Case Name: AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Plaintiff-Appellant, v. ALASKA AIRLINES, INC., Defendant-Appellee
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1990-03-14
Citations: 898 F.2d 1393
Docket Number: No. 87-4167
Parties: AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Plaintiff-Appellant, v. ALASKA AIRLINES, INC., Defendant-Appellee.
Judges: Before NELSON, BOOCHEVER and BRUNETTI, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 898
Pages: 1393–1400

Head Matter:
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Plaintiff-Appellant, v. ALASKA AIRLINES, INC., Defendant-Appellee.
No. 87-4167.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Nov. 3, 1988.
Withdrawn from Submission Dec. 2, 1988.
Resubmitted Sept. 29, 1989.
Decided March 14, 1990.
Jerry D. Anker, Air Line Pilots Association, Washington, D.C., for plaintiff-appellant.
John F. Aslin, Perkins Coie, Seattle, Wash., for defendant-appellee.
Before NELSON, BOOCHEVER and BRUNETTI, Circuit Judges.

Opinion:
NELSON, Circuit Judge:
Appellant Air Line Pilots Association ("ALPA" or "Union"), which represents Alaska Airlines ("Alaska") pilots in collective bargaining negotiations, seeks to challenge respondent's implementation of a new employee drug testing program. The district court denied ALPA's request for an injunction, finding that the dispute was a "minor" one under the Railway Labor Act ("the Act"), 45 U.S.C. § 151-188, and was therefore outside the scope of federal jurisdiction. In denying the injunction, the court also decided the merits of the case and entered summary judgment for the airline. While we agree that the denial of injunctive relief was proper, we do not believe that the case was ripe for summary judgment. Therefore, we affirm the denial of the injunction, vacate the entry of summary judgment, and remand for further development of the factual record.
FACTUAL AND PROCEDURAL BACKGROUND
Since 1976, Alaska Airlines has, pursuant to company regulations, prohibited all illegal drug use by its employees, whether on or off company premises. Since 1947, all collective bargaining agreements between ALPA and Alaska have included a provision requiring pilots to undergo a physical examination at the company's re quest. Although ALPA asserts that prior to 1986 Alaska had never attempted to compel a pilot to obtain a drug test, it is undisputed that company-ordered physicals have always included urinalysis for other purposes.
In July 1984, Alaska began requiring that all applicants for employment undergo drug screening. The following year, that policy was expanded to require that all employees returning to work after an absence of more than 60 days be tested. In November 1986, the airline proposed System Regulation 2.450 which was designed to "articulate and refine its existing and longstanding policy" against employee drug use. ALPA notified Alaska that it found the proposed regulation to be unacceptable and requested negotiations. Alaska refused to negotiate, and the proposed regulation became effective in December 1986.
System Regulation 2.450 provides, inter alia, that all new-hire candidates be tested and that all other employees be tested when they are believed to have a chemical dependency or abuse problem. The latter shall be removed from employment until all test results have been received. If the results are negative, the employees are reinstated with back pay. If the test is positive, the company will help provide rehabilitation. The results of the test and the employees' participation in a rehabilitation program are regarded as confidential and are not grounds for dismissal. However, once returned to work, employees testing positive are subject to mandatory testing without notice.
On March 3,1987, ALPA filed the instant action alleging that the drug testing program violated the collective bargaining agreement and thus was a "major" dispute under the Railway Labor Act. The Union sought a temporary restraining order and a preliminary injunction barring implementation of the program until the procedures specified in the Act for major disputes had been exhausted. In the alternative, if the dispute were determined to be "minor," ALPA sought comparable injunctive relief until the dispute had been resolved through the arbitration procedures specified in the Act. On August 11,1987, the district court found that the dispute was minor and denied the request for an injunction. Concluding that no other issues remained in the case, the court then entered summary judgment for the airline. ALPA now appeals from both orders.
DISCUSSION
I. Standard of Review
An order granting or denying a preliminary injunction is reviewed for abuse of discretion. Los Angeles Memorial Colisuem Comm'n v. Nat'l Football League, 634 F.2d 1197, 1200 (9th Cir.1980). A determination as to whether a dispute constitutes a mandatory subject of bargaining under the Railway Labor Act is, however, a question of law subject to de novo review. Brotherhood of Locomotive Eng'rs v. Burlington Northern R.R. Co., 838 F.2d 1087, 1089 (9th Cir.1988). Therefore, because the district court's classification of the drug-testing dispute as "minor" rendered it a non-mandatory subject of bargaining, this determination on which the motion for preliminary injunction was denied and summary judgment was entered is reviewed de novo. The factual findings underlying this determination are judged, however, under a clearly erroneous standard. See Int'l Molders' & Allied Workers' Local Union No. 164 v. Nelson, 799 F.2d 547, 550 (9th Cir.1986).
II. "Major" versus "Minor" Dispute
Labor relations between ALPA and Alaska are governed by the provisions of the Railway Labor Act. See 45 U.S.C. § 151— 188. The Act provides for two different types of dispute resolution procedures depending upon the nature of the issue that is the subject of disagreement. Disputes concerning "changes in rates of pay, rules, or working conditions" are subject to non-compulsory adjustment procedures including "negotiation[s], submission to the National Mediation Board, voluntary arbitration, and, possibly, investigation by a special emergency board appointed by the President." Burlington, 838 F.2d at 1091. The Supreme Court has referred to these types of issues as "major" disputes since they "present the large issues about which strikes ordinarily arise." Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. 711, 723-24, 65 S.Ct. 1282, 1289-90, 89 L.Ed. 1886 (1945), aff'd on reh., 327 U.S. 661, 66 S.Ct. 721, 90 L.Ed. 928 (1946).
By contrast, disagreements "growing out of grievances or out of the interpretation or application of agreements" may be submitted by one of the parties to mandatory, binding arbitration. See 45 U.S.C. § 153(First)(i); Elgin, 325 U.S. at 727, 65 S.Ct. at 1291; Burlington, 838 F.2d at 1091. These disputes are referred to as minor disputes. See Elgin, 325 U.S. at 723, 65 S.Ct. at 1289.
The issue of the characterization of the instant dispute as "major" or "minor" is governed by the recently decided Consol. Rail Corp. v. Ry. Labor Executives' Ass'n ("Conrail"), — U.S. -, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989). Like the instant case, Conrail concerned a dispute between union and management over the inclusion of urinalysis drug screening as part of periodic and return-from-leave physical examinations. The Court classified the dispute as "minor" under the Railway Labor Act, finding petitioner's actions to be "arguably justified by the terms of the parties' collective-bargaining agreement." Id. 109 S.Ct. at 2482. Where, on the other hand, "the employer's claims are frivolous or obviously insubstantial, the dispute is major." Id.
In determining whether Conrail's actions were justified by the agreement, the Court considered implied, as well as express, terms. The parties' "practice, usage and custom" were deemed significant in this regard. Id. at 2485 (citing Transportation Union v. Union Pacific R. Co., 385 U.S. 157, 161, 87 S.Ct. 369, 371, 17 L.Ed.2d 264 (1966)). In examining past practice, the Court noted that the Union had never intervened in the details of Conrail's previous drug testing procedures. This acquiescence to unilateral standards promulgated by the corporation rendered the Union's argument that the absence of an express agreement or a "meeting of the minds" as to the new policy somewhat specious. 109 S.Ct. at 2488.
In the instant case, the Union failed to object to the airline's testing practices prior to the introduction of System Regulation 2.450. Appellant, in fact, concedes that it "was not opposed to drug and alcohol testing as such." Therefore, given the range of discretion exercised by the airline in conducting employee medical examinations in the past, we find that, based on the evidence presented on the motion for preliminary injunction, Alaska's claim that the recent expansion of urinalysis screening is consistent with the terms of the collective bargaining agreement is arguably justified and not frivolous or wholly insubstantial.
ALPA argues, in the alternative, that neither the contractual provision pertaining to employee physical examinations nor the company's existing rule concerning drug or alcohol use authorizes drug testing. These regulations, the Union contends, are concerned with an employee's fitness for duty. Drug tests, on the other hand, determine whether an employee uses drugs; the effect of such usage on job performance is an altogether different inquiry to which mere testing is not relevant.
This line of reasoning was foreclosed by the Conrail Court's vindication of the railroad's drug testing policy as a legitimate "medical" concern about the fitness of its employees. Indeed, the expansion of drug testing in physical examinations of both Conrail and Alaska employees recognizes "the relevance of drug use to [the] medical fitness" of the employees involved and invalidates any attempt to separate the two concepts. 109 S.Ct. at 2488. Accordingly, since the new drug testing policy is "arguably justified" by the airline's exercise of discretion under the collective bargaining agreement to monitor employee fitness for duty, we uphold the district court's determination that the evidence presented did not indicate a sufficient likelihood of ALPA prevailing on the merits to grant the preliminary injunction. Hence, the denial of appellant's application did not constitute an abuse of discretion.
III. Entry of Final Judgment
As noted above, the district court essentially combined its decision on the preliminary injunction with a final decision on the merits. The court concluded that because it had determined that the dispute was minor for preliminary injunction purposes, it lacked subject matter jurisdiction to proceed further and was therefore required to enter judgment against ALPA.
A district court may consolidate a preliminary injunction hearing with a trial on the merits. See Fed.R.Civ.P. 65(a)(2). However, where such action is contemplated, the court should provide the parties with "clear and unambiguous notice [of the intended consolidation] either before the hearing commences or at a time which will afford the parties a full opportunity to present their respective cases." Univ. of Texas v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 1834, 68 L.Ed.2d 175 (1981) (quoting Pughsley v. 3750 Lake Shore Drive Coop. Bldg., 463 F.2d 1055, 1057 (7th Cir.1972)). It is undisputed that, in the instant case, the district court failed to notify the parties of its intention in this regard.
Alaska argues that Camenisch is inappo-site because the district court did not decide the merits of the case, i.e. the legitimacy of Alaska's drug testing policy. Such decision, the airline contends, remains in the hands of the System Board of Adjustment. This argument is unavailing. The merits of the instant action do not concern the legitimacy of the airline's policy, but rather the classification of the drug testing dispute as "major" or "minor" under the collective bargaining agreement. The district court unquestionably decided the merits of this issue, and did so on a motion for preliminary injunction without providing adequate notice to the parties.
Alaska's final argument asserts that ALPA was not harmed by the district court's consolidation of the merits and the issue of preliminary injunctive relief. The airline contends that there was no need for discovery since ALPA knew the history of its bargaining relationship with Alaska and, at any rate, ALPA had nine months before filing suit in which to get better prepared.
An examination of the record indicates, however, that the case would almost certainly benefit from further discovery. It is unclear, for example, the extent to which returning pilots were tested under the 1985 program and the extent to which ALPA was aware of this program. These factual determinations may ultimately influence the proper classification of the drug testing dispute.
Thus, and in sum, although the district court's findings were not clearly erroneous, upon further discovery the factual conclusions might change in deciding the merits of the case. Furthermore, the fact that ALPA had several months to prepare be fore filing this suit does not obviate the requirement of proper notice to the parties before entry of final judgment. Accordingly, the district court's entry of final judgment against ALPA is vacated, and the case is remanded for further proceedings.
AFFIRMED in part, REVERSED in part, and REMANDED.
. Although Alaska claims to have implemented the program in July 1985, ALPA argues that it was never notified as to the existence of any such policy and that no pilot was ever tested under it. The district court nevertheless concluded that such a policy did exist.
. Reinstated employees who subsequently test positive on a drug screen will, however, be subject to discharge,
. As this argument is based on a memorandum circulated by the general counsel of the National Relations Labor Board, it is of limited relevance here. Parallels drawn between the Railway Labor Act and the National Labor Relations Act "should be drawn with the utmost care and with full awareness of the differences between the statutory schemes." Chicago & N. W. Ry. v. United Trans. Union, 402 U.S. 570, 579 n. 11, 91 S.Ct. 1731, 1736 n. 11, 29 L.Ed.2d 187 (1971).
. A district court might also convert a decision on a preliminary injunction into a final disposition of the merits by granting summary judgment on the basis of the factual record available at the preliminary injunction stage. However, a court could not properly enter summary judgment where the notice and hearing requirements of Fed.R.Civ.P. 56 have not been followed. Since it is undisputed that the district court's decision did not comply with these requirements, the court's judgment cannot be sustained on this theory.