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One of the major considerations (or impediments) to corporate mergers – especially in the
airline industry – deals with how to integrate the unionized employees of both corporations
into one new company. As seniority is the most common method by which employees are
granted a preference in job security, promotions, and of other awards, it becomes a very
important, and heated, issue as to how to integrate the seniority list of the merged
corporations.
Exactly what does “seniority list integration” mean?
Quite simply it means the method by which the two seniority lists are combined into one.
Prior to negotiating over the integration of the seniority lists, each party must decide how
they wish to see it accomplished. There is no set way of doing it. Each group determines
what is best for their group.
Below are four commonly used methods of list integration:
Date-of-Hire
Many people believe straight date-of-hire is the only fair way to merge the lists. It is the only
method that gives each employee credit for his or her entire career at a unionized
corporation, such as an airline. Under this method, one year at Airline X is no more or no
less valuable than one year at Airline Y.
Rank Ratio
This method is fairly basic. For example, the ratio could be 1:1, 2:1, 4:3, 5:7, the combinations
are infinite. A 1:1 ratio takes the number one person from Airline X and places her below the
number one person at Airline Y (or vice versa); the number two person from Airline X goes
behind the number two person at Airline Y and so on. A 2:1 ratio is the same as a 1:1 ratio
except that numbers one and two of Airline X go behind the number one at Airline Y (or
vice versa).
Relative Seniority
Each person maintains her/his relative seniority on the new combined list. For example, a
person in the top 5% of Airline X will be in the top 5% of the combined list of Airline X-Y. A
person who is in the bottom 38% at Airline Y will end up in the bottom 38% of the
combined list of Airline X-Y. In a relative seniority integration no one loses or gains relative
seniority; each person maintains the same bidding power as if the lists had not been merged.
Career Expectation
Used often in pilot list integrations is the career expectation method. This complex method
examines each pre-merger group, including the routes, aircraft types, fleet plans, and growth
plans. The list is integrated in a way that attempts to preserve each group’s pre-merger career
expectations.
Date-of-hire, rank ratio, relative seniority, and career expectation are but four methods used
to integrate seniority lists. Often the lists are integrated using a combination of two or more
of these methods. Another method of ensuring fairness is to fence all or part of the operation
for some period of time.
Don Addington; John Bostic; Mark Burman; Afshin Iranpour; Robert Velez; Steve Wargocki; individual
residents of the State of Arizona, formerly employed by America West Airlines, Inc. and presently employed
by its successor after merger, US Airways, Inc., Plaintiffs, vs. US Airline Pilots Association, an
unincorporated association representing the pilots in the employment of US Airways Inc.; US Airways, Inc., a
Delaware corporation, Defendants.
No. CV-08-1633-PHX-NVW
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA
588 F. Supp. 2d 1051; 2008 U.S. Dist. LEXIS 95214; 185 L.R.R.M. 2980; 156 Lab. Cas. (CCH) P11,136
November 20, 2008, Decided November 20, 2008, Filed
SUBSEQUENT HISTORY: Motion granted by, in part, Motion denied by, in part Addington v. US Airline Pilots
Ass’n, 2008 U.S. Dist. LEXIS 105831 (D. Ariz., Dec. 24, 2008)
COUNSEL: [**1] For Don Addington, individual resident of the State of Arizona, formerly employed by America
West Airlines, Inc. and presently employed by its successor after merger, US Airways, Inc., John Bostic, individual
resident of the State of Arizona, formerly employed by America West Airlines, Inc. and presently employed by its
successor after merger, US Airways, Inc., Mark Burman, individual resident of the State of Arizona, formerly
employed by America West Airlines, Inc. and presently employed by its successor after merger, US Airways, Inc.,
Afshin Iranpour, individual resident of the State of Arizona, formerly employed by America West Airlines, Inc. and
presently employed by its successor after merger, US Airways, Inc., Roger Velez, individual resident of the State of
Arizona, formerly employed by America West Airlines, Inc. and presently employed by its successor after merger,
US Airways, Inc., Steve Wargocki, individual resident of the
State of Arizona, formerly employed by America West Airlines, Inc. and presently employed by its successor after
merger, US Airways, Inc., Plaintiffs: Andrew S Jacob, Kelly Joyce Flood, Marty Harper, Shughart Thomson &
Kilroy PC, Phoenix, AZ.
For US Airline [**2] Pilots Association, an unincorporated association representing the pilots in the employment of
US Airways, Inc., a Delaware corporation, Defendant: Nicholas Paul Granath, LEAD ATTORNEY, Seham Seham
Meltz & Petersen LLP, Minneapolis, MN; Lee Seham, Lucas K Middlebrook, Seham Seham Meltz & Petersen LLP,
White Plains, NY; Stanley Lubin, Lubin & Enoch PC.
JUDGES: Neil V. Wake, United States District Judge. OPINION BY: Neil V. Wake
OPINION
[*1055] ORDER
Plaintiff pilots (the “Plaintiff West Pilots”) brought
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588 F. Supp. 2d 1051, *1055; 2008 U.S. Dist. LEXIS 95214, **2; 185 L.R.R.M. 2980; 156 Lab. Cas. (CCH)
P11,136
suit against their employer, US Airways Inc. (“US Airways”), and their labor union, the US Airline Pilots
Association (“USAPA”) seeking injunctive relief and damages. The complaint alleged that US Airways breached a
collective bargaining agreement and that the union breached its duty of fair representation. (Doc. # 1.) The Plaintiff
West Pilots also filed a Motion for a Preliminary Injunction against US Airways. (Doc. # 12.) Both Defendants
moved to dismiss the case for lack of subject matter jurisdiction. (Docs. # 30, 35, 36.) In addition, USAPA moved to
dismiss for failure to state a claim upon which relief can be granted, or for summary judgment. (Docs. # 35, 36.)
Because the motion for summary judgment is premature, Fed. R. Civ. P. 56(f), [**3] it will be denied. The
remaining motions of USAPA will also be denied. US Airways’ motion to dismiss for lack of subject matter
jurisdiction will be granted. The Motion for Preliminary Injunction against US Airways (doc. # 12) will be denied
for lack of jurisdiction, with limited alternative findings of fact and conclusions of law to accelerate appellate review
in case it is sought.
I. FINDINGS OF FACT AND PLAINTIFFS’ ALLEGATIONS
A. Standards of Review
In considering a motion to dismiss for lack of subject matter jurisdiction, the court “is not confined by the facts
contained in the four corners of the complaint–it may consider facts and need not assume the truthfulness of the
complaint.” Americopters, LLC v. F.A.A., 441 F.3d 726, 732 n.4 (9th Cir. 2006). For purposes of a motion to dismiss
for failure to state a claim under Fed. R. Civ. P. 12(b)(6), the court accepts as true the allegations in the complaint.
Porter v. Jones, 319 F.3d 483, 489 (9th Cir. 2003). A ruling on a motion for preliminary injunction requires findings
of fact and conclusions of law. 29 U.S.C. § 107 (applicable to labor disputes); Fed. R. Civ. P. 52(a)(2). To honor all
of these standards, the allegations are summarized [**4] below, and necessary findings of fact and conclusions of
law are also stated.
B. Background and Summary of Agreements
The parties have stipulated to many essential facts of the case. (Doc. # 77.) Those facts are summarized and
supplemented by the following additional findings for purposes of jurisdiction and possible injunctive relief.
This case concerns two sets of pilots. One set, the West Pilots, were employed as pilots of America West Airlines,
Inc. (“America West”) before May 2005. The other set, the East Pilots, were employed by US Airways at the same
time. The terms “East Pilots” and “West Pilots” refer only to pilots who were on the seniority lists of their respective
airlines at that time. Both groups of pilots were then represented by the same labor union, the Air Line Pilots
Association (“ALPA”).
[*1056] Toward the end of 2003, America West and the West Pilots negotiated a collective bargaining agreement
effective January 2004 (the “2004 CBA”). That agreement provided that in the event of a merger where America
West was not the surviving carrier, America West would make reasonable efforts to have the surviving carrier
“integrate the two Pilot groups in accordance with [ALPA’s] Merger [**5] Policy.”
In May 2005, America West agreed to merge with US Airways. The merger agreement provided that US Airways
would succeed both air carriers in the combined enterprise. A few months later, US Airways (now acting as a
successor to both airlines), entered into a multilateral contractual agreement with the East Pilots and the West Pilots.
This agreement was called the Transition Agreement, and it affected the collective bargaining relationships among
the parties. Though the East Pilots and the West Pilots were both represented by ALPA, the Transition Agreement
was signed by Master Executive Councils of both pilot groups.
The allegations show that the negotiations and the resulting contract were designed to resolve the tension between
competing interests of the East Pilots and the West Pilots. Some terms of the Transition Agreement benefited the
East Pilots, some benefited the West Pilots. The Agreement provided generally that, until the two airlines achieved
operational integration, only America West pilots would fly on pre-merger America West aircraft and on western
flights that were current and announced as of the time of the agreement (collectively, “West Operations”). A parallel
[**6] provision existed for the East Pilots as to pre-merger US Airways aircraft and eastern flights (collectively,
“East Operations”). Subject to the Transition Agreement, US Airways could continue to operate each airline
separately, in accordance with the terms of each carrier’s collective bargaining agreement.
The Transition Agreement provided that during
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588 F. Supp. 2d 1051, *1056; 2008 U.S. Dist. LEXIS 95214, **6; 185 L.R.R.M. 2980; 156 Lab. Cas. (CCH)
P11,136
separate operations the parties were to adopt a single integrated seniority list “in accordance with ALPA Merger
Policy,” and the parties were bound to accept the list if it complied with certain criteria. However, this new seniority
list would not be effective until the two operations were integrated. The Transition Agreement also specified that
during separate operations any newly hired pilots (the “New Hires”) would be placed on a third seniority list and
made junior to all pilots on the America West and old US Airways seniority lists. US Airways had a significant
number of pilots on furlough status at the time of the merger, so the parties agreed that America West could not hire
new pilots until all furloughed US Airways pilots had been offered recall. Separate operations under separate
seniority lists would continue until two events [**7] took place: the completion of an integrated seniority list and the
negotiation of a single collective bargaining agreement. Within twelve months thereafter, operations would be
consolidated under a single Federal Aviation Administration operating certificate and the single seniority list would
govern.
Pursuant to ALPA Merger Policy, the two groups of pilots attempted to create a single integrated seniority list
through mediation. This attempt failed. Pursuant to the same policy and the Transition Agreement, the East Pilots
and the West Pilots brought the matter to binding arbitration in October 2006, and arbitrator George Nicolau issued
his decision in May 2007, which included a new seniority list (the “Nicolau Award”). This list gave the West Pilots
seniority over the East Pilots who were on furlough at the time of the merger, gave 517 East Pilots seniority over all
West Pilots, and blended the seniority of [*1057] the West Pilots and the remaining East Pilots. The arbitrator
considered the arguments of both sides and explained why he considered this award fair and reasonable under the
circumstances. US Airways was a much older airline than America West, and for that reason the West Pilots [**8]
would have fallen lower on a merged date-of-hire list than they would have under the Nicolau Award. However, at
the time of the merger, US Airways had dim economic prospects. The company was insolvent and operating in
bankruptcy reorganization, and it had 1,751 pilots on furlough status. America West, by contrast, was in stronger
financial condition, and all of its pilots were on active status. The arbitrator concluded that the superior employment
prospects of the West Pilots justified a superior position in the seniority list. At the same time, he declined to give
the West Pilots the full seniority that they requested. On December 20, 2007, US
Airways accepted this seniority list.
C. Formation and Purpose of USAPA
The East Pilots were unhappy with the results of the arbitration. In response, they used their majority status to form
a new union, USAPA. On April 18, 2008, the National Mediation Board certified USAPA as the exclusive collective
bargaining representative of all pilots employed by US Airways. USAPA has shown itself to be hostile to the
arbitrated seniority list. During the campaign to start USAPA, its proponents expressly promised that the new union
would not follow the Nicolau [**9] Award. USAPA has refused its duty under the 2004 CBA and the Transition
Agreement to bargain for implementation of the Nicolau seniority list.
USAPA’s Constitution declares its objective “[t]o maintain uniform principles of seniority based on date of hire and
the perpetuation thereof, with reasonable conditions and restrictions to preserve each pilot’s un-merged career
expectations.” To this end, USAPA has convened a merger committee made up of twelve East Pilots and no West
Pilots. This committee has formulated a date-of-hire seniority policy, which includes certain conditions and
restrictions but is greatly more favorable to the East Pilots, including those East Pilots on furlough at the time of the
merger, than the Nicolau Award. The conditions and restrictions do not eliminate or counterbalance the relative
disadvantage the date-of-hire policy poses to the West Pilots. The chairman of the committee testified that the policy
was designed to address the pre-merger career expectations of each pilot group, but he also admitted on crossexamination that he never considered the impact that this policy would have on the West Pilots. The chairman also
admitted that in formulating the policy, [**10] he gave no consideration to the relative financial condition of each of
the merging airlines, or to the fact that many East Pilots were on furlough status at the time of the merger. The dateof-hire policy was submitted to US Airways on September 30, 2008, but US Airways has not yet responded.
A single collective bargaining agreement has not been reached. In the meantime, US Airways has maintained
separate East and West Operations under separate seniority lists, as the Transition Agreement expressly entitles it to
do until operations are consolidated and a merged seniority list effectuated.
D. The Pilot Furloughs
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P11,136
In the years since the merger, US Airways has offered recall to all of the East Pilots who were previously
furloughed. Eight hundred of those pilots accepted recall. US Airways has brought in about 100 additional New
Hires. But with the airline industry now in decline, US Airways [*1058] has begun the process of furloughing
approximately 300 pilots, starting on October 1, 2008. Because the furloughs are separately administered within
each of the merged airlines, some West Pilots are being furloughed in the West Operations while East Pilots junior
to them on the Nicolau merged seniority [**11] list are retained in the East Operations. US Airways may operate the
two airlines separately under the plain terms of the Transition Agreement, but only because operations are not yet
consolidated and a merged seniority list is not in effect. Allegedly, West Pilots are also being furloughed ahead of
New Hires, which the Transition Agreement is claimed to proscribe even during separate operations.
Before the merger, financial difficulties at US Airways prompted the East Pilots to make substantial concessions in
their collective bargaining agreement relating to pay and conditions of employment. According to the Nicolau
Award, the West Pilots’ CBA is significantly more favorable than the East Pilots’ CBA. Other things being equal, it
is in US Airways’ economic interest to furlough West Pilots before it furloughs East Pilots during separate
operations.
E. Plaintiffs’ Claims for Relief
The Plaintiff West Pilots bring this action against USAPA and US Airways seeking damages for lost wages and
benefits and a permanent injunction that they negotiate a single collective bargaining agreement implementing the
Nicolau seniority list. They also seek a preliminary injunction against furloughing any [**12] West Pilot employed
as of September 25, 2005, if the employer retains any New Hire or any East Pilot who was on furlough on that date.
(Doc. # 57-2.) For purposes of the furloughs, the preliminary injunction would give the West Pilots the benefit of the
Nicolau seniority list under consolidated operations by requiring US Airways to lay off junior East Pilots and New
Hires and to transfer West Pilots to their positions. Alternatively, US Airways could comply with the preliminary
injunction by keeping flights it has decided to end, or by laying off neither group and paying non-working pilots,
things the Transition Agreement absolves US Airways from having to do.
The Plaintiff West Pilots allege in Count One that US Airways breached its collective bargaining agreement by
furloughing West Pilots ahead of New Hires and failing to furlough West Pilots and East Pilots according to the
Nicolau Award. Present application of the Nicolau Award requires a strained reading of the Transition Agreement
because the Transition Agreement expressly permits use of separate seniority lists during separate operations. The
better avenue to relief under the Nicolau Award lies in trying to blame the airline [**13] for the union’s delay in the
bargaining. Indeed, Count Two does that very thing, charging US Airways with the failure to exert every reasonable
1
reasonable negotiating efforts had been made, operations would have been consolidated and the Nicolau Award
would protect the West Pilots. Count Three charges USAPA with breach of its [*1059] duty of fair representation of
the West Pilots in these affairs.
1 The complaint alleges that the airline has failed to negotiate “in good faith.” This pleading is understood to invoke
the duty of the employer under the Railway Labor Act “to exert every reasonable effort to make . . . agreements.” 45
U.S.C. § 152 First; see also Flight Attendants v. Horizon Air Indus., Inc., 976 F.2d 541, 544 (9th Cir. 1992)
(comparing this duty to the duty of good faith under the National Labor Relations Act and holding that the Railway
Labor Act standard requires “at least” the same avoidance of bad faith that the NLRA requires).
F. Other Proceedings
One America West pilot has filed a grievance under the 2004 CBA regarding the impending furlough. The grievance
was denied [**14] and referred to a Board of Adjustment convened under the Transition Agreement. The grievance
asserts breach of the Transition Agreement but no breach of the duty of fair representation and no breach of the
obligation to exert every reasonable effort in …