141 F. Supp. 3d 836
N.D. Ill.2015Background
- United and ALPA negotiated a 2012 collective bargaining agreement (2012 UPA) that included $400 million in retroactive pay; legacy United pilots were allocated $225 million.
- ALPA (via the United Master Executive Council and LOA 24) used a formula comparing United 2003 hourly rates to Delta 2008 rates (the “Delta Differential”), multiplied by retro hours, to allocate the $225 million among United pilots.
- Pilot instructors received large pay increases under the 2012 UPA primarily from changes to their pay formula (a predetermined salary/hours structure), unlike line pilots paid by hourly rates and hours worked.
- Management pilots were treated differently under LOA 24: certain management time yielded no retro hours, other management time used average credit hours instead of actual hours, and bonuses could offset retro pay.
- Plaintiffs (two pilot instructors and three management pilots) sued ALPA claiming breach of the duty of fair representation (DFR) under the Railway Labor Act; management pilots also pleaded unjust enrichment in the alternative.
- The court granted judgment on the pleadings for ALPA as to the pilot instructors’ DFR claim but denied judgment as to the management pilots’ DFR and unjust enrichment claims, allowing the latter to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ALPA breached DFR to pilot instructors by using the Delta-differential formula that ignored the instructors’ pay-formula component | Pilot instructors: ALPA’s formula disregarded the most significant component of their UPA pay increase, thereby arbitrarily reducing their retro pay | ALPA: applied a single, uniform formula to all pilots; using the same starting point for both groups was rational | Court: Held for ALPA — formula was rational and not wholly irrational or arbitrary; instructors’ claim dismissed |
| Whether ALPA breached DFR to management pilots by (a) offsetting retro pay by bonuses, (b) using average credit hours instead of actual hours, and (c) excluding certain hours | Management pilots: ALPA singled out management pilots via offsets, average-hours rule, and exclusions, unfairly and discriminatorily reducing their retro pay | ALPA: either owed no DFR to management pilots, or, even if it did, its allocation decisions were part of a complex, rational bargaining compromise | Court: Denied judgment on the pleadings as to management pilots — factual dispute whether ALPA acted as their representative and whether its targeted deviations were arbitrary survives pleadings |
| Whether ALPA owed a DFR to management pilots at all (i.e., were they within ALPA’s exclusive representation) | Management pilots: ALPA acted as their representative (distributed retro pay, included management provisions in LOA 24, accepted dues/fees) | ALPA: contends it may not have owed DFR to management pilots | Court: Not resolved on pleadings — factual issue exists; DFR may attach given ALPA’s conduct; claim survives |
| Whether management pilots’ unjust enrichment claim is viable or preempted / barred by contract | Management pilots: plead unjust enrichment in the alternative if no contract/DFR applies | ALPA: unjust enrichment unavailable where contract governs and may be preempted by federal law | Court: Premature to dismiss; unjust enrichment claim may proceed conditionally (pleaded in the alternative) until DFR/contractual status resolved |
Key Cases Cited
- Vaca v. Sipes, 386 U.S. 171 (union’s duty to represent without discrimination)
- O’Neill v. Air Line Pilots Ass’n, Int’l, 499 U.S. 65 (deferential review; allocation compromise not per se discriminatory)
- Marquez v. Screen Actors Guild, 525 U.S. 33 (union judgments entitled to wide range of reasonableness)
- Cunningham v. Air Line Pilots Ass’n, Int’l, 769 F.3d 539 (7th Cir. 2014) (Rule 12(c) may dispose of DFR claims when complaint plus agreements defeat discrimination claim)
- Rakestraw v. United Airlines, Inc., 981 F.2d 1524 (7th Cir. 1992) (DFR obligations and limits; subjective motive not dispositive)
- Addington v. U.S. Airline Pilots Ass’n, 791 F.3d 967 (9th Cir. 2015) (union must act to promote aggregate welfare; legitimate union purpose standard)