U.S. Supreme Court
WESTERN AIRLINES, INC. v. INTERNATIONAL BROTH. OF TEAMSTERS ,
480 U.S.
1301 (1987)
480 U.S.
1301
WESTERN AIRLINES, INC. and Delta Air Lines, Inc.
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS and Air Transport
Employees
No. A-716.
April 2, 1987.
Page 480 U.S.
1301 , 1302
Justice O'CONNOR, Circuit Justice.
Applicants request that I issue a stay pending the filing and
disposition of a petition for certiorari to review the judgment of
the United States Court of Appeals for the Ninth Circuit.
The underlying dispute in this case involves the division of
responsibility for regulation of collective bargaining between
airlines and their employees under the Railway Labor Act, 44 Stat.
577, as amended, 45 U.S.C. 151 et seq. The Act defines three
classes of labor disputes and establishes a different dispute
resolution procedure for each. "Minor" disputes involve the
application or interpretation of an existing collective-bargaining
agreement. Minor disputes are subject to arbitration by a System
Board of Adjustment. 45 U.S.C. 184. While courts lack authority to
interpret the terms of a collective-bargaining agreement, a court
may compel arbitration of a minor dispute before the authorized
System Board.
"Major" disputes involve the
formation of collective-bargaining agreements, and the resolution
of such disputes is governed by 6 of the Act, 45 U.S.C. 156,
181.
"Representation" disputes involve
defining the bargaining unit and determining the employee
representative for collective bargaining. Under 2, Ninth, of the
Act, the National
Page 480 U.S.
1301 , 1303
Mediation Board has exclusive jurisdiction over
representation disputes. 45 U.S.C. 152, 181.
Applicants, Western Airlines and Delta Air Lines, entered
into an agreement and plan of merger on September 9, 1986. The
merger agreement was approved by the United States Department of
Transportation on December 11, 1986. On December 16, 1986,
shareholder approval of the merger was conferred and Western
Airlines became a wholly owned subsidiary of Delta. On the morning
of April 1, 1987, the merger of Western Airlines with Delta was
scheduled to be completed. See infra at ___.
Respondents represented various crafts or classes of
employees of Western Airlines. The Air Transport Employees (ATE)
was designated by the National Mediation Board as the bargaining
representative for a unit of Western employees consisting of
clerical, office, fleet, and passenger service employees. The
International Brotherhood of Teamsters Local 2707 was the certified
representative of three crafts or classes employed by Western:
mechanics and related employees, stock clerks, and flight
instructors. Each union's collective-bargaining agreement has a
provision stating that the agreement shall be binding upon
successors of the company.
Delta has substantially more employees than Western in the
crafts or classes represented by the unions, and these Delta
employees had no bargaining representative. Respondents filed
grievances alleging that Western violated the successorship
provisions of the two collective- bargaining agreements by failing
to secure Delta's agreement to be bound by the
collective-bargaining agreements between Western and respondent
unions. Western refused to arbitrate the grievances, asserting that
they necessarily involved representation issues and therefore were
within the exclusive jurisdiction of the National Mediation
Board.
The unions filed separate complaints in the District Court
for the Central District of California, each requesting the
Page 480 U.S.
1301 , 1304
District Court to treat the successor clause dispute as a
minor dispute, and compel arbitration of the dispute by the System
Adjustment Board. Both complaints were dismissed for lack of
subject matter jurisdiction.
On March 17, 1987, the Court of Appeals for the Ninth Circuit
entered an interim order directing arbitration of the grievances to
proceed before the unions' respective System Adjustment Boards
pending appeal.
At approximately 8 p.m., eastern time, March 31-little more
than 12 hours before the merger was scheduled to take place-the
Court of Appeals for the Ninth Circuit issued the following
order:
"1. The judgments of the district
court dismissing the unions' actions are reversed and the causes
are remanded with instructions to enter orders compelling
arbitration.
"2. Western's motion for
reconsideration of our order compelling arbitration pending appeal
is denied.
"3. The contemplated merger of
Western Air Lines and Delta Air Lines is enjoined pending
completion of arbitration proceedings or until Western and Delta
file with the Clerk of this Court a stipulation that the result of
the arbitration, subject to appropriate judicial review and all
valid defenses, will bind the successor corporation. Upon filing of
such stipulation and approval by the court, the injunction of the
merger shall terminate.
* * * * *
"It is so ordered. A written opinion will be filed as soon as
practicable." Application Exh. A.
The timing and substance of the Court of Appeal's order under
the exigencies of this case made compliance with Rule 44.4 of this
Court, requiring that a motion for a stay first be filed with the
court below, both virtually impossible and legally futile. I
conclude that this situation presents one of those rare,
extraordinary circumstances in which request for
Page 480 U.S.
1301 , 1305
a stay before the Court of Appeals is not required under the
Rule.
I also conclude that the judgment of the Court of Appeals,
reversing the District Court decisions, requiring the entry of
orders compelling arbitration, and enjoining the merger, is final
within the meaning of 28 U. S.C. 2101(f). The Court of Appeals'
provision for lifting the injunction upon certain stipulations of
applicants does not divest the judgment of finality when, as in
this case, the required stipulations, to have any significance,
must bind applicants to a concession of their position on the only
question before the Court of Appeals: whether the successor clause
dispute is within the jurisdiction of the System Adjustment Board
or the National Mediation Board.
Moreover, regardless of the finality of the judgment below,
"a Circuit Justice has jurisdiction to vacate a stay where it
appears that the rights of the parties to a case pending in the
court of appeals, which case could and very likely would be
reviewed here upon final disposition in the court of appeals, may
be seriously and irreparably injured by the stay, and the Circuit
Justice is of the opinion that the court of appeals is demonstrably
wrong in its application of accepted standards in deciding to issue
the stay." Coleman v. Paccar, Inc., 424 U.S.
1301, 1304, 847 (1976) (REHNQUIST, J., in chambers).
The reasoning of every other Court of Appeals that has ruled
on the issue raised before the Ninth Circuit casts grave doubt on
the validity of the Ninth Circuit's action in this case. The great
weight of the case law supports the proposition that disputes as to
the effect of collective- bargaining agreements on representation
in an airline merger situation are representation disputes within
the exclusive jurisdiction of the National Mediation Board. In
International Brotherhood of Teamsters v. Texas Int'l Airlines,
Inc., 717 F.2d
157 (1983), the Court of Appeals for the Fifth Circuit held
that "[t]he [Railway Labor] Act commits disputes involving a
determination of who is to represent airline employ-
Page 480 U.S.
1301 , 1306
ees in collective bargaining to the exclusive jurisdiction of
the National Mediation Board." The Fifth Circuit stated that "[a]
court may not entertain an action involving such a dispute even if
it arises in the context of otherwise justiciable claims. . . .
Moreover, a court may not grant injunctive relief maintaining the
status quo if the underlying dispute is representational in nature,
because to do so would necessarily have the effect, at least during
the period of the injunction, of deciding the representation
issue." Id., at 161. "Given the Mediation Board's undeniable sole
jurisdiction over representation matters," and the practical
problems of divided jurisdiction among the other dispute-
resolution fora, the Fifth Circuit inferred "a congressional
intention to allow that agency alone to consider the post-merger
problems that arise from existing collective bargaining
agreements." Id., at 164. The Court of Appeals for the Seventh
Circuit treated the question of National Mediation Board
jurisdiction over alleged collective-bargaining violations
implicating postmerger representation as one settled by " 'the
overwhelming and well-developed case law,' " and found "no reason
to depart from the consistent and well-considered analysis of our
colleagues in other circuits." Air Line Employees v. Republic
Airlines, Inc., 798 F.2d
967, 968 (quoting Order No. 86C5239 (ND Ill. July 28, 1986)),
cert. denied, 479 U.S. 962 (1986). See also Air Line Pilots Assn.
Int'l v. Texas Int'l Airlines, Inc., 656 F.2d
16 (CA2 1981); International Assn. of Machinists v. Northeast
Airlines, Inc., 536 F.2d
975, 977 (CA1), cert. denied, 429 U.S. 961 (1976); Brotherhood
of Railway & S.S. Clerks v. United Air Lines, Inc., 325 F.2d
576 (CA6 1963), cert. dism'd, 379 U.S. 26d 173 (1964).
It was upon this overwhelming body of case law that the District
Court for the District of Columbia relied when it considered the
complaint of the Association of Flight Attendants (AFA), also
arising from the Western-Delta merger. AFA's complaint, seeking an
order compelling Western to submit to arbitration by the System
Board of Adjustment and enjoining
Page 480 U.S.
1301 , 1307
the merger pending completion of proceedings before the
System Board, was dismissed. Association of Flight Attendants,
AFL-CIO v. Western Airlines, Inc., No. 87-0040 (Feb. 20, 1987). On
March 31, 1987, the Court of Appeals for the District of Columbia
Circuit denied AFA's motions to compel arbitration pending appeal,
and its motion for expedited appeal and decision before April 1.
Association of Flight Attendants, AFL-CIO v. Western Airlines,
Inc., No. 87-7040. The Ninth Circuit's divergence from this line of
Court of Appeals decisions leads me to find it very likely that at
least four Justices would vote to grant certiorari, and that the
applicant is likely to prevail on the merits.
To appreciate the balance of the equities created by the
Ninth Circuit's order, one must focus on the stipulation clause of
that order. What was to be gained or lost by the applicants and
respondents in this case was not the merger of Western and Delta
Airlines alone but the substance of the stipulation on which that
merger was conditioned by the Ninth Circuit.
The stipulation which the Ninth Circuit required from Western
and Delta Airlines is subject to two interpretations. The first is
a requirement that Delta and Western agree that if, after full
judicial review of the jurisdictional as well as other issues
raised, it is determined that the claims presented by respondents
fall under the jurisdiction of the System Adjustment Boards, the
successor corporation will be bound by the result of the completed
arbitration process. Under this interpretation of the stipulation,
the successor corporation was required to do no more than adhere to
the obligations placed upon it by law, as those obligations are
determined in the litigation. Those legal obligations, of course,
would exist independent of any stipulation. If the stipulation
would leave the applicants free to assert any of their arguments
against the jurisdiction of the System Adjustment Boards, the
applicants would have remained in the
Page 480 U.S.
1301 , 1308
same position after the stipulation as they were before, and
the stipulation would have served no purpose.
The other interpretation of the clause is that, in order to
avoid an eleventh hour injunction of the merger, Delta and Western
were required to stipulate as to the correctness of respondents'
argument that this dispute did in fact fall under the jurisdiction
of the System Adjustment Boards. As to the balance of equities on
this interpretation of the Ninth Circuit's order, they clearly
weigh in favor of the applicants. The potential harm that would be
suffered by the applicants as a result of the Court of Appeals'
injunction of their merger is seriously aggravated by the fact that
the order issued on the very eve of the merger's consummation. For
several months, the applicants have been planning to combine their
large-scale, complex, interrelated, and heavily regulated
operations effective April 1, 1987. That planning included the
transfer, modification, and cancellation of hundreds of Western's
contracts for supplies and services and equipment leases. The
approval of the Federal Aviation Administration (FAA) of changes in
Western's operating certificates, specifications, and training
programs have been sought and received. Maintenance schedules,
flight schedules, and staffing schedules have been modified in
order to effect a smooth transition to a merged operation on April
1. Large numbers of Western management personnel, without whom it
cannot operate as an independent entity, are to be severed
effective April 1; many have presumably arranged for new
employment. Delta has negotiated for transfer of Western's Mexican
and Canadian routes with the respective governments of those
countries. It is doubtful that these arrangements can be undone if
the merger does not take place as anticipated.
Because of the operational adjustments that are already in
place, the FAA has expressed doubt whether Western will be
permitted to continue operations should the merger not take place,
potentially stranding thousands of travelers.
Page 480 U.S.
1301 , 1309
Employees, expecting to be transferred to new locations after
April 1, have sold old homes and bought or leased new ones. Changes
in pay, working conditions, and conditions of employment all have
been planned for and relied upon in anticipation of the merger.
Millions of dollars of advertising have been targeted toward the
April 1, 1987, merger date. And the list of consequences goes on.
See Application, Affidavit of Hollis Harris and Exhibit 1 thereof;
Affidavit of Robert Oppenlander; Affidavit of Russell H. Heil;
Affidavit of Whitley Hawkins; Affidavit of C. Julian May; Affidavit
of Jason R. Archambeau. The cost of enjoining this huge undertaking
only hours before its long awaited consummation is simply
staggering in its magnitude, in the number of lives touched and
dollars lost. To assume that enjoining of the merger would do no
more than preserve the "status quo," in the face of this upheaval,
would be to blink at reality. Under the second interpretation of
the stipulation clause-the only interpretation under which the
required stipulations would have had meaning-applicants could
prevent these losses only by conceding their argument, supported by
the great weight of authority, that their dispute with respondents
fell under the jurisdiction of the National Mediation Board. On the
other side, respondents had no entitlement to such a concession,
obtained under these circumstances, from parties that had otherwise
indicated their intent to continue to assert the contrary position
on the jurisdictional issue. Before the Court of Appeals the unions
argued that completion of the merger would moot their claims under
the collective-bargaining agreement to System Board arbitration.
For the reasons stated above, I doubt that respondents' claims
would ultimately prevail. Moreover, preservation of respondents'
claims could have been accomplished equitably by a speedier
resolution of the jurisdictional issue, rather than by the
inequitable last-minute foisting of a Hobson's choice on the
applicants. Finally, the employees themselves are protected by
Delta's assumption of the Allegheny-Mohawk Labor Protec-
Page 480 U.S.
1301 , 1310
tive Provisions, requiring the continuation of certain fringe
benefits, displacement and dismissal allowances for up to four to
five years for employees who lose their jobs or get lesser paying
jobs, moving and related costs for employees required to move,
integration of seniority lists, and binding arbitration of any
dispute relating to the labor protective provisions. See
Allegheny-Mohawk Merger Case, 59 C.A.B. 22 ( 1971); Heil Affidavit,
6.
Because the stipulation upon which the lifting of the
injunction was conditioned appears to be either unnecessary or
extremely inequitable, depending upon its interpretation, and
because it appears to me likely that at least four Justices would
vote to grant certiorari and that the applicants are likely to
prevail on the merits, I grant the requested stay of the Court of
Appeals for the Ninth Circuit's injunction and order compelling
arbitration before the System Boards, pending the timely filing and
subsequent disposition of a writ of certiorari in this
case.