In the United States Court of Appeals For the Seventh Circuit
No. 21-1034
United States Court of Appeals for the Seventh Circuit
ARGUED MAY 21, 2021 — DECIDED JULY 15, 2021
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:13-cv-06243 — Gary Feinerman, Judge.
RIPPLE, Circuit Judge. The plaintiffs, pilot instructors for United Airlines, brought this class action against the Air Line Pilots Association, International (“ALPA“), their recognized agent for the purpose of collective bargaining. In their complaint, they alleged that ALPA had violated its duty of fair representation under the
Following discovery, ALPA moved for summary judgment. It maintained that the plaintiffs had not come forward with evidence that its sole motive in adopting the retroactive pay provision was to discriminate against the pilot instructors. The district court agreed and granted ALPA‘s motion.
We now affirm. To establish a violation of the duty of fair representation under the circumstances presented here, the plaintiffs were required to come forward with evidence from which a jury could conclude that ALPA‘s sole motive in adopting the retroactive pay provision was an illicit one. The plaintiffs did not meet that burden; consequently, the district court correctly entered summary judgment on behalf of ALPA.
I
BACKGROUND
We presume familiarity with our prior opinion and recount here only those facts critical to our analysis.
A.1
“Most United pilots are ‘line pilots,’ who ... fly[] passengers from one location to another. Pilot instructors, by contrast, train other pilots and work in a single location at United‘s training center in Denver,” Colorado.2 There are just over 100 pilot instructors, a “small fraction of all United pilots.”3 Although pilot instructors may return to line pilot positions whenever they wish, the reverse is not the case; line pilots must apply to become a pilot instructor.
ALPA represents all United pilots for the purpose of collective bargaining. In 2003, while United was in bankruptcy, United and ALPA negotiated a collective bargaining agreement (“2003 UPA“) that imposed significant cuts in wages and benefits on United pilots. The parties began to negotiate a new agreement in 2010, when the 2003 UPA became amendable; United pilots continued to work under the 2003 UPA during the negotiations, a process that took nearly three years. While negotiations were ongoing, United merged with Continental Airlines. Because ALPA was the certified representative of pre-merger Continental pilots as well, it continued negotiations on behalf of both groups of pilots. In 2012, United and ALPA reached a new agreement (“2012 UPA“).
“Under both the 2003 and 2012 UPAs, line pilots were paid by the hour, with each pilot assigned an hourly wage rate based on” (1) the type of aircraft flown (“fleet“); (2) the pilot‘s rank in that aircraft (“seat“); and (3) the length of the
pilot‘s service with the airline (“longevity“).4 “Both UPAs set an hourly rate for each fleet-seat-longevity combination ...[.] [L]ine pilots were paid at that rate for the number of hours they were credited,” and several “work rules” governed the calculation of credit hours for line pilots.5 For example, both the 2003 and 2012 UPAs established a minimum number of “pay credit” hours a line pilot would receive per month, and both accounted for various schedule changes in calculating the number of credit hours. “Pilot instructors’ compensation under the 2003 and 2012 UPAs was more akin to a salary,”6 but that salary also depended in part on the fleet-seat-longevity schedule used for line pilots. “Under the 2003 UPA, pilot instructors were paid as if they were first officers in a 757/767 class aircraft, with six years of longevity,” who worked eighty-nine hours per month.7 “Under the 2012 UPA, pilot instructors are paid as if they were first officers in a 777/787 class aircraft, with nine years of longevity,” who work ninety hours per month.8 Due to the increased pay cap, pilot instructors received “by far
the largest percentage pay increase in the 2012 UPA” compared to other United pilots.9
The pilots had hoped that, in addition to other favorable terms, ALPA would be able to secure approximately $1 billion in retroactive pay for the three years during which negotiations were taking place. ALPA, however, was able to negotiate only $400 million for retroactive pay, $225 million of which was allocated to pre-merger United pilots.10 This was significantly less than what was necessary to provide United pilots retroactive pay according to the newly adopted pay schedules. Consequently, the United Master Executive Council (“MEC“), the United pilots’ elected leadership, assigned to one of its subcommittees, Subcommittee 2, the task of developing a formula for allocating the $225 million.
Subcommittee 2 had five members: Robert Fox, a line pilot and subcommittee chair; Mark Arellano, a pilot instructor; Steve Lynch, a line pilot; and two other line pilots. Arellano “served as the elected representative of pilot instructors’ interests within ALPA during negotiations over the 2012 UPA and the retroactive pay formula. Another pilot instructor, Thomas Brinton, participated in Subcommittee 2‘s deliberations as a non-voting member.”11
In general, the pilot instructors were dissatisfied with the retroactive pay formula because, they believed, it substantially disadvantaged pilot instructors compared to line pilots.12 Indeed, Arellano, the pilot instructor representative on Subcommittee 2, initially had advocated for a different allo-
Nevertheless, Arellano ultimately spoke in favor of and voted for Subcommittee 2‘s proposal because “it would stand the test of time” and prevent “lawsuits.”15 In a recorded telephone call with a fellow pilot instructor, as well as in his later deposition testimony, Arellano explained that Subcommittee 2 was trying to achieve a formula that was “as simple as possible,”16 and that the “whole point” was to have an allocation that was “simplistic and fair and equitable without disparate treatment.”17 Overall, Arellano be-
After “[t]he MEC reviewed and approved Subcommittee 2‘s proposal, ... ALPA‘s membership ratified the formula alongside the 2012 UPA.”19 “Most of the United pilot instructors challenged the retroactive pay allocation formula through ALPA‘s dispute resolution process. The ALPA Executive Council—a central governing body with representatives from all ALPA-represented carriers—rejected the challenges,”20 and the pilot instructors appealed to an arbitrator.
During the arbitration, Subcommittee 2 Chairman Fox testified accordingly about the development of the retroactive pay formula:
Q. Okay. And how did your committee decide—what did your committee decide to do regarding the pilot instructors?
A. The committee, like I said before, had—Mark Arellano was part of the committee. ... Mark was an intimate member of the committee and explained exactly how pilot instructors get paid. And so I believe we relied heavily on Mark‘s advice.
Q. And did he make any proposals himself about how instructors should be treated? A. Yes. In explaining the process on what the language says in the collective bargaining agreement, the pilot instructors accept the job as a pilot instructor and they get paid based on their longevity up to a point; and then they‘re capped.
And once they hit the cap, they‘re basically paid for six-year 767/57 first officer pay rate.
Q. And was this a proposal from Mr. Mark Arellano?
A. Yes.21
At the arbitration, counsel for the pilot instructors cross-examined Fox at length, but did not specifically inquire regarding Arellano‘s involvement in creating the formula. In his deposition in this litigation, Fox clarified that the proposal did not originate with Arellano, but that Arellano “at the end of the day ... agreed to use this [methodology].”22 The arbitrator rejected the pilot instructors’ claim.
B.
The pilot instructors filed this action alleging that ALPA breached its duty of fair representation under the Railway Labor Act because it adopted the retroactive pay formula for
On remand, the district court granted the plaintiffs’ motion for class certification,24 the parties conducted discovery, and ALPA moved for summary judgment. In its motion, ALPA argued that, to establish a violation of the duty of fair representation, it was not enough for the pilot instructors to show that “the lump sum benefitted some pilots (or subgroup(s) of pilots) more than others.”25 Instead, the pilot instructors had to show that ALPA had made the decision “solely for the benefit of a stronger, more politically favored group over a minority group.”26 However, ALPA continued,
ALPA maintained that, in addition to not being able to establish an improper motive, the pilot instructors also could not establish causation. Specifically, plaintiffs could not show that “but for ALPA‘s alleged animus, the union would have adopted another allocation method that would have benefitted them.”29 Because there was no evidence that ALPA would have adopted any of the methodologies that the pilot instructors had proposed, any alleged harm that they suffered was merely “speculative.”30
The plaintiffs opposed the motion. They claimed that Subcommittee 2‘s retroactive pay formula was not even-handed because “the ‘rule’ that was supposedly applied ‘uniformly’ was based solely on the hourly rates under the Delta contract, the only component of a line pilot‘s pay,”
Finally, the pilot instructors claimed that ALPA‘s argument regarding causation was “nonsensical“:
The evidence shows that Subcommittee 2 deliberately sought to reduce the pilot instructors’ retro pay and accomplished that task by refusing to account for the most significant component of their pay raise, the increase to their pay cap, in calculating their retro pay despite being warned of the inequities that would result. That decision caused a drastic reduction—$ 6.2 Million—to pilot instructors’ retro pay.35
True enough, the summary judgment record, viewed in the light most favorable to Plaintiffs, could be read to support the proposition that ALPA‘s adoption of the [retroactive pay] formula was motivated in part by animus toward the pilot instructor minority. ...
...[T]he record indisputably shows that A[LP]A also had a nondiscriminatory, good faith justification for adopting the ... formula: the desire for a simple, facially neutral rule that would be understood as equitable by ALPA‘s entire membership.38
highlighted the complaint‘s allegations “that pilot instructors make up a minority of ALPA‘s membership and that ALPA acted with the intent to appease its majority membership, the line pilots, after a lengthy and contentious CBA negotiation.” Drawing reasonable inferences in Plaintiffs’ favor, the complaint alleged that this was the sole reason ALPA adopted the [retroactive pay] formula.
The summary judgment record, however, shows that ALPA had—either instead of or in addition to a discriminatory motive—a neutral, permissible motive for adopting the formula. That defeats Plaintiffs’ duty of fair representation claim under the governing standard.39
The pilot instructors timely appealed.
II
DISCUSSION
A.
We review the district court‘s grant of summary judgment de novo. See, e.g., Johnson v. Rimmer, 936 F.3d 695, 705
B.
Our task here is to determine whether the district court properly granted summary judgment in favor of ALPA on the plaintiffs’ duty of fair representation claim. The principles for determining whether a union has breached its duty of fair representation are set forth in our initial opinion. As we stated there, “[a] union breaches the duty of fair representation” only “if its actions are (1) arbitrary, (2) discriminatory, or (3) made in bad faith.” Bishop, 900 F.3d at 397 (citing Air Line Pilots Ass‘n, Int‘l v. O‘Neill, 499 U.S. 65, 67 (1991)). A plaintiff may succeed on a duty of fair representation by es-
The arbitrary prong of the fair representation test is “very deferential.” Id. In determining whether a union‘s action is arbitrary, “we employ ‘an objective inquiry.‘” Bishop, 900 F.3d at 397 (quoting Rupcich v. United Food & Com. Workers Int‘l Union, 833 F.3d 847, 854 (7th Cir. 2016)). A union breaches the duty of fair representation under the “arbitrary prong” if the product of its bargaining efforts can “be fairly characterized as so far outside a ‘wide range of reasonableness’ that it is wholly ‘irrational.‘” O‘Neill, 499 U.S. at 78 (quoting Ford Motor Co. v. Huffman, 345 U.S. 330, 338 (1953)). However, “[a] union‘s reasoned decision to support the interests of one group of employees over the competing interests of another group does not constitute arbitrary conduct.” Spellacy v. Airline Pilots Ass‘n-Int‘l, 156 F.3d 120, 129 (2d Cir. 1998).
“Whether or not a union‘s actions are discriminatory or in bad faith calls for a subjective inquiry and requires proof that the union acted (or failed to act) due to an improper motive.” Neal v. Newspaper Holdings, Inc., 349 F.3d 363, 369 (7th Cir. 2003). This inquiry must be undertaken with the understanding “that unions often must make decisions that distinguish among different categories of employees.” Bishop, 900 F.3d at 398. Thus,
a claim of discrimination or bad faith must rest on more than a showing that a union‘s actions
treat different groups of employees differently. A union member‘s claim must be based on more than the discriminatory impact of the union‘s otherwise rational decision to compromise. Instead, a claim of discrimination “requires proof that the union acted (or failed to act) due to an improper motive.”
Id. (quoting Neal, 349 F.3d at 369) (citation omitted).
To breach the duty of fair representation, discriminatory conduct must be “intentional, severe, and unrelated to legitimate union objectives.” Amalgamated Ass‘n of Street, Elec. Ry. & Motor Coach Emps. of Am. v. Lockridge, 403 U.S. 274, 301 (1971); see also Merritt v. Int‘l Ass‘n of Machinists & Aerospace Workers, 613 F.3d 609, 619 (6th Cir. 2010) (relying on same). “Whether a bargaining representative has acted fairly, impartially, and without hostile discrimination depends on the facts of each case.” Merritt, 613 F.3d at 621.
“The mere fact that plaintiffs [are] a minority group within their union organization and that they were adversely affected by the actions of the union [does] not establish that the union acted with hostile or discriminatory intent.” Id. (quoting Ratkosky v. United Transp. Union, 843 F.2d 869, 878–79 (6th Cir. 1988)). Moreover, tension or competition between different union constituencies does not evidence an improper motive. As one of our sister circuits has explained,
[r]ank and file members of a labor union invariably have conflicting interests and thus form multiple, and at times competing, constituencies. Concessions and compromises are inevitable by-products of the bargaining process
and any single bargaining decision may inure to the benefit of some members while potentially injuring others. Thus, union negotiators often find their members divided over the relative merits of the components of a settlement agreement.
Considine v. Newspaper Agency Corp., 43 F.3d 1349, 1357 (10th Cir. 1994).
Instead, a union‘s motive is improper if it is “obviously irrelevant and invidious.” Steele v. Louisville & N.R. Co., 323 U.S. 192, 203 (1944). Thus, by way of example, a union may not make distinctions on the basis of race, see id., or sex, see Carter v. United Food & Com. Workers, Local No. 789, 963 F.2d 1078, 1082 (8th Cir. 1992).
A union acts in “bad faith” when “it acts with an improper intent, purpose, or motive” “encompass[ing] fraud, dishonesty, and other intentionally misleading conduct.” Spellacy, 156 F.3d at 126 (citing Baxter v. United Paperworkers Int‘l Union, Local 7370, 140 F.3d 745, 747 (8th Cir. 1998)). “‘Deceptive actions’ or ‘fraud’ can be relevant to whether a union acted in bad faith.” Bishop, 900 F.3d at 398 (quoting Yeftich v. Navistar, Inc., 722 F.3d 911, 916 (7th Cir. 2013)). “We have said that ‘[a] union would act in bad faith if, for example, it disfavored members who supported a losing candidate for union office,‘” id. (quoting Cunningham v. Air Line Pilots Ass‘n Int‘l, 769 F.3d 539, 542 (7th Cir. 2014)), or if it made decisions “solely for the benefit of a stronger, more politically favored group over a minority group,” Barton Brands, Ltd. v. NLRB, 529 F.2d 793, 798–99 (7th Cir. 1976).
C.
Before us, the plaintiffs maintain that “there is a disputed question of fact as to whether ALPA acted arbitrarily, discriminat[orily], or in bad faith when it excluded from the calculation of retro pay the most significant component of pilot instructors’ pay raises under the new collective bargaining agreement.”40 More specifically, they maintain that the evidence supports a finding that ALPA‘s sole motive in adopting the retroactive pay formula was to benefit a larger and stronger portion of ALPA‘s membership at the expense of the pilot instructors. According to the plaintiffs, the critical evidence in support of this claim is: (1) the large disparity between the percentage of retroactive pay received by line pilots compared to pilot instructors; (2) “members of the subcommittee tasked with allocating retro pay harbored animosity toward pilot instructors and, therefore thought they should get less in retro pay“; and (3) the chairman of the same “subcommittee lied and claimed that [the committee] adopted a formula proposed and advocated for by the pilot instructor[]” representative on the subcommittee.41 We conclude that this evidence, taken individually and collectively, does not raise a genuine issue of material fact as to whether ALPA acted arbitrarily, discriminatorily, or in bad faith.
The plaintiffs assert that they have raised a genuine issue of fact that Subcommittee 2 knew both that its retroactive pay formula was not uniform and that the retroactive pay provision had a disparate impact on pilot instructors.42 However, as we and other circuits have made clear, that some contractual provisions may inure to the benefit of a discrete segment of the bargaining unit does not mean that the provision discriminates against other members of the bargaining unit or that it was adopted in bad faith. “[A] claim of discrimination or bad faith must rest on more than a showing that a union‘s actions treat different groups of employees differently.” Bishop, 900 F.3d at 398; see also Considine, 43 F.3d at 1357 (“Concessions and compromises are inevitable by-products of the bargaining process and any single bargaining decision may inure to the benefit of some members while potentially injuring others.“).
Moreover, the retroactive pay formula must be placed in the greater context of negotiations for the 2012 UPA. See Merritt, 613 F.3d at 621 (noting that whether a bargaining agent “has acted fairly, impartially, and without hostile discrimination depends on the facts of each case“). It is undisputed that, under the 2012 UPA, pilot instructors received the largest pay raise of any subgroup of pilots. It is impossible to evaluate ALPA‘s subjective intent toward the pilot instructors without considering the broader context of the 2012
In sum, the fact that ALPA‘s retroactive pay formula may have impacted pilot instructors more negatively than line pilots—and that Subcommittee 2 knew of that negative impact when it adopted the retroactive pay provision—does not raise a genuine issue of material fact.
2.
Turning to evidence of illicit motive, the pilot instructors rely primarily on the declaration of John Barton, a member of the United MEC during the time that the retroactive pay issue was being considered. According to Barton‘s declaration, Arellano told Barton that members of Subcommittee 2 stated that pilot instructors should get less in retroactive pay because they were “not real pilots,” they received the largest raises under the 2012 UPA, and they made a lot of money “working at home.”44 The pilot instructors maintain that, having produced evidence that members of the committee had an illicit motive, the question of whether the illicit motive was Subcommittee 2‘s sole motivation must go to the jury. We disagree.
In his declaration, Barton states that he and Arellano spoke frequently about the deliberations of Subcommittee 2. Barton also describes some of those conversations:
4) Among other things, Arellano told me that during Subcommittee 2 meetings comments were made to the effect that pilot instructors should get less in retro pay because they were “not real pilots” and made a lot of money “working at home.” According to Arellano, Steve Lynch, an ALPA Captain representative based in Chicago, was one of the members of Subcommittee 2 who made these comments.
5) Arellano also told me that the other members of Subcommittee 2 were all trying to cut TK [i.e., pilot instructors] out of retro pay because they received one of the biggest raises and were going to make a lot of money under the new contract. Arellano told me that with pilot instructors getting that much money under the new contract there was no way they would be getting their share of retro pay. Arellano told Barton he did not agree with this, but that was the sentiments of Subcommittee 2.45
a.
As an initial matter, we must decide the admissibility of the statements contained in paragraph five of Barton‘s declaration. In the district court, ALPA objected to this portion of the declaration on the ground that “Arellano‘s personal view of the mental states or motivations of other individuals is
The pilot instructors now maintain that the district court should have considered this evidence. The district court‘s determination, however, was not an abuse of discretion. See Yancick v. Hanna Steel Corp., 653 F.3d 532, 547 (7th Cir. 2011). “Rule 701 of the Federal Rules of Evidence allows lay testimony of mental state as long as it is (a) rationally based on the perception of the witness; (b) helpful to a clear understanding of the witness’ testimony or the determination of a fact in issue; and (c) not based on scientific, technical, or other specialized knowledge.” Id. Moreover, the proffering party has to establish the factual basis for the witness‘s perception. See id. Barton‘s declaration does not satisfy this foundational requirement; it is silent on what Arellano perceived that may have led him to reach his conclusions concerning the motivations of “other members of Subcommittee 2.”47 The district court therefore did not abuse its discretion in refusing to consider the allegations in paragraph 5.
b.
The plaintiffs, therefore, are left with the statement of one subcommittee member, Lynch, who stated that pilot instructors should get less in retroactive pay because they were
3.
Finally, the pilot instructors point to evidence that ALPA “lied about the reason it adopted the retro pay allocation methodology.”51 They note that, in his testimony at the arbi-
However, this specific misrepresentation is not evidence that Subcommittee 2‘s sole motivation in adopting its retroactive pay formula was discriminatory or in bad faith.55 First,
Here, the summary judgment record does not raise a genuine issue of material fact that requires us to send the plaintiffs’ duty of fair representation claim to a jury.56 ALPA
Conclusion
For the reasons set forth in this opinion, we affirm the judgment of the district court.
AFFIRMED