Court Opinion

ID: 8410495
Source: CourtListenerOpinion
Date Created: 2022-11-02 18:05:02.863921+00
Date Added: 2024-06-11T16:47:46.730703
License: Public Domain

DENNIS JACOBS, Chief Judge,
concurring:
I agree with the majority in affirming the preliminary injunction, but I take a different route.
As the majority explains, the Association of Flight Attendants (AFA) has yet to “exert every reasonable effort to make and maintain agreements” as required by 45 U.S.C. § 152 (§ 2 (First)) in light of its failure to exhaust the bargaining procedures of the Railway Labor Act (RLA) and its rejection without good cause of Northwest’s proposed modifications to the collective bargaining agreement (CBA).
But does that answer the AFA’s argument that Northwest’s alteration of the status quo — effected under § 1113 of the Bankruptcy Code — gave the AFA a reciprocal right to strike, without violating its § 2 (First) duty? The AFA argues, with real force, that a strike would not compromise its § 2 (First) duty (or the status quo obligation incorporated therein) if Northwest has already violated its own obligation to the status quo — an obligation that the Supreme Court has strongly implied (if not held) is reciprocal.
The majority sidesteps this argument, holding that once Northwest implemented the terms of the bankruptcy court’s § 1113 order, the status quo simply “terminated.” Majority Op. at 170. In other words, the status quo — and the protections it offered to the AFA — is said to have terminated when (and because) it was abrogated. I could not possibly explain this to the flight attendants; if I agreed with the majority that Northwest violated a reciprocal duty to maintain the status quo, I would vote to vacate the injunction and permit the AFA to strike.
I vote to affirm nevertheless because, although Northwest effected a change in *178the status quo, it did not do so unilaterally. A debtor-carrier’s rejection of a labor agreement in bankruptcy — subject to strict statutory conditions and court oversight— cannot be described fairly as a unilateral divergence from the status quo, and does not trigger a reciprocal right to strike. Northwest’s resort to § 1113 therefore did not affect the AFA’s § 2 (First) duties, which keep the union at the bargaining table and off the picket line.
I
We affirm the anti-strike injunction on the basis of the AFA’s § 2 (First) duty. Because “the vagueness of the obligation under § 2 (First) could provide a cover for freewheeling judicial interference in labor relations,” Chicago & N.W. Ry. Co. v. United Transp. Union, 402 U.S. 570, 588, 91 S.Ct. 1731, 29 L.Ed.2d 187 (1971), the section is understood to incorporate an “implicit status quo requirement,” see Detroit & Toledo Shore Line R.R. v. United Transp. Union, 396 U.S. 142, 151 & n. 18, 90 S.Ct. 294, 24 L.Ed.2d 325 (1969). Given this implicit status quo obligation, strikes are generally inconsistent with exerting every reasonable effort “to settle disputes without interruption to interstate commerce,” id. at 151, 90 S.Ct. 294. But if a debtor-carrier’s resort to § 1113 violates its duty to maintain the status quo, and if that duty is reciprocal, id. at 154-55, 90 S.Ct. 294, then a union’s strike might be fully consistent with § 2 (First). In my view, then, we cannot avoid deciding the antecedent question whether Northwest violated its duty to maintain the status quo.
The RLA does not expressly reference a “status quo,” yet the Supreme Court has read it to require that “[wjhile the dispute is working its way through the[ ] [RLA’s] stages, neither party may unilaterally alter the status quo.” Bhd. of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 378, 89 S.Ct. 1109, 22 L.Ed.2d 344 (1969) (emphasis added). The obligation is “an affirmative legal duty upon both employers and unions alike — which is enforceable by the courts.” United Air Lines, Inc. v. Int’l Ass’n of Machinist & Aero. Workers, 243 F.3d 349, 363 (7th Cir.2001) (emphasis in original). Only “if the parties exhaust [RLA] procedures and remain at loggerheads, ... may [they] resort to self-help in attempting to resolve their dispute.” Burlington N. R.R. v. Bhd. of Maint. of Way Employees, 481 U.S. 429, 445, 107 S.Ct. 1841, 95 L.Ed.2d 381 (1987).
Northwest does not seriously dispute that its resort to § 1113 effected a change in the status quo; and, like the majority, I do not endorse the district court’s conclusion that the change simply created an “altered baseline,” Northwest Airlines Corp. v. Ass’n of Flight Attendants-CWA (In re Northwest Airlines Corp.), 349 B.R. 338, 379 (S.D.N.Y.2006). The question is whether that change was one that violated Northwest’s duty to maintain the status quo. See Air Line Pilots Ass’n, Int’l v. United Air Lines, Inc., 802 F.2d 886, 896-97 (7th Cir.1986) (“[I]t is a difficult question to determine when, if ever, an otherwise legitimate self-help measure begins to impede upon a statutory protection.”). The majority evades this question. But that is the question the AFA puts to us, and, as I have explained, we cannot avoid answering it.
The Supreme Court has consistently characterized the duty to maintain the RLA status quo as a duty to avoid changing it “unilaterally.” See Consol. Rail Corp. v. Ry. Labor Executives’ Ass’n, 491 U.S. 299, 306, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989); Burlington N. R.R., 481 U.S. at 449, 107 S.Ct. 1841; Shore Line, 396 *179U.S. at 146-47, 90 S.Ct. 294; Jacksonville Terminal, 394 U.S. at 378, 89 S.Ct. 1109. We have preserved that distinction. See Aircraft Mechanics Fraternal Ass’n v. Atlantic Coast Airlines (“Atlantic Coast II”), 125 F.3d 41, 41—42 (2d Cir.1997); Pan Am. World Airways, Inc. v. Int’l Bhd. of Teamsters, 894 F.2d 36, 38-39 (2d Cir.1990). And our sister circuits have done the same.1 Avoidance of unilateral changes in the status quo is an aspect of the duty to eschew “self-help.” See Shore Line, 396 U.S. at 154, 90 S.Ct. 294. Unilateral alteration of the status quo is so subversive of the RLA process that it supports injunctive relief without a further showing of irreparable harm. See Consol. Rail Corp., 491 U.S. at 303, 109 S.Ct. 2477.
Northwest did not effect a change in the status quo that is unilateral. A unilateral act is one “in which there is only one party whose will operates.” Black’s Law Dictionary 26 (8th ed.1999). In the context of an RLA status quo, it is an act “without negotiations, without bargaining.” Bhd. of Locomotive Eng’rs v. Atchison, Topeka & Santa Fe Ry. Co., 768 F.2d 914, 920 (7th Cir.1985). The characterization of the status quo duty as a duty to avoid changing it unilaterally prevents self-help, promotes negotiation, and enlists and serves the interest of the public, as set out in Shore Line:
The Act’s status quo requirement is central to its design. Its immediate effect is to prevent the union from striking and management from doing anything that would justify a strike. In the long run, delaying the time when the parties can resort to self-help provides time for tempers to cool, helps create an atmosphere in which rational bargaining can occur, and permits the forces of public opinion to be mobilized in favor of a settlement without a strike or lockout.
396 U.S. at 150, 90 S.Ct. 294.
A debtor-carrier’s conduct pursuant to 11 U.S.C. § 1113 cannot fairly be described as unilateral, or as unmoored from negotiations. The procedure is essentially collective bargaining on wheels. Before terminating or altering a labor agreement, a debtor must “make a proposal to the authorized representative of the employees covered by such agreement,” which proposal [i] must be “based on the most complete and reliable information available at the time of such proposal,” [ii] must “provide[ ] for those necessary modifications in the eroployee[s’] benefits and protections that are necessary to permit the reorganization of the debtor,” and [iii] must “assure[ ] that all creditors, the debtor and all of the affected parties are treated fairly and equitably.” 11 U.S.C. § 1113(b)(1)(A). The debtor must then “confer in good faith” with the employees’ representative and attempt to “reach mutually satisfactory modifications of such agreement.” Id. § 1113(b)(2).
Section 1113 thus sets in motion an “expedited form of collective bargaining with several safeguards designed to insure that employers [do] not use Chapter 11 as medicine to rid themselves of corporate indigestion.” Century Brass Prods., Inc. v. United Auto., Aero. & Agric. Implement Workers of Am. (In re Century Brass *180Prods., Inc.), 795 F.2d 265, 272 (2d Cir.1986). Because the bankruptcy court can ultimately order relief, the modifications are constrained in three important ways: they must be necessary to the reorganization, id. § 1113(b)(1)(A); the union must have rejected them without good cause, id. § 1113(c)(2); and the balance of the equities must favor them, id. § 1113(c)(3). Courts enforce these requirements. See, e.g., Wheeling-Pittsburgh Steel Corp. v. United Steelworkers of Am., 791 F.2d 1074, 1094 (3d Cir.1986). In this case, Judge Gropper took exceptional care to assure, notwithstanding the AFA’s rejection of Northwest’s proposals without good cause, that relief would be limited to those modifications to which the union leadership had once agreed.
An order pursuant to § 1113 is thus implicitly the product of negotiations (successful or unsuccessful). The process
ensure[s] that well-informed and good faith negotiations occur in the market place, not as part of the judicial process. Reorganization procedures are designed to encourage such a negotiated voluntary modification. Knowing that it cannot turn down an employer’s proposal without good cause gives the union an incentive to compromise on modifications of the collective bargaining agreement, so as to prevent its complete rejection. Because the employer has the burden of proving its proposals are necessary, the union is protected from an employer whose proposals may be offered in bad faith.
N.Y. Typographical Union No. 6 v. Maxwell Newspapers, Inc. (In re Maxwell Newspapers, Inc.), 981 F.2d 85, 90 (2d Cir.1992) (citations omitted). I therefore read § 1113 as replacing one-sided modification of a labor agreement with court-approved modification after accelerated negotiation:
No provision of this title shall be construed to permit a trustee to unilaterally terminate or alter any provisions of a collective bargaining agreement prior to compliance with the provisions of this section.
11 U.S.C. § 1113(f) (emphasis added); accord United Steelworkers of Am. v. Unimet Corp. (In re Unimet Corp.), 842 F.2d 879, 884 (6th Cir.1988) (“[Section 1113 unequivocally prohibits the employer from unilaterally modifying any provision of the collective bargaining agreement.”) (emphasis in original). Any other interpretation of § 1113 “would largely, if not completely, undermine whatever benefit the debtor-in-possession otherwise obtains by its authority to request rejection of the agreement.” NLRB v. Bildisco & Bildisco, 465 U.S. 513, 529, 104 S.Ct. 1188, 79 L.Ed.2d 482 (1984). I do not see how the majority can disagree, given its conclusion that a contrary approach would yield “results inconsistent with Congress’s intent in passing § 1113.” Majority Op. at 172.
Moreover, a debtor-carrier’s use of § 1113 is in every sense multilateral: its proposals must “assure[ ] that all creditors, the debtor and all of the affected parties are treated fairly and equitably.” 11 U.S.C. § 1113(b)(1)(A). Creditors have important interests to protect in a Chapter 11 proceeding, as emphasized by amicus curiae the Official Committee of Unsecured Creditors. The bankruptcy court must keep in view all “affected parties,” which in this context includes thousands of other employees, the traveling public, and any commercial entity that uses air carriers to engage in interstate commerce — not to mention whole cities and communities that rely on a single carrier (or few) for transportation by air.
At oral argument, the AFA pointed out that the § 1113 order merely authorized Northwest to act, and that the decision to *181act on that authorization was taken by Northwest alone, i.e., unilaterally. This argument cannot be squared with the findings of the bankruptcy court that the modifications were necessary, and no greater than necessary: Northwest’s choice was to do what the order allowed, or risk dissolution there and then. As a debtor-in-possession, Northwest might well have violated its fiduciary duty to creditors and the estate had it not exercised its right to implement the authorized changes. See 11 U.S.C. § 1107(a); see also In re Ionosphere Clubs, Inc., 113 B.R. 164, 169 (Bankr.S.D.N.Y.1990) (The “debtor-in-possession’s fiduciary obligation to its creditors includes refraining from acting in a manner which could ... hinder a successful reorganization of the business.”). An act under compulsion does not violate the status quo obligation. See, e.g., CSX Transp., Inc. v. United Transp. Union, 86 F.3d 346, 349 (4th Cir.1996) (enjoining strike threatened in response to changes mandated by compulsory arbitration and found necessary by the Interstate Commerce Commission); Laffey v. Northwest Airlines, Inc., 740 F.2d 1071, 1100 (D.C.Cir.1984) (the status quo obligation “does not stop an employer from immediately equalizing wages upward in accordance with a judicial determination that an existing wage disparity violates the Equal Pay Act.”).
The majority opinion rejects this approach because the change in the status quo effected by § 1113 is available only to carriers; so if a change pursuant to § 1113 is non-unilateral, the “equal” nature of the status quo obligation would be disturbed. Majority Op. at 172. The status quo obligation’s reciprocity certainly leaves the parties “equally restrained,” Shore Line, 396 U.S. at 155, 90 S.Ct. 294, but the burden it imposes is not equal, and won’t be unless Congress sees fit to create a pathway for non-unilateral action by unions akin to § 1113. “[I]t is for the Congress, and not the Courts, to strike the balance between the uncontrolled power of management and labor to further their respective interests” in RLA bargaining. Jacksonville Terminal, 394 U.S. at 392, 89 S.Ct. 1109 (internal quotation marks omitted).
I would therefore hold that a debtor-carrier’s resort to § 1113 does not work a unilateral alteration of the RLA’s status quo and therefore does not violate the debtor-carrier’s status quo obligation. Because Northwest did not violate that obligation, the AFA never accrued a right to strike, and a strike would therefore be inconsistent with its § 2 (First) duty to exert all reasonable efforts in pursuit of agreement.
II
The majority “might well agree” that § 1113 “permits a carrier ‘unilaterally’ to alter its employees’ terms and conditions of employment ... [and] breach the RLA’s status quo provisions,” Majority Op. at 171, yet nevertheless rejects the AFA’s position that this breach justifies a reciprocal action in the form of a strike. The majority avoids reconciling these positions by holding that once Northwest turned to § 1113, [i] the CBA “ceased to exist,” and [ii] the status quo was accordingly “terminated” (and thereby incapable of sustaining a reciprocal right to strike). Id. at 170. In my view, the very purpose of the RLA status quo is to perpetuate “rates of pay, rules, or working conditions” regardless of whether the CBA is terminated.
The majority would limit the force of the status quo on the basis of 45 U.S.C. § 152 (Seventh), which refers to terms of employment “embodied in agreements.” Majority Op. at 173. Yet the Supreme Court has already rejected the argument “that *182the ‘as embodied in agreements’ restriction [of § 152 (Seventh)] should be read into the status quo provisions of §§ 5, 6, and 10.” Shore Line, 396 U.S. at 155-56, 90 S.Ct. 294.2 Those sections demonstrate that the protections offered by the reciprocity of the status quo obligation are not coextensive with the underlying agreement: § 5 refers to the status quo as the “rates of pay, rules, or working conditions or established practices in effect prior to the time to the dispute arose,” 45 U.S.C. § 155 (First) (emphasis added); § 6 to any “intended change in agreements affecting rates of pay, rules, or working conditions,” regardless of whether those terms of employment are to be embodied in an agreement, 45 U.S.C. § 156 (emphasis added); and § 10 to “the conditions out of which the dispute arose,” 45 U.S.C. § 160.
The majority opinion is the first to hold that the status quo obligation perishes with the underlying agreement. True, the Supreme Court has said that the status quo provisions are inapplicable where no collective bargaining agreement had ever existed between the parties. See Williams v. Jacksonville Terminal Co., 315 U.S. 386, 400-03, 62 S.Ct. 659, 86 L.Ed. 914 (1942). But the Court subsequently limited even this exception; it operates only where (in contrast to our case) “there was absolutely no prior history of any collective bargaining or agreement between the parties on any matter.” Shore Line, 396 U.S. at 157-58, 90 S.Ct. 294; see also Virgin Atlantic Airways, Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245, 1253 (2d Cir.1992).
Thus, in Aircraft Mechanics Fraternal Ass’n v. Atlantic Coast Airlines, Inc. (“Atlantic Coast I”), we concluded that a “newly certified union that has no collective bargaining agreement with the carrier is not entitled to a status quo freeze under the [RLA].” 55 F.3d 90, 94 (2d Cir.1995). The holding of Atlantic Coast I rested on the fact that no agreement had ever existed between the parties, and, for that reason, the status quo provisions had never applied. There is therefore no basis for the majority’s view that an existing status quo can “terminate,” and the authorities cited by the majority furnish no support for this idea.3
I would not thus discard the status quo provisions in cases involving an abrogated CBA. The status quo obligation is not subject to the horsetrading of collective bargaining; it is superimposed by statute on every labor agreement subject to the RLA, and was thus designed to survive such agreements rather than die with them. See Manning v. American Airlines, Inc., 329 F.2d 32, 34 (2d Cir.1964) (“the very *183purpose of § 6 is to stabilize relations by artificially extending the lives of agreements for a limited period regardless of the parties’ intentions”). Further, § 6 speaks of “an intended change in agreements,” see Shore Line, 396 U.S. at 158, 90 S.Ct. 294 (citing 45 U.S.C. § 156), which means to me that abrogation of an agreement does not void the status quo provisions.
If two parties are reciprocally committed to the terms of an agreement while they bargain over its renewal, can we prevent one from responding to the other’s violation solely on the premise that the violation cancelled the agreement itself? The “permanency and continuity” of collective bargaining are what merit the protection of a status quo, see Williams, 315 U.S. at 403, 62 S.Ct. 659, and the indicium of an enforceable status quo is whether its terms have been in place “for a sufficient period of time with the knowledge and acquiescence of the employees,” Shore Line, 396 U.S. at 154, 90 S.Ct. 294. Borrowing the majority’s parlance, then, it is the fact that terms of employment are or were “embodied” in an agreement, and not the continuing vitality of that agreement, that triggers the status quo provisions.
The majority focuses on the district court’s conclusion that § 1113 established a “new” status quo, and attributes that conclusion to me as well. Majority Op. at 169 n. 2. The scope and terms of the RLA status quo going forward after a debtor-carrier’s resort to § 1113 present difficult questions, but not the ones that the parties have asked us to answer. The issue is whether an abrogation of the status quo that was not unilateral — i.e., an abrogation blessed under § 1113 — triggered in the union, by reciprocity, the right to strike it sought to exercise.
The majority dilates on whether the CBA was abrogated, breached, modified, partially assumed and partially rejected, or rejected altogether. This misses the point: the CBA between Northwest and its flight attendants is not a private bilateral contract and is therefore not susceptible to such analysis; “[m]ore is involved than the settlement of a private controversy without appreciable consequences to the public.” Virginian Ry. Co. v. Sys. Fed’n No. hO, 300 U.S. 515, 552, 57 S.Ct. 592, 81 L.Ed. 789 (1937). The primary purpose of the RLA is “to avoid any interruption to commerce or to the operation of any carrier engaged therein,” 45 U.S.C. § 151a, and its provisions “must be read in [that] light,” Air Cargo Inc. v. Local Union 851, Int’l Bhd. of Teamsters, 733 F.2d 241, 245 (2d Cir.1984). Labor agreements in the RLA framework are therefore multilateral insofar as they account for the public interest:
In our complex society, metropolitan areas in particular might suffer a calamity if rail service for freight or for passengers were stopped. Food and other critical supplies might be dangerously curtailed; vital services might be impaired; whole metropolitan communities might be paralyzed.
Bhd. of Ry. & S.S. Clerks v. Fla. E. Coast Ry. Co., 384 U.S. 238, 245, 86 S.Ct. 1420, 16 L.Ed.2d 501 (1966).
Accordingly, § 1113 effects non-unilateral abrogation of RLA agreements notwithstanding (or perhaps because of) the union’s obstinance. And it does so out of deference to the interests protected by § 1113 and (by incorporation) the RLA: creditors, the carrier’s other employees, the flying public, and interstate commerce. The majority rejects my approach as an impermissible “harmonization” of the statutes. Majority Op. at 169 n. 2. No one can accuse the majority of attempting to harmonize the statutes at issue, or of succeeding.
*184III
I say the question is whether Northwest abrogated the status quo unilaterally, and would hold that it did not. For the majority, the question is instead whether Northwest abrogated the status quo at all, and the majority says that it did. Under the majority’s view, then, it must be that Northwest has “failed to comply with [an] obligation imposed by law which is involved in the labor dispute in question.” 29 U.S.C. § 108. This failure to comply is certainly not a good thing; in fact, it means that Northwest would lack “clean hands,” and that in turn means that under the Norris-LaGuardia Act, 29 U.S.C. § 101 et seq., the district court could not enter an anti-strike injunction.
For its part, the majority holds that Northwest has clean hands because it acted “under authority of a § 1113 court order.” Majority Op. at 176-77. This sounds right; but the determinative question is whether Northwest has “failed to comply with [an] obligation imposed by law which is involved in [this] labor dispute.” If (as I argue) Northwest’s obligation was to avoid a unilateral change in the status quo, the Norris-LaGuardia Act would not inhibit an injunction. It is hard to see how the majority can conclude that a carrier that unilaterally abrogated the CBA, caused it to go up in smoke, and breached the status quo nevertheless complied with all of the legal obligations involved in this labor dispute. And the fact that a carrier has the “authority” to take an act does not itself vest the carrier -with the power to enjoin a strike threatened in response to that act. See Bhd. of R.R. Trainmen Enter. Lodge, No. 27 v. Toledo, Peoria & W. R.R., 321 U.S. 50, 64-65, 64 S.Ct. 413, 88 L.Ed. 534 (1944) (although a carrier has statutory authority to refuse arbitration under 45 U.S.C. § 157 (First), “if it refuses, it loses the legal right to have an injunction issued by a federal court”). The majority’s analysis would therefore seem to preclude an anti-strike injunction. Under my analysis, the injunction was properly granted.

. See, e.g., Machinist & Aero. Workers, 243 F.3d at 362; Atlas Air, Inc. v. Air Line Pilots Ass’n, 232 F.3d 218, 223 (D.C.Cir.2000); Int’l Ass’n of Machinists & Aerospace Workers v. Transportes Aereos Mercantiles Pan Americandos, S.A., 1005, 1007 (11th Cir.1991); United Transp. Union v. Black Lick R.R. Co., 894 F.2d 623, 628-629 (3d Cir.1990) Labor Execs. Ass’n v. Chesapeake W. Ry., 915 F.2d 116 (4th Cir.1990); Div. No. 1, Bhd. of Locomotive Eng’rs v. Consol. Rail Corp., 844 F.2d 1218, 1220 n. 1 (6th Cir.1988); Trans World Airlines, Inc. v. Indep. Fed’n of Flight Attendants, 809 F.2d 483, 488 (8th Cir.1987); Int’l Bhd. of Teamsters v. Texas Int'l Airlines, Inc., 717 F.2d 157, 159 (5th Cir.1983).

. As the Court put it, § 152 (Seventh) "simply states one category of cases in which [major dispute] procedures must be invoked.” Shore Line, 396 U.S. at 156, 90 S.Ct. 294 (emphasis added). The dispute between Northwest and the AFA fell into this category once Northwest signaled its intention to change the CBA, long before it had entered Chapter 11 or implemented § 1113 relief.

. The majority says that we have "suggest[ed] that the status quo ceases when an employer rejects a CBA with the approval of a bankruptcy court.” Majority Op. at 169 n. 2 (emphasis added). I cannot see how we could have suggested as much, given that nearly all of the cases cited by the majority had nothing whatsoever to do with the Railway Labor Act or its status quo provisions. The only conceivable exception is Bhd. of Ry., Airline & S.S. Clerks v. REA Express, Inc., which held that a debtor-carrier is "a new juridical entity” and therefore is "not a party to and [is] not bound by the terms of [a] collective bargaining agreement.” 523 F.2d 164, 170 (2d Cir.1975). But this holding was repudiated by the Supreme Court, see Bildisco, 465 U.S. at 528, 104 S.Ct. 1188, and laid to rest by the enactment of § 1113, see Air Line Pilots Ass’n, et al. v. Continental Airlines, Inc. (In re Continental Airlines), 901 F.2d 1259, 1266 n. 6 (5th Cir.1990).