Northwest Airlines, Inc. v. Phillips

758 F. Supp. 2d 786, 50 Employee Benefits Cas. (BNA) 2077, 189 L.R.R.M. (BNA) 3013, 2010 U.S. Dist. LEXIS 135521, 111 Fair Empl. Prac. Cas. (BNA) 1034, 2010 WL 5356496
CourtDistrict Court, D. Minnesota
DecidedDecember 21, 2010
DocketCivil 07-4803 (JNE/JJG)
StatusPublished
Cited by2 cases

This text of 758 F. Supp. 2d 786 (Northwest Airlines, Inc. v. Phillips) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northwest Airlines, Inc. v. Phillips, 758 F. Supp. 2d 786, 50 Employee Benefits Cas. (BNA) 2077, 189 L.R.R.M. (BNA) 3013, 2010 U.S. Dist. LEXIS 135521, 111 Fair Empl. Prac. Cas. (BNA) 1034, 2010 WL 5356496 (mnd 2010).

Opinion

ORDER

JOAN N. ERICKSEN, District Judge.

This case is before the Court on the motion of the Air Line Pilots Association (ALPA) for summary judgment on the sole remaining counterclaim of a class of pilots (Pilots) for breach of the duty of fair representation (DFR). For the reasons set forth below, the Court grants ALPA’s motion.

I. BACKGROUND

On January 26, 2009, 594 F.Supp.2d 1075 (D.Minn.2009), the Court granted partial summary judgment for Northwest Airlines, Inc. (Northwest), and ALPA. The Court concluded that the Money Purchase Plan for Pilot Employees (MP3), a target benefit plan, did not violate either the Age Discrimination in Employment Act or the Employee Retirement Income Security Act (ERISA), and that ERISA preempted the Pilots’ state-law claims. On May 7, 2009, 2009 WL 1287497, the Court granted ALPA’s motion for judgment on the pleadings as to the Pilots’ DFR claims based on arbitrary or bad faith conduct. The sole remaining claim is the Pilots’ claim that ALPA’s decision to adopt the MP3 was made out of discriminatory animus toward the “older and more senior pilots” in violation of the DFR. 1 Having detailed the facts of this case in orders dated January 26, 2009, and May 7, 2009, the Court reviews them briefly here.

*789 In the wake of September 11, 2001, Northwest, like the entire airline industry, faced tremendous financial difficulty. On September 14, 2005, confronted with increasing losses, Northwest filed for bankruptcy. Northwest and ALPA agreed to freeze the Northwest Airlines Pension Plan for Pilot Employees and agreed that, going forward, Northwest would contribute a percentage of pilot earnings annually to a Retirement Savings Plan. Under the agreement, each pilot would receive benefits based on his pay, but ALPA had the right to determine an alternative method of allocation. The pilot membership ratified this agreement on May 3, 2006.

On April 26, 2006, the Master Executive Council (MEC), the member-elected representatives of ALPA at Northwest, unanimously resolved to adopt a target plan to distribute Northwest’s retirement contributions. The MEC informed the membership and posted the news of its decision on its website on April 27, six days before voting on the agreement closed. Throughout 2006 and 2007, the MEC continued to consider the exact actuarial assumptions underlying the target plan and negotiated with Northwest for the adoption of the plan. On December 11, 2007, Northwest and ALPA implemented the MP3. Under the MP3, a “gross target benefit” is calculated for each pilot. Each pilot receives an amount based on the difference between the pilot’s gross target benefit and his frozen pension plan benefit. A pilot whose frozen pension plan benefit exceeds his gross target benefit does not receive MP3 contributions; he receives only his frozen pension benefit. A pilot whose gross target benefit exceeds his frozen pension plan benefit will receive contributions under the MP3, but in some cases the contributions will be less than they would have been under the pro-rata to pay plan.

The MEC’s resolution dated April 26 explained its decision: given the “limited resources available,” and the fact that “continued funding of the frozen Pension Plan is an application of resources which provides greater benefits to longer-service pilots than to shorter-service pilots,” resources should be used to create “to the maximum extent possible, parity of retirement expectations among all pilots.” Without a target plan, ALPA predicted that the combination of the pro-rata to pay plan and the frozen Pension Plan would have resulted in a wide disparity in retirement benefits among active pilots ranging from 30% to 75% of their Final Average Earnings.

II. DISCUSSION

Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A party asserting that a fact cannot be or is genuinely disputed” must support the assertion by “citing to particular parts of materials in the record,” “showing that the materials cited do not establish the absence or presence of a genuine dispute,” or “showing ... that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c)(1)(A)-(B). “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3). In determining whether summary judgment is appropriate, a court must look at the record and any inferences to be drawn from it in the light most favorable to the party opposing the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Though the language of the Pilots’ motion echoes their already-dismissed Age Discrimination in Employment Act claims, the DFR discrimination claim is reviewed under a different standard; that *790 of the Railway Labor Act, 45 U.S.C. §§ 151-164 (2006). Under the Railway Labor Act, an exclusive bargaining agent is obligated to “serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct.” Vaca v. Sipes, 386 U.S. 171, 177, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). In general, the court’s review of union decision-making must be highly deferential:

Congress did not intend judicial review of a union’s performance to permit the court to substitute its own view of the proper bargain for that reached by the union. Rather, Congress envisioned the relationship between the courts and labor unions as similar to that between the courts and the legislature. Any substantive examination of a union’s performance, therefore, must be highly deferential, recognizing the wide latitude that negotiators need for the effective performance of their bargaining responsibilities.

Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65, 78, 111 S.Ct. 1127, 113 L.Ed.2d 51 (1991); see Thompson v. United Transp. Union, 588 F.3d 568, 572 (8th Cir.2009). Under this standard, “[discriminatory conduct occurs when the union fails to serve ‘the interests of all members without hostility or discrimination toward any.’ ” Thompson, 588 F.3d at 572 (citing Vaca, 386 U.S. at 177, 87 S.Ct. 903). To show discrimination, individuals must “adduce substantial evidence of discrimination that is intentional, severe, and unrelated to legitimate union objectives.” Amalgamated Ass’n of Street, Electric Ry. and Motor Coach Emps.

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758 F. Supp. 2d 786, 50 Employee Benefits Cas. (BNA) 2077, 189 L.R.R.M. (BNA) 3013, 2010 U.S. Dist. LEXIS 135521, 111 Fair Empl. Prac. Cas. (BNA) 1034, 2010 WL 5356496, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northwest-airlines-inc-v-phillips-mnd-2010.