Santiago v. United Air Lines Inc et al

Filing 104

MEMORANDUM Opinion and Order entered by the Honorable Gary Feinerman on 8/17/2012. Mailed notice (tlm)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
WANDA RAQUEL SANTIAGO,

)
)
Plaintiff,
)
)
vs.
)
)
UNITED AIR LINES, INC. dba UNITED
)
CONTINENTAL HOLDINGS, and ASSOCIATION OF )
FLIGHT ATTENDANTS–CWA,
)
)
Defendants.
)

11 C 9109
Judge Feinerman

MEMORANDUM OPINION AND ORDER
Wanda Santiago, a retired flight attendant, brought this suit under the Railway Labor Act
(“RLA”), 45 U.S.C. § 151 et seq., against United Air Lines, Inc., her former employer, and the
Association of Flight Attendants-CWA (“AFA”), the union that represents United flight
attendants. Santiago alleges that United violated the RLA by failing to submit to arbitration her
grievance regarding recent changes to United’s employee travel policy—changes that, Santiago
asserts, benefit current employees at the expense of retirees. Santiago also alleges that the AFA
violated its duty of fair representation under the RLA by failing to assist her with the grievance.
Both defendants sought dismissal on the ground that Santiago, as a retiree rather than a current
employee, can obtain no redress under the RLA. The court denied both motions. 2012 WL
2049486 (N.D. Ill. June 6, 2012). The court acknowledged the general rule that retirees may not
sue under the RLA, but held that Santiago fell within an exception, recognized in Pennsylvania
Railroad Co. v. Day, 360 U.S. 548 (1959), for “claims regarding … benefits that accrued while

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[the employee] had been employed and subject to the protections of the RLA.” Air Line Pilots
Ass’n, Int’l v. United Air Lines, Inc., 802 F.2d 886, 912 (7th Cir. 1986).
The AFA seeks reconsideration, arguing that the Day exception does not apply to RLA
fair representation claims. To the parties’ and the court’s knowledge, only one court has directly
addressed this question, and it held that the Day exception is limited to a retiree’s claims against
her former employer and does not apply to fair representation claims against a union. See Bove
v. Long Island R.R., 1995 WL 901990, at *5-8 (E.D.N.Y. Dec. 12, 1995). This court agrees with
Bove, grants the AFA’s motion for reconsideration, and dismisses the AFA from this suit. To
understand why this result is correct, it is necessary first to examine the rationale underlying the
Supreme Court’s recognition of a duty of fair representation under the RLA in Steele v.
Louisville & Nashville Railroad Co., 323 U.S. 192 (1944), and then to examine the rationale
underlying the Court’s recognition of the Day exception fifteen years later.
The RLA empowers the members of a given craft or class of employees (such as flight
attendants) to determine, by majority vote, who shall represent them under the Act; whomever
they choose (typically a labor union) then acts as the employees’ exclusive representative in
bargaining with the employer under the RLA. See 45 U.S.C. § 152, Second, Fourth, Sixth,
Seventh; Steele, 323 U.S. at 199-200. Because even employees who are not part of the majority
that selects the union will be represented exclusively by that union, Steele read the RLA to
impose upon the union an implied duty to fairly represent all employees in the represented craft
or class. Id. at 201-03; see also Int’l Bhd. of Elec. Workers v. Foust, 442 U.S. 42, 46-47 (1979).
That duty is grounded on the “principle of general application that the exercise of a granted
power to act in behalf of others involves the assumption toward them of a duty to exercise the
power in their interest and behalf.” Steele, 323 U.S. at 202. If the union did not owe such a duty
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to all employees in the class it represented, it could use its statutorily granted position as their
exclusive representative to benefit the majority that had selected it to the detriment of the
minority—as happened in Steele, where the white majority of locomotive firemen employed by a
railroad allegedly used their numbers to select a union, excluded the African-American minority
of firemen from union membership, and sought to use the union’s leverage to force their
employer to stop hiring African-Americans as firemen altogether. Id. at 194-96; see also Bhd. of
R.R. Trainmen v. Howard, 343 U.S. 768 (1952) (holding that an all-white union violated its duty
of fair representation by pressuring the railroad to fire African-American employees in the
represented craft and to hire white workers to replace them). As the Supreme Court explained:
Unless the labor union representing a craft owes some duty to represent
non-union members of the craft, as least to the extent of not discriminating
against them as such in the contracts which it makes as their representative,
the minority would be left with no means of protecting their interests, or
indeed, their right to earn a livelihood by pursuing the occupation in which
they are employed.
Steele, 323 U.S. at 201.
A union’s duty of fair representation generally does not extend to retired employees. The
seminal case on this point is Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co.,
404 U.S. 157 (1971), which asked whether an employer’s mid-term unilateral modification of
retiree benefits is a mandatory subject of collective bargaining. The National Labor Relations
Board answered in the affirmative, reasoning that “retired employees are ‘employees’ within the
meaning of the statute for the purposes of bargaining about changes in their retirement benefits”
and that “[b]argaining on benefits for workers already retired is an established aspect of current
labor-management relations.” Id. at 162 (brackets in original, internal quotation marks omitted).
The Supreme Court disagreed, reasoning that “the scope of the bargaining unit controls the
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extent of the [employer’s] bargaining obligation,” that “active and retired employees … plainly
do not share a community of interests broad enough to justify inclusion of the retirees in the
bargaining unit,” and therefore that an employer has no obligation to engage in collective
bargaining with retirees. Id. at 165, 173. As a necessary implication of this holding, the Court
stated that “[s]ince retirees are not members of the bargaining unit, the bargaining agent is under
no statutory duty to represent them in negotiations with the employer.” Id. at 181 n.20. Put
another way: “A union’s statutory duty of fair representation traditionally runs only to the
members of its collective-bargaining unit, and is coextensive with its statutory authority to act as
the exclusive representative for all the employees within the unit.” Schneider Moving & Storage
Co. v. Robbins, 466 U.S. 364, 376 n.22 (1984); see also In re UAL Corp., 468 F.3d 456, 459 (7th
Cir. 2006) (“A union’s duty to bargain collectively on behalf of the members of the bargaining
unit that the union represents does not extend to retired workers, because they are not members
of the unit.”).
It is true that Pittsburgh Plate Glass interpreted the National Labor Relations Act rather
than the RLA, but the Supreme Court has treated the duty of fair representation—which, as
noted above, originated in Steele, an RLA case—as a unitary doctrine across those two statutory
contexts. See Karahalios v. Nat’l Fed’n of Fed. Emps., 489 U.S. 527, 531-32 (1989); Hines v.
Anchor Motor Freight, Inc., 424 U.S. 554, 564 (1976); Vaca v. Sipes, 386 U.S. 171, 177 (1967);
Ford Motor Co. v. Huffman, 345 U.S. 330, 337 (1953). Moreover, there is no tension between
Pittsburgh Plate Glass and Steele. The rationale underlying Steele, that the union is the
exclusive bargaining representative of the craft, including employees who did not vote for the
union or who are not members, does not apply to retirees. Because retirees do not participate in
the selection of the union and are not exclusively represented by the union selected by current
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employees, they are free to deal directly with their former employer. As the Seventh Circuit has
explained, while the RLA “does not permit an employer to engage in collective bargaining with
any entity other than the union that represents its employees,” that prohibition “would not
prevent the employer from negotiating with retirees, who are no longer members of the
bargaining unit.” In re UAL Corp., 443 F.3d 565, 570 (7th Cir. 2006).
Excluding retirees from a union’s fair representation duty makes sense. Pittsburgh Plate
Glass recognized that requiring a union to represent both retirees and current employees would
saddle the union with a conflict of interest, for retirees and current employees often want
different things in dealing with the employer:
Pensioners’ interests extend only to retirement benefits, to the exclusion of
wage rates, hours, working conditions, and all other terms of active
employment. Incorporation of such a limited-purpose constituency in the
bargaining unit would create the potential for severe internal conflicts that
would impair the unit’s ability to function and would disrupt the processes
of collective bargaining. Moreover, the risk cannot be overlooked that the
union representatives on occasion might see fit to bargain for improved
wages or other conditions favoring active employees at the expense of
retirees’ benefits.
Pittsburgh Plate Glass, 404 U.S. at 173. The Eighth Circuit echoed these thoughts in explaining
why the duty of fair representation does not extend to retirees:
The difficulty for the union in representing both active employees and
retirees is most apparent in the contract negotiation process. In contract
negotiation the conflict of interest between the active employees and the
retirees is made clear as the total benefits available from the employer are
divided between active employees and retirees. Though the conflict is
clearer in the negotiation process, there is also a conflict of interest between
active employees and retirees in the contract administration process. In
contract administration the union must choose which grievance to pursue
with limited resources. More resources spent pursuing retiree grievances
means less available for grievances of active employees. Further, a victory
for a retiree in a contract administration matter may ultimately be paid for
by the active employees. If a retiree victory reduces the employer’s assets,
there will be less available for future benefits to active employees.
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Anderson v. Alpha Portland Indus., Inc., 727 F.2d 177, 183 (8th Cir. 1984) (emphasis added).
That potential for conflict exists in this case, as Santiago’s grievance challenges an amendment
to United’s employee travel policy that (according to Santiago) favors employees over retirees.
Interpreting the RLA to require the AFA to assist Santiago with her grievance would put it
directly at odds with its members, current United flight attendants.
The question here is whether, despite all this, the Day exception requires unions to
represent retirees in disputes regarding retirement benefits, like the travel benefits at issue here,
that accrued when the retiree was an employee. Day held that a railroad retiree who has a
grievance with his former employer arising from an asserted right that accrued during his
employment must bring that grievance before the National Railroad Adjustment Board
established by the RLA. Day, 360 U.S. at 551-52; see also Air Line Pilots Ass’n v. United Air
Lines, 802 F.2d at 912; Air Line Pilots Ass’n, Int’l v. Alaska Airlines, Inc., 735 F.2d 328, 328-29
(9th Cir. 1984). The Court reached this holding even though the RLA explicitly provides the
Adjustment Board with jurisdiction only over “disputes between an employee … and a carrier”
and appears to limit the definition of “employee” to persons currently employed. Id. at 551
(quoting 45 U.S.C. § 151, Fifth; id. § 153(i)). The Court reasoned as follows:
The National Railroad Adjustment Board was established as a tribunal to
settle disputes arising out of the relationship between carrier and employee.
All the considerations which led Congress to entrust an expert
administrative board with the interpretation of collective bargaining
agreements are equally applicable when, as here, the employee has retired
from service after initiating a claim for compensation for work performed
while on active duty. The nature of the problem and the need for experience
and expert knowledge remain the same. The same collective bargaining
agreement must be construed with the same need for uniformity of
interpretation and orderly adjustment of differences. There is nothing in the
Act which requires that the employment relationship subsist throughout the
entire process of administrative settlement. The purpose of the Act is
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fulfilled if the claim itself arises out of the employment relationship which
Congress regulated.
Id. at 551-52. In other words, Congress established the Adjustment Board as an expert body and
gave it exclusive jurisdiction over a class of labor disputes to ensure that those disputes would be
handled in an expert and uniform manner; if a former railroad employee could press her
grievance in court instead of before the Adjustment Board simply because, though she had been
employed when the right she asserted had accrued, she had retired by the time the dispute arose,
then Congress’s scheme would be undermined. The RLA provides a slightly different procedure
for dispute resolution in the air carrier industry, see 45 U.S.C. § 184, but that procedure similarly
provides the exclusive procedure for resolving disputes over the interpretation of collective
bargaining rights, see Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 253 (1994), and so the
Day exception applies equally to retired air carrier employees like Santiago. See Ballew v.
Continental Airlines, Inc., 668 F.3d 777, 781-82 (5th Cir. 2012); Air Line Pilots Ass’n v. United
Air Lines, 802 F.2d at 912; Air Line Pilots Ass’n v. Alaska Airlines, 735 F.2d at 328-29.
The Supreme Court’s reasoning and conclusion in Day do not require, entail, or suggest
that a retiree who proceeds under Day in grieving a dispute with her former employer before the
designated arbitral board is entitled to fair representation from the relevant union in pursuing that
grievance. Nothing in Day changes the fact that the rationale in Steele for a fair representation
duty does not extend to retirees, for, as noted above, retirees (unlike current employees) need not
be represented by the union in negotiations with the employer and can instead deal with the
employer directly. See In re UAL Corp., 443 F.3d at 570. Nor does the rationale underlying
Day undercut Pittsburgh Plate Glass’s observation that requiring unions to consider and fairly

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represent the interests of both current employees and retirees would burden unions with a
substantial conflict of interest.
To summarize, although Day is an exception to the RLA’s general rule that a retiree’s
grievance with her former employer need not proceed before the designated RLA arbitral board,
Day does not carve out an exception to the rule of Pittsburgh Plate Glass that the union owes no
duty of fair representation to the retiree. Because the AFA does not owe Santiago a duty of fair
representation, it cannot be held liable under the RLA for having breached that duty. Santiago’s
complaint therefore fails to state a claim against the AFA. The AFA’s motion for
reconsideration is granted, and the AFA is dismissed as a defendant from this case.

August 17, 2012
United States District Judge

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