International Brotherhood of Teamsters, Airline Division v. Southern Air, Inc.

• Court: District Court, District of Columbia
• Decided: January 28, 2020
• Docket: Civil Action No. 2019-1948
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AIRLINE DIVISION, et al.,

Plaintiffs, Case No. 19-cv-1948 (CRC) v.

SOUTHERN AIR, INC.,

Defendant.

MEMORANDUM OPINION

Two airlines, Southern Air and Atlas Air, have been in the midst of a merger since 2016.

The union representing pilots from both carriers—the International Brotherhood of Teamsters—

and the airlines disagree about their respective obligations under the merger provisions in each

airlines’ collective bargaining agreements. After the airlines successfully compelled the union to

submit their disputes to arbitration, both the Southern Air and Atlas Air arbitration boards

entered awards in favor of the airlines. The union filed separate petitions in this Court to vacate

the awards. This case is before the Court on Southern Air’s motion to dismiss the union’s

petition to vacate the Southern Air Board’s award. Finding no plausible basis for vacating the

award, the Court will grant the motion to dismiss. 1

I. Background

The International Brotherhood of Teamsters (“IBT” or the “Union”) is the exclusive

bargaining representative of pilots employed by and who fly aircraft for Southern Air

1 The Court is simultaneously issuing an opinion granting Atlas Air’s motion to dismiss the union’s petition to vacate the Atlas Air arbitration board’s award. See Int’l Bhd. of Teamsters v. Atlas Air, Inc., No. 19-cv-2723. (“Southern” or the “Company”), a world-wide air carrier. Compl. ¶¶ 4-6. The Union and the

Company are parties to a collective bargaining agreement (the “Southern CBA”) that covers the

rates of pay, rules, and working conditions of IBT-represented pilots employed by Southern. Id.

¶ 7, Exh. 1 [hereinafter “Southern CBA”]. The Southern CBA establishes a grievance and

arbitration procedure for certain disputes. See Southern CBA § 19.

In January 2016, Atlas Air Worldwide Holdings (“AAWW”) announced that it had

entered into an agreement to acquire Southern Air Holdings, Inc. (“SAHI”). Id. ¶ 12. SAHI is

the parent company of Southern and another air carrier, Florida West International Airways. Id.

AAWW is the parent company of Atlas Air and Polar Air (collectively, “Atlas”). Id. ¶ 13. IBT

also represents the Atlas and Polar-employed pilots, and IBT, Atlas, and Polar are parties to a

collective bargaining agreement (the “Atlas CBA”) that is separate from the Southern CBA. Id.

¶¶ 13-14. IBT owes separate duties of representation to each pilot group. Id. ¶ 15.

Upon announcing its intent to acquire SAHI, AAWW announced a plan to operationally

merge Southern into Atlas. Id. ¶ 16. The merger provision of the Southern CBA provided that

[i]n the event of a merger, this Agreement shall be merged with the merging air carrier’s crewmember collective bargaining agreement, if any; if such merged agreement is not completed within nine months from the date an integrated Master Seniority List is submitted to the surviving entity, the parties shall submit all outstanding issues to binding interest arbitration.

Southern CBA § 1.B.3; Compl. ¶ 8.

Relying on this provision and an analogous one in the Atlas CBA, AAWW demanded

that the Southern and Atlas pilot groups begin negotiations to merge the two pre-existing CBAs

into one and that the Union and the pilot groups immediately begin seniority list integration

negotiations. Compl. ¶ 16. The Union and the pilot groups refused both demands. Id. ¶ 17. In

April 2016, Atlas filed a management grievance against the Union alleging that the Union had

2 breached their CBA by refusing to engage in joint collective bargaining agreement (“JCBA”) or

integrated seniority list (“ISL”) negotiations. Id. ¶ 18. The Union responded that it was not

required to arbitrate the grievance. Id.

In January 2017, Southern purported to submit a management grievance against the

Union for refusing to engage in JCBA negotiations (the “Southern Grievance”). Id. ¶ 19. Unlike

the Atlas CBA, the Southern CBA does not contain any express provision that allows

management grievances. Id. ¶ 18. The Union responded that it would not arbitrate the Southern

Grievance because, among other things, the Southern CBA did not permit the arbitration of

management-initiated grievances. Id. ¶ 20.

Southern and Atlas then brought suit against the Union in the United States District Court

for the Southern District of New York to compel the Union to arbitrate their respective

grievances. Id. ¶ 21. Judge Forrest granted the airlines’ motion to compel arbitration of both

grievances in March 2018, Atlas Air, Inc. v. Int’l Bhd. of Teamsters, 293 F. Supp. 3d 457

(S.D.N.Y. 2018), which was affirmed by the Second Circuit in November 2019, Atlas Air, Inc. v.

Int’l Bhd. of Teamsters, 943 F.3d 568 (2d Cir. 2019).

The Southern System Board of Adjustment (the “Board”) heard the Southern Grievance.

The Union moved to dismiss on the ground that the Southern CBA grievance and arbitration

procedure does not permit management grievances. Compl. ¶ 24. Arbitrator Richard Bloch

issued an Opinion and Award in Southern’s favor in June 2019. Id. ¶ 25, Exh. 3 [hereinafter

“Op. & Aw.”]. The Board concluded that the Southern CBA did permit management grievances

3 and that the Union and pilot groups had violated the merger provisions of the CBA by refusing to

engage in JCBA or ISL negotiations. 2 Id. at 20-23.

IBT then filed suit in this Court seeking to vacate the Southern Board’s Opinion and

Award. Southern filed a motion to dismiss for failure to state a claim. Seeing no basis to vacate

the arbitrator’s award, the Court will grant Southern’s motion.

II. Legal Standards

The Railway Labor Act (“RLA”) “provide[s] for the prompt and orderly settlement of all

disputes” between air carriers and their employees. Landers v. Nat’l R.R. Passengers Corp., 485

U.S. 652, 656 (1988) (quoting 45 U.S.C. § 151a(5)). To that end, it requires carriers and

employees to form collective bargaining agreements and creates two types of dispute resolution

procedures, which vary based on whether the dispute is “major” or “minor.” See Consol. Rail

Corp. v. Ry. Labor Exec. Ass’n, 491 U.S. 299, 302 (1989).

“[M]ajor disputes are those over the formation of collective agreements” affecting

employees’ rates of pay, rules, or working conditions “or efforts to secure them.” Union Pac. R.

Co. v. Bhd. of Locomotive Engineers & Trainmen Gen. Comm. of Adjustment, Cent. Region,

558 U.S. 67, 72 n.1 (2009) (internal quotation marks omitted). Given the magnitude of the

issues at stake, the RLA establishes a “rather elaborate machinery for negotiation, mediation,

voluntary arbitration, and conciliation” that governs the resolution of major disputes. Detroit &

2 The Atlas System Board of Arbitration (the “Atlas Board”) heard Atlas’s grievance in October 2018. As of IBT’s filing of this suit, the Board had not yet issued a decision, but it issued a Decision and Award in favor of Atlas in late August 2019. IBT then filed suit to vacate that award as well, which, as noted above, the Court addresses in a separate opinion. See Int’l Bhd. of Teamsters v. Atlas Air, Inc., No. 19-cv-2723.

4 T. S. L. R. Co. v. United Transp. Union, 396 U.S. 142, 148-49 (1969) (citing Gen. Comm. of

Adjustment v. Missouri-Kansas-Texas R.R. Co., 320 U.S. 323, 328-33 (1943)).

A minor dispute, by contrast, “involves a question about how to interpret an existing

collective bargaining agreement, like the meaning of a term or whether the agreement permits a

certain action.” Atlas Air, Inc. v. Int’l Bhd. of Teamsters, 928 F.3d 1102, 1108 (D.C. Cir. 2019)

(citing Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. 711, 723 (1945)). The Second Circuit

determined that the Southern Grievance constituted a minor dispute, which the parties do not

contest. The framework for resolving minor disputes is considerably less involved: disputes are

first submitted to the grievance procedure agreed upon in the CBA and, if unsuccessful, are

submitted to mandatory arbitration before the National Railroad Adjustment Board or, as here, a

special board of adjustment established by the carrier and the union. See Norfolk S. Ry. Co. v.

Solis, 915 F. Supp. 2d 32, 36 (D.D.C. 2013); 45 U.S.C. § 153 First (i).

“Congress considered it essential to keep these so-called ‘minor’ disputes within the

Adjustment Board and out of the courts.” Union Pac. R. Co. v. Sheehan, 439 U.S. 89, 94 (1978).

The RLA thus makes the mandatory arbitration process exclusive of all other remedies and an

award issued by the board “final and binding.” 45 U.S.C. § 153 First (m); see Andrews v.

Louisville & Nashville R.R. Co., 406 U.S. 320, 322-24 (1972). Judicial review of such awards is

available only on grounds of: (1) failure to comply with the requirements of the RLA; (2) failure

to confine the decision to matters within the scope of the board’s jurisdiction; (3) fraud or

corruption; and (4) contravention of law and public policy. See 45 U.S.C. § 153 First (q);

Sheehan, 439 U.S. at 93; Nat’l R.R. Passenger Corp. v. Fraternal Order of Police, Lodge 189

Labor Comm., 855 F.3d 335, 338 (D.C. Cir. 2017).

5 To withstand Southern’s motion to dismiss, then, the Union’s complaint must allege facts

that support at least one of the above-mentioned grounds for judicial review. The Court must

grant a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) if the complaint’s

allegations do not “contain sufficient factual matter, accepted as true, to ‘state a claim to relief

that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In making that determination, the Court “must

take all of the factual allegations in the complaint as true,” save legal conclusions “couched

as . . . factual allegation[s].” Id. (citing Twombly, 550 U.S. at 555). The Court may not consider

materials outside the pleadings, except “documents attached as exhibits or incorporated by

reference in the complaint,” Ward v. D.C. Dep’t of Youth Rehab. Servs., 768 F. Supp. 2d 117,

119 (D.D.C. 2011), and documents attached to a motion to dismiss if their “authenticity is not

disputed,” “they are referred to in the complaint,” and they “are integral to [the plaintiff’s]

claim[s],” Kaempe v. Myers, 367 F.3d 958, 965 (D.C. Cir. 2004) (citations omitted).

III. Analysis

A. Count I: Challenges to the Board’s Liability Finding

In granting the Southern Grievance, the Board decided two issues: whether it had

jurisdiction over the Southern Grievance and whether the Union violated the Southern CBA by

refusing to present the Company with an ISL or engage in JCBA negotiations. See Op. & Aw. 4.

The Court concludes that it may not vacate the Board’s decision on either score.

1. The Board’s Jurisdiction to Hear the Company’s Grievance

The Board framed the first issue as whether it “ha[d] jurisdiction over the Company’s

grievance.” Id.; see Madison Hotel v. Hotel & Rest. Emps., Local 25, AFL-CIO, 144 F.3d 855,

857 (D.C. Cir. 1998) (“An arbitrator’s view of the issues submitted to him for

6 arbitration . . . receives the same judicial deference as an arbitrator’s interpretation of a collective

bargaining agreement.”). Count I of the complaint alleges that the Board erred in finding that it

had jurisdiction to hear the Southern Grievance because Southern did not have a right under the

CBA to compel the Union to arbitrate a Company-initiated grievance. Compl. ¶ 38.

Southern responds that the Court must defer to the Board’s determination that it had a

right to pursue a management grievance so long as the Board’s interpretation is “rationally

explainable as a logical means of furthering the aims of the contract.” Def. Mot. to Dismiss 10

(quoting Union Pacific R.R. Co. v. United Transp. Union, 23 F.3d 1397, 1399 (8th Cir. 1994)).

That is the incorrect standard of review. As the Supreme Court has explained, unless the parties

agree otherwise, “the question of arbitrability—whether a collective-bargaining agreement

creates a duty for the parties to arbitrate the particular grievance—is undeniably an issue for

judicial determination.” AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649

(1986). 3 This threshold issue of arbitrability encompasses both “whether or not the company [or

the union] was bound to arbitrate, as well as what issues it must arbitrate.” Atkinson v. Sinclair

Ref. Co., 370 U.S. 238, 241 (1962) (emphasis added).

3 The parties may agree by contract to submit “question[s] of whether the parties agreed to arbitrate” to arbitration. AT & T, 457 U.S. at 649. But, the parties do not suggest—nor does anything in the language of the Southern CBA indicate—that they “clearly and unmistakably” agreed to do so here. Id. The CBA’s grant to the Board of “jurisdiction over disputes growing out of grievances or out of the interpretation or application of any of the terms of this Agreement” does not clearly encompass threshold questions concerning arbitrability. Southern CBA § 19.D.2. Moreover, the Union has consistently refused to submit to this arbitration on the basis that the Southern Grievance was not arbitrable. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 947 (1995) (“[I]nsofar as the Kaplans were forcefully objecting to the arbitrators deciding their dispute with First Options, one naturally would think that they did not want the arbitrators to have binding authority over them.” (emphasis in original)).

7 Ordinarily, then, the Court would review the Board’s jurisdiction over the Southern

Grievance de novo, employing ordinary principles of contract interpretation with the

presumption that arbitration should be upheld “unless it may be said with positive assurance that

the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT

& T, 475 U.S. at 650 (quoting United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S.

574, 582-83 (1960)). Here, however, the Court concludes that it is precluded from undertaking

such review by the Second Circuit’s decision in Atlas Air, Inc., 943 F.3d at 568. Cf. Moses H.

Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 12 (1983) (noting in the Pullman

abstention context that “[o]nce the state court decided the issue of arbitrability, the federal court

would be bound to honor that determination as res judicata”). 4

Issue preclusion “bars successive litigation of an issue of fact or law actually litigated and

resolved in a valid court determination essential to the prior judgment, even if the issue recurs in

the context of a different claim.” Taylor v. Sturgell, 553 U.S. 880, 892 (2008) (quoting New

Hampshire v. Maine, 532 U.S. 742, 748-49 (2001)). It is intended to “protect against ‘the

expense and vexation attending multiple lawsuits, conserv[e] judicial resources, and foste[r]

reliance on judicial action by minimizing the possibility of inconsistent decisions.’” Id. (quoting

Montana v. United States, 440 U.S. 147, 153-54 (1979)) (alterations in original).

Issue preclusion has three elements: (1) “the same issue now being raised must have been

contested by the parties and submitted for judicial determination in the prior case”; (2) “the issue

4 On November 26, 2019, the Court invited the parties to submit supplemental briefing on whether the Second Circuit’s decision in Atlas Air, 943 F.3d at 568, and/or Judge Forrest’s decision in Atlas Air, Inc., 293 F. Supp. 3d at 457, preclude it from ruling that the Board lacked jurisdiction over the Southern Grievance because it was not brought by the Union. See Minute Order (Nov. 26, 2019).

8 must have been actually and necessarily determined by a court of competent jurisdiction in that

prior case”; and (3) “preclusion in the second case must not work a basic unfairness to the party

bound by the first determination.” Martin v. Dep’t of Justice, 488 F.3d 446, 454 (D.C. Cir.

2007) (quoting Yamaha Corp. of Am. v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992)).

The Court concludes that each of these elements is met here with respect to the issue of the

arbitrability of a Company-initiated grievance under the Southern CBA.

First, the question was contested by the parties throughout this litigation and squarely

submitted to both Judge Forrest and the Second Circuit. The Union has insisted, from its initial

response to Southern’s demand for arbitration, that Southern did not have a right under their

CBA to bring grievances before the Board. See Compl. ¶ 20. In their briefing before Judge

Forrest, Southern asserted that it had such a right, Pl. Mem. in Supp. Mot. Summ. J. 20, Atlas

Air, Inc. v. Int’l Bhd. of Teamsters., No. 17-cv-903 (S.D.N.Y. Apr. 20, 2017), ECF No. 36, and

the Union responded that the “Court ha[d] no jurisdiction to compel arbitration of a management

grievance” because “the IBTAD-Southern CBA does not authorize management to file a

grievance,” Def. Mem. in Opp. Mot. Summ. J. 37-38, Atlas Air, Inc. v. Int’l Bhd. of Teamsters,

No. 17-cv-903 (S.D.N.Y. June 5, 2017), ECF No. 46. In seeking reversal of Judge Forrest’s

decision before the Second Circuit, the Union again argued that “the District Court had no

jurisdiction to compel arbitration of a management grievance” because “the Southern CBA does

not authorize management to file a grievance,” Appellants’ Br. 48, Atlas Air, Inc. v. Int’l Bhd. of

Teamsters, No. 18-1086 (2d Cir. July 26, 2018), and Southern again argued otherwise,

Appellee’s Br. 40, Atlas Air, Inc. v. Int’l Bhd. of Teamsters, No. 18-1086 (2d Cir. Oct. 25,

2018). In both cases, the parties vigorously disputed the question at issue.

9 Second, the question was “actually and necessarily determined by a court of competent

jurisdiction.” Martin, 488 F.3d at 454. The Union argues that Judge Forrest did not actually

decide whether Southern’s grievance was arbitrable; she decided only that the dispute was a

minor one and thus subject to the Board’s jurisdiction. Pl. Opp. Supp. Br. 3. And, the Union

says, because the Second Circuit’s holding that Southern’s grievance was arbitrable was thus

unnecessary to its affirmance of her decision, its decision cannot provide a basis for preclusion

either. Id. at 3-5.

The Union ignores, however, Judge Forrest’s explicit ruling that its argument that “the

specific issues here are not arbitrable by the relevant adjustment boards” was “unavailing.”

Atlas Air, 293 F. Supp. 3d at 468. To be sure, Judge Forrest did not expressly address the

Union’s argument that the Southern CBA did not authorize management to file a grievance. 5

But, “[i]n issue preclusion, it is the prior judgment that matters, not the court’s opinion

explicating the judgment.” Yamaha, 961 F.2d at 254 (emphasis in original). “Even in the

absence of any opinion[,] a judgment bars relitigation of an issue necessary to the judgment.”

Am. Iron & Steel Inst. v. E.P.A., 886 F.2d 390, 397 (D.C. Cir. 1989) (emphasis in original).

5 As relevant here, Judge Forrest held that

[The Union’s] argument that the Southern Adjustment Board lacks jurisdiction to consider this dispute is plainly incorrect. The Southern CBA provides that the Southern Adjustment Board's jurisdiction “shall not extend to proposed changes in hours of employment, rates of compensation, or working conditions.” But as previously noted, the actual terms of the JCBA are not at issue here—the sole issue is whether the Union must negotiate. That issue turns on interpretation of § 1.B.3 of the Southern CBA, and the Southern Adjustment Board unquestionably has jurisdiction “over disputes growing out of . . . the interpretation or application of any of the terms” of the Southern CBA.

Atlas Air, 293 F. Supp. 3d at 469 n.17 (quoting Southern CBA § 19.D.2).

10 Courts may not compel arbitration of disputes that are not arbitrable. See Air Line Pilots

Ass’n, Int’l v. Delta Air Lines, Inc., 863 F.2d 87, 91 (D.C. Cir. 1988) (noting that “an issue need

not be subject to arbitration if there is ‘positive assurance that the arbitration clause is not

susceptible of an interpretation that covers the asserted dispute’” (quoting Nw. Airlines v. ALPA,

808 F.2d 76, 82 (D.C. Cir. 1987)); see generally Dean Witter Reynolds, Inc. v. Byrd, 470 U.S.

213, 218 (1985) (noting that the Federal Arbitration “Act leaves no place for the exercise of

discretion by a district court, but instead mandates that district courts shall direct the parties to

proceed to arbitration on issues as to which an arbitration agreement has been signed” (emphasis

in original)). The parties squarely raised—in addition to the question whether the Southern

Grievance was a “minor” or “major” dispute—the question of the grievance’s arbitrability. In

compelling the parties to submit the Southern Grievance to arbitration, Judge Forrest thus

actually and necessarily decided that such grievances, i.e., those initiated by the Company, were

arbitrable. 6 See 18 Wright & Miller Fed. Prac. & Proc. Juris. § 4420 (3d ed. 2002) (“[T]he

6 There is an argument to be made that Judge Forrest’s decision precluded the Board from deciding whether the CBA permitted management to file grievances, such that the Board should never have reached that question at all. See Op. & Aw. 11 n.16 (noting Southern’s argument that “[h]ad the District Court not already held that the management grievance was proper . . . it would not have ordered the merits of the grievance to arbitration” (quoting Southern Mot. to Dis. Br. at 7)). The Board itself grappled with this question, noting that Judge Forrest “concluded that the dispute was arbitrable,” but “it is not as clear that the Court also ruled on the merits of whether a grievance by Management could be filed.” Id. at 11. The Board ultimately concluded that it was not precluded from reaching “the merits of that question.” Id.

The Court questions the Board’s framing of the question “whether a grievance by Management could be filed” as one “on the merits,” as opposed to one of arbitrability. See Atkinson, 370 U.S. at 241 (noting that arbitrability encompasses both “whether or not the company was bound to arbitrate, as well as what issues it must arbitrate” (emphasis added)). The better reading of Judge Forrest’s decision, in the Court’s view, is that her holding that the Southern Grievance was arbitrable necessarily encompassed a finding that Southern was permitted to submit grievances under the CBA. In any event, the Court need not delve into the validity of the Board’s issue preclusion analysis, because it concludes that the Second Circuit’s

11 simple fact of victory or defeat of a plaintiff or defendant establishes decision of all the issues

that would have had to be resolved to support the result.”).

In any case, the arbitrability of the Southern Grievance was conclusively resolved by the

Second Circuit. In affirming Judge Forrest’s decision, the Second Circuit expressly rejected

each of the Union’s “arguments with respect to the arbitrability of the Employers’ management

grievances,” including its argument that “the Southern CBA does not permit the employer to file

a grievance that could be the basis of arbitration.” Atlas Air, 943 F.3d at 584. After examining

the language in the Southern CBA, the Second Circuit explicitly held that the CBA “permitted

[Southern] to unilaterally file a grievance with the Southern Board.” Id.

The Union contends that “it is not certain that the Second Circuit intended to decide an

issue that Judge Forrest purposefully had not decided because she believed she lacked

jurisdiction to render any such decision at all.” Pl. Opp. Supp. Br. 5. To the extent that the

Union is arguing that the Second Circuit’s holding was unnecessary to its affirmance of Judge

Forrest’s decision, the Union ignores the well-established principle that courts, not arbitrators,

“must decide whether a collective bargaining agreement requires the parties to arbitrate a

grievance unless the agreement provides otherwise.” Atlas Air, 943 F.3d at 584 (emphasis

added) (citing AT & T Techs., 475 U.S. at 649; Collins & Aikman Prods. Co. v. Bldg. Sys., Inc.,

58 F.3d 16, 19 (2d Cir. 1995)). The Second Circuit was thus required to decide whether the

Southern Grievance was arbitrable, and its conclusion that management was permitted to file

grievances was thus necessary to its affirmance of Judge Forrest’s order compelling arbitration

decision in Atlas Air, 943 F.3d at 584, definitely resolves the Board’s jurisdiction to hear management-initiated grievances.

12 of that grievance. 7 See Consol. Edison Co. of New York v. Bodman, 449 F.3d 1254, 1258 (D.C.

Cir. 2006) (“If this issue was actually and necessarily decided, the prior decision would be

conclusive and require dismissal of the Claimants’ complaint, which seeks the opposite result.”).

Southern’s right to submit a grievance under the CBA was thus “actually and necessarily

determined by a court of competent jurisdiction.” Martin, 488 F.3d at 454.

Finally, preclusion does not “work a basic unfairness” to the Union. Id. The D.C.

Circuit has “limit[ed] equitable exceptions to issue preclusion to certain limited circumstances”:

(1) “if there has been an intervening change in controlling legal principles;” (2) “if the party to

be bound lacked an incentive to litigate in the first trial, especially in comparison to the stakes of

the second trial”; or (3) “if the prior proceedings were seriously defective.” Canonsburg Gen.

Hosp. v. Burwell, 807 F.3d 295, 306 (D.C. Cir. 2015) (internal quotation marks omitted). None

apply here.

The Union argues that the decisions of Judge Forrest and the Second Circuit are

inconsistent with well-settled Supreme Court precedent. Pl. Opp. Br. 5-6. But, “issue preclusion

prevents relitigation of wrong decisions just as much as right ones.” B & B Hardware, Inc., 575

U.S. at 157 (internal quotation marks omitted); see also Canonsburg Gen. Hosp., 807 F.3d at 306

7 To the extent that the Union attaches significance to the fact that “[t]he Second Circuit did not render its decision affirming Judge Forrest’s decision until approximately five months after the Southern System Board issued its decision and award,” Pl. Opp. Supp. Br. 4, that does not alter the preclusive effect of the Second Circuit’s decision on this Court’s review of the Southern Board’s decision. See, e.g., Wright & Miller, 18 Fed. Prac. & Proc. Juris. § 4404 (3d ed. 2002) (“[T]he first judgment in time establishes preclusion in any other action, no matter which action was filed first.”); U.S. ex rel. Sheldon v. Kettering Health Network, 816 F.3d 399, 416 (6th Cir. 2016) (“[T]he relevant inquiry for res judicata is which action resulted in judgment first, not which action was filed first.”); Giragosian v. Ryan, 547 F.3d 59, 63-65 (1st Cir. 2008) (“[W]hen two actions are pending on the same claim or issue, the first judgment becomes conclusive in the other action, regardless of the order in which the actions were brought.”).

13 (“[E]ven a ‘patently erroneous’ first judgment is insufficient to bar issue preclusion.’” (quoting

Otherson v. Dep’t of Justice, 711 F.2d 267, 273 (D.C. Cir. 1983))). The Union does not identify

any intervening legal precedents that would render the application of preclusion unfair here.

Nor has the Union made “a compelling showing of unfairness” with respect to the

adequacy of its incentives to litigate the question at issue in the earlier litigation. Id. (explaining

that “if there is mutuality of parties in successive litigation, . . . ‘courts should refuse to give the

first judgment preclusive effect on grounds that the party lacked adequate incentive to litigate in

the first proceeding only upon a compelling showing of unfairness’” (quoting Otherson, 711 F.2d

at 277) (emphasis in original)). In opposing the Company’s motion to compel arbitration of the

Southern Grievance, the Union had every incentive to argue that the grievance was not

arbitrable; doing so successfully would have defeated the motion. Moreover, “there is no

concern about procedural defects” in the proceedings before Judge Forrest or the Second Circuit.

Id. Accordingly, the Court finds that giving preclusive effect to the Second Circuit’s decision

does not work a basic unfairness to the Union.

Finding that all three elements of issue preclusion met, the Court concludes that it must

give preclusive effect to the Second Circuit’s holding that the Southern CBA permits the

Company to submit grievances to arbitration. Accordingly, it may not vacate the Southern

Board’s decision on the ground that the management-initiated grievance was not arbitrable.

2. The Board’s Decision on the Merits

With respect to the merits of the underlying contractual dispute, the Board concluded that

the Union had breached the Southern CBA by refusing to engage in JCBA or ISL negotiations.

Op. & Aw. 22. The Southern CBA provides that

[i]n the event of a merger, this Agreement shall be merged with the merging air carrier’s crewmember collective bargaining agreement, if any; if such merged

14 agreement is not completed within nine (9) months from the date an integrated Master Seniority List is submitted to the surviving entity, the parties shall submit all outstanding issues to binding interest arbitration.

Southern CBA § 1.B.3. The Board concluded that the announced merger between

Southern and Atlas was sufficiently far along such that the Union was obligated—under

the terms of Section 1.B.3—to participate in JCBA negotiations, “including the germinal

step of producing an ISL.” Op. & Aw. 18-19, 22.

The Union first alleges that the Board’s finding on this score should be vacated because

“despite abundant evidence that Southern and Atlas had not merged into ‘one unified corporate

entity,’ as required under Section 1.B.2 of the Southern CBA, Arbitrator Bloch sustained the

Southern Grievance.” Compl. ¶ 25. The Court’s inquiry with respect to this challenge is “is not

whether the arbitrator’s decision is wrong on the merits, but whether his decision draws its

essence from the parties’ CBA.” U.S. Postal Serv. v. Am. Postal Workers Union, 553 F.3d 686,

693 (D.C. Cir. 2009).

The Board’s reasoning shows that it was interpreting the contractual term “merger,”

which the CBA defined to “refer to a transaction in which the functional departments of the

Company (e.g., operations, marketing, finance, human resources, etc.) are integrated with those

of another certificated air carrier employing crewmembers, and in such a manner that only one

unified corporate entity remains.” Southern CBA § 1.B.2. The Board rejected the Union’s

reading of the contractual phrase “are integrated” to mean “fully and finally integrated.” Op. &

Aw. 18. The Board concluded—in light of the fact that “[s]ubsection B.3 speaks to a scenario

wherein the process of achieving an integrated seniority list and a joint CBA are part of a

continuum in completing the desired unified corporate entity”—that the CBA did not require

“the necessary steps of combining the pilot workforce [to] await finalization of all other

15 elements.” Id. at 18-19. And, based on that reading of the CBA—as well as evidence that all

functional departments had been integrated and that Atlas and Southern had adopted the same

Flight Operations Manual, non-pilot training programs, employment policies and handbook,

financial systems and process, IT systems, and operating systems—the Board concluded that a

“merger” was sufficiently in place. There is no basis for finding that the Board “stray[ed] from

interpretation and application of the agreement” in so concluding. Major League Baseball

Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001).

The Union also challenges the Board’s conclusion that the parties were not required to

initiate and complete RLA § 6 bargaining prior to merging the two CBAs. Compl. ¶ 39; Op. &

Aw. 19-22. Under Section 27 of the operative CBA, the CBA was set to “renew itself without

change” after November 6, 2016, “unless written notice by either party of intended change is

served in accordance with [RLA] Section 6 . . . , no more than three hundred and sixty-five (365)

days prior to November 6, 2016.” Southern CBA § 27.A. Section 27 outlined a progressive

dispute resolution process, including six months of direct negotiations, followed by expedited

facilitated negotiations, and, if necessary, arbitration before the National Mediation Board. Id.

§§ 27.B-C.

The Union argued that the processes outlined in Sections 27 and 1.B.3 were intended to

operate in tandem: Southern and the Union were required to first exhaust the RLA § 6

negotiations processes contemplated by Section 27 of the CBA before the parties could proceed

to the bargaining schedule and dispute settlement mechanism agreed to in Section 1.B.3. Op. &

Aw. 21. The Board, drawing a distinction between the processes for negotiating a new Southern-

IBT CBA and a joint CBA of two merged companies, rejected the Union’s reading. Id. at 21-22.

The Board concluded that the nine-month timetable and potential interest arbitration set forth in

16 Section 1 was the only procedure “directly applicable to, and controlling of, bargaining

surrounding a new, unrelated JCBA.” Id.

The Union has not shown that the Board’s decision on this score did not “draw[] its

essence from the parties’ CBA.” U.S. Postal Serv., 553 F.3d at 693. The Board evaluated the

structure of the CBA when it concluded that Section 1 was the only provision that applied

directly to the situation at hand. See generally RadLAX Gateway Hotel, LLC v. Amalgamated

Bank, 566 U.S. 639, 645 (2012) (“[W]here general and specific authorizations exist side-by-side,

the general/specific canon avoids rendering superfluous a specific provision that is swallowed by

the general one.”). Choosing between two competing interpretations of contractual provisions is

precisely the type of dispute that the parties agreed to submit to arbitration; “so far as the

arbitrator’s decision concerns construction of the contract, the courts have no business overruling

him because their interpretation of the contract is different from his.” United Steelworkers of

Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 599 (1960).

B. Challenges to the Board’s Remedy

The Union also raises several challenges the specific remedy that the Board imposed—a

45-day deadline for the Union to produce an ISL. See Op. & Aw. 23.

1. Count II: Whether the Remedy Drew Its Essence From the CBA

Although arbitrators are given substantial flexibility in crafting remedies for contractual

violations, an arbitral “award is legitimate only so long as it draws its essence from the collective

bargaining agreement.” Enter. Wheel, 363 U.S. at 597. The Union has not shown that the

Board’s remedy failed to draw its essence from the Southern CBA.

To the extent that the Union’s argument is premised on the fact that the Southern CBA

does not expressly specify any particular “timeframe on the commencement, duration, or

17 endpoint of the seniority integration process,” Pl. Opp. 5, that alone is an insufficient basis for

vacating the Board’s decision. Relying on mandatory language in the merger provisions, see,

e.g., Southern CBA § 1.B.2 (“In the event of a merger . . . , there shall be an integration of the

two crewmember groups . . . .” (emphasis added)); id. § 1.B.3 (“In the event of a merger, this

Agreement shall be merged with the merging air carrier’s crewmember collective bargaining

agreement, if any . . . .” (emphasis added)), the Board concluded the CBA made “participation in

the process of merging . . . mandatory,” Op. & Aw. 22. Although the Board acknowledged that

this conclusion “d[id] not answer the question of ‘when?,’” it proceeded from the “premise

codified in Sections 1.B.2 and 3—that the merger process encompasses the work of both

parties”—to conclude that the parties “share[d] a current obligation of joint cooperation,” which

encompassed an “expectation of timely performance.” Id.

The fact that the CBA did not define timely performance does not mean that the Board

exceeded its authority in setting a specific deadline for the Union’s compliance with its

obligations under Section 1. See generally Nat’l Postal Mail Handlers Union v. Am. Postal

Workers Union, 589 F.3d 437, 443 (D.C. Cir. 2009) (“The fact that an arbitrator relies on a

substantive background principle of law or an established canon of construction—and does not

follow the plain text of a contract—does not automatically mean the arbitrator has gone rogue.”).

Given the “delay inspired by the Union’s misapprehension of the contractual requirements” and

the “recognition that the workforces are relatively small—some 2,000 pilots,” the Board

concluded that 45 days was a reasonable timeframe for the Union’s production of an ISL. Op. &

Aw. 23. That conclusion falls within the substantial “flexibility” given to arbitrators “when it

comes to formulating remedies.” Enter. Wheel, 363 U.S. at 597. Accordingly, the Court

18 concludes that the complaint does not plausibly allege that the Board exceeded its authority in

imposing a 45-day deadline for the Union’s submission of an ISL.

The Union also alleges that remedy was unlawful because it “appli[ed] to Atlas-Polar

pilots who are covered under a separate bargaining agreement, and pertain[ed] to a matter subject

to a separate System Board’s jurisdiction.” Compl. ¶ 41. 8 Both the Southern CBA and Atlas

CBA contained provisions that obligated the Union to present an ISL and participate in JCBA

negotiations upon certain triggering events; both boards were directed to make an “independent

determination” as to whether such triggering events had occurred under the respective CBAs.

Atlas Air, 943 F.3d at 585. Complying with that directive, the Southern Board ordered only the

Southern pilots—through the Union—to present an ISL to Southern within 45 days and to

participate in subsequent JCBA negotiations, and, if necessary, interest arbitration.

Nothing in the Southern Board’s decision purports to bind Atlas pilots. See id. (“Nothing

in the process of interpreting the provisions of the two collective bargaining agreements purports

to bind Atlas or Southern pilots to the terms of another existing collective bargaining

agreement.”). The fact that the creation of an integrated seniority list may, as a practical matter,

require Atlas pilots’ participation does not mean that the Southern Board exceeded its authority

by imposing a 45-day deadline for the Southern pilots to present one to Southern. 9 See

8 Count V alleges that “[t]he Union, as representative of the Atlas-Polar pilots, and the Atlas-Polar Pilots are not subject to the jurisdiction of the Southern System Board of Adjustment and the Southern Decision does not apply to them with respect to their obligations under the Atlas-Polar CBA.” Compl. ¶ 52. The Court sees no substantial difference between the Union’s allegations in Count II and Count V so will consider them together. 9 The Southern CBA does not mandate any procedure for the creation of an ISL, and there was “no evidence in the record” before Arbitrator Bloch as to “how long it will take to generate the ISL,” although “[t]he Union . . . did suggest it could be done relatively quickly. Op. & Aw. 23 & n.42. There was nothing in the record to suggest that the creation of an ISL would

19 Arrowhead Glob. Sols., Inc. v. Datapath, Inc., 166 F. App’x 39, 45 (4th Cir. 2006) (The fact that

a party’s compliance with an arbitral award “may, as a practical matter, have an incidental effect

on other parties . . . does not prevent the arbitrators from exercising the power that they do have

to [issue such relief].”). The Atlas pilots remain free to contest their obligations under the

merger provisions of their own CBA 10 and to litigate any objections to an ISL or JCBA before

the Atlas Board. Accordingly, the Court concludes that the Award did not exceed the Southern

Board’s authority under the Southern CBA.

2. Counts III and IV: The Remedy’s Compliance with Federal Law

a. The RLA

The Union also alleges that the Board’s decision violates various provisions in the RLA,

including 45 U.S.C. §§ 152, 156 & 184. See Compl. ¶ 45. 11 None of these provisions provides a

basis for vacating the Board’s decision.

45 U.S.C. § 184 provides that “[i]t shall be the duty of every carrier and of its

employees . . . to establish a board of adjustment of jurisdiction not exceeding the jurisdiction

which may be lawfully exercised by system, group, or regional boards of adjustment, under the

authority of section 153 of this title.” To the extent that the Union’s argument is that the

require protracted negotiations between Southern and Atlas pilots. Indeed, the record before the Atlas Board showed that the Union had a past practice for the integration of seniority lists that was potentially as simple as applying a date-of-hire approach. See Def. Mot. to Dismiss at 20, Int’l Bhd. of Teamsters v. Atlas Air, Inc., No. 19-cv-2723 (D.D.C. Oct. 11, 2019), ECF No. 7. 10 At the time of the Southern Board’s decision, Atlas’s separate grievance against the Union was pending before the Atlas Board. It was later granted in August 2019. 11 Count III alleges that “[t]he Award of Arbitrator Bloch fails to comply with, and violates the requirements of the Railway Labor Act.” Compl. ¶ 43. To the extent that Count III alleges the same violations of the RLA as Count IV, it is dismissed as duplicative. To the extent that Count III alleges any violations independent of the claims in Counts I, II, and IV, it is dismissed as conclusory. See Iqbal, 556 U.S. at 678.

20 Southern Board’s decision usurps the jurisdiction of the Atlas Board, the Court has already

explained how that contention fails.

Nor does the complaint plausibly allege a violation of the status quo provisions of the

RLA. The RLA prohibits airline carriers from “chang[ing] 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 or in section 156 of this title.” 45 U.S.C. § 152 Seventh

(emphasis added).

To the extent that the Union’s argument is that the Board’s decision effects “change[s]

[in] the rates of pay, rules, or working conditions” of Southern pilots, the Union has not shown

that such changes would be effected in a “manner” other than one “prescribed” in the Southern

CBA. Id. As the Court has explained, the Board permissibly held that the expedited JCBA

negotiations and interest arbitration procedure mandated in the event of a “merger” by Section 1

of the Southern CBA displaces the prolonged RLA Section 6 negotiations procedure

contemplated by Section 27 of the CBA. Holding the Union to its obligations under Section 1 of

the CBA to present an ISL and negotiate a JCBA—in lieu of RLA Section 6 negotiations—does

not run afoul of the status quo provisions of the RLA. See, e.g., Air Line Pilots Ass’n v. Alaska

Airlines, Inc., No. C05-0897L, 2005 WL 2898140, at *1 (W.D. Wash. Oct. 28, 2005) (“The

Railway Labor Act allows parties to follow their own contractually negotiated procedures for

amending their collective bargaining agreements in lieu of the lengthy procedures set forth in the

statute.” (citations omitted)).

To the extent that the Union’s argument is that the Southern Board’s decision

impermissibly affects the “rates of pay, rules, or working conditions” of Atlas pilots, the Union

has not shown how it does so. As Southern points out, the terms of the Award only compel the

21 Union to provide Southern with an ISL (and to thereafter commence negotiations for a JCBA).

Whether Atlas and the Union agreed under the Atlas CBA to participate in expedited merger

procedures in lieu of RLA Section 6 is a separate question that was to be determined (and was

later resolved in the affirmative) by the Atlas Board. The Southern Board did not purport to

resolve that question and its remedy does not have the effect of doing so. The Union’s RLA-

based allegations thus provide no basis for vacating the Board’s decision. 12

b. Duty of Fair Representation Under the NLRA

The Union also alleges that the Southern Board’s decision “subject[s] [it] to potential

liability for breaching its duty of fair representation to the Atlas-Polar pilots.” Compl. ¶ 47; see

Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 44 (1998) (“When a labor organization has

been selected as the exclusive representative of the employees in a bargaining unit, it has a duty,

implied from its status under § 9(a) of the NLRA as the exclusive representative of the

employees in the unit, to represent all members fairly.”).

The Union does not explain how its compliance with the Southern Board’s order to

present an ISL in accordance with the Southern CBA makes its conduct toward Atlas pilots

“arbitrary, discriminatory, or [taken] in bad faith.” Id. (citing Vaca v. Sipes, 386 U.S. 171, 190

(1967)). Airline mergers frequently require a balancing of competing interests between two pilot

groups, and courts have been reluctant to hold unions liable for violations of the duty of fair

12 The Complaint also contains a barebones allegation that the Award “violates the due process rights” of the Union and the Southern and Atlas pilots. Compl. ¶¶ 39, 41. “Courts of Appeals have divided on whether [the RLA] precludes judicial review of NRAB proceedings for due process violations,” Union Pac. R. Co. v. Bhd. of Locomotive Engineers & Trainmen Gen. Comm. of Adjustment, Cent. Region, 558 U.S. 67, 75 (2009), and the D.C. Circuit has not yet weighed in. The Court need not reach this question, however, because the complaint contains no facts to support the Union’s conclusory due process allegation. See Iqbal, 556 U.S. at 678.

22 representation under such circumstances. See, e.g., Cunningham v. Air Line Pilots Ass’n, Int’l,

769 F.3d 539, 542-43 (7th Cir. 2014) (finding that union did not breach duty of fair

representation by negotiating CBA with employer airline carrier regarding longevity of pilots

following employer’s merger with another carrier); cf. Air Line Pilots Ass’n, Int’l v. O’Neill,

499 U.S. 65, 81 (1991) (holding that “[a] rational compromise on the initial allocation of the

positions [between striking and working pilots] was not invidious ‘discrimination’ of the kind

prohibited by the duty of fair representation”). 13 Nothing in the Award obligates the Union to

favor one pilot group over another or purports to set the actual terms of the JCBA. The Court

thus concludes that the Southern Board’s decision was not inconsistent with the Union’s

statutory duty of fair representation to either pilot group. 14

C. Injunctive Relief

In addition to asking the Court to vacate the Opinion and Award, the Complaint also

seeks preliminary and permanent injunctive relief to prevent Southern from enforcing it. The

complaint does not identify any independent basis for such injunctive relief apart from its

allegations why the Court should vacate the Board’s decision. Because the Court has concluded

that those allegations do not have merit, the Court will deny the requested injunctive relief.

13 This case can be distinguished from Bernard v. Air Line Pilots Ass’n, Int’l, AFL-CIO, 873 F.2d 213 (9th Cir. 1989), where the Ninth Circuit held that a union breached its duty of fair representation to a pilot group by refusing to permit them to participate in negotiations with the Company after a merger and by not complying with its own merger policy for merger with union-represented groups. See id. at 216. The Complaint does not allege that the Award compels the Union to do either. 14 In any event, the Union does not explain how an ex ante risk of breaching its duty of fair representation under the NLRA provides a basis for vacating an arbitration award issued pursuant to the RLA.

23 IV. Conclusion

For the foregoing reasons, the Court dismisses the Plaintiffs’ petition to vacate the

arbitration award. A separate order accompanies this memorandum opinion.

CHRISTOPHER R. COOPER Date: January 28, 2020 United States District Judge