Court Opinion

ID: 7857627
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:47:25.819215+00
Date Added: 2024-06-11T16:29:56.814053
License: Public Domain

MIKVA, Circuit Judge,
with whom WALD, Chief Judge, and SPOTTSWOOD W. ROBINSON, III, and HARRY T. EDWARDS, Circuit Judges, join, dissenting from the denial of the suggestion to hear the case en banc:
This case convinces me that we should install a witness stand and a jury box in the courtroom of this court of appeals. The panel’s own findings of fact are so extensive, and revise the district court’s conclusions so completely, that they do genuine violence to the deference we owe to the determinations of our fellow judges on the district court. The panel apparently thought that justice required it to allow Eastern’s management to extricate itself from a financial morass largely of its own making; to achieve that result, the panel has rushed headlong into the complexities of the Railway Labor Act (“RIA”) and has transplanted an inapposite doctrine from the National Labor Relations Act (“NLRA”) into the specialized context of the RLA. This transplant occurred even though the district judge never considered the doctrine applicable. In addition, the panel has cut a huge swath into the “status quo” doctrine of section 6 and created a square conflict with two of our sister circuits. Given all that baggage, I would grant the petition to rehear the case en banc.
I. The District Court’s Findings of Fact
The district court issued an injunction after finding that large-scale employee furloughs were part of. a coercive, anti-union strategy adopted by Eastern as part of its effort to avoid collective bargaining in violation of the RLA, section 2, Third and Fourth, 45 U.S.C. § 152, Third and Fourth. The district court formed its conclusion after hearing testimony for seven days from many of the major players in the transaction and after reviewing a wide variety of exhibits and declarations, see district court memorandum opinion (“Mem. op.”) at 3.
The district court found as a matter of fact that Eastern sought to lower its labor costs by intimidating its unions, the Air Line Pilots Association (“ALPA”), the International Association of Machinists (“IAM”), and the Transport Workers Union (“TWU"). “The clear and obvious targets of Eastern’s downsizing [were] Eastern’s unions and. their collective bargaining agreements,” and Eastern intended to continue to downsize its operations beyond any “rational economic stopping point * * * until the unions acquiesced.” Mem. op. at 22. “By walking away from the bargaining table and unilaterally furloughing 4,000 employees,” and by “singlehandedly terminat[ing] these jobs without negotiation,” Eastern “wants to show its employees that no union can stop it.” Mem. op. at 46. It thereby hoped to win wage concessions from its frightened work force. The airline “is sending a very clear message” to its remaining workers that their unions “are powerless to protect [them].” Mem. op. at 44.
In addition, Eastern, together with Texas Air and Continental, also intended to transfer "assets, work and work opportunities” to Continental so that “Continental’s total work force of non-union, pilots, ground services personnel, and flight attendants [would] outnumber[ ] Eastern’s.” Mem. op. at 17. This was done in part to reduce costs but also to ensure that if a pending National Mediation Board (“NMB”) certification election found that Texas Air/Continental/Eastem were a single carrier, it would have a work force where non-union employees would outnumber their union counterparts. Mem. op. at 18. In contrast, the district court found that there was no illegal union conduct to diminish or offset the legal effect of the unions’ claims. Mem. op. at 22-24.
The panel rejects outright the careful fact-finding of the district judge and, pay*226ing only lip service to the “clearly erroneous” standard of Fed.R.Civ.P. 52(a), “reverse[s] the finding of the trier of fact simply because it is convinced that it would have decided the case differently.” Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985). An administrative agency would have received more deference than did the district judge in this case. For example, the panel dismisses statements by Eastern officials that the targets of its downsizing strategy were the unions. David Kuntsler, Eastern’s Vice President for Planning, warned that if no “labor resolution” were reached, Eastern would continue to sell aircraft. Mem. op. at 21. On the day the furloughs were announced, Kuntsler cautioned the unions that “until we restructure our labor costs * * * then really almost everything has to be for sale.” Mem. op. at 22. Similarly, Robert Ferguson, a Texas Air Vice President, emphasized that the strategy would continue: “Eastern has made the decision, if it can’t get its costs restructured, it will allow its operation to shrink. It will sell assets as necessary * * Mem. op. at 22.
The panel finds that these statements are not evidence of a specific anti-union plan, characterizing them instead as merely “generalized union hostility in the background.” Supra at 909. The panel rejects as “speculative,” supra at 909, the district court’s conclusion that the shuttle spin-off, repeated transfer of assets and opportunities out of Eastern, and the proposed cutbacks were all part “of Eastern’s strategy of shrinkage until the unions acquiesced.” Mem. op. at 22.
The panel also discounts the numberous instances of work transfer from Eastern to the less unionized Continental, but it misses the forest for the trees. The district court pointed to an extensive pattern of transfers of Eastern assets and corporate opportunities, and documented a series of suspicious financial transactions within the corporate family. The lower court found that “Texas Air offered available growth opportunities to Continental rather than Eastern.” Mem. op. at 10. Eastern, meanwhile, was left to wither on the vine. A parent, of course, may prefer one corporate affiliate to another as a matter of business judgment. But in this case, the district court found that “[t]he coordination of efforts was generally for purposes of assisting [less unionized] Continental and frustrating the collective bargaining representatives of Eastern's employees.” Mem. op. at 10. The withdrawal from Kansas City was part and parcel of this strategy to weaken Eastern.
In short, the panel simply declines to accept those findings of the trial judge with which it disagrees. The district court found as a matter of fact that Eastern’s actions were designed to “avoid and reduce labor costs under the existing bargaining agreements; force Eastern employee groups to accept further cuts in wages and benefits, and undermine the unions’ exclusive representative status.” Mem. op. at 18. The panel rejects this view and substitutes instead its own conclusion that Eastern’s statements of anti-union animus lacked “adequate causal connection to Eastern’s actions.” Supra at 912 (emphasis in original).
Since I was not even an original panel member in this case, I am not in a position to judge for myself what the facts really are. But I do know which court was in the best position to decide.
II. The Wright Line Test
The panel acknowledges the Supreme Court’s admonition that “of course NLRA precedents may not be casually transferred to the RLA context,” supra at 909, but it then proceeds to do exactly that — to apply Wright Line to a large-scale corporate restructuring under the Railway Labor Act. I have grave doubts whether the Wright Line test is appropriate here. I have no doubt that its application for the first time on appeal and in the manner used by the panel is totally inappropriate.
In Wright Line, 251 N.L.R.B. 1083 (1980), enf't granted, NLRB v. Wright Line, 662 F.2d 899 (1st Cir.1981), cert. denied, 455 U.S. 989, 102 S.Ct. 1612, 71 L.Ed. 2d 848 (1982), the National Labor Relations *227Board (“NLRB”) developed a two-part test to determine whether an employer committed an unfair labor practice by terminating a union activist who was also an unsatisfactory employee. This approach was confirmed in NLRB v. Transportation Management Corp., 462 U.S. 393, 103 S.Ct. 2469, 76 L.Ed.2d 667 (1983), where the Supreme Court ruled that the NLRB General Counsel has the burden of persuading the Board by a preponderance of the evidence that anti-union animus contributed to an employer’s decision to discharge an employee, and that an employer can avoid the conclusion that it violated the NLRA by proving by a preponderance of the evidence that the employee would have been fired for permissible reasons even if he had not been involved in protected union activities. Once the General Counsel carries the burden of proving the elements of an unfair labor practice, the employer carries a significant burden of proof to show that the alleged unlawful action would have occurred in any event for valid reasons. “It is fair that [the employer] bear the risk that the influence of legal and illegal motives cannot be separated, because he knowingly created the risk and because the risk was created not by innocent activity but by his own wrongdoing.” 462 U.S. at 403, 103 S.Ct. at 2475.
Even if Wright Line were the correct legal standard to apply in the RLA context, the panel errs by not remanding this case for application of the Wright Line standard by the district court. The district judge cited neither Wright Line nor Transportation Management. Mem. op. at 44-46. Indeed, only on appeal did Eastern persuade the court to view the case as a mixed-motive employee termination case through the Wright Line lens. The panel should have remanded the case for additional fact-finding; “it should not simply have made factual findings of its own.” Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714, 106 S.Ct. 1527, 1530, 89 L.Ed. 2d 739 (1986); see Pullman-Standard v. Swint, 456 U.S. 273, 291-93, 102 S.Ct. 1781, 1791-92, 72 L.Ed.2d 66 (1982). Eastern was obliged to shoulder a significant burden of proof with respect to its affirmative defense, and also bore the risk that the. permissible and impermissible motives could not be separated. This burden was never even attempted at the trial level. The panel’s generosity to Eastern is accomplished through wholly improper appellate procedure.
The panel seizes upon two sentences in the lower court opinion in which the district judge stated that the operational changes proposed by Eastern were motivated by “sound financial reasons” and that “Eastern has legitimate and compelling business reasons to withdraw from the Kansas City hub.” Mem. op. at 28. These two sentences, however, hardly amount to a “finding” by the district court that Eastern would have made the same decision in the absence of anti-union animus, particularly under the burden of proof mandated by Transportation Management. The panel attempts to twist this short statement of the district judge into something it is not, by isolating it from the rest of the opinion, including the 20 pages of “Findings of Fact” (the two sentences on which the panel dwells did not appear in the “Findings of Fact” section of the district court opinion) which detailed the numerous instances of anti-union conduct by Eastern. The panel’s argument that the word “compelling” in the district court opinion automatically translates into a finding of “independent and sufficient motive,” supra at 903, is semantic sophistry. The panel’s obsession with these two short sentences and its attempt to read them out of context to fit its own conclusions betray a remarkable disrespect for the district court.
I doubt, however, whether Wright Line is even the appropriate test here. The court of appeals in that case cautioned that its approach was inapplicable to “a challenge to an overall policy of the employer rather than to a single discharge.” 662 F.2d at 904 n. 8. This counsel is wise, and the panel has overlooked it.
There is a great difference between an individual employee’s discharge and a massive restructuring of the work force. In the former case, if one employee is fired, another is usually hired to take his place. *228Thus, there are no overriding elements of corporate strategy at stake, and the task for a reviewing court, while by no means always easy, involves a more straightforward determination as to whether the employee would have been fired in any case for behavior unconnected with his participation in protected activities. There is usually an employee manual or collective bargaining agreement to which a court can refer to determine what type of activities are “dischargeable offenses,” see, e.g., Wright Line, 662 F.2d at 901, and there is often a history of employee terminations to which a court can compare the instant case, see, e.g., NLRB v. Transportation Management Corp., 462 U.S. 393, 397, 404, 103 S.Ct. 2469, 2472, 2475-76, 76 L.Ed.2d 667 (1983).
When a mammoth corporate restructuring is at stake, it is a different matter. The counterfactual inquiry of what the employer would have done in the absence of anti-union animus is difficult to resolve and often clouded by a multitude of post hoc rationalizations. In addition, there is no “usual practice,” Transportation Management, 462 U.S. at 404, 103 S.Ct. at 2475-76, by reference to which a reviewing court can judge the propriety of the transaction. How many other times has Eastern closed its Kansas City hub or furloughed 12 percent of its work force? Although employers and unions can point to other “comparable” moves in the past, each transaction is really sui generis. The Wright Line test crumbles in this context, and the practical import of the panel's rule is to say that so long as the proposals of the employer will save money, anything goes.
The Supreme Court has endorsed a different approach. It has warned that if a corporate transaction is motivated by more than an insignificant anti-union purpose, then it is illegal, regardless of the arguments that can be mustered to justify the move financially. “An employer may not simply shut down part of its business and mask its desire to weaken and circumvent the union by labeling its decision ‘purely economic.’ ” First National Maintenance Corp. v. NLRB, 452 U.S. 666, 682, 101 S.Ct. 2573, 2582, 69 L.Ed.2d 318 (1981); see Textile Workers v. Darlington Manufacturing Co., 380 U.S. 263, 275, 85 S.Ct. 994, 1002, 13 L.Ed.2d 827 (1965); cf. International Union, UAW v. NLRB, 765 F.2d 175, 178, 184 (D.C.Cir.1985) (“Milwaukee Spring”) (upholding NLRB finding of no unfair labor practice where employer relocation was neither an attempt to obtain lower wage rates nor motivated by anti-union animus).
Finally, even if Wright Line were the appropriate standard for large-scale corporate transactions under the NLRA, I am doubtful whether it can be transplanted to the RLA context. “It is by now almost axiomatic that NLRA and RLA cases are not freely interchangeable, as the two statutes have distinctly different histories and different approaches to the problem of labor management relations.” Railway Labor Executives’ Association v. Pittsburgh & Lake Erie Railroad Co., 845 F.2d 420, 429 (3d Cir.1988). In particular, the RLA envisions a much greater role for unions in decisions to scale back operations, see First National Maintenance Corp., 452 U.S. at 686 n. 23, 101 S.Ct. at 2585 n. 23; Railroad Telegraphers v. Chicago & North Western Railway Co., 362 U.S. 330, 339-40, 80 S.Ct. 761, 766, 4 L.Ed.2d 774 (1960). The aim of the RLA is to resolve disputes not through unilateral action but by collective bargaining and thereby to “promote peaceful relationships between the carriers and their employees [and] prevent interruptions of transportation.” S.Rep. No. 606, 69th Cong., 1st Sess. 3 (1926). Eastern’s “furlough first, talk later” approach thwarts this special RLA policy and should not be scrutinized according to Wright Line or any other NLRA standard. Instead, the panel should have applied the test followed in other RLA cases that an “[a]nti-union motivation invalidates even a discharge which could be justified on independent grounds.” Air Line Pilots Association v. United Air Lines, Inc., 802 F.2d 886, 900 (7th Cir.1986) (quoting Conrad v. Delta Air Lines, Inc., 494 F.2d 914, 918 (7th Cir.1974)), cert. denied, 480 U.S. 946, 107 S.Ct. 1605, 94 L.Ed.2d 791 (1987).
*229III. The Status Quo Requirements
The district court’s injunction rested independently on RLA section 6, 45 U.S.C. § 156, which protects collective bargaining by requiring the parties to maintain the status quo on “major” issues while bargaining about a new contract proceeds. It is of course implausible on its face to assert, as the panel does, that the largest furlough in Eastern’s history, undertaken at a time of unprecedented bitterness in labor-management relations and affecting thousands of employees, is not a major dispute. The whole purpose of the RLA is to prevent inflammatory unilateral actions by either side that threaten to disrupt national transportation. Indeed, the Supreme Court has found similar disputes to be major even when they have occurred within the context of existing collective bargaining agreements. See Railroad Telegraphers v. Chicago & North Western Railway Co., 362 U.S. 330, 341, 80 S.Ct. 761, 767, 4 L.Ed.2d 774 (1960). This dispute is made even easier to analyze as “major” by the fact that there was no collective bargaining agreement in effect between Eastern and IAM, and Eastern and ALPA, at the time of the cutbacks.
The district court found that Eastern was involved in collective bargaining negotiations with IAM and ALPA over contract proposals directly related to Eastern’s restructuring plan when that plan was announced on July 22, see Mem. op. at 34. Eastern and IAM served section 6 notices on October 2, 1987, in which both parties indicated their intention to negotiate changes to their collective bargaining agreement. The two had been negotiating since January 1988 under the mandatory auspices of the NMB, see Mem. op. at 34. Eastern and ALPA served section 6 notices on May 31, 1988, in which both parties proposed the renegotiation of all rates of pay, rules, and working conditions for the Eastern pilot group, see Mem. op. at 33-34. Eastern and ALPA met to engage in collective bargaining over new contract proposals on June 21, 1988, July 6, 1988, and July 22, 1988, and exchanged written contract proposals on July 6 and 7, 1988, see Mem. op. at 34.
Precisely this kind of situation has led two of our sister circuits to characterize as “major disputes” disagreements which were the subject matter of new bargaining after the expiration of the old agreement. See IAM v. Aloha Airlines, Inc., 776 F.2d 812, 816 (9th Cir.1985); Air Cargo, Inc. v. Local Union 851, 733 F.2d 241, 245-46 (2d Cir.1984). In both these cases, courts issued injunctions to prevent the alteration of “the actual, objective working conditions out of which the dispute arose,” Detroit & Toledo Shore Line Railroad Co. v. United Transportation Union, 396 U.S. 142, 143, 90 S.Ct. 294, 295, 24 L.Ed.2d 325 (1969). The panel rejects this doctrine on the ground that it collapses the “major” and “minor” categories with respect to terms over which the parties are bargaining after the expiration of their agreement. It thus creates a square conflict with these other circuits, which have more faithfully followed congressional intent that neither labor nor management “rock[s] the boat * * * until the procedure of the Railway Labor Act is exhausted.” Manning v. American Airlines, Inc., 329 F.2d 32, 35 (2d Cir.), cert. denied, 379 U.S. 817, 85 S.Ct. 33, 13 L.Ed.2d 29 (1964). The two-track procedure is not an end in itself but rather a tool to ensure that the parties settle their disputes through bargaining rather than self-help. The Supreme Court has described the status quo requirement as “central” to the RLA’s design because “only if both sides are equally restrained can the Act’s remedies work effectively.” Shore Line, 396 U.S. at 150, 155, 90 S.Ct. at 299, 302. Eastern has made a sham of the bargaining process by pretending to negotiate, while unilaterally implementing the very changes it had been unable to obtain through collective bargaining. The panel’s novel ruling defeats, rather than promotes, the intent of the RLA.
The panel is able to reach its conclusion only by ignoring the district court’s finding that:
“[n]one of Eastern’s prior job terminations [is] comparable in scope and breadth to the scheduled furloughs.” Mem. op. at 17.
*230The layoffs in the wakes of the 1973 oil embargo, the 1979 oil price increase, airline deregulation, the 1981 PATCO strike, and the recession of the early 1980s, were all responses to exogenous, industry-wide economic shocks. The district court found that furloughs of this scale have never occurred:
(1) during collective bargaining with the unions over precisely the working conditions altered by Eastern’s conduct, Mem. op. at 5-6, 17;
(2) as part of a decision to dismantle the airline and bring Eastern “back to its roots,” Mem. op. at 17, 28-35; and
(3) as part of an ongoing plan to transfer Eastern work to a non-union corporate affiliate, Mem. op. at 8-10, 17-22.
The panel also ignored the district court’s finding that the unions, which frequently resisted Eastern’s furloughs in the past, Mem. op. at 17, did not demonstrate the “acquiescence” or “mutual understanding” necessary to establish a “past practice,” see Shore Line, 396 U.S. at 154, 90 S.Ct. at 301; United Transportation Union Local Lodge No. 31 v. St. Paul Union Depot Co., 434 F.2d 220, 222 (8th Cir.1970), cert. denied, 401 U.S. 975, 91 S.Ct. 1194, 28 L.Ed.2d 324 (1971). The panel’s result with respect to this issue, like its other conclusions, can only be reached by rejecting wholesale the findings of fact of the district court.
Judge Williams believes that I am suffering from a “clear misconception” because I fail to recognize that the status quo obligation under section 6 was an express premise of the panel’s analysis. The disagreement is a matter of semantics. The final version of the panel’s opinion rejects the classification of the dispute as “major” and concludes that the dispute before it “is a minor one,” supra at 913. This means, of course, that “the courts do not have jurisdiction to issue status quo injunctions,” supra at 896, because the System Board has exclusive jurisdiction over minor disputes. The panel may consider section 6 a premise of its argument, but it is a well-buried premise indeed. The panel, after all, prevents the district court from issuing an injunction to preserve the status quo.
CONCLUSION
Oscar Wilde once boasted that he could resist everything except temptation. It is always tempting to adjust the tensions and conflicts in a trial court record according to one’s own predilections. But in doing so, the panel has usurped the fact-finding role of the district court; it has rashly transplanted the Wright Line doctrine to the context of large-scale corporate restructurings under the RLA; and it has rejected the considered judgment of two sister circuits regarding the RLA’s status quo requirements.
This case has spawned, at the en banc stage alone, six separaté statements involving eight judges on our court. Four statements have explained why the case should not be reheard en banc, and two have advocated that it be so reheard. There have appeared four different interpretations of how the Railway Labor Act’s system for classifying disputes as “major” or “minor” ought to be applied in this case: the panel believes the dispute here is “minor”; Judge Silberman thinks it may be “major,” but contends that classifying it as “major” would not alter the outcome of the case; Judge Edwards has proposed that the dispute may be both “major” and “minor”; and I have argued that the dispute is “major” and that this classification would affect the result. There are also divisions among us in our understandings of the appropriate role of the Wright Line test in the context of large-scale corporate restructurings under the Railway Labor Act. These disparate views, it seems to me, suggest that the panel opinion cannot serve as any significant guidepost in this circuit on these difficult and unsettled areas of law.
I think the panel opinion sets a very bad precedent and the case ought to be reheard en banc.