claims."
As for the seventh provision, Raggi said, "the statutory scheme as interpreted by the courts recognizes the representative union as the proper party to invoke" that provision.
The circuit then agreed with Gershon that state law claims were rightly dismissed as preempted by the act and that she was correct in granting summary judgment for the union on the duty of fair representation claim.
The individual plaintiffs were represented by Emily M. Bass, Steven M. Nachman; Michael S. Haber, and also Martin Garbus.
Stephen B. Moldof, Michael L. Winston and Travis M. Mastroddi of Cohen, Weiss and Simon represented the union.
Thomas E. Reinert, Jr. and Jonathan C. Fritts of Morgan Lewis & Bockius represented American Airlines and AMR Corp.
The flight attendants' union was joined in restructuring its contract with the airline by the pilots and the transport workers unions.
Moldof said, "This is a situation where the union was faced with an incredibly difficult set of circumstances. It did its best under those circumstances to protect the interests of the membership and the courts agreed that what the union did was lawful."
Moldof noted that there were substantial reductions in wages and vacation, "in the context of a company that was in dire financial distress that had publicly threatened to file for bankruptcy."
