International Brotherhood of Teamsters, Airline Division et al v. Kalitta Air, LLC

Filing 13

OPINION and ORDER granting Plaintiffs' 3 Motion for Preliminary Injunction. Signed by District Judge David M. Lawson. (JOwe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
INTERNATIONAL BROTHERHOOD
OF TEAMSTERS, AIRLINE DIVISION,
and AIRLINE PROFESSIONALS
ASSOCIATION OF THE INTERNATIONAL
BROTHERHOOD OF TEAMSTERS,
LOCAL NO. 1224,

Case Number 15-13527
Honorable David M. Lawson

Plaintiffs,
v.
KALITTA AIR, LLC,
Defendant.
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OPINION AND ORDER GRANTING PLAINTIFFS’
MOTION FOR PRELIMINARY INJUNCTION
The plaintiff labor union and defendant Kalitta Air, an air freight company, are in the midst
of negotiations to amend the terms of a collective bargaining agreement addressing, among other
things, the pay provisions for pilots, including newly hired pilots. While the negotiations are
ongoing, Kalitta unilaterally increased the pay for new hires, although not to the level demanded by
the union in its negotiating sessions. Kalitta says that it needs to pay more to new pilots because the
pilot market is thin, it needs to attract more pilots to satisfy customer demands, and nothing in the
current CBA prohibits it from increasing pay for newly hired pilots. The plaintiffs have filed the
present lawsuit seeking a preliminary injunction under the Railroad Labor Act (“RLA”), 45 U.S.C.
§ 151, et seq. to preserve the status quo while negotiations are ongoing. Kalitta has filed an answer
in opposition, and the plaintiffs filed a reply; the Court then scheduled a hearing for October 30,
2015. However, the attorneys for the defendant stated that they were unavailable on that date, and
because the motion papers adequately set forth the relevant facts and law, and oral argument will

not aid in the disposition of the motion, it is ORDERED that the motion be decided on the papers
submitted. See E.D. Mich. LR 7.1(f)(2).
A key question presented here is whether the dispute identified in the complaint is a “major
dispute” or a “minor dispute” under the RLA. A major dispute may be addressed by a federal court,
and injunctive relief to preserve the status quo may be ordered. The Court has no jurisdiction over
a minor dispute; those disputes must be submitted to compulsory and binding arbitration before a
separate entity. Here, the dispute addresses the modification of a CBA relating to rates of pay, rather
than the interpretation of an existing agreement. Kalitta’s arguments to the contrary are frivolous
or insubstantial. Therefore, the dispute is a major dispute over which this Court has jurisdiction.
Moreover, the plaintiffs have demonstrated the right to an injunction to preserve the status quo,
which will be granted.
I.
The plaintiffs are the International Brotherhood of Teamsters, Airline Division and Airline
Professionals Association of the International Brotherhood of Teamsters, Local No. 1224. Local
1224 is a labor organization and the exclusive bargaining representative of the pilots employed by
Kalitta. Kalitta is an air freight carrier that directly employs Local 1224-represented pilots. The
parties have entered into a series of collective bargaining agreements over the years, all negotiated
under the RLA. Local 1224 alleges that the CBA became effective August 1, 2007.
Kalitta operates heavy turbine-powered aircraft, for which its pilots must be properly
certificated and type-rated under regulations promulgated by the Federal Aviation Administration
(FAA). That procedure entails a session of ground school and flight simulator training, followed
by flight time in the actual aircraft under the supervision of a check airman approved by the FAA.

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That time-in-aircraft is referred to as “Operating Experience,” or “OE,” in the CBA. Until a pilot
completes OE, he or she is considered to be in training.
Under Section 5(A) of the current CBA — the provision the parties seek to modify in the
ongoing negotiations — a “new hire Crewmember who receives Training prior to his qualification
as a Crewmember will be paid six hundred dollars ($600.00) per week while in Training. A new hire
Crewmember will not receive Flight Pay until he completes OE.” So under the current terms of the
CBA, a newly hired pilot will receive a $600 per week training rate, rather than the higher “flight
pay” rate received by regular pilots, until his or her training is complete.
On May 31, 2011, Local 1224 sent a notice to Kalitta under Section 6 of the RLA, 45 U.S.C.
§ 156, to begin the statutory process to negotiate and amend the CBA. The RLA requires that
“[c]arriers and representatives of the employees shall give at least thirty days’ written notice of an
intended change in agreements affecting rates of pay, rules, or working conditions . . . .” Ibid.
Thereafter, the parties began negotiating terms and conditions of employment, but have not yet
reached an agreement to amend the CBA. On August 23, 2013, the parties jointly requested
mediation by the National Mediation Board. Local 1224 says that it has submitted a proposal to
raise the new hire pay, but Kalitta has not responded to the proposal. Instead, the plaintiffs allege
that Kalitta engaged in unlawful “self help” by changing the new hire pay without an agreement with
Local 1224 or exhausting the statutory procedure for bargaining changes to agreements under the
RLA.
According to Local 1224, Kalitta unilaterally changed the new hire pay rate from $600 per
week to the actual flight pay rate of $65.52 per hour. That move increased new hire pay to
approximately $1,000 per week. On September 30, 2015, Local 1224 wrote to Kalitta and

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demanded that it cease and desist from making such a change and further requested that it restore
the status quo. On October 2, 2015, the defendant responded that “[i]t is Kalitta’s position that the
Management Rights and the Agency Shop Provisions of the current Collective Bargaining
Agreement with the [union] authorizes the increase in New Hire Pay.” However, to resolve the
matter, the defendant suggested the parties “execute a side letter agreement allowing the increase
in New Hire Pay.” Local 1224 responded to the Kalitta letter again demanding that Kalitta cease
and desist. When Kalitta refused, this lawsuit followed, along with the present request for a
preliminary injunction.
II.
A.
The parties do not dispute that Local 1224 is a bargaining representative, and Kalitta is a
carrier, within the meaning of the RLA, 45 U.S.C. §§ 151 Sixth, 151 First, 181. One of the main
purposes for which Congress enacted the RLA was “[t]o avoid any interruption to commerce or to
the operation of any [air or rail] carrier engaged therein.” 45 U.S.C. § 151a(1). To achieve that
goal, the RLA specifies mandatory procedures for resolving disputes between labor unions and
carriers. 45 U.S.C. § 151a. To determine which of the RLA’s procedures are to be followed in
resolving such disputes, courts have classified those disputes as either “major” or “minor.” See
Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. 711, 732 (1945).
“In the event of a major dispute, the RLA requires the parties to undergo a lengthy process
of bargaining and mediation.” Consol. Rail Corp. v. Ry. Labor Executives’ Ass’n, 491 U.S. 299,
302-03 (1989). The process begins when a party desiring to make a change affecting the “‘rates of
pay, rules, or working conditions” gives a thirty-day written notice to the other party of the intended

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change, known as a “Section 6 notice.’” Wheeling & Lake Erie Ry. Co. v. Bhd. of Locomotive
Engineers & Trainmen, 789 F.3d 681, 690 (6th Cir. 2015) (quoting 45 U.S.C. § 156). After the
Section 6 notice is received, the parties must designate a time and place to begin negotiations. Ibid.
“If the parties’ private negotiations are unsuccessful, then the dispute must be mediated by the
parties under the auspices of the National Mediation Board.” Ibid. “If mediation does not succeed,
the parties must voluntarily accept or reject arbitration. If the major dispute continues after
arbitration, the matter may finally make its way to the President’s desk for possible intervention to
secure a resolution of the dispute before a strike occurs that would impact the nation’s transportation
system.” Id. at 690-91 (citing; Burley, 325 U.S. at 725; Consol. Rail Corp., 491 U.S. at 303 n. 3;
45 U.S.C. § 160).
“Until [the parties] have exhausted those procedures, the parties are obligated to maintain
the status quo, and the employer may not implement the contested change in rates of pay, rules, or
working conditions. The district courts have subject-matter jurisdiction to enjoin a violation of the
status quo pending completion of the required procedures, without the customary showing of
irreparable injury.” Consol. Rail Corp., 491 U.S at 303 (emphasis added) (citing Detroit & T.S.L.R.
Co. v. Transportation Union, 396 U.S. 142 (1969)).
By contrast, when negotiations fail over a minor dispute, the parties are required “to submit
the dispute to compulsory and binding arbitration before the National Railroad Adjustment Board
(NRAB) or, alternatively, to an adjustment board established by the carrier and the employees.”
Wheeling, 789 F.3d at 691. The adjustment board “has exclusive jurisdiction to resolve a minor
dispute.” Consol. Rail Corp., 491 U.S. at 304. A district court has no subject matter jurisdiction
to address a minor dispute, and no authority to order that the status quo be maintained. Ibid.; Airline

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Professionals Ass’n of Int’l Bhd. of Teamsters, Local Union No. 1224, AFL-CIO v. ABX Air, Inc.,
274 F.3d 1023, 1028 (6th Cir. 2001).
The first order of business to address, then, when such labor disputes are presented to the
district court is whether the dispute is major or minor. In this case, the parties each have
characterized the dispute over new hire rates of pay according to their respective interests. The
plaintiffs say it is major; the defendant insists it is minor. Courts have recognized, however, the
foolishness of labeling such disputes based on which side wins the race to the courthouse. “[T]here
is danger in leaving the characterization of the dispute solely in the hands of one party.’” Consol.
Rail Corp., 491 U.S. at 305. Therefore, when there is a disagreement over the nature of the labor
dispute, it is the Court’s obligation to recharacterize the dispute consistent with the statutory
definitions. Id. at 306; Wheeling, 789 F.3d at 692.
The Supreme Court has explained that major disputes are defined by 45 U.S.C. § 152
Seventh (stating that no carrier “shall change the rates of pay, rules, or working conditions of its
employees, as a class, as embodied in agreements except in the manner prescribed in such
agreements”) and § 156 (establishing the mediation procedures mentioned earlier).
This statutory category “relates to disputes over the formation of collective
agreements or efforts to secure them. They arise where there is no such agreement
or where it is sought to change the terms of one, and therefore the issue is not
whether an existing agreement controls the controversy. They look to the acquisition
of rights for the future, not to assertion of rights claimed to have vested in the past.”
Consol. Rail Corp., 491 U.S. at 302 (quoting Burley, 325 U.S. at 723).
The statutory basis for the minor dispute category is 45 U.S.C. § 152 Sixth (describing
disputes “arising out of grievances or out of the interpretation or application of agreements
concerning rates of pay, rules, or working conditions”) and § 153 First (i) (describing the arbitration

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process for such grievances). A minor dispute “‘contemplates the existence of a collective
agreement already concluded or, at any rate, a situation in which no effort is made to bring about
a formal change in terms or to create a new one.’” Consol. Rail Corp., 491 U.S. at 303 (quoting
Burley, 325 U.S. at 723).
All of this boils down, the Court explained, to whether resolution of an employer’s contested
action can be made by deciding whether “the terms of an existing agreement either establish or
refute the presence of a right to take the disputed action.” Consol. Rail Corp., 491 U.S. at 305. That
an employer says as much, however, is not enough. Instead, the court must decide for itself whether
“the dispute may be conclusively resolved by interpreting the existing agreement.”

Ibid.

“Accordingly, ‘[w]here an employer asserts a contractual right to take the contested action, the
ensuing dispute is minor if the action is arguably justified by the terms of the parties collectivebargaining agreement. Where, in contrast, the employer’s claims are frivolous or obviously
insubstantial, the dispute is major.’” Wheeling, 789 F.3d at 692 (quoting Consol. Rail Corp., 491
U.S. at 307).
Local 1224 points out that it has served its Section 6 notice and the parties have been in
negotiations over the very issue on which Kalitta unilaterally acted: new hire pay rates. That the
subject of a dispute is the object of ongoing negotiations, however, does not automatically render
the dispute a major one. Airline Professionals Ass’n, Teamster Local Union 1224 v. ABX Air, Inc.,
400 F.3d 411, 415 (6th Cir. 2005). The Court must make that determination on the specific facts
before it. Ibid.
Kalitta characterizes this dispute as requiring only the interpretation of the CBA. It contends
that it retains the discretion as an employer to waive the OE requirement, which in turn allows it to

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increase the rate of pay of new hires to the level of flight pay. Kalitta does not dispute that its goal
in doing so is to increase new hire pay. Kalitta argues that there is a shortage of pilots in the aviation
industry and it needs to raise the new hire pay so that it can attract new pilots in order to maintain
its business obligations.
But that argument collides with the language in Section 5 of the CBA, which states
specifically that “[a] new hire Crewmember will not receive Flight Pay until he completes OE.”
(emphasis added). Kalitta certainly retains the right to prescribe a training regimen, consistent with
FAA regulations. But OE is a distinct component of training mandated by the FAA. It appears to
be a benchmark in the CBA for establishing pay scales for pilots employed by the defendant. For
example, in Section 1(D)(2)(f), pay protection is contingent on the “successful completion of OE.”
Section 16(J)(1) states that “[e]xcept for OE, a Crewmember will not be required to fly a revenue
flight while in initial or transition Training.” Nonetheless, Kalitta presents three arguments in its
attempt to justify its position that the CBA does not prevent it from unilaterally raising the pay for
newly hired pilots: (1) it contends that the majority of new hires are not subject to the CBA, and
therefore are not bound by Section 5; (2) even if the CBA applies, Kalitta retains management rights
under Section 4 to waive the OE requirement; and (3) new hires are probationary crewmembers and
have no right to arbitrate any grievance. The Court must determine if these arguments “are frivolous
or obviously insubstantial.” The Court believes they are.
First, Kalitta’s belief that new hires are not covered by the CBA is based apparently on
contract language that says new hires are not required to become members of Local 1224 before the
ninetieth day of their employment. Union membership, however, is irrelevant to the reach of the
CBA. Even if a new hire fails to join the union after 90 days, he or she still is required to pay a

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“service charge as a contribution for the administration of [the CBA].” And the CBA does not
contain language excluding non-members. Nor could it. As the exclusive bargaining representative,
“the union is obliged ‘fairly and equitably to represent all employees . . ., union and
nonunion,’within the relevant unit.” Abood v. Detroit Bd. of Ed., 431 U.S. 209, 221 (1977).
Paradoxically, after arguing new hires are not covered by the CBA, Kalitta relies on the
CBA’s provision that new hires are “Probationary Crewmembers” for the first twelve months of
employment to conclude that it can waive the OE requirement of Section 5. It argues that because
“Training of Probationary Crewmembers will be handled at the Company’s discretion” under
Section 16(J)(2) of the CBA, Kalitta can modify those training conditions at any time before the end
of the probationary period. That provision addresses training, not pay. And it does not permit the
company to waive OE, or the express requirements of other sections of the CBA. Kalitta’s first
argument is “obviously insubstantial.”
Second, Kalitta argues that the Management Rights section of the CBA gives it all of the
traditional management rights that are not specifically modified by an express provision of the CBA.
From that indisputable proposition, Kalitta reasons that it has the right to decide how training is
conducted, and therefore waiving the OE requirement as a condition of receiving flight pay is
impliedly within its authority under the CBA. That argument, however, runs headlong into the
mandatory language of Section 5, which states,“A new hire Crewmember will not receive Flight Pay
until he completes OE.” (Emphasis added). Section 5 is an express provision of the CBA that
modifies the traditional management rights, at least with regard to waiving the OE requirement.
“Because the language of the scope rule is express, [the Court] need not consider any implied

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terms.” Wheeling, 789 F.3d at 694. Therefore, there is no support in the CBA under the
Management Rights section to waive the OE requirement.
Third, Kalitta argues that under Section 20(F), probationary crewmembers have no right to
arbitrate any grievance. This assertion is patently false. Section 20(F) states, “Nothing in this
Agreement shall be construed to extend the right to arbitrate a grievance concerning his discipline
or discharge to a Probationary Crewmember, or to require that such discipline or discharge be Based
on just cause. However, a Probationary Crewmember shall have the right to submit any grievance
. . . .” (Emphasis added). The arbitration prohibition is limited to discipline or discharge for good
cause; a probationary crewmember has the right to file a grievance for any other reason. Unless
paying new hires flight pay amounts to discipline under the CBA, Kalitta can find no support in the
CBA to waive the OE requirement.
The dispute in this case plainly involves “change [to] rates of pay,” 45 U.S.C. § 152 Seventh,
not “the interpretation or application of agreements concerning rates of pay,” 45 U.S.C. § 152 Sixth.
As the defendant’s arguments demonstrate, its actions in raising the pay rate for new hires cannot
“arguably [be] justified by the terms of the parties collective-bargaining agreement.” Wheeling, 789
F.3d at 692. Therefore, the present dispute is a major dispute over which this Court has subject
matter jurisdiction under the RLA.
B.
The plaintiffs seek an injunction to maintain the status quo relating to the pay rate for new
hires while the negotiations are pending according to the process outlined in 45 U.S.C. § 156 and
Wheeling, 789 F.3d 681, 690-91. When considering whether to issue a preliminary injunction,
courts weigh these factors: (1) whether the movant has demonstrated a substantial likelihood of

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success on the merits; (2) whether the movant will suffer irreparable injury without the injunction;
(3) would the preliminary injunction cause substantial harm to others; and (4) will the public interest
be served if the injunction issues. Overstreet v. Lexington–Fayette Urban Cnty. Gov’t, 305 F.3d
566, 573 (6th Cir.2002) (citation omitted); McPherson v. Michigan High Sch. Athletic Ass’n, 119
F.3d 453, 459 (6th Cir. 1997) (en banc). These factors must be balanced with one another,
Overstreet, 305 F.3d at 573, and “no one factor is controlling,” Gonzales v. Nat’l Bd. of Med.
Examiners, 225 F.3d 620, 625 (6th Cir. 2000) (citing Michigan State AFL–CIO v. Miller, 103 F.3d
1240, 1249 (6th Cir. 1997). However, in the context of a labor dispute under the RLA, a district
court may “enjoin a violation of the status quo pending completion of the required procedures,
without the customary showing of irreparable injury.” Consol. Rail Corp., 491 U.S. at 303 (citing
Detroit & T.S.L.R. Co. v. Transportation Union, 396 U.S. 142 (1969). “[W]hat must be preserved
as the status quo are the actual, objective working conditions out of which the dispute arose,
irrespective of whether those conditions are covered in an existing collective agreement.” Detroit
& T.S.L.R. Co., 396 U.S. at 143.
The insubstantiality of Kalitta’s arguments that its actions can be justified by an
interpretation of the CBA suggest that the plaintiff likely will succeed on the merits of its claims.
As to the substantial harm to others and public interest factors, Kalitta argues that it will be
substantially harmed because it will be less able to hire new pilots from a shrinking pool of
candidates. However, the plaintiffs point out that if Kalitta is allowed to succeed in its attempt to
unilaterally alter the CBA, the viability of the union as a legitimate bargaining partner would be
severely undermined.

And changing the new hire policy for economic reasons to remain

competitive would frustrate the purpose of the RLA because any carrier could make the same claim

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and thus alter the status quo. But “the purpose of the status quo provision of the RLA ‘is to
guarantee only that existing collective agreements continue to govern the parties’ rights and duties
during efforts to change those agreements,’ and that ‘working conditions as expressed in an
agreement shall not be altered.’” Wheeling, 789 F.3d at 696 (quoting Detroit & T.S.L.R. Co., 396
U.S. at 147-48).
That outside economic forces may incite Kalitta to alter the CBA by raising the pay for new
hires does not alter the balance of interests. In fact, those forces apparently were contemplated by
Congress when it enacted the RLA. As the Sixth Circuit explained, “[b]ecause one party may wish
to change the status quo without undue delay, the power granted in the RLA to the other party ‘to
preserve the status quo for a prolonged period’ encourages the moving party to compromise and
reach agreement without interrupting commerce.”

Ibid.

Permitting unilateral self help in

contravention of a specific provision of the CBA — whose terms are presently the subject of
negotiations — would be a course “sharply at variance with the overall design and purpose of the
Railway Labor Act.” Detroit & T.S.L.R. Co., 396 U.S. at 148.
Here, as in Wheeling, Section 6 notice was given beginning the statutory process to negotiate
and amend parts of the CBA, which included new hire pay. The parties have not yet reached a
voluntary agreement to amend the CBA. The parties jointly requested National Mediation Board
mediation. However, before coming to a resolution, Kalitta decided to change the new hire pay rate
unilaterally, despite contrary language in the CBA. Like the railroad in Wheeling, Kalitta argues,
among other things, that it has the managerial discretion to modify the CBA. However, as explained
above, Kalitta’s arguments are “frivolous or obviously insubstantial in light of the express language”
of the CBA. Kalitta’s attempt to raise the new hire pay by waiving some of the training

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requirements in the CBA is not even arguably justified by any provision of the CBA, and appears
to be nothing more than an end run around its bargained-for agreement with Local 1224.
An injunction preserving the status quo is justified.
III.
The plaintiffs have shown that they are entitled to an injunction to preserve the status quo
concerning the terms of the collective bargaining agreement presently in effect with defendant
Kalitta Air. Those terms focus on the rate of pay for new hires who have not completed their
Operating Experience. No security will be required because no damages will be caused to the
persons bound by the preliminary injunction.
Accordingly, it is ORDERED that the motion for preliminary injunction [dkt. #3] is
GRANTED.
It is further ORDERED that the defendant, Kalitta Air, L.L.C., its agents, servants,
employees, attorneys and all those in active concert and participation with them who receive actual
notice of this order, are RESTRAINED AND ENJOINED from violating the terms of the
Collective Bargaining Agreement between Kalitta Air, L.L.C. and International Brotherhood of
Teamsters, Airline Division and Airline Professionals Association of the International Brotherhood
of Teamsters, Local No. 1224, including the Section 5 New Hire Pay provision. The defendant must
adhere to the terms of that collective bargaining agreement and maintain the status quo working
conditions unless and until those terms are altered in bargaining with plaintiffs under Section 6 of
the Railway Labor Act, or until further order of the Court.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: October 30, 2015
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PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on October 30, 2015.
s/Susan Pinkowski
SUSAN PINKOWSKI

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