Court Opinion

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Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-3-2004

Intl Assn Machinists v. US Airways Inc
Precedential or Non-Precedential: Precedential

Docket No. 03-4169

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Recommended Citation
"Intl Assn Machinists v. US Airways Inc" (2004). 2004 Decisions. Paper 967.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/967

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                    PRECEDENTIAL           Tom A. Jerman
                                           Rachel A. Shapiro
   UNITED STATES COURT OF                  Aparna B. Joshi
           APPEALS                         O’Melveny & M eyers
    FOR THE THIRD CIRCUIT                  1625 Eye Street, N.W.
                                           Washington, DC 20006
             No. 03-4169
                                           Robert A. Siegel (argued)
                                           O’Melveny & M eyers
INTERNATIONAL ASSOCIATION OF               400 South Hope Street
         MACHINISTS                        15th Floor
   AND AEROSPACE WORKERS;                  Los Angeles, CA 90071-2899
INTERNATIONAL ASSOCIATION OF
  MACHINISTS AND AEROSPACE                 Sidney Zonn
           WORKERS                         Littler Mendelson, P.C.
     DISTRICT LODGE 141-M                  625 Liberty Avenue
                                           Dominion Tower, 26th Floor
                   v.                      Pittsburgh, PA 15222

        US AIRWAYS, INC.,                  Kristine G. Derewicz
                                           Littler Mendelson, P.C.
                    Appellant              1601 Cherry Street
                                           Three Parkway, Suite 1400
                                           Philadelphia, PA 19102-1321
   On Appeal from the United States
              District Court                 Attorneys for Appellant
for the Western District of Pennsylvania
        (D.C. Civ. No. 03-01496)           Michael J. Healey
     Honorable Robert J. Cindrich,         Healey & Hornack
              District Judge               429 Fourth Avenue
                                           Law & Finance Building, 5th Floor
                                           Pittsburgh, PA 15219
       Argued January 12, 2004
                                           Ira L. Gottlieb (argued)
   BEFORE: BARRY, SMITH, and               Robert A. Bush
    GREENBERG, Circuit Judges              Geffner & Bush
                                           3500 West Olive Avenue
       (Filed: February 3, 2004)           Suite 1100
                                           Burbank, CA 91505-4657
David Neigus                                    the district court lacked jurisdiction to
9000 Machinists Place                           issue the preliminary injunction.
Upper Marlboro, MD 20772-2687

   Attorneys for Appellees
                                                           I. BACKGROUND

                                                A. Factual Background
      OPINION OF THE COURT
                                                         The IAM is an unincorporated
                                                labor organization that is the certified
GREENBERG, Circuit Judge.                       collective bargaining representative of
                                                US Airways’ mechanics and related
         This matter comes on on appeal         personnel. District Lodge 141-M is the
from an order of the district court dated       IAM’s negotiating arm. For more than
and entered on October 21, 2003, barring        50 years, the IAM and US Airways have
US Airways, Inc. (“US Airways” or the           been parties to collective bargaining
“Company”) from using an outside                agreements governing US Airways’
contractor to perform maintenance               mechanics and related employees. On
overhauls called S-Checks, mandated by          August 11, 2002, US Airways filed for
the Federal Aviation Administration             Chapter 11 bankruptcy and implemented
(“FAA”), on the Company’s narrow body           measures to reduce its operating costs.
Airbus aircraft. The district court             These measures included renegotiating
concluded that the dispute between US           the terms of its collective bargaining
Airways and the International                   agreements, rejecting certain aircraft
Association of Machinists and Aerospace         leases, rejecting real property leases,
Workers (the “IAM”) over whether such           reducing wages and benefits for its
subcontracting was permissible                  management and non-union employees,
constituted a major dispute under the           and rejecting or renegotiating other
Railway Labor Act, 45 U.S.C. § 151 et           agreements with its lessors, vendors, and
seq. (“RLA”). 1 For the reasons set forth       suppliers.
below, we hold that the dispute is a
minor one under the RLA, and therefore                   1. The S-Check Requirement

                                                         FAA guidelines require US
  1                                             Airways to perform S-Checks on its
    The Railway Labor Act has covered
                                                narrow body Airbus aircraft every five
the airline industry since 1936. See
                                                years. S-Checks are the most extensive
Independent Ass’n of Continental Pilots
                                                type of scheduled maintenance checks,
v. Continental Airlines, 155 F.3d 685,
                                                requiring a detailed inspection of the
689 (3d Cir. 1998).

                                            2
aircraft and repair of any discrepancies         described work,
on the airframe, components, and                 wherever performed, is
engines. US Airways’ first S-Check (on           recognized as coming
an aircraft it acquired in 1998) became          within the jurisdiction
due on October 15, 2003. US Airways              of the [IAM], and is
had nine other S-Checks due by the end           covered by this
of 2003 and seven others are due in              Agreement: . . . all
September 2004. As of January 2005, S-           work involved in
Checks will be required on an ongoing            dismantling,
basis.                                           overhauling, repairing,
                                                 fabricating, assembling,
          US Airways emerged from                welding, and erecting
bankruptcy on March 31, 2003. It claims          all parts of airplanes,
that until that time it could not properly       airplane engines,
arrange for the ten S-Checks that were           avionics equipment,
due in 2003. At some point before                electrical system,
October 6, 2003, US Airways told the             heating system,
IAM that it may need to hire a vendor to         hydraulic system, and
perform the S-Checks because it lacked           machine tool work in
the necessary equipment and facilities to        connection therewith . .
perform them itself. On October 6, 2003,         ..
US Airways confirmed this need with the
IAM with regard to its first ten S-                       ....
Checks, but it said it would work with
the IAM to identify means by which the           The duties of aircraft
remaining S-Checks could be performed            cleaning, lavatory
in house.                                        servicing, potable water
                                                 servicing, receipt and
        2. The Collective Bargaining             dispatch, ancillary
        Agreement (“CBA”)                        duties associated with
                                                 receipt and dispatch,
        a. The Scope Clause (Article             and operation of ground
        2(B))                                    power units may be
                                                 performed by
        Article 2(B) of the CBA defines          employees covered by
the scope of the work to be performed by         this Agreement and/or
IAM-represented employees:                       other employees and
                                                 vendors as described in
        The Company agrees                       Article 4 paragraphs J
        that the following                       and N at those

                                             3
locations/shifts where                  dispatch, including the
such covered                            ancillary duties
employees are not                       associated with receipt
staffed. Aircraft towing                and dispatch, of
may be performed by                     Commuter Aircraft may
employees not covered                   be accomplished by
by this Agreement at                    employees not covered
those locations/shifts                  by the mechanic and
where such covered                      related agreement.
employees are not
staffed. It is not the         JA 170; Appellees’ br. at 7.2 The parties
intent of this paragraph       do not dispute that the scope language
to have non-Mechanical         encompasses airframe heavy
and Related employees          maintenance (“HMV”) work, which is
perform such work on           the type of work an S-Check requires.
shifts where covered
employees are staffed                   There are two addenda to the
except as provided for         CBA: (1) the “Letter of Clarification”
elsewhere in this              (the “First Clarification”); and (2)
agreement. It is the           “Clarification of Article 2(B)” (the
Company’s intent,              “Second Clarification”).
however, to utilize all
its equipment and                       b. The First Clarification
facilities in performing
work in its own                         The First Clarification states that
organization. In the           “Section (B) of said Article 2 is
event that a situation         recognized by both parties as prohibiting
should develop                 the ‘farming out’ of the types of work
whereby the equipment          specified in said Section (B).” JA 194.
and facility limitations
are not available or                    c. The Second Clarification
sufficient to perform
such work, the                          The Second Clarification states
Company will confer            that:
with the Union in an
effort to reach an                      Relative to [the Scope
understanding with
respect to how the
problem is to be                 2
                                  References to “JA” refer to the joint
resolved. Receipt and
                               appendix filed in this court.

                           4
clause], it is agreed that,                may subcontract the
within the limits                          major overhaul of
hereinafter specified,                     aircraft engines during
the following listed                       the life of this
exceptions to the                          Agreement.
coverage of Article 2
shall not be deemed in            JA 195-96. The IAM notes that neither
violation thereof:                HMV nor other maintenance work on
                                  aircraft airframes is mentioned in the list
           ...                    of subcontracting “exceptions.” The
                                  parties agree that HMV work is not the
(G) Types of work                 type of work that customarily has been
customarily contracted            contracted out.
out, such as parts and
material which the                         3. Bargaining History
Company could not be
expected to                                 The IAM presents to the court
manufacture, such as              past conduct on the part of US Airways
engine and airframe               regarding the subcontracting of HMV
parts, castings,                  work on its Boeing fleet. Specifically,
cowlings, seats, wheels           the IAM notes that during negotiations in
and other items which             1999 for a successor agreement (a major
are commonly                      dispute), US Airways sought to obtain
manufactured as                   the right to subcontract Q-Checks of its
standard items for the            Boeing fleet, claiming that it lacked the
trade by vendors. Work            facilities to perform the work. The IAM
subcontracted out to a            rejected US Airways’ proposal, and thus,
vendor will be of the             US Airways did not achieve the right to
type that cannot be               subcontract the Q-Checks.
manufactured or
repaired in-house by                       4. The Parties’ Practice
existing
skills/equipment or                        US Airways never has
facilities of the                 subcontracted HMV work in its 54-year
Company.                          relationship with the IAM. Rather, IAM-
                                  represented employees always have
          ....                    performed such work, regardless of the
                                  model of the aircraft. The IAM claims
(I) Due to lack of                that the Company acquired a hangar in
facilities, the Company           Tampa, Florida, where it could have

                              5
performed the S-Checks, although it                       On August 4, 2003, the IAM
voluntarily closed the facility in               notified US Airways that use of an
November 2002.                                   outside vendor for the S-Checks would
                                                 violate the scope of the CBA and would
        5. The Dunsford Arbitration              create a major dispute. US Airways
                                                 countered on August 8, 2003, that
          US Airways presents evidence           because the parties differed as to the
of an arbitration between it and the IAM         interpretation of the CBA regarding
in 1991-1992 before the US Airways-              whether S-Checks could be
IAM System Board of                              subcontracted, the dispute was a minor
Adjustment/Arbitration (“System                  one. Thus, US Airways attempted to
Board”) which Professor John Dunsford            submit the dispute to the System Board,
decided (the “Dunsford Arbitration”).            but the IAM refused to arbitrate the
The issue before the System Board was            dispute.
whether US Airways could outsource
engine overhaul work because it lacked                    On October 6, 2003, the IAM
the facilities to perform the work in            moved in the district court for a
house. Professor Dunsford decided that           temporary restraining order and
it could, noting that the IAM had not met        preliminary injunction barring US
its burden of showing that there were            Airways from using an outside vendor
facilities to do the work in house. While        for the S-Checks. 3 The IAM argued that
the parties agree that this award has            the CBA required US Airways to use
become part of the CBA, they dispute its         IAM employees for its S-Checks and that
meaning. US Airways claims that                  use of an outside vendor constituted a
Professor Dunsford relied on the second
sentence of Section (G) of the Second
Clarification in holding that even though          3
                                                     The IAM included in its supporting
the engine overhaul work customarily
                                                 papers declarations explaining how US
had not been contracted out, US Airways
                                                 Airways could perform the Airbus HMV
could do so in that case because it lacked
                                                 work in house with existing facilities,
the facilities to do the work in house. In
                                                 equipment, and mechanics, both active
contrast, the IAM believes that Professor
                                                 and on layoff status. It also provided a
Dunsford relied solely on Section (I),
                                                 declaration from William Freiberger,
which creates a specific exception for
                                                 who was the IAM ’s chief negotiator in
aircraft engine overhauling where there
                                                 the 1999 negotiations, in which he stated
is a lack of facilities.
                                                 that during the course of the 1999
                                                 negotiations US Airways had negotiated
                                                 for the right to subcontract HMV work
                                                 on its Boeing fleet, but never attained
B. Procedural Background
                                                 that right.

                                             6
major dispute, requiring maintenance of           one. See General Comm. of Adjustment
the status quo.                                   v. CSX R.R. Corp., 893 F.2d 584, 589
                                                  (3d Cir. 1990) (“CSX”). We review
         After oral argument, the district        factual findings under the clearly
court held on October 21, 2003, that the          erroneous standard. See Shire US Inc. v.
dispute was a major one and it                    Barr Labs. Inc., 329 F.3d 348, 352 (3d
preliminarily enjoined US Airways from            Cir. 2003).
using an outside vendor for the S-
Checks. It held that US Airways’
arguments under the CBA were
“obviously insubstantial” and that it was                    III. DISCUSSION
“attempting to remake or amend” the
CBA’s prohibition against HMV                     A. Major vs. Minor Disputes
subcontracting. JA 18.
                                                          1. The Guidelines
          US Airways filed a notice of
appeal and a motion for stay pending                        “The Railway Labor Act is the
appeal. After a hearing, the district court       product of a joint effort by labor and
denied US Airways’ request for a stay,            management representatives to channel
but it modified its injunction to permit          labor disputes into constructive
US Airways to complete work on one                resolution procedures as a means of
partially disassembled aircraft. On               avoiding interruptions to commerce and
October 27, 2003, US Airways moved in             preventing strikes.” CSX, 893 F.2d at
this court for an emergency stay pending          589. The two types of disputes that can
appeal, which a motion panel denied on            arise under the RLA are major disputes
November 5, 2003, though at the same              and minor disputes. In Consolidated Rail
time it expedited the appeal. On January          Corp. v. Railway Labor Executives’
12, 2004, we heard oral argument on US            Ass’n, 491 U.S. 299, 109 S.Ct. 2477
Airways’ appeal.                                  (1989) (“Conrail”), the Supreme Court
                                                  explained that “the formal demarcation
                                                  between major and minor disputes does
                                                  not turn on a case-by-case determination
II. JURISDICTION AND STANDARD                     of the importance of the issue presented
           OF REVIEW                              or the likelihood that it would prompt the
                                                  exercise of economic self-help.” Id. at
         Jurisdiction over the appeal of a        305, 109 S.Ct. at 2481. Rather, the
preliminary injunction is proper pursuant         difference between the two types of
to 28 U.S.C. § 1292(a)(1). We exercise            disputes is that major disputes seek to
plenary review over the question of               create contractual rights, while minor
whether the dispute is a major or minor           disputes seek to enforce them. See id. at

                                              7
302, 109 S.Ct. at 2480 (holding that the                   The district courts have
inclusion of drug testing as part of                       subject-matter
railroad’s physical examinations                           jurisdiction to enjoin a
arguably was justified by implied terms                    violation of the status
of collective bargaining agreement, and                    quo pending completion
therefore dispute was minor); see also                     of the required
Elgin, J. & E. Ry. v. Burley, 325 U.S.                     procedures, without the
711, 723, 65 S.Ct. 1282, 1290 (1945).                      customary showing of
                                                           irreparable injury.
          Major disputes relate to the
formation of collective bargaining                Id. at 302-03, 109 S.Ct. at 2480.
agreements or efforts to secure them.
They arise in the absence of such an                        In contrast, minor disputes arise
agreement or where a party seeks to               out of grievances or out of the
change the terms of one, and therefore            interpretation or application of existing
the issue is not whether an existing              collective bargaining agreements. See
agreement controls the controversy.               id. at 303, 109 S.Ct. at 2481. “The
Major disputes look to the acquisition of         dispute relates either to the meaning or
rights for the future, not to the assertion       proper application of a particular
of rights claimed to have vested in the           provision with reference to a specific
past. See Conrail, 491 U.S. at 302, 109           situation or to an omitted case.” Id.
S.Ct. at 2480. As the Supreme Court               Where an employer asserts a contractual
stated in Conrail,                                right to take the contested action, the
                                                  ensuing dispute is a minor one if the
         [i]n the event of a major                action arguably is justified by the implied
         dispute, the RLA                         or express terms of the parties’ collective
         requires the parties to                  bargaining agreement. Where, by
         undergo a lengthy                        contrast, the employer’s claimed
         process of bargaining                    justification for the action is frivolous or
         and mediation. . . .                     obviously insubstantial, the dispute is a
         Until they have                          major one. See id. at 310, 109 S.Ct. at
         exhausted those                          2484; see also CSX, 893 F.2d at 593
         procedures, the parties                  (noting that the court may not “consider
         are obligated to                         the merits of the underlying dispute; its
         maintain the status quo,                 role is limited to determining whether the
         and the employer may                     dispute can be characterized as involving
         not implement the                        the proper application or meaning of a
         contested change in                      contract provision”).
         rates of pay, rules, or
         working conditions.                               A minor dispute is subject to a

                                              8
compulsory and binding arbitration              Clarification (which does not contain an
before an adjustment board established          exception for HMV work); and (4) US
by the employer and the unions                  Airways’ past practice of performing all
representing the employees. That board,         HMV work in house.
in this case the System Board, has
exclusive jurisdiction over the dispute.                  In US Airways’ view, the
There is no general statutory obligation        dispute can be resolved by reference to
that the employer maintain the status quo       the following: (1) the scope clause
pending the arbitrator’s decision. See          (Article 2(B)) (which includes HMV
Conrail, 491 U.S. at 302, 109 S.Ct. at          work); (2) the “facilities and equipment”
2481. Thus, in a minor dispute, “[e]ach         clause of Article 2(B) (which contains a
side can act on its interpretation of the       meet and confer obligation when the
existing agreements until the arbitration       Company lacks adequate equipment or
panel rules otherwise.” CSX, 893 F.2d at        facilities to perform the work); (3) the
594 (citations omitted).                        Second Clarification, Section (G),
                                                second sentence (which states that US
        2. The Instant Dispute                  Airways may contract out work for
                                                which it lacks the skills, equipment or
         We hold that the instant dispute       facilities to perform the work in house);
is a minor one because both parties have        (4) the Dunsford Award (upholding right
asserted rights existing under the CBA,         to subcontract engine overhaul work
the dispute turns on the proper                 when in house facilities are lacking); (5)
interpretation or application of the CBA,       the past practice of subcontracting
and US Airways’ argument is neither             aircraft maintenance work when in house
frivolous nor obviously insubstantial.          equipment or facilities are lacking; and
                                                (6) the absence of any past practice of
        a. Both Parties Assert Rights           performing Airbus S-Checks.
        Under the CBA
                                                         Thus, both parties contend that
          Both parties contend that the         terms of the CBA, as interpreted through
terms of the existing CBA either                custom and past experience, determine
establish or refute the presence of the         the result in this case.
right to subcontract S-Checks. The IAM
contends that the dispute can be resolved                b. US Airways’ Argument is
by reference to the following: (1) the                   Neither Frivolous Nor
scope clause (Article 2(B)) (which                       Obviously Insubstantial
includes HMV work); (2) the First
Clarification (which prohibits the                       As described below, we hold
“farming out” of work included in the           that the district court erred in finding US
scope clause); (3) the Second                   Airways’ position to be frivolous and

                                            9
obviously insubstantial.                          may be contracted out to a vendor when
                                                  the Company lacks the skills, equipment
                                                  or facilities to perform the work in
                                                  house. In concluding that this sentence
                                                  “can only be read as a clarification of the
                                                  first sentence,” JA 16, the district court
        1. US Airways’ Section (G)                impermissibly interpreted the CBA.4 As
        Argument

         Section G of the Second                    4
                                                      The district court based its decision
Clarification reads as follows:
                                                  on the following factors: (1) the
                                                  “longstanding and uninterrupted
        (G) Types of work
                                                  practice” of performing “heavy
        customarily contracted
                                                  maintenance types of work”; (2) the “fact
        out, such as parts and
                                                  that such work has always been
        material which the
                                                  considered within the exclusive province
        Company could not be
                                                  of those employees . . . as evidenced by
        expected to
                                                  the aforementioned history”; and (3) the
        manufacture, such as
                                                  fact that US Airways in 1999 asked the
        engine and airframe
                                                  IAM to allow it to subcontract Q-Checks
        parts, castings,
                                                  on Boeing aircraft because of a backlog
        cowlings, seats, wheels
                                                  of that work. JA 17. It further opined
        and other items which
                                                  that under US Airways’ interpretation of
        are commonly
                                                  Section (G), US Airways “could
        manufactured as
                                                  unilaterally void the entire CBA based on
        standard items for the
                                                  such interpretation simply by not
        trade by vendors. Work
                                                  providing IAM-represented employees
        subcontracted out to a
                                                  with adequate facilities or tools to
        vendor will be of the
                                                  perform their work.” JA 17-18.
        type that cannot be
        manufactured or
                                                         With regard to the 1999 history,
        repaired in-house by
                                                  US Airways argues that it did not have
        existing
                                                  an adequate opportunity to respond to the
        skills/equipment or
                                                  IAM’s factual allegations, but that in any
        facilities of the
                                                  event this past negotiation is
        Company.
                                                  distinguishable because there US
                                                  Airways was seeking permission to
JA 196. US Airways argues that the
                                                  subcontract work for which it had
second sentence of Section (G), read
                                                  adequate equipment and facilities. US
alone, supports its position that any work
                                                  Airways correctly notes that the district

                                             10
US Airways correctly explains, the                 Section (G), by stating that “[a]lthough
district court’s analysis went beyond              the IAM has argued that the Dunsford
determining whether the CBA resolved               Award was based on Section (I) of the
the dispute; instead, it performed the task        [Second Clarification], which applies
of the arbitrator in determining the               only to engine maintenance, that could
proper construction of Section (G). Of             not have been the basis for the decision
course, under US Airways’ view, the                because Section (I) refers only to lack of
district court’s action was impermissible          ‘facilities,’ and not lack of equipment or
even if it correctly interpreted the CBA.          skills.” Appellant’s br. at 27.

         2. US Airways’ Dunsford                           3. US Airways’ Equipment and
            Award Argument                                 Facilities Clause Argument

          US Airways argues that the                         US Airways also argues that the
Dunsford Award is indicative that the              district court failed to acknowledge the
second sentence of Section (G) is free             “equipment and facilities clause” of
standing. It claims that Professor                 Article 2(B), which states that “[i]n the
Dunsford concluded that engine overhaul            event that a situation should develop
work customarily was not contracted out,           whereby the equipment and facility
but nonetheless US Airways could                   limitations are not available or sufficient
contract it out because it did not have the        to perform such work, the Company will
facilities and equipment needed to                 confer with the Union in an effort to
perform the work in house. Thus, US                reach an understanding with respect to
Airways argues that the second sentence            how the problem is to be resolved.” JA
of Section (G) gives it authority to               170. US Airways argues that this clause
contract out S-Checks where it lacks the           creates at least an implied right to
facilities and equipment to perform them           subcontract where the Company does not
in house, even though this is not the type         have adequate equipment or facilities.
of work customarily contracted out. US             US Airways further argues that under the
Airways also counters the IAM’s                    Dunsford Award, this clause applies
argument that the Dunsford Award was               whenever work is covered by the
based solely on Section (I) 5 , and not on         agreement (e.g. HMV work), and not
                                                   where the work is subject to an express
                                                   exception under the Second Clarification,
court’s reliance on this bargaining history        such as Section (G). As such, it
is attenuated given that the court did not
review the bargaining history of Section
(G).
                                                   subcontract the major overhaul of aircraft
  5
   Section (I) states as follows: “Due to          engines during the life of this
lack of facilities, the Company may                Agreement.” JA 196.

                                              11
concludes that even if the second                 SMITH, Circuit Judge, Dissenting:
sentence of Section (G) applied only to
work “customarily contracted out,” the
equipment and facilities clause of Article
2(B) “creates an independent basis for                      This case turns on whether the
the Company’s right to subcontract S-             dispute between US Airways, Inc. (“US
Checks.” Appellant’s br. at 31.                   Airways” or “the Company”) and the
                                                  International Association of Machinists
         Based on these arguments, we             and Aerospace Workers (the “IAM ”) is
hold that US Airways has met its                  characterized as “major” or “minor” for
“relatively light” burden, see Conrail,           purposes of the Railway Labor Act, 45
491 U.S. at 307, 109 S.Ct. 2482 (citation         U.S.C. §§ 151 et seq. (“RLA”). The
omitted), of asserting rights under the           majority holds that it is a minor one
CBA that are neither frivolous nor                “because both parties have asserted
obviously insubstantial. But we do not            rights existing under the [collective
go further and state a view as to whether         bargaining agreement], the dispute turns
we ultimately agree with US Airways or            on the proper interpretation or
the IAM as it is not our responsibility to        application of the CBA, and US
make such a determination. Rather, we             Airways’ argument is neither frivolous
leave the merits of the parties’ arguments        nor obviously insubstantial.” Supra at
to the System Board, and merely will lift         13. I agree with the majority that the
the preliminary injunction because there          parties’ dispute is resolved by application
is no requirement that the status quo be          of the CBA and the interpretation of its
maintained in this minor dispute.                 terms. Where I part company with my
                                                  colleagues is in their conclusion that US
                                                  Airways’ position is not frivolous. I
                                                  agree, instead, with the District Court
          IV. CONCLUSION                          that, “[u]nder the guise of a claimed
                                                  dispute about meaning of language in the
         For the reasons stated above, the        CBA, [US Airways] is attempting to
order of the district court dated and             remake or amend the most elemental and
entered on October 21, 2003, will be              consequential provisions of the CBA.”
reversed and this matter will be                  Because I believe that US Airways has
remanded to the district court for further        not presented a construction of the
proceedings consistent with this opinion.         contract that even arguably supports its
                                                  position, I respectfully dissent.

                                                           A genuine dispute over the
                                                  “‘meaning or proper application of a
                                                  particular provision’” in the parties’

                                             12
collective bargaining agreement is                        contractual basis for its
“minor,” and subject to the exclusive                     claim is “insincere” in
jurisdiction of the System Board of                       doing so, or its
Adjustment. Consol. Rail Corp. v. Ry.                     “position [is] founded
Labor Executives’ Ass’n (“Conrail”),                      upon . . . insubstantial
491 U.S. 299, 303-04 (1989) (quoting                      grounds,” the result of
Elgin, J. & E. Ry. Co. v. Burley, 325 U.S.                honoring that party’s
711, 723 (1945)). A “major” dispute, on                   characterization would
the other hand, arises “where there is no                 be to undercut “the
such agreement or where it is sought to                   prohibitions of § 2,
change the terms of one.” Conrail, 491                    Seventh, and § 6 of the
U.S. at 302 (quoting Burley, 325 U.S. at                  Act” against unilateral
723) (emphasis added). The RLA                            imposition of new
prescribes “a lengthy process of                          contractual terms. In
bargaining and mediation” for major                       such circumstances,
disputes, during which time the “parties                  protection of the proper
are obligated to maintain the status quo.”                functioning of the
Conrail, 491 U.S. at 302-03. The district                 statutory scheme
courts have jurisdiction to enjoin a                      requires the court to
violation of the status quo pending                       substitute its
completion of the required procedures,                    characterization for that
without the customary showing of                          of the claimant.
irreparable injury. Id. at 303.

         The Supreme Court in Conrail
explicitly recognized that any capable            Conrail, 491 U.S. at 306 (quoting
advocate can massage an attempt to                Norfolk & Portsmouth Belt Line R.R. Co.
change the terms of an agreement into a           v. Bhd. of R.R. Trainmen, 248 F.2d 34,
question of contract interpretation, and          43-44 n.4 (4th Cir. 1957)).6 Under
that deferring to every such argument as
a matter of course would undermine the
basic structure of the RLA:                         6
                                                       See also Hawaiian Airlines, Inc. v.
                                                  Norris, 512 U.S. 246, 265-66 (1994)
        [T]here is a danger in
                                                  (“Recognizing that accepting a party’s
        leaving the
                                                  characterization of a dispute as ‘minor’
        characterization of the
                                                  ran the risk of undercutting the RLA’s
        dispute solely in the
                                                  prohibition ‘against unilateral imposition
        hands of one party. In a
                                                  of new contractual terms,’ the Court [in
        situation in which the
                                                  Conrail] held that a dispute would be
        party asserting a
                                                  deemed minor only if there was a

                                             13
Conrail, a dispute is minor only where                     arguably justified by the
the parties’ positions are “arguably                       terms of the parties’
justified” by the terms of their                           collective-bargaining
agreement:                                                 agreement. Where,
                                                           incontrast, the
         Where an employer                                 employer’s claims are
         asserts a contractual                             frivolous or obviously
         right to take the                                 insubstantial, the
         contested action, the                             dispute is a major one.
         ensuing dispute is
         minor if the action is

                                                   Conrail, 491 U.S. at 307.
sincere, nonfrivolous argument that it
                                                            In holding that the dispute
turned on the application of the existing
                                                   between the parties is minor rather than
agreement, that is, if it was ‘arguably
                                                   major, the majority concludes that the
justified’ by that agreement.”); S.E.
                                                   District Court “impermissibly interpreted
Penn. Transp. Auth. v. Bhd. of R.R.
                                                   the CBA.” Supra at 14. Of course, the
Signalmen, 882 F.2d 778, 783 (3rd Cir.
                                                   District Court had no choice but to
1989) (explaining that the Conrail
                                                   interpret the CBA in order to determine
standard should not “allow a party to
                                                   whether it arguably justifies US Airways’
utilize the minor dispute resolution
                                                   position. See Conrail, 491 U.S. at 306-
procedures by simply pleading that the
                                                   07; see also S.E. Penn. Transp. Auth.,
dispute is resolvable by reference to an
                                                   882 F.2d at 784-85 (discussing the
existing collective bargaining
                                                   sources to be considered when
agreement” and that “courts can exercise
                                                   interpreting a CBA to determine whether
some judicial control over the label to be
                                                   a party’s position is arguably justified).
affixed to the dispute”); Rutland Ry.
                                                   A court’s interpretation is impermissible
Corp. v. Bhd. of Locomotive Eng’rs, 307
                                                   under Conrail only if it elects among
F.2d 21, 33 (2d Cir. 1962) (“In [deciding
                                                   multiple, non-frivolous constructions of
if a dispute is major or minor] we must
                                                   the terms of the agreement. By stating
not place undue emphasis on the
                                                   that the District Court “impermissibly
contentions or the maneuvers of the
                                                   interpreted the CBA,” the majority, it
parties. M anagement will assert that its
                                                   seems to me, only invites the question: is
position, whether right or wrong, is only
                                                   US Airways’ position grounded on a
an interpretation or application of the
                                                   non-frivolous construction of the parties’
existing contract. Unions, on the other
hand, in their assertions about the dispute
at issue, will obviously talk in terms of
change.”).

                                              14
agreement? 7                                       sentence of Section (G) hinges on a
                                                   logical fallacy. That sentence states:
          The majority does not really             “Work subcontracted out to a vendor will
answer this question, but rather repeats           be of the type that cannot be
US Airways’ argument that “the second              manufactured or repaired in-house by
sentence of Section (G), read alone,               existing skills/equipment or facilities of
supports its position that any work may            the Company.” From this, US Airways
be contracted out to a vendor when the             argues: (1) S-Checks cannot be repaired
Company lacks the skills, equipment or             in-house using existing equipment and
facilities to perform the work in house.”          facilities; (2) therefore, S-Checks are
Supra at 14; compare Appellant’s Br. at            work that can be subcontracted out. Yet
22. Yet two critical issues remain: (1)            this argument is a classic non sequitur. It
whether the second sentence of Section             is as if US Airways had argued: (1) All
(G), read alone, arguably supports US              precedential opinions of the Third Circuit
Airways’ position, and (2) whether that            will be of the type published in the
sentence can arguably be read alone?               Federal Reporter; (2) Rutland Railway
                                                   Corp. v. Brotherhood of Locomotive
         I believe that both issues must           Engineers, 307 F.2d 21 (2d Cir. 1962), is
be resolved in the negative. US                    published in the Federal Reporter; (3)
Airways’ interpretation of the second              therefore, Rutland is a precedential
                                                   opinion of the Third Circuit.

  7                                                          US Airways’ argument would be
     I take issue with the majority’s
                                                   valid (and therefore arguable) if the
characterization that the District Court
                                                   second sentence of Section (G) actually
“based its decision” on the parties’ past
                                                   read: “Work of the type that cannot be
practice and bargaining history. Supra at
                                                   manufactured or repaired in-house by
14-15 n.4. The District Court simply
                                                   existing skills/equipment or facilities of
read the CBA and concluded— as I
                                                   the Company will be subcontracted out
do—that it lends no support to US
                                                   to a vendor.” 8 This is not the language of
Airways’ position. Having arrived at
                                                   the text, however, and US Airways offers
what it concluded was the only arguable
                                                   no argument or explanation why we
interpretation of the CBA, the District
Court went on to state that it had
“confidence” in its conclusion based on
                                                     8
the parties’ past practice and bargaining               Likewise, the hypothetical
history. To the extent that these sources          conclusion given above would be valid if
were considered by the District Court,             the first premise stated: “All opinions of
they were used merely to confirm the               the type published in the Federal
plain text of the CBA, not to interpret the        Reporter will be precedential opinions of
CBA in the first instance.                         the Third Circuit.”

                                              15
should reverse the subject and predicate            Adjustment’s opinion in the Dunsford
of the second sentence of Section (G).              Arbitration, which US Airways insists is
The Company simply presents the                     part of the CBA and binding on the
implicit and fallacious ipse dixit that this        parties. See supra at 8. As the majority
is how the sentence should be read. Such            points out, the issue before the System
argumentation is, in my view, obviously             Board in the Dunsford Arbitration was
insubstantial.                                      whether US Airways could outsource
                                                    certain engine overhaul work because it
          Whether S-Checks can be                   lacked the facilities to perform the work
performed using existing                            in-house. US Airways attempted to
skills/equipment therefore tells the reader         justify the outsourcing under Sections
little about whether S-Checks can be                (G) and (I) of the Second Clarification.
outsourced. Indeed, the second sentence             The Board held that Section (G) did not
of Section (G), standing alone, provides            authorize outsourcing because US
no basis for determining what work may              Airways had performed similar engine
be outsourced. Which leads to the                   overhaul work in-house:
second issue that I believe the majority
has left unresolved: can the second                         Although the Company
sentence of Section (G) arguably be read                    has never overhauled a
standing alone? In my view, the District                    CFM-56 engine in
Court was correct in concluding that it                     house, it has performed
cannot. That sentence states that                           overhaul work on [a
“[w]ork subcontracted out to a vendor                       different] series of
will be of” a certain type. It therefore                    engines since the early
has no practical meaning without a prior                    1970s. Hence, the
definition of “[w]ork subcontracted out.”                   “type” of work which is
The second sentence of Section (G) thus                     in arbitration is the
can be read only as a clarification of the                  work of engine
first sentence, which, as an enumerated                     overhaul, no [sic] the
exception to Article 2(B)’s requirement                     overhaul of a particular
that work be performed in-house,                            engine. . . . If work on
provides such a definition. That is, the                    the new part is of a
second sentence clarifies the “[t]ypes of                   “type” that previously
work customarily contracted out” that                       was performed on other
will continue to be contracted out under                    parts, it does not come
the CBA.                                                    within the exception of
                                                            [Section] (G). . . .
         All of this is apparent from the
plain language of the CBA. It is also
clear from the System Board of

                                               16
        . . . The quantity of                              Again, all of this is clear from
        work [that US Airways]                    the CBA. More important for purposes
        has done on [similar                      of the RLA, however, is the fact that US
        engines] over many                        Airways offers no explanation for how
        years is quite                            the second sentence of Section (G)
        substantial, and clearly                  supports its position, or how its
        establishes that this                     construction of that sentence can be
        “type of work” is not                     harmonized with the rest of the contract.
        customarily contracted                    Having adopted a logically invalid
        out.                                      conclusion from the text of the CBA;
                                                  having contradicted a dispositive
                                                  decision of the System Board; having
                                                  ignored the elementary canon that a
(Emphasis added). The System Board’s              contract must be read as a whole, and
opinion reiterates the only arguable              that individual provisions must be read in
reading of the CBA: the Section (G)
exception is limited to “[t]ypes of work
customarily contracted out.” 9
                                                         US Airways takes liberties with
                                                  the Dunsford Arbitration that are simply
                                                  unsupportable. The System Board
  9
         The Board did conclude that              addressed US Airways’ arguments under
outsourcing was authorized under                  Sections (G) and (I) in succession. In its
Section (I), which provides: “Due to              33-page opinion, the Board disposed of
lack of facilities, the Company may               US Airways’ Section (G) argument in
subcontract the major overhaul of aircraft        just over a single page. The System
engines during the life of this                   Board devoted the remaining seven
Agreement.” US Airways’ argument that             pages of its opinion to US Airways’
there is an inconsistency between the             Section (I) argument (Section (G) is not
Board opinion and Section (I) is a red            mentioned again in the opinion). It is in
herring. Because the Board explicitly             this context that the Board stated: “the
found Section (G) inapplicable, any               operative standard in the relationship of
inconsistency can only have relevance to          the parties has been whether the
the meaning of Section (I). In other              Company possessed the requisite skills,
words, Section (I) may very well apply            equipment and facilities to do certain
due to lack of equipment and skills as            engine overhaul work.” (Emphasis
well as “due to lack of facilities.” But          added). Of course, US Airways in its
this is irrelevant to the dispute at hand,        brief conveniently omits the italicized
because US Airways does not contend               portion of this quote, which places the
that Section (I) justifies the outsourcing        Board’s allegedly inconsistent statement
of S-Checks.                                      squarely in the context of Section (I).

                                             17
their context and not in a vacuum, see In                  intent, however, to
re New Valley Corp., 89 F.3d 143, 149                      utilize all its equipment
(3d Cir. 1996); having abandoned the                       and facilities in
equally fundamental canon that a                           performing work in its
contract must be read so as to give effect                 own organization. In
to all of its parts, see New Wrinkle, Inc.                 the event that a
v. John L. Armitage & Co., 238 F.2d 753,                   situation should
757 (3d Cir. 1956)10 ; US Airways was                      develop whereby the
obliged to offer some logical argument                     equipment and facility
why its interpretation makes sense. No                     limitations are not
such argument was attempted by US                          available or sufficient
Airways, and this failure should be fatal                  to perform such work,
under Conrail.                                             the Company will
                                                           confer with the Union
         Instead, US Airways puts forth                    in an effort to reach an
an alternative argument that the                           understanding with
“equipment and facilities” clause in                       respect to how the
Article 2(B) is actually an exception to                   problem is to be
Article 2(B)’s requirement that work be                    resolved.
performed in-house. Not only is this
alternative argument frivolous, it
confirms the absence of any justification
for US Airways’ Section (G) argument.             This clause does not purport to allow US
The “equipment and facilities” clause             Airways to take any unilateral action at
provides:                                         all. Instead, it simply requires the parties
                                                  to “confer.” The System Board of
         It is the Company’s                      Adjustment made this very point in the
                                                  Dunsford Arbitration, rejecting US
                                                  Airways’ reliance on the equipment and
  10                                              facilities clause as outsourcing authority.
      US Airways’ construction of the
                                                  US Airways thus attempts to revive two
CBA renders Section (I) of the Second
                                                  arguments explicitly rejected by the
Clarification superfluous. If, as US
                                                  System Board, while at the same time
Airways argues, the second sentence in
                                                  insisting that the Dunsford Arbitration is
Section (G) allows US Airways to
                                                  part of the CBA and binding on the
outsource all work that cannot be
                                                  parties. See supra at 8. Rather than
performed due to lack of facilities, there
                                                  support a broad right to outsource, the
would be no need for a separate Section
                                                  “equipment and facilities” clause
(I) specifically dealing with the
                                                  demonstrates that the parties
outsourcing of engine overhaul work
                                                  contemplated a variety of situations in
“[d]ue to lack of facilities.”

                                             18
which “equipment and facility limitations                   distinction, but one that
are not available or sufficient,” but                       has no basis in the text.
restricted US Airways’ right to outsource                   We would hold the
to certain narrowly defined situations.                     railroads’ view
                                                            “frivolous or obviously
          I see this situation as similar to                insubstantial” and
that confronted by the Seventh Circuit in                   affirm the district
Brotherhood of Maintenance of Way                           court—if the act of
Employees v. Atchison, Topeka & Santa                       interpretation were to
Fe Railway Co., 138 F.3d 635 (7th Cir.                      stop at the four corners
1997). The dispute in that case was                         of the Agreement. 11
whether the parties’ collective bargaining
agreement required the railroads to
compensate maintenance workers for
travel expenses. Id. at 638. According              Id. Unlike the railroads in Atchison, US
to the union, the CBA obligated the                 Airways has failed to show that its
railroads to compensate all traveling               arguments are even theoretically
employees, whereas the railroads insisted           plausible. Rather, its Section (G)
that their obligation was limited to
reimbursing “regional and system
gangs.” Id. The CBA, however, simply                  11
                                                          The court in Atchison nevertheless
referred to “employees.” Id. at 640. The
                                                    found support for the railroad’s argument
Seventh Circuit rejected the railroads’
                                                    in the parties’ bargaining history. Id. at
attempt to construe “employees”
                                                    640-43; see Conrail, 491 U.S. at 311
narrowly:
                                                    (stating that courts must consider both
                                                    implied and express terms of a CBA, as
         Either [parties’] view is
                                                    well as the parties’ practice, usage, and
         logically possible;
                                                    custom). US Airways states that it relies
         neither is barred by the
                                                    on the parties’ past practice of
         explicit terms of Article
                                                    subcontracting aircraft maintenance work
         XIV. But while the
                                                    when in-house equipment or facilities are
         term “employees” could
                                                    lacking. But the only “aircraft
         refer solely to regional
                                                    maintenance work” that US Airways
         and system gangs, there
                                                    claims to have outsourced is the engine
         is no hint in Article
                                                    overhaul work that was the subject of the
         XIV that “employees”
                                                    Dunsford Arbitration. US Airways
         actually bears the
                                                    “past practice” of doing something
         narrower meaning. . . .
                                                    explicitly authorized by Section (I)
         The railroads propose a
                                                    provides no insight into the meaning of
         theoretically plausible
                                                    Section (G) or Article 2(B).

                                               19
argument is sophistry, condemned by US
Airways’ alternative—and equally
insubstantial— argument from Article
2(B).

          Ultimately, my disagreement
with the majority reflects a different
assessment of the meaning and purpose
of the “arguably justified” standard set           A True Copy:
forth by the Supreme Court in Conrail
for distinguishing between major and               Teste: Clerk of the United States Court
minor disputes. Conrail, as I noted                of Appeals for the Third Circuit
above, explicitly recognized that any
good lawyer can plead a major dispute as
a question of contract interpretation, but
that parties cannot circumvent the RLA’s
status quo requirement with “frivolous,”
or “obviously insubstantial” arguments.
Conrail, 491 U.S. at 306-07; see also
Detroit & Toledo Shore Line R.R. Co. v.
United Trans. Union, 396 U.S. 142, 150
(1969) (“The Act’s status quo
requirement is central to its design. . . .
[T]he power which the Act gives the
other party to preserve the status quo for
a prolonged period will frequently make
it worth-while for the moving party to
compromise with the interests of the
other side and thus reach agreement
without interruption to commerce.”).
Because I believe that the majority is
allowing the proffer of an argument, in
and of itself, to satisfy US Airways’
already “relatively light burden,”
Conrail, 491 U.S. at 307, I respectfully
dissent.

                                              20