Court Opinion

ID: 8911863
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:19:13.184551+00
Date Added: 2024-06-11T17:08:35.987082
License: Public Domain

WINTER, Circuit Judge,
concurring and dissenting:
For the reasons that it assigns, I agree with the majority that § 2, Eleventh, of the Railway Labor Act, 45 U.S.C. § 152, Eleventh, as made applicable to airline pilots by 45 U.S.C. § 181, does not render illegal the assessment of membership dues to ALPA by a formula based upon a percentage of their earnings. I disagree, however, that the 1% monthly finance charge levied on the unpaid balance of the monthly dues of those employees who choose to participate in the ALPA finance plan is not to be paid by non-members of ALPA who are covered by the several bargaining agreements. To that extent I respectfully dissent. Further, I do not think that the finance charge runs afoul of the statute because it constitutes a penalty. Certainly also, the finance charge is “periodic” and “uniform”, as the statute requires.1 Under my view of the case, I would not reach any question of the failure to exhaust contractual or statutory remedies.
The collective bargaining agreements all require the payment of a service charge by non-members of ALPA equal to the regular monthly dues. It is true, as the majority asserts, that the collective bargaining agreements do not authorize the exaction of annual dues with an imposition of an interest charge if paid on a monthly basis. But, the collective bargaining agreements by requiring a service charge equal to the regular monthly dues make, in effect, ALPA’s constitution and bylaws with respect to the amount of dues and how the amount is affected by the time and manner of payment applicable to non-members.2 In short, there is incorporation by referencé.
*345Although ALPA’s constitution and bylaws provide that annual dues and the equivalent agency shop service charge are payable annually in advance, there are two optional methods of payment: (1) the check-off where no interest is charged or finance charge imposed,3 and (2) the ALPA finance plan where interest of 1% per month on the unpaid balance is charged. It must be stressed that these two options are precisely that — options. No pilot is required to employ either, although there may be a strong economic compulsion to authorize a check-off. The lack of compulsion to use the ALPA finance plan where the finance charge is imposed robs the imposition of the charge of a large measure of the nature of a penalty. Simply stated, a penalty is usually suffered involuntarily, as a result of a default by the person upon whom the penalty is imposed; here, the alleged penalty is an obligation voluntarily assumed by the pilot electing this form of payment.
There are other factors which persuade me that the finance charge is not a penalty. When ALPA permits a pilot to defer payment of his annual dues or service charge, ALPA is deprived of the current use of the monies due it, and it is not unreasonable that it should be compensated for the use of its money so long as the rate of compensation is not disproportionate to that prevailing in the marketplace. I do not think that the current finance charge is disproportionate to the current market rate. Additionally, when it defers the payment of dues and there is no check-off, ALPA has other expenses such as billing and record keeping as amounts are paid, and it is not unreasonable that it make a charge to compensate itself for these operational costs. Of course, some of the same operational costs, including the use of its money, are sustained by ALPA when it permits a pilot to use a check-off without imposing a finance charge. But, when a pilot authorizes a check-off, it is obvious that ALPA’s credit risk is markedly reduced. ALPA can look to the credit of the employer rather than that of the employee to insure future payment. It is assured that as a pilot earns compensation the proper percentage will be paid to ALPA. With this reduction of risk, I do not think it unreasonable for ALPA to fail to impose a finance charge on this kind of deferred payment. Certainly the fact that ALPA draws a distinction between the two options and requires a finance charge on one but not the other does not, in my view, convert the finance charge into a penalty.
Since I am persuaded that the finance charge is not in violation of the statute when it is imposed for ALPA finance-deferred payments, I would not consider ALPA’s contention that plaintiffs have failed to exhaust their contractual or statutory remedies before litigating the validity of the charge. I would affirm the judgment of the district court in its entirety.

. Consistent with the holding in Part II of the majority’s opinion, it is obvious that the finance charge is “uniform”. It is certainly “periodic” also because it is payable monthly on the unpaid balance of the annual dues.

. The majority implicitly concedes as much in Part II of its opinion because the formula for computing dues is contained in ALPA’s constitution and bylaws and not in the collective bargaining agreements. I respectfully suggest a glaring inconsistency on the part of the majority when it looks to ALPA’s internal documents to find out the amount of the service *345charge but turns a blind eye to the documents with reference to the amount as affected by the time and manner of payment.

. As the majority points out in n. 2 of its opinion, the check-off may be authorized by non-members of ALPA as well as members.