Document: 499 U.S. 65 111 S.Ct. 1127 113 L.Ed.2d 51 AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Petitionerv.Joseph E. O'NEILL, et al. No. 89-1493. Argued Jan. 14, 1991. Decided March 19, Syllabus After Continental Airlines, Inc., filed a petition for reorganization under Chapter 11 of the Bankruptcy Code, it repudiated its collective-bargaining agreement with petitioner Air Line Pilots Association, International (ALPA). An acrimonious strike ensued, during which hired replacement pilots and reemployed several hundred crossover strikers. Two years into strike, announced in "Supplementary Base Vacancy Bid 1985-5" (85-5 bid) that would fill large number anticipated vacancies using system allows to bid positions that, past, had assigned by seniority. Although ALPA authorized strikers submit bids, all been awarded working pilots. then agreed end dispose some related litigation, reallocate covered 85-5 bid. Striking were offered option settling outstanding claims participating positions' allocations, electing not return work receiving severance pay, or retaining their individual against becoming eligible only after reinstated. Thus, striking received previously settlement, respondents, former pilots, suit District Court ALPA, charging, inter alia, union breached duty fair representation. The court granted ALPA's motion summary judgment, but Appeals reversed. It rejected argument cannot breach representation without intentional misconduct, applying, instead, rule Vaca v. Sipes, 386 171, 87 903, 17 842 violates if actions are "arbitrary, discriminatory, bad faith," id., at 190, S.Ct., 916. With respect test's first component, found nonarbitrary decision must be (1) based upon relevant permissible factors, (2) rational result consideration those (3) inclusive impartial employees' interests. Applying test, concluded jury could find acted arbitrarily negotiating settlement less favorable than consequences complete surrender Continental, believed have left intact pilots' seniority rights regard positions. also existence material issue fact whether favored treatment allocation constituted discrimination Held: 1. tripartite standard supra, applies capacity. See, e.g., Communications Workers Beck, 487 735, 743, 108 2641, 2647, 101 634. when acting capacity, is not, as contends, required act good faith treat members equally nondiscriminatory fashion. Rather, has rational, fashion provide adequate U.S., 177, 909; Steele Louisville & Nashville R. Co., 323 192, 202, 226, 231, 89 L.Ed. 173. Pp. 73-77. 2. final product bargaining process may constitute evidence if, light factual legal landscape, can fairly characterized so far outside "wide range reasonableness," Ford Motor Co. Huffman, 345 330, 338, 73 681, 686, 97 1048, wholly "irrational" "arbitrary." Appeals' refinement arbitrariness component authorizes more judicial review substance negotiated agreements consistent national labor policy. Congress did intend union's performance permit substitute own view proper bargain reached union. NLRB Insurance Agents, 361 477, 488, 80 419, 426, 4 454. envisioned relationship between courts unions similar legislature. See Steele, 198, 230. Any substantive examination performance, therefore, highly deferential, recognizing wide latitude negotiators need effective responsibilities. Cf., Day-Brite Lighting, Inc. Missouri, 342 421, 423, 72 405, 407, 96 469. P.78. 3. resolution dispute was well within reasonableness" allowed bargaining. Assuming made no means irrational viewed landscape time settlement. Given Continental's resistance recognize voluntary might precipitated litigation over strikers' right positions, abandoned position disposing claims. negotiate produced certain prompt access share new jobs, avoided costs risks associated major significant who chose severance. does represent duty, because, correct accept compromise form inevitable. Cf. Trans World Flight Attendants, 489 109 1225, 103 456; Erie Resistor Corp., 373 221, 83 1139, 10 308, distinguished. 78-81. 886 F.2d 1438 (CA5 1985), STEVENS, J., delivered opinion unanimous Court. Laurence Gold, Washington, D.C., petitioner. Marty Harper, Phoenix, Ariz., respondents. Justice STEVENS 1 We certiorari clarify governs claim negotiation back-to-work terminating strike. hold 916, (1967)—that breaches either faith"—applies activity, including contract negotiation. further arbitrary actions, behavior 1048 (1953), irrational. 2 * This case arose out bitter confrontation (Continental), representing On September 24, 1983, Code. Immediately thereafter, approval Court, unilaterally reduced salaries benefits half. responded calling lasted two years. 1438, 1440 1989). 3 Of approximately 2,000 employed about 200 supported By ended, 400 "crossed over" accepted reemployment order reapplication. App. Brief Amicus Curiae A11, n. 8. trimming operations hiring 1,000 replacements, able continue business. August 1985, there 1,600 F.2d, 1440. acrimonious, punctuated incidents violence filing variety law suits, charges, countercharges. In notified withdrawing recognition agent federal lawsuit alleging unlawfully refusing negotiations agreement. this adversary context, on 9, posted bid)—an an now before us. Ibid. 5 For many used "system bid" procedure assigning Bids typically advance allow necessary training interfering current service. When group posted, any pilot specifying his her preferred (captain, officer, second officer), base operations, aircraft type. vacant basis seniority, determined date flew Continental. unusually vacancies—441 future captain officer undetermined vacancies. given nine days—until 18, 1985—to bids. Id., 1441. 6 Fearing effectively lock jobs indefinite future, Several so, initially bids from both groups, soon became concerned bona fides offers date. therefore challenged 7 At juncture, intensified committee agreement, entered October 31, 1985. 7-41. provided disposition pending reallocation 10-34. 8 three options. Under first, settled participate option, elected pay $4,000 per year service (or $2,000 they beenfur loughed began).1 third retained F.2d., 1441-1442. 9 thus entitled according 100 allocated next 70 awarded, returning one. 13. Thereafter, nonstriking 1-to-1 ratio. 13-14. initial type striker assignments assignment, changes bases equipment active began credit period 22. II months representatives class brought action ALPA. addition raising other charges us, respondents alleged accepting settlement.2 extensive discovery, judgment. Opposing motion, identified four "ALPA discriminated pilots."3 relying alternatively approved finding even 31 merely private oral explanation ruling, Judge opined "the achieved looks atrocious retrospect, fiduciary badly settle strike." 75. 12 misconduct. held includes " 'three distinct' components. 1444 (quoting Tedford Peabody Coal 533 952, 957, 1976)). A conduct 'arbitrary, faith.' 916). followed Fifth Circuit precedent, stating: 13 'We think non-arbitrary relevant, factors excludes possibility being motivations such personal animosity political favoritism; these factors; interests employees.' Tedford, 957) (footnotes omitted emphasis added Appeals). 14 test facts case, because "left worse off respects [Continental]." 1445. That conclusion rested court's suggested simply surrendered unconditional offer work, priority bid.4 Relying another airline,5 arguably already 1446. addition, ruled raised genuine chosen 1446-1447. 15 question violated refrain "arbitrary" conduct, remanded trial. 1448-1449. Because reversed Court's grant judgment decide precluded issues fact.6 16 statement governing application case. 498 806, 37, 112 (1990). III central requires argues, impose obligation discrimination.7 limited scope contends finding, question, sufficient support 18 maintains, merit, rationality good-faith, decisions consonant Government generally regulated collective bargaining," H.K. Porter NLRB, 397 99, 102, 90 821, 823, 25 146 (1970) (emphasis added), relied parties establish "their charter ordering industrial relations," Teamsters Oliver, 358 283, 295, 79 297, 304, 312 (1959). As we stated 454 (1960), "intended should negotiations, unrestricted governmental power regulate solution differences." Carbon Fuel Mine Workers, 444 212, 219, 410, 62 394 (1979). 19 There is, however, critical difference modification terms search adequately constituency. Our long recognized proceeds directly statutory role exclusive agent. "[T]he exercise behalf others involves assumption toward them interest behalf." 232, 173 (1944). 20 akin owed fiduciaries beneficiaries. example, Members analogized owes employees represents trustee trust Terry, 494 558, 567-568, 110 1339, 1346, 519 (1990); 584-588, 1355-1357 (KENNEDY, dissenting). Others likened employee attorney client. 582, 1353-1354 (STEVENS, concurring part judgment). parallels responsibilities corporate officers directors shareholders. Just owe beneficiaries care loyalty, honestly faith. Restatement (Second) Trusts § 174 (1959) (trustee's care); Strickland 466 668, 104 2052, 2063, 674 (1984) (lawyer render "adequate assistance"); Hanson Trust PLC ML SCM Acquisition 781 264, 274 (CA2 1986) (directors loyalty). 21 suggests enforceable protected inadequate process. Seventh Circuit, "do . protection inept invidious" "union incompetent job vote will do better union." Dober Roadway Express, 707 292, 295 (CA7 1983). representation, Even legislatures, subject actions. United States Carolene Products 304 144, 58 778, 82 1234 (1938); Department Agriculture Moreno, 413 528, 93 2821, 37 782 (1973). 22 relies heavily language which, union, management permissible. particular, stresses our comment "[a] reasonableness representative serving unit represents, always honesty purpose discretion." 686. Unlike read passage limit "good purpose," rather reasonableness." 23 admittedly variation way opinions described unions' repeatedly components prohibition conduct. Writing leading area law, White explained: 24 "The developed ago series cases involving racial certified Railway Labor Act, see N.R. 192 [65 226]; Tunstall Brotherhood Locomotive Firemen, 210 235, 187 (1944) ], extended N.L.R.A., supra. doctrine, agent's authority designated serve hostility any, discretion honesty, avoid Humphrey Moore, 375 [335], [84 363, 367, 370 (1964) ]. obvious Owens' complaint Union grounded statutes, cause action." 910. description "duty statutes" line spanning almost quarter century.8 26 correctly points out, virtually distinguished involved administration enforcement argues policy area. possible distinction, none governed double standard. Indeed, noted Sipes "challenges leveled efforts activities well." 634 (1988) (internal citation omitted); Electrical Foust, 442 42, 47, 99 2121, 2125, 60 698 (1979); 909-10. instances role, operates hall. Breininger Sheet Metal 493 67, 87-89, 424, ----, 107 388 (1989). 27 doubt, moreover, bright drawn Industrial grievances precipitate amendments, strikes focus entirely questions interpretation. Conley Gibson, 355 41, 46, 78 (1957); Steelworkers Warrior Gulf Navigation 363 574, 581, 1347, 1352, 1409 (1960). Finally, fall neither category. Breininger, ----. 28 are, satisfied persuaded, 29 acknowledged above, 469 (1952) (court "not sit superlegislature weigh wisdom legislation nor expresses offends public welfare"); Products, 154, 784 (where "question least debatable," "decision Congress"). reason, 30 approach particularly flawed fails take account strong favoring peaceful disputes, see, Groves Ring Screw Works, Ferndale Fastener Div., 168, 174, 498, 508 (1990), importance evaluating climate confronted made. shall explain, convince us reasons posited Appeals. IV placed great stress deal struck obtained unilateral termination alone irrationally. 1445-1446. holding unduly constrains breaching duty. 32 purposes decision, assume voluntarily terminated Moreover, rescinding assignment all, rescind half pursuant settlement—one 33 Nevertheless, turns retrospect Viewed give up certainly illogical. maintaining jobs. 34 comparable asserted Lines Northern Illinois.9 decided filled until trained actually assignments, here resolved favor But reasoning overlooks validity ruling appeal.10 35 clear vacancies, erroneously assumed existing clarion workers. latter proposition solely interpreting National Relations Act. clear, Act necessarily controlling situations, one, Trainmen Jacksonville Terminal 369, 383, 1109, 1117-18, 344 (1969). 36 background stages attempted disposed ultimately one realistic abandon very least, litigation. since lump-sum payment reinstatement, 1, presumably advantageous kinds run lawsuit. events, 38 suggestion "discrimination" represented fails. If groups invidious kind prohibited "super-seniority" workers 308 (1963), preserved reinstatement. Erie, extra enabled keep while senior lost theirs layoff subsequent 223-224, 1142-1143. mechanism reintegration permanently alter system. closely resembles 456 (1989), airline's refusal, displace cross-over unlawful discrimination. 39 reversed, proceedings opinion. 40 ordered. amicus curiae brief, states 366 $17.3 million, average $47,000 pilot. 9. included counts: violation Labor-Management Reporting Disclosure 1959 (LMRDA), U.S.C. 411 seq., LMRDA, contract. 47-56. petitioners counts, 72-77, appealed 1442 affirmed LMRDA count, 1448, seek decision. Therefore, respondents' follows: O'Neill Group various failed ratification misrepresented surrounding vote; Group; retired resigned settlement; (4) defendants compelled motives gain, namely self-interest motivations." 1442. "Accepting true do, reasonably conclude unconditionally [Continental] likely returned permitted [Continental]'s seniority-based procedures." Assn. Int'l Lines, 614 F.Supp. 1020 (ND Ill.1985), aff'd part, Assn., 802 1986), cert. denied, 480 946, 1605, 94 791 (1987). Respondents argued 3, below erred reversing Part IV, infra, express put forth triable concerning "There nothing indicate choices among best thought construct; somewhat satisfactory representation." 74. 563, Hines Anchor Freight, 424 554, 564, 1056, 47 231 (1976). Ill.1985). assuredly First, controlled outcome dispute, Circuit. Second, factually distinguishable dictated regarding carrier's taken faith, motivated antiunion animus. 898; F.Supp., 1046. equivalent

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