Sixth Circuit Rules on Turbulent Air-Line Merger
In an opinion colored by aviation-themed puns, Judge Thapar, writing for the Sixth Circuit in Flight Options, LLC v. Int’l Bhd. of Teamsters, Local 1108, ordered airlines and pilot unions to arbitrate their long-running dispute. A few years ago, two luxury airlines merged, leading to a spate of litigation. Most recently, the airlines attempted to integrate the pilots under one collective bargaining agreement. Around the same time, the union proposed substantive changes to the CBA. In the dispute that reached the Sixth Circuit, the airlines and the union disagreed over the order in which to tackle these problems, with the airlines seeking to first integrate the two groups of pilots, and with the union seeking to immediately resolve dispute over rates of pay and work rules. The district court entered a preliminary injunction ordering the airline to bargain in good faith over the union’s demands.
Admonishing the parties as “frequent fliers” in the circuit, the Sixth Circuit vacated the district court’s injunction and sent the dispute to arbitration. Airlines and their unions must resolve disputes over CBAs pursuant to the procedures set forth by the Railway Labor Act. The Act, in turn, provides separate tracks for major and minor disputes. The Sixth Circuit ruled that it could not resolve the instant dispute because the dispute is a “minor” one, which must be arbitrated before a party asks for judicial review.
The court explained that, compared with major disputes, a minor dispute does not involve the acquisition of new rights, but rather the assertion of rights that have already vested. More specifically, a minor dispute involves the interpretation of the existing CBA. The Sixth Circuit held that a specific provision within the existing agreement relating to the order of the negotiations, and therefore, the existing agreement “control[ed] the controversy.” And it concluded that the airlines’ position that the parties did not have to bargain over the union’s proposed changes until a fully merged agreement was reached parties “arguably justified.” The court did refuse, however, to grant the airlines’ requested advisory opinion, and made no findings on the merits of the disagreement.