Opinion ID: 481693
Heading Depth: 2
Heading Rank: 1

Heading: Duration Clause

Text: 14 We construe the terms of the duration clause of this agreement in light of the national labor policy enunciated by the Railway Labor Act, which governs airlines as well as railroads, and, in light of pertinent decisions bearing on the issues. 15 The RLA was enacted with a number of purposes in mind: 16 (1) To avoid any interruption to commerce or to the operation of any carrier engaged therein; (2) to forbid any limitation upon freedom of association among employees or any denial, as a condition of employment or otherwise, of the right of employees to join a labor organization; (3) to provide for the complete independence of carriers and of employees in the matter of self-organization to carry out the purposes of this chapter; (4) to provide for the prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions; (5) to provide for the prompt and orderly settlement of all disputes growing out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions. 17 45 U.S.C. Sec. 151a. 18 To enable the parties to a collective bargaining agreement to attain these goals, Congress has established mandatory, and almost interminable, procedures which must be followed in settling disputes such as exist here. Detroit & Toledo Shore Line R.R. v. United Transp. Union, 396 U.S. 142, 149, 90 S.Ct. 294, 298-99, 24 L.Ed.2d 325 (1969). Any party seeking to make changes in rates of pay, rules or working conditions of employees must file a notice pursuant to section 6 of the RLA, 45 U.S.C. Sec. 156, and confer with the other party. 42 U.S.C. Sec. 152, Seventh. If the parties are unable to resolve their dispute, they may invoke the services of the NMB or the Board may, in an emergency situation, proffer its services. 45 U.S.C. Sec. 155, First. If the NMB is unsuccessful in helping to resolve the dispute, the Board must attempt to induce the parties to agree to arbitration. Said arbitration is not, however, mandatory. Id. If the dispute is not resolved under these provisions of the Act and the NMB finds the dispute should threaten substantially to interrupt interstate commerce to a degree such as to deprive any section of the country of essential transportation service, the NMB must contact the President of the United States who may set up an Emergency Board to evaluate the dispute and report to him. 45 U.S.C. Sec. 160. Throughout this period, the parties may not alter the status quo and no change may be made in those rates of pay, working conditions or rules which are the subject of the dispute. It is only after all statutory procedures have been exhausted that the parties may engage in self help. 19 Congress, in enacting these detailed procedures, sought to encourage collective bargaining by railroads and their employees in order to prevent, if possible, wasteful strikes and interruptions of interstate commerce. Detroit & Toledo Shore Line R.R., 396 U.S. at 148, 90 S.Ct. at 298 (footnote omitted). This detailed statutory scheme has bargaining as its major thrust. At the same time, it seeks to avoid any interruption in commerce. Brotherhood of Railroad Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 377-78, 89 S.Ct. 1109, 1114-15, 22 L.Ed.2d 344 (1969). The Act attempts to provide the parties with every opportunity to resolve their labor disputes through bargaining and negotiation. 20 The Supreme Court recognized the central role of bargaining and the continuity of the relationship between management and labor in industries subject to the RLA, in holding that where terms in a collective bargaining agreement have not been the subject of dispute, those terms continue to bind the parties. Brotherhood of Railway & Steamship Clerks, Freight Handlers, Express & Station Employees, AFL-CIO v. Florida East Coast Ry. Co., 384 U.S. 238, 86 S.Ct. 1420, 16 L.Ed.2d 501 (1966) (FEC ). In FEC, during a strike over a wage increase and notice requirements prior to layoffs and job abolition, and after complying with the RLA's procedural requirements and entering the self help stage, the railroad resumed operations with a substantially different labor force with whose members it made individual employment agreements that were substantially different from the existing collective bargaining agreements. A number of the changes made by the railroad had not been the subject of a section 6 notice, nor had they been subject to RLA procedures. The Supreme Court held that given the public service nature of the business, id. at 244, 86 S.Ct. at 1423, and its responsibility to the public to maintain the public service at all times, id. at 245, the railroad could 21 make only such changes as are truly necessary in light of the inexperience and lack of training of the new labor force or the lesser number of employees available for the continued operation. The collective bargaining agreement remains the norm; the burden is on the carrier to show the need for any alteration of it, as respects the new and different class of employees that it is required to employ in order to maintain that continuity of operation that the law requires of it. 22 Id. at 248, 86 S.Ct. at 1425 (emphasis added). The Court further limited this power to change or revise the collective bargaining agreement by holding that it must be closely confined and supervised by the courts, id. at 246, 86 S.Ct. at 1424, recognizing that 23 [t]hese collective bargaining agreements are the product of years of struggle and negotiation; they represent the rules governing the community of striking employees and the carrier. That community is not destroyed by the strike, as the strike represents only an interruption in the continuity of the relation. Were a strike to be the occasion for a carrier to tear up and annul, so to speak, the entire collective bargaining agreement, labor-management relations would revert to the jungle. A carrier could then use the occasion of a strike over a simple wage and hour dispute to make sweeping changes in its work-rules so as to permit operation on terms which could not conceivably have been obtained through negotiation. Having made such changes, a carrier might well have little incentive to reach a settlement of the dispute that led to the strike. It might indeed have a strong reason to prolong the strike and even break the union. The temptation might be strong to precipitate a strike in order to permit the carrier to abrogate the entire collective bargaining agreement on terms most favorable to it. The processes of bargaining and mediation called for by the Act would indeed become a sham if a carrier could unilaterally achieve what the Act requires be done by the other orderly procedures. 24 Id. at 246-47, 86 S.Ct. at 1424-25 (footnote omitted). 25 The Supreme Court thus recognized that bargaining is central to the RLA and that even the existence of a strike does not empower management to annul those terms of the collective bargaining agreement that had not been subject to prior bargaining. 26 The very words of TWA's reopener notice amply demonstrates that TWA itself has recognized the limited nature of its reopening of the collective bargaining agreement and that a notice to change is not a notice to terminate the agreement in the event an impasse is reached is strongly evidenced by the very words of TWA's reopener notice. In its letter of February 29, 1984, TWA proposed eliminating certain items of compensation, amending certain articles relating to expenses, credits and bidding procedures, and modifying certain other procedures. In its conclusion, TWA reserved the right to propose further additions, deletions, modifications or other changes in the agreement    . Letter from J.W. Hoar, Director/Technical & Contract Liaison, TWA, to Arthur Teolis, President, The Independent Federation of Flight Attendants (Feb. 29, 1984), in Affidavit of Counsel Attaching Certain Pertinent Portions of the District Court Record, Exhibit 3, Affidavit of William A. Jolley (Aug. 20, 1986). Nowhere does TWA suggest that failure to reach an accord would terminate the balance of the terms and provisions of the agreement. 27 Further, the affidavit of William A. Jolley clarifies the understanding of the parties as to the continuity of the terms of the collective bargaining agreement, including those terms not reopened. That affidavit, which is undisputed, states in part: 28 3. Since April 1, 1977 and continuing to date I have had numerous discussions with various TWA officials and representatives concerning interpretation of terms of the collective bargaining agreement, grievance handling, arbitrations and in the course of numerous collective bargaining negotiations sessions. At no time prior to receipt of an April 25, 1986 letter signed by J.W. Hoar have I ever heard any such official or representative of TWA refer to an expiration date of the collective bargaining agreement or speak in terms of that agreement expiring or terminating or in any other way suggesting or implying that on or after March 7, 1986, TWA could or have the right to unilaterally implement or change terms of conditions of employment other than those which had been subject to Section 6 Notices and made the subject of collective bargaining. On the contrary, since April 1, 1977 and until April 25, 1986, TWA officials and representatives referred to the amendable date of the Agreement and spoke in terms of that Agreement becoming amendable. 29 Affidavit of Counsel Attaching Certain Pertinent Portions of the District Court Record, Exhibit 3, Affidavit of William A. Jolley (Aug. 20, 1986). 30 TWA, in its claim that it is no longer bound by the union security clause, or indeed any other provision of the collective bargaining agreement, asserts that the contract came to a complete termination when the parties reached an impasse in their bargaining. Therefore, because the self help period has ended with the formal ending of the strike, TWA can disregard any provision of the previous collective bargaining agreement. TWA contends that the duration clauses analyzed by the Second, Seventh and Ninth Circuits support its view that the contract terms of an airline's collective bargaining agreement can expire and, comparing the present duration clause with those in other contracts, there exists no reasonable basis for concluding that the TWA-Union contract in issue here has not expired. 31 TWA relies principally on EEOC v. United Airlines, 755 F.2d 94 (7th Cir.1985); IAM v. Reeve Aleutian Airways, 469 F.2d 990 (9th Cir.1972); Flight Eng'r Int'l Ass'n, EAL Chapter v. Eastern Airlines, 359 F.2d 303 (2d Cir.1966); and Manning v. American Airlines, 329 F.2d 32 (2d Cir.1964). In further support of the Reeve case, TWA cites IAM v. Aloha Airlines, 776 F.2d 812 (9th Cir.1985) and IAM v. Quantas Airways, 122 L.R.R.M. 2263 (N.D.Cal.1985). 32 In our view, EEOC v. United Airlines, decided by the Seventh Circuit, does not support TWA's position. Indeed, Judge Posner's opinion seems to reject the central thesis of TWA's analysis in construing the duration clause at issue there as creating an amendable, not a terminable, contract. Nor does the Second Circuit's opinion in Manning support TWA's position. Manning dealt with a dues check-off agreement that was specifically excluded from the contract's automatic renewal clause. The Second Circuit held that the check-off provision was a working condition within the meaning of section 6 of the RLA, thus coming within the status quo provisions of section 6. The clause, therefore, could not be unilaterally abrogated by the airline. In Manning, the parties agreed that the check-off provision expired on April 30, 1963, and that the provision did not come within the general renewal provision of the contract. Nevertheless, the provision remained in effect subject to the application of section 6 of the RLA, requiring written notice of change, bargaining and mediation. The Manning court at no time addressed whether or not contract terms not subject to reopening and bargaining would automatically expire on impasse. 33 Two other Second Circuit cases cited by appellant are not especially revealing. In Air Cargo Inc. v. Local Union 851, 733 F.2d 241 (2d Cir.1984), the court considered and decided that the status quo provisions of section 6 required that the union maintain the actual working conditions of an organization performing work for an air carrier. While the court referred to the expiration of the agreement in that case, the discussion does not indicate that the contract between the union and the employer contained a duration clause providing for automatic renewal as in the airline contract at issue here. TWA's citation of the Eastern Airlines case is equally without persuasive effect. Nowhere in that opinion does the Second Circuit discuss the precise issue before us even though that court agreed with the trial court that the underlying collective bargaining agreement between the parties had terminated. That case concerns itself with issues that were the subject of much controversy among the parties and over which the parties had engaged in sustained bargaining and mediation. The case does not deal with provisions of the contract which were not in dispute. Moreover, the Eastern Airlines opinion does not discuss the policy considerations cited in FEC, inasmuch as it predates FEC. 3 Thus, TWA's position that on impasse all provisions of the collective bargaining agreement terminate rests essentially on a comparison of the duration clause in the instant litigation with that at issue in Reeve and the acceptability of Reeve as persuasive authority here. 34 The Reeve case and its progeny, including Aloha and Quantas, directly hold that airline contracts similar, but not identical, to the TWA contract here in issue come to an end upon impasse and, following a strike and self help period, the airline employer may change those working conditions which had not been proposed for change or bargained over. The agreement in Reeve read: 35 This agreement shall become effective November 1, 1966, and shall continue in full force and effect until April 1, 1968, and shall renew itself without change until each succeeding April 1st thereafter, unless written notice of intended change is served in accordance with Section 6, Title 1, of the Railway Labor Act, as amended, by either party hereto at least sixty (60) days prior to April 1st in any year after 1967. 36 469 F.2d at 991. The opinion in the Ninth Circuit quotes and affirms the district court's statement that: 37 The terms of the agreement called for its termination on the first day of April following notice by either party of intended changes. It is irrelevant that the defendant [Company] never served notice of any intended changes, and it is of no consequence that only portions of the contract were subject to negotiation. The contract expired by its own terms on April 1, 1968. 38 Id. at 992-93. 39 An examination of the district court opinion suggests that the parties did not present the issue of contract interpretation to the district court, for its opinion stated that [t]he sole issue presented is whether the Railway Labor Act, 45 U.S.C.A. Sec. 151 et seq., has the effect of extending a collective bargaining agreement beyond the termination date specified in the agreement. 330 F.Supp. 332, 333-34 (D. Alaska 1971). Moreover, the district court's discussion indicates that the union predicated its claim for relief solely on the FEC case, not on the contract terms. Id. at 334. The district court distinguished FEC on grounds that FEC related to unexpired agreements. The district court, without citation to any authority in cases under the RLA, stated [a]s a matter of law, the contract expired by its own terms   . Id. at 335. 40 Neither the district court opinion nor the Ninth Circuit opinion in Reeve gives any detailed consideration to construction of the renewal clause in a manner consistent with the policies of the RLA and the core language of FEC that requires stable and continuing agreements between management and labor. 4 We emphasize that core language in FEC : 41 These collective bargaining agreements are the product of years of struggle and negotiation; they represent the rules governing the community of striking employees and the carrier. That community is not destroyed by the strike, as the strike represents only an interruption in the continuity of the relation. Were a strike to be the occasion for a carrier to tear up and annul, so to speak, the entire collective bargaining agreement, labor-management relations would revert to the jungle. 42 384 U.S. at 246-47, 86 S.Ct. at 1424-25 (footnote omitted). Moreover, the Ninth Circuit opinion gives no consideration to what the Supreme Court referred to as the spirit of the Act: 43 While the carrier has the duty to make all reasonable efforts to continue its operations during a strike, its power to make new terms and conditions governing the new labor force is strictly confined, if the spirit of the Railway Labor Act is to be honored. 44 Id. at 247, 86 S.Ct. at 1425 (footnote omitted). 45 We will not follow the Reeve rationale in this case. 46 The district court noted in the present case that as to contract interpretation, the Reeve case is subject to question--realistically, the July 31, 1984 date is not a termination date at all but it is a date that serves as a measuring point for the ninety-day notice required prior to the making of intended changes to the contract. On this issue of contract interpretation, District Judge Sachs wrote further: 47 In EEOC v. United Air Lines, Inc., 755 F.2d 94 (7th Cir.1985), Judge Posner avoided a ruling flatly disapproving of the Reeve decision, 469 F.2d 993 [sic], by construing the duration clause in the airline contract before him as creating an amendable rather than a terminable contract. The language under consideration specified that the agreement shall remain in full force and effect through November 1, 1978, and thereafter shall be subject to change by service of a notice as provided for in Section 6 of the Railway Labor Act. 755 F.2d at 97. Although the district court had concluded that the contract had terminated in its entirety, the Seventh Circuit disagreed. The appellate ruling was that the service of the notice is the mode of amendment, implying that what is not sought to be changed continues in effect. November 1 really is not a termination date at all; it is the date before which no changes can be made. Id. (Emphasis added.) The opinion continues: 48 The present contract contains a duration clause providing: 49 Except as otherwise specified in this Agreement, this entire Agreement shall be effective August 1, 1981 [and] shall remain in effect until July 31, 1984, and thereafter shall renew itself without change for yearly periods unless written notice of intended change is served in accordance with Section 6 ... of the Railway Labor Act by either party hereto, at least 90 days prior to the renewal date in each year. 50 This language shows that a total renewal occurs if no notice is received. As in EEOC, there is no express language terminating the agreement in the event of a notice of intended change. While the notice prevents total renewal, nothing in the wording prevents partial renewal. On the contrary, partial renewal seems implied in the language preventing renewal of the entire agreement. The reference to the entire contract is useless, by the TWA interpretation, and merely serves as emphasis. It is more likely that it has an operative purpose, distinguishing between all or parts of the agreement. The language appears to create an amendable contract, as in EEOC, with prospective changes limited to the subject matter of the notice (footnote omitted).