In Re Northwest Airlines Corporation
Richard M. Seltzer (Thomas N. Ciantra and Oriana Vigliotti, on the brief), Cohen, Weiss & Simon, New York, NY, for Intervenor-Appellant.
Brian P. Leitch, Arnold & Porter, LLP, Washington, D.C. (Timothy Atkeson, Timothy MacDonald, Kent A. Yalowitz, and Brandon H. Cowart, Arnold & Porter, LLP, New York, N.Y. and Denver, Colorado; Bruce R. Zirinsky, Cadwalader, Wickersham & Taft, LLP, New York, NY, on the brief) for Plaintiff-Appellee.
Heidi A. Wendel, Assistant United States Attorney (Michael J. Garcia, United States Attorney for the Southern District of New York, Melanie Hallums and David S. Jones, Assistant United States Attorneys, on the brief), for Amicus Curiae United States of America.
John J. Gallagher (Neal D. Mollen and Margaret H. Spurlin, on the brief), Paul, Hastings, Janofsky & Walker, LLP, Washington D.C., for Amici Curiae: Air Transport Association of America, Inc., David A. Berg, on the brief. Airline Industrial Relations Conference, Robert J. DeLucia, on the brief.
William R. Wilder (Stefan P. Sutich, on the brief), Baptiste & Wilder, P.C., Washington, D.C., for Amicus Curiae International Brotherhood of Teamsters.
Jeffrey Freund, Bredhoff & Kaiser, P.L.L.C. (Jonathan Hiatt, American Federation of Labor on the brief), Washington, D.C., for Amicus Curiae American Federation of Labor and Congress of Industrial Organizations.
Lee Seham (Lucas K. Middlebrook and Stanley J. Silverstone, on the brief), Seham, Seham, Meltz & Petersen, LLP, White Plains, NY, for Amicus Curiae Aircraft Mechanics Fraternal Association.
Scott L. Hazan (Brett H. Miller and Lorenzo Marinuzzi, on the brief), Otterbourg, Steindler, Houston & Rosen, P.C., New York, NY, for Amicus Curiae Official Committee of Unsecured Creditors of Northwest Airlines Corporation.
Chief Judge JACOBS concurs in a separate opinion.
JOHN M. WALKER, JR., Circuit Judge:
1 This dispute between the Association of Flight Attendants (“AFA“) and Northwest Airlines (“Northwest“) is situated in a peculiar corner of our law more evocative of an Eero Saarinen interior of creative angularity than the classical constructions of Cardozo and Holmes. Northwest, under the protection of Chapter 11 of the Bankruptcy Code and with the bankruptcy court‘s imprimatur, has rejected the collective-bargaining agreement that until recently governed its relationship with the AFA and imposed new terms and conditions of employment upon its flight attendants. The AFA does not wish to accede to these terms and conditions of employment and threatens a work stoppage unless Northwest agrees to terms and conditions that are more favorable to the flight attendants.
2 The District Court for the Southern District of New York (Victor Marrero, Judge) issued a preliminary injunction precluding the AFA and its members from engaging in any form of work stoppage. It held that any such work stoppage would cause irreparable harm and, at this juncture, violate the Railway Labor Act. On this basis, the district court concluded that the Norris-LaGuardia Act did not deprive it of jurisdiction to issue the injunction.
3 We agree, but for substantially different reasons than those advanced by the district court. We hold that Section 2 (First) of the Railway Labor Act forbids an immediate strike when a bankruptcy court approves a debtor-carrier‘s rejection of a collective-bargaining agreement that is subject to the Railway Labor Act and permits it to impose new terms, and the propriety of that approval is not on appeal.
BACKGROUND
4 In December 2004, Northwest, one of the nation‘s largest air carriers, began negotiating changes to the collective-bargaining agreement (“CBA“) governing its relationship with its flight attendants, who were then represented by the AFA‘s predecessor, the Professional Flight Attendants Association (“PFAA“). Since April 2005, these negotiations have been conducted under the auspices of the National Mediation Board (“NMB“), which is authorized by the Railway Labor Act to mediate disputes between carriers and their employees.
5 In September 2005, Northwest filed for protection under Chapter 11 of the Bankruptcy Code. Northwest‘s plan for reorganization required that its employees make significant concessions. Most of the unions that represent groups of Northwest employees have since negotiated new agreements.
6 Unable to reach an accommodation with its flight attendants, on November 7, 2005, Northwest sought bankruptcy court approval of certain interim modifications to the relevant CBA under
7 In addition to seeking interim relief from its CBA, Northwest sought in September 2005 to obtain permanent relief from its CBA pursuant to
[t]he Court would do the flight attendants and the Debtors’ thousands of other employees no favor if it refused to grant the Debtors’ § 1113 relief, and the Debtors joined the ranks of the many other airlines that have liquidated as a consequence of a Chapter 11 filing.
8 In re Nw. Airlines Corp., 346 B.R. 307, 330 (Bankr.S.D.N.Y.2006). Along with this relief, the bankruptcy court permitted Northwest to impose the terms of the March 1 Agreement upon the flight attendants. Neither party appealed this decision.
9 The bankruptcy court conditioned its decision on Northwest‘s agreement to negotiate for an additional two weeks before it would allow the March 1 Agreement to take effect. Negotiations ensued, this time with the Association of Flight Attendants (“AFA“), which the flight attendants had elected as their new representative on July 7, 2006. On July 17, Northwest and the AFA reached another tentative agreement; again, however, on July 31, the flight attendants rejected the proposed agreement, this time by the narrower margin of 55-45%.
10 Northwest then imposed the March 1 Agreement. The AFA responded by notifying Northwest of its intent to disrupt Northwest‘s service by using a tactic suitably named CHAOS (“Create Havoc Around Our System“), which entails mass walkouts for limited periods of time and pinpoint walkouts at certain airports or gates. See Ass‘n of Flight Attendants v. Alaska Airlines, 847 F.Supp. 832, 833-34 (W.D.Wash.1993).
11 Northwest moved to enjoin the strike. Bankruptcy Judge Gropper denied the motion on the basis that Northwest‘s rejection of the CBA and imposition of the March 1 Agreement amounted to a “unilateral action in changing the status quo that in turn frees the employees to take job action.” Nw. Airlines Corp. v. Ass‘n of Flight Attendants-CWA (In re Nw. Airlines Corp.), 346 B.R. at 344. On appeal, the district court reversed and granted the preliminary injunction. Judge Marrero held that Northwest had not unilaterally changed the status quo and that the union remained bound by the status quo provisions of the RLA, which forbid the exercise of self-help pending the exhaustion of various mechanisms to resolve disputes, including NMB mediation. Nw. Airlines Corp. v. Ass‘n of Flight Attendants-CWA (In re Nw. Airlines Corp.), 349 B.R. 338, 379 (S.D.N.Y.2006) (“[T]his Court finds that an order authorizing rejection of a collective bargaining agreement pursuant to § 1113 does not terminate the Section 6 [of the RLA] process....“).
12 The AFA and intervenor Air Line Pilots Association filed a timely appeal.
DISCUSSION
I. The Statutory Framework
13 The AFA appeals entry of a preliminary injunction. We review the district court‘s judgment for abuse of discretion, although our review of its application of the law is de novo. See Green Party v. New York State Bd. of Elections, 389 F.3d 411, 418 (2d Cir.2004). We inquire whether Northwest has shown,
first, irreparable injury, and, second, either (a) likelihood of success on the merits, or (b) sufficiently serious questions going to the merits and a balance of hardships decidedly tipped in [its] favor.
14 Id.
15 This appeal turns on Northwest‘s likelihood of success on the merits, any assessment of which, in turn, requires us to interpret and heed three different statutory schemes: Section 1113 of Chapter 11 of the Bankruptcy Code,
A. The Bankruptcy Code: 11 U.S.C. § 1113
16
17 Congress passed
B. The Norris-LaGuardia Act
18 The NLGA deprives federal courts of jurisdiction to issue “any restraining order or temporary or permanent injunction in a case involving or growing out of a labor dispute, except in a strict conformity with the provisions of this chapter.”
No restraining order or injunctive relief shall be granted to any complainant who has failed to comply with any obligation imposed by law which is involved in the labor dispute in question, or who has failed to make every reasonable effort to settle such dispute either by negotiation or with the aid of any available governmental machinery of mediation or voluntary arbitration.
19
C. The Railway Labor Act
20 The RLA “abhors a contractual vacuum.” See Air Line Pilots Ass‘n, Int‘l v. UAL Corp., 897 F.2d 1394, 1398 (7th Cir.1990). Accordingly, a collective-bargaining agreement between a carrier subject to the RLA and its employees or their union (we use the two terms interchangeably) hardly ever expires. See Manning v. Am. Airlines, Inc., 329 F.2d 32, 34 (2d Cir.1964) (“The effect of § 6 [of the RLA] is to prolong agreements subject to its provisions regardless of what they say as to termination.“). Rather, once a CBA becomes “amendable,” the carrier and the union are bound by statute to embark upon an “almost interminable” re-negotiation process. Detroit & Toledo Shore Line R.R. Co. v. United Transp. Union, 396 U.S. 142, 149, 90 S.Ct. 294, 24 L.Ed.2d 325 (1969). During the pendency of this re-negotiation process, the RLA “obligate[s] [the parties] to maintain the status quo.” Consol. Rail Corp. v. Ry. Labor Executives’ Ass‘n, 491 U.S. 299, 302, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989).
21 The term “status quo,” found throughout the case law, appears nowhere in the RLA. Several of the RLA‘s provisions require that parties to a CBA governed by the RLA maintain objective working conditions during the pendency of any dispute arising under (or during the re-negotiation of) their CBA. See
22 While the status quo provisions are integral to the RLA, the “heart” of that statute is Section 2 (First), Bhd. of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 377-78, 89 S.Ct. 1109, 22 L.Ed.2d 344 (1969), which requires carriers and employees to “exert every reasonable effort to make [agreements,] . . . [to] maintain agreements . . . and to settle all disputes, whether arising out of the application of such agreements or otherwise, in order to avoid any interruption to commerce,”
23 Critical to this case, however, Section 2 (First) also imposes a separate duty, which is less closely related to the RLA‘s status quo provisions: carriers and unions must “exert every reasonable effort to make [agreements] . . . and to settle all disputes,”
24 We conclude that, in light of Northwest‘s court-authorized rejection of its CBA under
II. The Effect of Contract Rejection Under 11 U.S.C. § 1113
25 To understand the legal consequences of Northwest‘s rejection, we turn first to the plain text of
26 With these principles in mind, we reach three conclusions: (1) Northwest‘s rejection of its CBA after obtaining court authorization to do so under
A. Rejection of the CBA pursuant to the bankruptcy court‘s § 1113 order abrogates that agreement.
27 In theory, Northwest‘s rejection of its CBA under
28 The latter two interpretations suffer from one common defect: they ignore the unique purpose of
29 Likewise, these two interpretations (CBA still in force—no breach; CBA still in force—breach) are also difficult to square with the structure of
30 The second possible interpretation of the effect of contract rejection under
31 The third possible interpretation of the effect of contract rejection under
32 Under the circumstances of this case, we adopt the first of the three possible interpretations we have identified: We hold that Northwest, acting pursuant the authority conferred to it by the bankruptcy court, abrogated its CBA. The purpose of
33 We have intimated that a union would be free to strike following contract rejection under
34 In cases governed by the NLRA, we have also hinted that a union is free to strike, even following contract rejection under
35 We thus conclude that a carrier-debtor governed by the RLA and authorized by the bankruptcy court acting pursuant to
B. Rejection under § 1113 terminates the status quo.
36 We must next consider how, if at all, the RLA applies in the event a carrier abrogates its CBA. The RLA‘s explicit status quo provisions attach to “rates of pay, rules, or working conditions . . . as embodied in agreements,”
37 Nor does the implicit status quo requirement of Section 2 (First) apply in the absence of a collective-bargaining agreement to which both carrier and union have assented. First, like the explicit status quo provisions, Section 2 (First) refers to “agreements” between the parties,
C. Rejection under § 1113 leaves intact the duty to “make” agreements under Section 2 (First).
38 The explicit duty to exert every reasonable effort to “make” agreements, however, is distinct from the implicit status quo requirement of Section 2 (First).
39 We thus conclude that a bankruptcy court acting pursuant to
III. The Duty to “Make” Agreements Under the RLA and the AFA‘s Proposed Strike
40 The “reasonable effort” required by Section 2 (First) has uncertain contours. At times, this court has suggested that “injunctive relief under section 152 First may be limited to cases where parties have bargained in bad faith.” United Air Lines, Inc. v. Airline Div., Int‘l Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers of Am., 874 F.2d 110, 114 n. 5 (2d Cir.1989); cf. Shore Line, 396 U.S. at 155 n. 23, 90 S.Ct. 294. On the other hand, the Supreme Court has expressly reserved decision on whether the duty entails “more . . . than avoidance of `bad faith.‘” Chicago & Nw., 402 U.S. at 579 n. 11, 91 S.Ct. 1731.
41 The critical fact is that the Section 2 (First) duties are not fully reciprocal. This conclusion, that carriers and their employees may at times bear different, even unequal burdens, despite being subject to the same standard, is compelled by our decisions in the Atlantic Coast cases. In Aircraft Mechanics Fraternal Ass‘n v. Atlantic Coast Airlines, Inc. (”Atlantic Coast I“), we held that a carrier did not breach Section 2 (First) by making unilateral changes to the terms and conditions of employment so long as it did not bargain in bad faith. 55 F.3d 90 (2d Cir.1995). Yet in Atlantic Coast II, we held that a union did breach Section 2 (First) by making (even if in good faith) a unilateral change to the terms and conditions of employment—e.g., by striking—where the railroad had taken no bad faith action to provoke such a response. See 125 F.3d 41. In line with our precedent, we hold today that in the absence of carrier bad faith, a union must come closer to exhausting the dispute resolution processes of the RLA than the AFA has in this case in order to satisfy its duty under Section 2 (First). There is no need at this point to decide when and if the AFA will have fulfilled its duty; it has not done so yet.
42 In approving Northwest‘s motion to reject its collective-bargaining agreement, the bankruptcy court found, as it was required to do, see
43 Simply put, the AFA has not exerted “every reasonable effort” to reach agreement. It has not sought to persuade its members of the need to “face[] up to economic reality.” In re Nw. Airlines Corp., 346 B.R. at 331; cf. United Air Lines, Inc., v. Int‘l Ass‘n of Machinist & Aerospace Workers, AFL-CIO, 243 F.3d 349 (7th Cir.2001) (holding that union had duty under Section 2 (First) to control employee behavior and prevent “wildcatting“). Nor has it sought the assistance of the NMB, which is at least available on consent of the parties.8 Finally, since “reasonableness” under the RLA, like “reasonableness” under the NLRA, see, e.g., Ass‘n of Flight Attendants, AFL-CIO v. Horizon Air Indus., Inc., 976 F.2d 541, 545 (9th Cir.1992), is informed by the “reasonableness of the proposals,” id., our conclusion is buttressed by the AFA‘s failure to take account, as it must, of the duty Northwest “owes the public,” Bhd. of Ry. and Steamship Clerks, Freight Handlers, Express and Station Employees, AFL-CIO v. Florida East Coast Ry. Co., 384 U.S. 238, 245, 86 S.Ct. 1420, 16 L.Ed.2d 501 (1966).
44 The AFA argues that the foregoing reasoning is too one-sided in the carrier‘s favor and thus is at odds with the legislative history of the RLA, which was drafted by “a team composed of representatives of both management and labor.” See Summit Airlines, Inc. v. Teamsters Local Union No. 295, 628 F.2d 787, 789 (2d Cir. 1980) (emphasis added). But the duty Section 2 (First) imposes upon carriers is not toothless. Bhd. of Maint. of Way Employees v. Union Pac. R.R. Co., 358 F.3d 453, 458 (7th Cir.2004) (“[T]he duty to exert every reasonable effort requires a [carrier] to do more than discharge its legal obligations.“). Indeed, were a carrier simply to go “through the motions” of negotiating, see Archibald Cox, The Duty to Bargain in Good Faith, 71 Harv. L.Rev. 1401, 1413 (1958), it would violate its duty. Moreover, the scope of the duty to bargain in good faith increases as the parties approach agreement; for instance, whether the carrier has already agreed to a tentative deal, see Transportes Aereos, 924 F.2d at 1008-09, and whether it has a history of negotiating with a particular union, see Virgin Atl. Airways, Ltd. v. Nat‘l Mediation Bd., 956 F.2d 1245, 1253 (2d Cir.1992), are relevant variables. Cf. Cox, supra (suggesting that under certain circumstances unilateral changes to the terms and conditions of employment may constitute circumstantial evidence of bad faith). Finally, carriers must meet with union representatives, United Air Lines, 874 F.2d at 115, and, whether or not an agreement exists, must accede to a union‘s request for NMB assistance,
IV. The “Clean Hands” Requirement
Finally, the AFA argues that Northwest has not made “every reasonable effort to settle” this dispute, see
CONCLUSION
Although this is a complicated case, one feature is simple enough to describe: Northwest‘s flight attendants have proven intransigent in the face of Northwest‘s manifest need to reorganize. On that basis, we conclude that the AFA has violated Section 2 (First) of the RLA and affirm the preliminary injunction.
DENNIS JACOBS, Chief Judge, concurring:
I agree with the majority in affirming the preliminary injunction, but I take a different route.
As the majority explains, the Association of Flight Attendants (AFA) has yet to “exert every reasonable effort to make and maintain agreements” as required by
But does that answer the AFA‘s argument that Northwest‘s alteration of the status quo—effected under
The majority sidesteps this argument, holding that once Northwest implemented the terms of the bankruptcy court‘s § 1113 order, the status quo simply “terminated.” Majority Op. at 170. In other words, the status quo—and the protections it offered to the AFA—is said to have terminated when (and because) it was abrogated. I could not possibly explain this to the flight attendants; if I agreed with the majority that Northwest violated a reciprocal duty to maintain the status quo, I would vote to vacate the injunction and permit the AFA to strike.
I vote to affirm nevertheless because, although Northwest effected a change in the status quo, it did not do so unilaterally. A debtor-carrier‘s rejection of a labor agreement in bankruptcy—subject to strict statutory conditions and court oversight—cannot be described fairly as a unilateral divergence from the status quo, and does not trigger a reciprocal right to strike. Northwest‘s resort to § 1113 therefore did not affect the AFA‘s § 2 (First) duties, which keep the union at the bargaining table and off the picket line.
*
We affirm the anti-strike injunction on the basis of the AFA‘s § 2 (First) duty. Because “the vagueness of the obligation under § 2 (First) could provide a cover for freewheeling judicial interference in labor relations,” Chicago & N.W. Ry. Co. v. United Transp. Union, 402 U.S. 570, 583, 91 S. Ct. 1731, 29 L. Ed. 2d 187 (1971), the section is understood to incorporate an “implicit status quo requirement,” see Detroit & Toledo Shore Line R.R. v. United Transp. Union, 396 U.S. 142, 151 & n. 18, 90 S. Ct. 294, 24 L. Ed. 2d 325 (1969). Given this implicit status quo obligation, strikes are generally inconsistent with exerting every reasonable effort “to settle disputes without interruption to interstate commerce,” id. at 151, 90 S. Ct. 294. But if a debtor-carrier‘s resort to § 1113 violates its duty to maintain the status quo, and if that duty is reciprocal, id. at 154-55, 90 S. Ct. 294, then a union‘s strike might be fully consistent with § 2 (First). In my view, then, we cannot avoid deciding the antecedent question whether Northwest violated its duty to maintain the status quo.
* * *
The RLA does not expressly reference a “status quo,” yet the Supreme Court has read it to require that “[w]hile the dispute is working its way through the[] [RLA‘s] stages, neither party may unilaterally alter the status quo.” Bhd. of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 378, 89 S. Ct. 1109, 22 L. Ed. 2d 344 (1969) (emphasis added). The obligation is “an affirmative legal duty upon both employers and unions alike—which is enforceable by the courts.” United Air Lines, Inc. v. Int‘l Ass‘n of Machinist & Aero. Workers, 243 F.3d 349, 363 (7th Cir. 2001) (emphasis in original). Only “if the parties exhaust [RLA] procedures and remain at loggerheads, . . . may [they] resort to self-help in attempting to resolve their dispute.” Burlington N. R.R. v. Bhd. of Maint. of Way Employees, 481 U.S. 429, 445, 107 S. Ct. 1841, 95 L. Ed. 2d 381 (1987).
Northwest does not seriously dispute that its resort to § 1113 effected a change in the status quo; and, like the majority, I do not endorse the district court‘s conclusion that the change simply created an “altered baseline,” Northwest Airlines Corp. v. Ass‘n of Flight Attendants-CWA (In re Northwest Airlines Corp.), 349 B.R. 338, 379 (S.D.N.Y. 2006). The question is whether that change was one that violated Northwest‘s duty to maintain the status quo. See Air Line Pilots Ass‘n, Int‘l v. United Air Lines, Inc., 802 F.2d 886, 896-97 (7th Cir. 1986) (“[I]t is a difficult question to determine when, if ever, an otherwise legitimate self-help measure begins to impede upon a statutory protection.“). The majority evades this question. But that is the question the AFA puts to us, and, as I have explained, we cannot avoid answering it.
The Supreme Court has consistently characterized the duty to maintain the RLA status quo as a duty to avoid changing it “unilaterally.” See Consol. Rail Corp. v. Ry. Labor Executives’ Ass‘n, 491 U.S. 299, 306, 109 S. Ct. 2477, 105 L. Ed. 2d 250 (1989); Burlington N. R.R., 481 U.S. at 449, 107 S. Ct. 1841; Shore Line, 396 U.S. at 146-47, 90 S. Ct. 294; Jacksonville Terminal, 394 U.S. at 378, 89 S. Ct. 1109. We have preserved that distinction. See Aircraft Mechanics Fraternal Ass‘n v. Atlantic Coast Airlines (”Atlantic Coast II“), 125 F.3d 41, 41-42 (2d Cir. 1997); Pan Am. World Airways, Inc. v. Int‘l Bhd. of Teamsters, 894 F.2d 36, 38-39 (2d Cir. 1990). And our sister circuits have done the same.1 Avoidance of unilateral changes in the status quo is an aspect of the duty to eschew “self-help.” See Shore Line, 396 U.S. at 154, 90 S. Ct. 294. Unilateral alteration of the status quo is so subversive of the RLA process that it supports injunctive relief without a further showing of irreparable harm. See Consol. Rail Corp., 491 U.S. at 303, 109 S. Ct. 2477.
Northwest did not effect a change in the status quo that is unilateral. A unilateral act is one “in which there is only one party whose will operates.” Black‘s Law Dictionary 26 (8th ed. 1999). In the context of an RLA status quo, it is an act “without negotiations, without bargaining.” Bhd. of Locomotive Eng‘rs v. Atchison, Topeka & Santa Fe Ry. Co., 768 F.2d 914, 920 (7th Cir. 1985). The characterization of the status quo duty as a duty to avoid changing it unilaterally prevents self-help, promotes negotiation, and enlists and serves the interest of the public, as set out in Shore Line:
The Act‘s status quo requirement is central to its design. Its immediate effect is to prevent the union from striking and management from doing anything that would justify a strike. In the long run, delaying the time when the parties can resort to self-help provides time for tempers to cool, helps create an atmosphere in which rational bargaining can occur, and permits the forces of public opinion to be mobilized in favor of a settlement without a strike or lockout.
396 U.S. at 150, 90 S. Ct. 294.
A debtor-carrier‘s conduct pursuant to
Section 1113 thus sets in motion an “expedited form of collective bargaining with several safeguards designed to insure that employers [do] not use Chapter 11 as medicine to rid themselves of corporate indigestion.” Century Brass Prods., Inc. v. United Auto., Aero. & Agric. Implement Workers of Am. (In re Century Brass Prods., Inc.), 795 F.2d 265, 272 (2d Cir. 1986). Because the bankruptcy court can ultimately order relief, the modifications are constrained in three important ways: they must be necessary to the reorganization,
An order pursuant to § 1113 is thus implicitly the product of negotiations (successful or unsuccessful). The process
ensure[s] that well-informed and good faith negotiations occur in the market place, not as part of the judicial process. Reorganization procedures are designed to encourage such a negotiated voluntary modification. Knowing that it cannot turn down an employer‘s proposal without good cause gives the union an incentive to compromise on modifications of the collective bargaining agreement, so as to prevent its complete rejection. Because the employer has the burden of proving its proposals are necessary, the union is protected from an employer whose proposals may be offered in bad faith.
N.Y. Typographical Union No. 6 v. Maxwell Newspapers, Inc. (In re Maxwell Newspapers, Inc.), 981 F.2d 85, 90 (2d Cir. 1992) (citations omitted). I therefore read § 1113 as replacing one-sided modification of a labor agreement with court-approved modification after accelerated negotiation:
No provision of this title shall be construed to permit a trustee to unilaterally terminate or alter any provisions of a collective bargaining agreement prior to compliance with the provisions of this section.
Moreover, a debtor-carrier‘s use of § 1113 is in every sense multilateral: its proposals must “assure[] that all creditors, the debtor and all of the affected parties are treated fairly and equitably.”
At oral argument, the AFA pointed out that the § 1113 order merely authorized Northwest to act, and that the decision to act on that authorization was taken by Northwest alone, i.e., unilaterally. This argument cannot be squared with the findings of the bankruptcy court that the modifications were necessary, and no greater than necessary: Northwest‘s choice was to do what the order allowed, or risk dissolution there and then. As a debtor-in-possession, Northwest might well have violated its fiduciary duty to creditors and the estate had it not exercised its right to implement the authorized changes. See
The majority opinion rejects this approach because the change in the status quo effected by § 1113 is available only to carriers; so if a change pursuant to § 1113 is non-unilateral, the “equal” nature of the status quo obligation would be disturbed. Majority Op. at 172. The status quo obligation‘s reciprocity certainly leaves the parties “equally restrained,” Shore Line, 396 U.S. at 155, 90 S. Ct. 294, but the burden it imposes is not equal, and won‘t be unless Congress sees fit to create a pathway for non-unilateral action by unions akin to § 1113. “[I]t is for the Congress, and not the Courts, to strike the balance between the uncontrolled power of management and labor to further their respective interests” in RLA bargaining. Jacksonville Terminal, 394 U.S. at 392, 89 S. Ct. 1109 (internal quotation marks omitted).
I would therefore hold that a debtor-carrier‘s resort to § 1113 does not work a unilateral alteration of the RLA‘s status quo and therefore does not violate the debtor-carrier‘s status quo obligation. Because Northwest did not violate that obligation, the AFA never accrued a right to strike, and a strike would therefore be inconsistent with its § 2 (First) duty to exert all reasonable efforts in pursuit of agreement.
II
The majority “might well agree” that § 1113 “permits a carrier ‘unilaterally’ to alter its employees’ terms and conditions of employment . . . [and] breach the RLA‘s status quo provisions,” Majority Op. at 171, yet nevertheless rejects the AFA‘s position that this breach justifies a reciprocal action in the form of a strike. The majority avoids reconciling these positions by holding that once Northwest turned to § 1113, [i] the CBA “ceased to exist,” and [ii] the status quo was accordingly “terminated” (and thereby incapable of sustaining a reciprocal right to strike).
The majority would limit the force of the status quo on the basis of
The majority opinion is the first to hold that the status quo obligation perishes with the underlying agreement. True, the Supreme Court has said that the status quo provisions are inapplicable where no collective bargaining agreement had ever existed between the parties. See Williams v. Jacksonville Terminal Co., 315 U.S. 386, 400-03, 62 S. Ct. 659, 86 L. Ed. 914 (1942). But the Court subsequently limited even this exception; it operates only where (in contrast to our case) “there was absolutely no prior history of any collective bargaining or agreement between the parties on any matter.” Shore Line, 396 U.S. at 157-58, 90 S. Ct. 294; see also Virgin Atlantic Airways, Ltd. v. Nat‘l Mediation Bd., 956 F.2d 1245, 1253 (2d Cir. 1992).
Thus, in Aircraft Mechanics Fraternal Ass‘n v. Atlantic Coast Airlines, Inc. (”Atlantic Coast I“), we concluded that a “newly certified union that has no collective bargaining agreement with the carrier is not entitled to a status quo freeze under the [RLA].” Aircraft Mechanics Fraternal Ass‘n v. Atlantic Coast Airlines, Inc., 55 F.3d 90, 94 (2d Cir. 1995). The holding of Atlantic Coast I rested on the fact that no agreement had ever existed between the parties, and, for that reason, the status quo provisions had never applied. There is therefore no basis for the majority‘s view that an existing status quo can “terminate,” and the authorities cited by the majority furnish no support for this idea.3
I would not thus discard the status quo provisions in cases involving an abrogated CBA. The status quo obligation is not subject to the horsetrading of collective bargaining; it is superimposed by statute on every labor agreement subject to the RLA, and was thus designed to survive such agreements rather than die with them. See Manning v. American Airlines, Inc., 329 F.2d 32, 34 (2d Cir. 1964) (“the very purpose of § 6 is to stabilize relations by artificially extending the lives of agreements for a limited period regardless of the parties’ intentions“). Further, § 6 speaks of “an intended change in agreements,” see Shore Line, 396 U.S. at 158, 90 S. Ct. 294 (citing
If two parties are reciprocally committed to the terms of an agreement while they bargain over its renewal, can we prevent one from responding to the other‘s violation solely on the premise that the violation cancelled the agreement itself? The “permanency and continuity” of collective bargaining are what merit the protection of a status quo, see Williams, 315 U.S. at 403, 62 S. Ct. 659, and the indicium of an enforceable status quo is whether its terms have been in place “for a sufficient period of time with the knowledge and acquiescence of the employees,” Shore Line, 396 U.S. at 154, 90 S. Ct. 294. Borrowing the majority‘s parlance, then, it is the fact that terms of employment are or were “embodied” in an agreement, and not the continuing vitality of that agreement, that triggers the status quo provisions.
The majority focuses on the district court‘s conclusion that § 1113 established a “new” status quo, and attributes that conclusion to me as well. Majority Op. at 169 n. 2. The scope and terms of the RLA status quo going forward after a debtor-carrier‘s resort to § 1113 present difficult questions, but not the ones that the parties have asked us to answer. The issue is whether an abrogation of the status quo that was not unilateral—i.e., an abrogation blessed under § 1113—triggered in the union, by reciprocity, the right to strike it sought to exercise.
The majority dilates on whether the CBA was abrogated, breached, modified, partially assumed and partially rejected, or rejected altogether. This misses the point: the CBA between Northwest and its flight attendants is not a private bilateral contract and is therefore not susceptible to such analysis; “[m]ore is involved than the settlement of a private controversy without appreciable consequences to the public.” Virginian Ry. Co. v. Sys. Fed‘n No. 40, 300 U.S. 515, 552, 57 S. Ct. 592, 81 L. Ed. 789 (1937). The primary purpose of the RLA is “to avoid any interruption to commerce or to the operation of any carrier engaged therein,”
In our complex society, metropolitan areas in particular might suffer a calamity if rail service for freight or for passengers were stopped. Food and other critical supplies might be dangerously curtailed; vital services might be impaired; whole metropolitan communities might be paralyzed.
Bhd. of Ry. & S.S. Clerks v. Fla. E. Coast Ry. Co., 384 U.S. 238, 245, 86 S. Ct. 1420, 16 L. Ed. 2d 501 (1966).
Accordingly, § 1113 effects non-unilateral abrogation of RLA agreements notwithstanding (or perhaps because of) the union‘s obstinance. And it does so out of deference to the interests protected by § 1113 and (by incorporation) the RLA: creditors, the carrier‘s other employees, the flying public, and interstate commerce. The majority rejects my approach as an impermissible “harmonization” of the statutes. Majority Op. at 169 n. 2. No one can accuse the majority of attempting to harmonize the statutes at issue, or of succeeding.
III
I say the question is whether Northwest abrogated the status quo unilaterally, and would hold that it did not. For the majority, the question is instead whether Northwest abrogated the status quo at all, and the majority says that it did. Under the majority‘s view, then, it must be that Northwest has “failed to comply with [an] obligation imposed by law which is involved in the labor dispute in question.”
For its part, the majority holds that Northwest has clean hands because it acted “under authority of a § 1113 court order.” Majority Op. at 176-77. This sounds right; but the determinative question is whether Northwest has “failed to comply with [an] obligation imposed by law which is involved in [this] labor dispute.” If (as I argue) Northwest‘s obligation was to avoid a unilateral change in the status quo, the Norris-LaGuardia Act would not inhibit an injunction. It is hard to see how the majority can conclude that a carrier that unilaterally abrogated the CBA, caused it to go up in smoke, and breached the status quo nevertheless complied with all of the legal obligations involved in this labor dispute. And the fact that a carrier has the “authority” to take an act does not itself vest the carrier with the power to enjoin a strike threatened in response to that act. See Bhd. of R.R. Trainmen Enter. Lodge, No. 27 v. Toledo, Peoria & W. R.R., 321 U.S. 50, 64-65, 64 S. Ct. 413, 88 L. Ed. 534 (1944) (although a carrier has statutory authority to refuse arbitration under