Lead Opinion
Plaintiff-appellee Air Line Pilots Association (ALPA) brought this action under the Railway Labor Act (RLA), 45 U.S.C. §§ 151-188, seeking to enjoin the defendants from engaging in what ALPA described as “a brazen and apparently successful effort to destroy a union,” Appellee’s Br. at 3, by transferring work from a unionized firm to its non-unionized corporate sibling. A magistrate judge found that a major dispute existed as that term is used in the jurisprudence of the RLA and further found that the defendants had engaged in prohibited conduct. He therefore recommended the imposition of a preliminary injunction. The district court concurred and issued the requested injunction. Concluding, as we do, that the court did not apply the correct legal standards, we vacate the injunction and remand for further proceedings consistent with this opinion.
I. THE STATUTORY SCHEME
When Congress envisioned a need to create a separate labor regime for railroads in order to mitigate the potential for disruption of interstate travel and transportation of goods, it conceived the RLA. See Detroit & Toledo Shore Line R.R. Co. v. United Transp. Union,
The RLA evinces a strong preference for alternative dispute resolution and sharply limits judicial involvement in labor disputes. See Tex. & New Orleans R.R. Co. v. Bhd. of Ry. & S.S. Clerks,
The Supreme Court has denominated disputes that touch upon the proper interpretation of a CBA as “minor,” and has made it pellucid that courts have no jurisdiction in such cases. Elgin, Joliet & E. Ry. Co. v. Burley,
The RLA contemplates the existence of two other types of disputes. A representational dispute involves a union’s claim to be the lawful representative of certain employees. Air Line Pilots Ass’n, Int’l v. Tex. Int’l Airlines, Inc.,
Another type of dispute concerns allegations that an employer’s conduct interferes with employees’ rights to organize and designate an exclusive bargaining agent. Such organizational disputes implicate 45 U.S.C. § 152, Third and Fourth. Those provisions bar covered employers from meddling in, coercing, or unduly influencing employees’ representational choices and from interfering with the right to unionize. Atlas Air, Inc. v. Air Line Pilots Ass’n,
II. THE CASE AT BAR
In 1999, Guilford Transportation Industries, Inc. (Guilford) formed a wholly-owned subsidiary, Pan ¡American Airlines, Inc. (PAA), as a repository for the acquired assets of a bankrupt airline. PAA placed those assets in a wholly-owned subsidiary, Pan American Airways Corp. (Pan Am), which began offering commercial airline service aboard a fleet of leased Boeing 727 jet aircraft. Over time, Pan Am’s service graduated from charter flights to scheduled flights originating at airports on the East Coast and in the Caribbean.
From the beginning, Pan Am’s airplanes were flown by the pilot force of its bankrupt predecessor. Pan Am and the pilots’ union — ALPA—entered into a CBA on November 15, 1999. At its high point, Pan
Finances explain this reduction in force. The record shows that Pan Am lost tens of millions of dollars over approximately five years. These losses took a toll, and Pan Am informed federal regulators in June of 2004 that it would cease all flight operations on October 31, 2004. Pan Am hewed to that line and is now in the process of winding up its affairs.
There is, however, more to the story. In 1999, PAA formed a second wholly-owned subsidiary, Boston-Maine Airways Corp. (Boston-Maine). Boston-Maine, a commercial airline, employs only non-union pilots. Initially, it operated a fleet of small aircraft that included two CASA-212 turboprop cargo planes and ten Jetstream 3100 nineteen-seat passenger aircraft.
Boston-Maine had higher aspirations and, in 2002, it applied to the United States Department of Transportation and the Federal Aviation Administration (FAA) for permission to fly Boeing 727 aircraft. Despite ALPA’s vigorous opposition, the federal regulators approved the application. Boston-Maine began operating 727s in commercial service in the summer of 2004 and Pan Am thereafter contracted with Boston-Maine to fly certain Pan Am routes. That move triggered the commencement of the instant action. In its complaint, filed on September 1, 2004,
Simultaneous with the filing of its complaint, ALPA moved for temporary and preliminary injunctive relief seeking, inter alia, to prohibit Boston-Maine from operating large aircraft (including 727s) in commercial service while ALPA and Pan Am negotiated changes to the CBA. The district court referred the motion to a magistrate judge. See 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b). Following a two-day evidentiary hearing, the magistrate judge recommended that the court characterize the dispute as major, reasoning that Pan Am and Boston-Maine should be treated as a single entity and that the CBA could not plausibly be interpreted to justify Pan Am’s use of Boston-Maine to operate flights that otherwise would be flown by ALPA-repre-sented pilots. The magistrate judge also recommended a finding that Pan Am and Boston-Maine had violated the unionized pilots’ statutory rights because the attempted creation of a parallel 727 operation constituted an effort to interfere with the statutorily protected right to union representation. See Air Line Pilots Ass’n, Int’l v. Guilford Transp. Indus., Inc., No. 04-331,
The district court spurned the defendants’ timely objections and adopted the magistrate judge’s report “in its entirety.”
*95 1. To restore to the status quo rates of pay, rules and working conditions of the Pan Am flight crew members as they existed on July 15, 2004, including but not limited to, all those embodied in the collective bargaining agreement between Pan Am and ALPA, until all required bargaining, mediation and dispute resolution procedures of the Railway Labor Act are exhausted.
2. To refrain from using Boston-Maine, or any other affiliated operation, to operate [Boeing]-727s or any other large jet aircraft in service traditionally performed by Pan Am and that Pan Am is capable of performing.
3. To refrain from transferring to Boston-Maine any aircraft from the Pan Am certificate to the Boston-Maine certificate.
Two days later, the district court rebuffed the defendants’ motion for a stay.
The defendants promptly brought this interlocutory appeal, see 28 U.S.C. § 1292(a)(1), and requested an appellate stay. We denied that request on October 22, 2004, but expedited the appeal. Following briefing and oral argument, we took the matter under advisement on December 7, 2004.
III. STANDARD OF REVIEW
We review the district court’s issuance of a preliminary injunction for abuse of discretion. Charlesbank Equity Fund II v. Blinds to Go, Inc.,
Whether a preliminary injunction should issue usually depends upon a medley of four factors:
(1) the likelihood of success on the merits; (2) the potential for irreparable harm if the injunction is denied; (3) the balance of relevant impositions, he.,, the hardship to the nonmovant if enjoined as contrasted with the hardship to the mov-ant if no injunction issues; and (4) the effect (if any) of the court’s ruling on the public interest.
Ross-Simons of Warwick, Inc. v. Baccarat, Inc.,
ALPA argues that this four-part inquiry does not apply in full flower to disputes under the RLA and, specifically, that a showing of irreparable harm is not a condition precedent to preliminary injunctive relief in such cases. This argument rests on Supreme Court dictum. See Conrail,
We find it unnecessary to resolve this apparent tension today. In the last analysis, this appeal turns on the likelihood of success, so we leave for another time the extent to which a showing of irreparable harm is a necessary precondition for preliminary injunctive relief under the RLA.
IV. ANALYSIS
Although ALPA has lumped its grievances together, we think it is useful to envision the challenged conduct as comprising two practices: contracting out and diversion of business. By contracting out, we mean Pan Am’s contracting with Boston-Maine to fly certain Pan Am flights after Boston-Maine had developed a large aircraft service. By diversion of business, we mean Pan Am’s decision to cease all operations while Boston-Maine, having developed a large aircraft service, continues to fly 727s over at least some of Pan Am’s wonted routes. We address these practices sequentially. Before doing so, however, we pause to mention the doctrine of corporate veil-piercing.
A. Veil-Piercing.
ALPA suggests that the corporate veils that separate Guilford, Pan Am, and Boston-Maine should be pierced and the three companies treated as a single entity. ALPA’s effort to frame the dispute in these terms stems from its overly expansive reading of our decision in an earlier RLA case, namely, Brotherhood of Locomotive Engineers v. Springfield Terminal Railway Co.,
If a company has two healthy subsidiaries — one unionized and one not — an attempt to shift work from the former to the latter could, depending upon the terms of the CBA, raise a contract dispute susceptible to arbitration. Such a dispute would be beyond the reach of our jurisdiction and, thus, no judicial inquiry — veil-piercing or otherwise — would be necessary.
Of course, the diversion of work from a unionized subsidiary to a non-union one also might constitute a major dispute (if, say, the matter were not addressed by either the terms of the CBA or prior custom and usage between the parties). In that case the mediation processes of the RLA would come into play. This scenario, like the first scenario, does not engender any need for a veil-piercing analysis; the appropriate inquiry is simply a matter of whether the two subsidiaries are commonly owned. See Textile Workers Union v. Darlington Mfg. Co.,
We do not wish to paint with too broad a brush. While a separate veil-piercing analysis will prove unnecessary in many cases, we recognize that, in certain situations, such an analysis may be appropriate. That would include, for example, situations in which an employer, attempts to use a dummy corporation to avoid its collectively bargained obligations. See, e.g., NLRB v. W. Dixie Enters., Inc.,
Here, however, ALPA has made no allegation that either Pan Am or Boston-Maine is a sham, and the facts in the record belie any such possibility. Accordingly, we can eschew any detailed veil-piercing discussion in this case. Instead, we emulate the Supreme Court’s approach and accept that Guilford, Pan Am, and Boston-Maine are commonly controlled and that Pan Am may not use its corporate affiliates as a means of evading its obligations under either the CBA or the RLA. See Springfield Terminal,
B. Contracting Out.
With respect to contracting out, the first step in our analysis is to determine what type of dispute is at issue. The relevant facts are largely uncontroverted. By August of 2004, the FAA had granted Boston-Maine authority to operate up to three large aircraft. Pursuant to that authorization, Boston-Maine had begun operating one Boeing 727 and Pan Am had beg-un contracting with Boston-Maine to undertake some scheduled Pan Am flights. The threshold question is whether the controversy that erupted over these events constitutes a major or minor dispute as those terms áre used in the lexicon of the RLA.
The defendants maintain that the dispute is minor because their position is arguably justified by the terms of the CBA. In this regard, they emphasize the CBA’s “scope” clause, CBA § 1.B, which restricts the conduct of “all flying by and for the service of the Company on aircraft owned or leased by and for the Company and utilizing the' authority granted under the Company’s operating certificate” to “pilots whose names appear on the Pilots’ System Seniority List.”
The defendants find additional support for their position in the bargaining that predated the CBA. They point out that, during the negotiations, ALPA unsuccessfully proposed broad language for the scope clause — language that, at least arguably, would have prevented Pan Am’s corporate affiliates from developing parallel businesses. Because courts look to the parties’ bargaining history for help in determining whether a given dispute is major or minor, see Transp.-Comm. Employees Union v. Union Pac. R.R. Co.,
In addition to arguing that ALPA bargained away any restriction on the defendants’ right to engage in parallel service through affiliated airlines, the defendants also assert that the CBA explicitly authorizes Pan Am to contract with others to fly scheduled Pan Am flights. This assertion rests primarily on section l.B.2 of the CBA, which provides that Pan Am “may enter into aircraft interchange agreements with other carriers if such interchange agreements do not result in the furlough of any of the Company’s pilots.” The defendants claim that ALPA was aware of Pan Am’s interest in contracting with Boston-Maine prior to the execution of the CBA;
Finally, the defendants conjoin the scope clause and section l.B.2 and asseverate that the combination amply satisfies the company’s modest burden of demonstrating that its interpretation of the CBA is arguably justified. See Conrail,
For its part, ALPA derides this focus on the language and history of the CBA. It contends that, regardless of those features, the RLA itself prohibits Boston-Maine from either expanding into large aircraft service or entering into contracts to operate any Pan Am flights. As a fallback, ALPA raises the decibel level and declaims that the CBA, notwithstanding its language and history, cannot in good conscience be interpreted to “authorize the massive unilateral transfer of work to [a] non-union alter-ego, resulting in the abrogation of all RLA rights of the Pan Am pilots.” Appellee’s Br. at 10. We use ALPA’s contentions to frame the issue.
ALPA’s statutory argument relies principally on our decision in Springfield Terminal. ALPA reads that case to stand for the proposition that — irrespective of either the language in or the history behind a CBA — an employer subject to the RLA may never use a commonly owned nonunion affiliate to perform work of the type traditionally performed by union members. See Springfield Terminal,
We agree that an employer sometimes may create a major dispute by transferring work the union already has been doing. See, e.g., id. at 31-32. So too an employer sometimes may create a major dispute by shifting new work to a corporate affiliate. Id. at 33 (dictum). But “sometimes” is the operative word. The essence of any dispute under the RLA derives from the particular relationship of the parties, see Shore Line,
At this stage of the proceedings, that expectation cannot carry the day. Even if ALPA’s construct is objectively reasonable (a matter on which we take no view), it is not so irresistible that it overwhelms the defendants’ contrary and otherwise plausible interpretation of the exist
ALPA also places Springfield Terminal at the head of a line óf RLA cases that found major disputes to exist when an employer transferred work from a unionized company to a commonly owned nonunion affiliate. See, e.g., Springfield Terminal,
To sum up, the defendants plausibly assert that the parties authorized an arrangement, memorialized in the CBA, to allow Pan Am’s corporate affiliates to operate large aircraft alongside Pan Am and, subject to certain carefully circumscribed conditions, to contract with other airlines (including Boston-Maine) to operate some of Pan Am’s scheduled flights. Because such an interpretation of the CBA is neither obviously insubstantial nor barred by the RLA, the “contracting out” dispute between ALPA and the defendants is minor. It follows inexorably that arbitration affords ALPA’s sole avenue for relief with respect to this practice. See, e.g., Nat'l R.R. Passenger Corp. v. Int’l Ass’n of Machinists,
C. Diversion of Business.
The second challenged practice concerns the defendants’ decision to close down Pan Am while continuing 727 service through the instrumentality of Boston-Maine. Building on the commonality of ownership that links Pan Am and Boston-Maine, ALPA alleges that the common owners engaged in a scheme to release themselves entirely from their collectively bargained obligations while still retaining Pan Am’s core business under the Boston-Maine label. ALPA insists that, at a minimum, this conduct presents a major dispute and that, alternatively, it violates the “organizational rights” protections of the RLA, 45 U.S.C. § 152, Third and Fourth (indepen
We first consider whether a major dispute exists. Had Pan Am remained in business but engaged in a wholesale transfer of the work of its unionized pilots to Boston-Maine, that audacity might well have fomented a major dispute. Although we found plausible the defendants’ argument that the CBA allowed Pan Am to contract out some flights, see supra Part IV(B), we doubt that the CBA reasonably can be interpreted to give Pan Am carte blanche to contract out all flights.
Here, however, Pan Am has gone out of business. That fact is crucial to the proper analysis of the issues before us. The Supreme Court has held squarely that decisions to go out of business are “so peculiarly matters of management prerogative that they [will] never constitute violations” of the RLA. Pittsburgh & Lake Erie R.R. Co. v. Ry. Labor Execs.’ Ass’n,
In the instant case, there is a twist: although Pan Am had announced its intention to go out of business prior to the commencement of this suit (and has since done so), the defendants’ interlocked management decided that Boston-Maine should continue to fly. Management apparently intends that Boston-Maine will take over at least some of Pan Am’s former business (the extent is unclear, partially because the lower court’s injunction precluded any such activity). Thus, the question reduces to whether a non-union corporate affiliate may, when a unionized carrier closes its doors, assume portions of the latter’s business portfolio without either triggering a major dispute or violating the RLA.
ALPA seeks to avoid a direct answer to this question, insisting that the rule of Pittsburgh & Lake Erie is inapplicable to this case because the defendants shut down only part of their aggregate business (i.e., they permanently grounded Pan Am but kept Boston-Maine aloft). The union’s position is incorrect. In Textile Workers, an NLRA case heavily relied upon by the Pittsburgh & Lake Erie Court, the defendant ran a number of manufacturing operations as separate subsidiaries. After workers at one plant voted to unionize, management liquidated that subsidiary while allowing other subsidiaries in the same line of business to
The case law reflects the ubiquity of the Pittsburgh & Lake Erie doctrine and its applicability under the RLA. Numerous cases hold that a railroad owning multiple lines may sell some and keep others in operation without triggering bargaining obligations under the RLA. See, e.g., Ry. Labor Execs.’ Ass’n v. CSX Transp., Inc.,
Pittsburgh & Lake Erie does not, however, address what — if any — restrictions devolve upon surviving corporate affiliates after a unionized carrier shuts its doors. We conclude that, as long as the unionized company actually terminates operations and would have done so regardless of the availability of a non-union affiliate as a vehicle for picking up the pieces of its abandoned business, the RLA itself creates no restrictions either on the company that is going out of business or on the affiliate that is seeking to salvage the defunct company’s operations.
Our starting point remains the Supreme Court’s holding that a company may cease its operations for any reason or no reason without triggering an obligation to bar: gain. That is, the continued existence of the cbmpany^ — and by extension the union members’ jobs — simply is not guaranteed by the RLA. Pittsburgh & Lake Erie,
On balance, this rule serves the interests of all concerned. If an airline is going under, it benefits no one to prevent an affiliated corporation from assuming all or part of its business. Rather than insisting that the baby be thrown out with the bath water, it makes sense to allow affiliates to continue those aspects of the closed corporation’s business that they deem, viable, thereby maintaining some jobs, continuing’ services beneficial to the public, and recouping some profit for the owners.
It might be feared that such a rule will create an incentive for management to cut and run rather than trying to make a go of a struggling business, and that, if this occurs, it will lead to the loss of union jobs. For that argument to prevail, however, it would be necessary for union members to have some right under the RLA to insist that management try to make a go of a
Assuming that the CBA neither authorizes nor forbids the transfer, an exception to this general rule might arise when the company going out of business does so for the explicit purpose of transferring its unionized operations to an affiliated corporation without any union ties. Although there exists little law on the issue and the Supreme Court has shown itself fairly hostile to applying the RLA to run-of-the-mill business closures, we hold that a union might have an arguable claim worthy of mediation if a company that closes its doors would not have done so but for the opportunity to transfer its unionized operations to a non-union affiliate. Similarly, if a carrier is to avail itself of the rule of Pittsburgh & Lake Erie, it may not engage in a shell game — a series of paper transactions that have the effect of winding up the business as a technical matter while management then resumes the same business in a different corporate guise. For example, we think it obvious that the owner of a unionized airline could not form a new corporation, sell all the assets of the airline to the new corporation, and continue to operate the airline unfettered by the CBA. Cf. Southport Petroleum Co. v. NLRB,
Still, when an employer shuts down entirely but continues similar business operations through a corporate affiliate, judicial inquiry is quite limited. That inquiry is properly focused not on whether the employer can in some sense be said to have transferred union work to the surviving affiliate, but, rather, on whether the employer itself went out of business so that its union work could be transferred to its ununionized affiliate. If there is no subterfuge, the closure is in fact legitimate and complete, and the answer to this question is in the negative, then the decision to close falls outside the ambit of bargainable disputes under the RLA.
In this case, nothing in the record points to such an artifice. The undisputed evidence is that Pan Am was losing money hand over fist; that the company surrendered its operating certificate to the FAA; that it is no longer serving customers; and that it took many of these actions after the district court had enjoined Boston-Maine from taking on Pan Am’s routes. That Boston-Maine still seeks to carry passengers over routes previously flown by Pan
The dissent insists that the foregoing analysis is beside the point because the CBA contains a provision expressly limiting the defendants’ rights in the event Pan Am closed. We disagree that the CBA contains any such provision. The dissent relies on the CBA section that authorized Pan Am, while it was in business, to contract with other carriers to operate certain flights, as long as that contracting did not result in the furlough of any union pilots. Nothing in that section purports to limit the rights of affiliated companies to engage in large aircraft service should Pan Am cease operations. Moreover, the CBA nowhere addresses the company’s or the union’s right in the event of a business closure. Given these facts the dissent’s attempt to read into the CBA an explicit limitation on Pan Am’s right to cease operations is plainly implausible. At the expense of carting coal to Newcastle, we add that even if an argument could be made for the dissent’s interpretation, that argument would be far from conclusive and thus would, at best, create a minor dispute under the RLA (in which case no injunction would be appropriate). Conrail,
Having established that ALPA has not met its burden of showing the existence of a major dispute under the RLA, we turn briefly to the union’s argument that the defendants’ actions independently violated the pilots’ organizational rights. Generally speaking, 45 U.S.C. § 152, Third and Fourth prohibit carriers from taking actions designed to interfere with employees’ rights to organize and bargain collectively. The Supreme Court emphasized this point in TWA, in which it held that once a union is certified, employees’ rights under section 152, Third and Fourth are narrowly circumscribed.
Although employees’ postcertification rights under section 152 are quite limited, they are not nonexistent. In Wightman, we held that, after a union has been certified, an employer may violate section 152 in the rare circumstance when the employer’s actions constitute “a fundamental attack on the collective bargaining process or ... a direct attempt to destroy a union.”
ALPA misunderstands the reach of section 152. For a company’s conduct to be actionable under that provision, it must somehow interfere with the employees’ rights to organize or bargain. TWA,
Such situations are to be contrasted with those involving violations of a CBA or even the repudiation thereof; those situations ordinarily will not come within the ambit of section 152, Third and Fourth. See Boston & Me. Corp.,
Stripped of rhetorical flourishes, the union’s only substantial allegation in this case is that the defendants violated the CBA by transferring (or plotting to transfer) covered work to an affiliated corporation. There is nothing to suggest that the defendants have somehow tried to prevent the pilots from organizing or that they have erected obstacles to the pilots’ ability to act collectively.
ALPA’s reliance on the decision in Ruby v. TACA Int’l Airlines,
The Ruby decision long predates the Supreme Court’s decision in TWA, and that chronology casts doubt upon its continued vitality. In any event, there is a crucial distinction between Ruby and this case. In Ruby, the airline’s plan not only would have rendered the CBA unenforceable but also would have prevented the pilots from engaging in future collective
ALPA nonetheless maintains that a dispute exists under section 152, Third and Fourth because the union has no other adequate remedy. Specifically, ALPA suggests a judicial forum is necessary because “[o]nly the courts, rather than arbitrators or administrative agencies, have jurisdiction and authority to protect employees’ ‘statutory ’ RLA organizational rights.” Appellee’s Br. at 48. This argument is question begging at its worst. While it may be true that only courts have authority to adjudicate disputes under section 152, Third and Fourth, see, e.g., Boston & Me. Corp.,
At any rate, the union’s other remedies under the RLA are fully adequate. If it is ultimately determined that a major dispute exists, the union will be entitled to an injunction requiring the defendants to maintain the status quo while the parties undertake the extra-judicial processes limned in the RLA. Conrail,
The upshot is that the district court erred by misconceiving -the proper inquiry and thus erred in its determination that ALPA was likely to succeed on the merits of its claims. Because likelihood of success is a sine qua non to preliminary in-junctive relief, Bl(a)ck Tea,
D. The Bond Requirement.
There remains a loose end. Section 7 of the Norris-LaGuardia Act, 29 U.S.C. § 107, applies in connection with injunctions issued under the RLA. See E. Airlines,
Here, the nisi prius court, as part of its order for preliminary injunctive relief, rejected the defendants’ more extravagant damage submissions and required ALPA to post only a $50,000 bond. The defendants protest that the bond amount is too low and invite us to increase the amount retroactively. We decline the invitation.
We need not pass upon the adequacy of the bond amount. Even if a $50,000 bond was plainly inadequate to compensate the defendants for their anticipated damages and attorneys’ fees — a matter on which we take no view — we lack authority to modify the district court’s decision on the amount of the bond retroactively.
Once a court determines the appropriate amount of an injunction bond, the plaintiff is free to decide that it is better to forgo the injunction than to post the bond and risk losing the penal sum if the injunction is later deemed to have been improvidently issued. Retroactively increasing the amount of a bond would deprive the plaintiff of its right to make that decision on an informed basis. Thus, it would be grossly unfair for us to increase the penal sum retroactively.
Y. CONCLUSION
We need go no further. More than anything else, this case illustrates that judicial remedies under the RLA are only available in special circumstances. Whatever we may think of the defendants’ actions, our jurisdiction is severely limited, and the parties must live with the bargain that they struck in the CBA. On remand, ALPA will have an opportunity to demonstrate, consistent with this opinion, that the defendants have tried to evade those obligations in an impermissible manner. Failing that, the union must take its grievances elsewhere.
Vacated and remanded for further proceedings consistent with this opinion. Costs to appellants.
Notes
. ALPA named Guilford, Boston-Maine, and Pan Am as defendants, but not PAA. The omission is fribbling, and nothing turns on it.
. Inasmuch as the district judge adopted the findings of the magistrate judge, we take an institutional view and refer to those findings as the findings of the district court.
. It is unclear whether the Court's dictum referred to all injunctions issued under the RLA or merely to status quo injunctions issued in the context of major disputes.
. "Company” is defined elsewhere in the CBA as meaning Pan Am.
. ALPA also contends that the defendants’ interpretation of the- CBA is unreasonable (and, thus, not arguably justified) because it would allow Pan Am to abrogate the pilots' entire panoply of RLA-protected rights. But ALPA glosses over two points. First, the CBA explicitly limits Pan Am's right to outsource work by providing that such contracting is impermissible if it brings about the furloughing of one or more union pilots. Thus, the feared across-the-board usurpation of RLA-protected rights is wholly speculative. Second, as to contracting out, ALPA has shown only that Boston-Maine operated a few Pan Am flights during the time frame preceding the issuance of the preliminary -injunction.
. Óf course, we cannot- — and do not — decide whether the CBA actually permitted the defendants to engage in the challenged conduct. As in any minor dispute under the RLA, that judgment is for the arbitrator.
. Our dissenting brother suggests that the defendants have forfeited any argument based on Pittsburgh & Lake Erie by not citing that case to the district court or in their opening brief on appeal. He confuses the making of an argument with the citation of a case. Although the defendants did not cite Pittsburgh & Lake Erie until their reply brief, they have— from the beginning of this case — made the argument that because Pan Am went out of business entirely, no transfer of work took place. Therefore, there is no procedural barrier to our consideration of this argument.
. That an employer has no obligation to bargain over the decision to go out of business does not mean that it has no obligation to bargain over the effects of that decision. To the contrary, the RLA requires employers to bargain over those effects if the union seasonably requests such bargaining. Pittsburgh & Lake Erie,
. We caution that in determining whether the unionized employer's business justification is a sham and that it shut down solely for the purpose of avoiding the CBA, evidence of generalized union animus, though perhaps relevant, is insufficient to establish an unlawful scheme. The union must show that the specific decision to close was taken for the purpose of repudiating the CBA and avoiding its strictures.
. To be sure, the record contains some testimony to the effect that Pan Am had engaged in such activities in the past. But those past actions are not the subject of ALPA’s present challenge and have no bearing on whether the conduct at issue here constitutes a violation of the pilots’ organizational rights.
. We hasten to add that, under the RLA, a union may bargain for terms that provide workers with a special prophylaxis in the event that the employer goes out of business. The CBA in this case contains no such terms. Additionally, a union may assert a right to represent the employees who undertake transferred work and bring any ensuing representational dispute before the National Mediation Board. For whatever reason, ALPA thus far has eschewed that path.
. Nor is there any need, at this stage of the proceedings, to dwell on the bond on a going-forward basis. The vacation of the injunction eliminates the need for continuing the bond in effect.
Dissenting Opinion
(dissenting).
Although the majority opinion cogently presents its rationale for classifying the ALPA claim as a “minor” dispute uhder the RLA, its rationale is premised upon an interpretation of Pittsburgh & Lake Erie Railroad Co. v. Railway Labor Executives’ Association,
The appellants neither cited nor relied upon the P & LE decision in the district court, nor have they done so on appeal. Accordingly, their argument has been twice forfeited, and should not be addressed sua sponte. See Plumley v. S. Container, Inc.,
First, unlike Pan Am, P & LE proposed to sell all its operating assets to a company with which it had no apparent corporate affiliation. See P & LE,
In contrast, the district court determined that Pan Am and Boston-Maine were “part of the same corporate family,” and the findings of fact upon which it premised its conclusion plainly are not clearly erroneous. Air Line Pilots Ass’n, Int’l v. Guilford Transp. Indus., No. 04-331-JD,
Second, P & LE is inapposite because it did not involve any CBA provision which would create rights in P & LE’s employees in the event P & LE were to decide to cease all operations. See P & LE,
In holding that P & LE’s employees could not enjoin the sale pending bargaining over the effects of the sale, the Supreme Court observed that the right to indefinite employment was not a “condition of employment” over which P & LE was obligated to bargain, and that it had unfettered discretion to terminate its entire business “ ‘for any reason [it] pleases.’ ” P & LE,
The Court did not suggest, however, that the same rule should apply when the CBA at issue contains an express anti-diversion provision which confers upon employees the contractual right to prevent a closure. Here, the CBA negotiated by ALPA contains just such an unambiguous provision, according Pan Am’s pilots the right to bargain over any closure which permits Pan Am to divert business to another company, but only as long as such diversions “do not result in the furlough of any of the Company’s pilots.” In context, the term “furlough” {viz., a mutually agreed upon leave of absence) must be construed as the equivalent of “lay-off.” The Pan Am pre-closure diversions of some 727 flights to Boston-Maine neither implicated nor violated this CBA provision, due to the fact — as the majority decision notes — that they resulted in no lay-off of Pan Am pilots, but simply a diminution in the pilots’ flight hours.
On the other hand, the permanent closure of Pan Am does unmistakably implicate the pilots’ express rights, in that it has resulted in the lay-off of all of the unionized Pan Am pilots. Accordingly, the district court sensibly held that any other proposed interpretation of the CBA provisions is not “arguably justified.” See Air Line Pilots Ass’n,
For at least these two important reasons, the defendants in this case prudently decided not to rely upon the inapposite P & LE decision, either in the district court or on appeal. In all events, the argument has been waived. As ALPA is entitled to bargain {viz., negotiate and self-help) over both the Pan Am closure and its effects, I would affirm the status-quo injunction granted by the district court.
. The majority asseverates that the defendants adequately preserved the legal theory propounded in P & LE merely by arguing — in general terms — that, "because Pan Am went out of business entirely, no transfer of work took place.” Besides the implausibility of the notion that defendants could advance a legal principle without citing the seminal Supreme Court case establishing it, we repeatedly have refused to countenance the majority's generalized approach to issue preservation. See B & T Masonry Constr. Co. v. Pub. Serv. Mutual Ins. Co.,
. Perhaps in acknowledgment of the harsh interpretation it accorded P & LE, the majority opinion admirably attempts to engraft upon the P & LE -holding a limitation that an employer can exercise its prerogative for only a legitimate business reason. See supra Majority Opinion, at Section IV.C. Unfortunately, this dictum cannot be found anywhere in P & LE’s language. Moreover, it is belied by the Court’s unqualified declaration that the closure may be for "any reason [the employer] pleases," even when the employer is motivated by anti-union animus. P & LE,