Daniel Demetris v. Transp. Workers Union of Am.
862 F.3d 799
| 9th Cir. | 2017Background
- American Airlines and American Eagle filed Chapter 11 in Nov. 2011; TWU (Transport Workers Union of America) negotiated new CBA terms that cut pensions/medical and obtained an equity stake (3.1%, later 4.8%) as part of the bankruptcy consideration.
- TWU and American adopted an Early Separation program (Sept–Oct 2012) offering lump-sum cash payments to senior members who voluntarily left; those who took Early Separation received cash but (as implemented) were largely excluded from the bulk of the later equity distribution.
- TWU formed a committee and hired financial advisers in April 2013 to design an equity-distribution plan; a draft circulated June–July 2013 and the union’s governing council approved the final plan on July 16, 2013.
- Plaintiffs (members who accepted Early Separation, aka “Retirees”) sued in consolidated actions alleging TWU breached its duty of fair representation by excluding Early Separation participants from most equity.
- District court dismissed the duty-of-fair-representation claims as implausible; the Ninth Circuit affirmed, holding TWU’s conduct was not arbitrary, discriminatory, or in bad faith.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TWU’s distribution was arbitrary | Retirees: withholding equity from Early Separation participants was irrational given same concessions | TWU: decision involved union judgment, committee review, and was within wide reasonableness | Not arbitrary — union exercised judgment; dismissal affirmed |
| Whether distribution was discriminatory | Retirees: TWU favored politically valuable (voting) members and punished those who left | TWU: plan served legitimate objectives and also gave equity to nonvoting members (deceased, injured, on leave) | Not discriminatory — no plausible facts showing intentional, severe, illegitimate discrimination |
| Whether union acted in bad faith by delaying disclosure | Retirees: TWU’s Sept 2012 letter created duty to disclose distribution criteria before Early Separation deadline | TWU: no plan existed before deadline; statements warned equity was undetermined and active status might be considered | No bad faith — allegations at most show negligence; implausible to infer fraud or deceit |
| Whether union acted in bad faith by manipulating procedures | Retirees: TWU allegedly manipulated internal processes to favor active members | TWU: Plaintiffs did not identify any internal rule or policy violated | No bad faith — no pleaded violation of internal rules; dismissal affirmed |
Key Cases Cited
- Vaca v. Sipes, 386 U.S. 171 (union’s duty of fair representation derives from exclusive representation)
- Marquez v. Screen Actors Guild, 525 U.S. 33 (union breaches duty when conduct is arbitrary, discriminatory, or in bad faith)
- Beck v. United Food & Commercial Workers Union, 506 F.3d 874 (plaintiff bears burden to prove breach; arbitrary standard explained)
- Air Line Pilots Ass’n v. O’Neill, 499 U.S. 65 (union judgment reviewed within wide range of reasonableness)
- Amalgamated Ass’n v. Lockridge, 403 U.S. 274 (discrimination actionable only if intentional, severe, and unrelated to legitimate objectives)