Professional Airline Flight Control Association v. Spirit Airlines, Inc.

• Court: Court of Appeals for the Eleventh Circuit
• Decided: March 8, 2023
• Docket: 22-11341
• Status: Published

Opinion

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[PUBLISH] In the United States Court of Appeals For the Eleventh Circuit

____________________

No. 22-11341 ____________________

PROFESSIONAL AIRLINE FLIGHT CONTROL ASSOCIATION, Plaintiff-Appellant, versus SPIRIT AIRLINES, INC.,

Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 0:21-cv-60396-RKA ____________________ USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 2 of 15

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Before WILLIAM PRYOR, Chief Judge, MARCUS, Circuit Judge, and MIZELLE,∗ District Judge. WILLIAM PRYOR, Chief Judge: This appeal requires us to decide whether the district court had subject-matter jurisdiction over a labor dispute between Spirit Airlines and the union that represents Spirit’s flight dispatch offic- ers. The Railway Labor Act, 45 U.S.C. § 151 et seq., divides labor disputes into two categories: disputes over the interpretation of an existing agreement are “minor” and resolved exclusively through binding arbitration, and disputes over proposed changes to an agreement or over a new agreement are “major” and addressed through bargaining and mediation. During a major dispute, district courts have subject-matter jurisdiction to enjoin violations of the status quo. But district courts ordinarily lack jurisdiction over mi- nor disputes. The Professional Airline Flight Control Association complained that Spirit is attempting to change their agreement. Spirit responded that its unilateral decision to open a second oper- ations control center is permitted by the parties’ agreement. The district court agreed with Spirit that this dispute is minor and dis- missed the action for lack of subject-matter jurisdiction. We affirm.

∗ Honorable Kathryn Kimball Mizelle, United States District Judge for the Middle District of Florida, sitting by designation. USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 3 of 15

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I. BACKGROUND The Professional Airline Flight Control Association serves as the exclusive bargaining representative of the approximately 75 flight dispatch officers employed by Spirit Airlines, Inc. Flight dis- patch officers manage “major flight decisions” such as flight paths, fuel loads, and whether to dispatch flights. Spirit and the union en- tered into a collective bargaining agreement in 2018 that is effective through October 2023. Neither side can amend the agreement ear- lier than 150 days before October 15, 2023. The dispatch officers work at an operations control center in Miramar, Florida, where Spirit is headquartered. In February 2020, Spirit informed the union that because of the threat of hurricanes in Miramar, it intended to move the operations control center to Nashville, Tennessee. Under section 6.D of the collective bargain- ing agreement, the parties began negotiating about moving ex- penses. In September, Spirit informed the union that instead of mov- ing the control center to Nashville, it had decided to keep the Miramar control center and open a second control center in Or- lando, Florida. The parties recommenced bargaining, now regard- ing a wider set of issues, “such as bidding to work in one center or the other, cross-center seniority rights, and cross-center shift trad- ing.” In January 2021, the parties had not reached an agreement, and Spirit informed the union that it would not engage in further negotiations. About a week later, Spirit publicly announced its in- tention to open the second control center in Orlando and to either USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 4 of 15

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transfer some employees there from Miramar or hire new employ- ees. Neither party has made a formal proposal to amend the exist- ing agreement. In February 2021, the union filed suit in the district court. It alleged that Spirit’s decision to open a second control center was an attempt to change the parties’ agreement about conditions of employment, so the dispute was major. And it argued that Spirit was required by the Railway Labor Act to negotiate over the sec- ond control center and to maintain the status quo in the meantime. The union sought injunctive relief. Spirit moved to dismiss the complaint. It argued that the col- lective bargaining agreement permits it to unilaterally decide to open a second control center. It argued that the dispute concerned the interpretation of the existing agreement, not a proposed change to the agreement, which made the labor dispute a minor one over which the district court lacked subject-matter jurisdiction. The dis- trict court ruled that the labor dispute was minor and dismissed the complaint for lack of subject-matter jurisdiction. II. STANDARD OF REVIEW We review issues of both subject-matter jurisdiction and the classification of a dispute as major or minor under the Railway La- bor Act de novo. See Calderon v. Baker Concrete Constr., Inc., 771 F.3d 807, 810 (11th Cir. 2014); CSX Transp., Inc. v. Bhd. of Maint. of Way Emps., 327 F.3d 1309, 1320 (11th Cir. 2003). USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 5 of 15

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III. DISCUSSION The Railway Labor Act, 45 U.S.C. § 151 et seq., was enacted in 1926 “to encourage collective bargaining by railroads and their employees in order to prevent, if possible, wasteful strikes and in- terruptions of interstate commerce,” Detroit & Toledo Shore Line R.R. Co. v. United Transp. Union (Shore Line), 396 U.S. 142, 148 (1969); see 45 U.S.C. § 151a. Congress later amended the Act to govern the airline industry. See 45 U.S.C. §§ 181–88. The Act pro- vides the procedures that carriers and their employees must follow to resolve labor disputes. There are two types of disputes under the Act, and each trig- gers different procedural requirements. See Consol. Rail Corp. v. Ry. Labor Execs.’ Ass’n (Conrail), 491 U.S. 299, 302–04 (1989). Mi- nor disputes are those that concern “a collective agreement already concluded or . . . a situation in which no effort is made to bring about a formal change in terms or to create a new one. The dispute relates either to the meaning or proper application of a particular provision . . . .” Id. at 303 (quoting Elgin, Joliet & E. Ry. Co. v. Bur- ley, 325 U.S. 711, 723 (1945)); see 45 U.S.C. § 152 Sixth (discussing disputes “arising out of grievances or out of the interpretation or application of agreements concerning rates of pay, rules, or work- ing conditions”). Major disputes are about “the formation of collec- tive 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.” Conrail, 491 U.S. at 302 (quoting Burley, USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 6 of 15

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325 U.S. at 723); see 45 U.S.C. § 152 Seventh (discussing changes to employees’ “rates of pay, rules, or working conditions . . . as em- bodied in agreements”). In short, “major disputes seek to create contractual rights, [and] minor disputes to enforce them.” Conrail, 491 U.S. at 302. A minor dispute that the parties cannot resolve is subject to compulsory arbitration before an adjustment board created by the airline and its employees. See id. at 303–04; Whitaker v. Am. Air- lines, 285 F.3d 940, 943–44 (11th Cir. 2002) (explaining the differ- ences between the adjustment boards for railroads and those for airlines); 45 U.S.C. § 184. The adjustment board has exclusive juris- diction over a minor dispute. Conrail, 491 U.S. at 304; see also Pyles v. United Air Lines, Inc., 79 F.3d 1046, 1050 (11th Cir. 1996) (“Con- gress intended that these ‘minor disputes’ be resolved through the grievance procedures of the [Railway Labor Act] rather than in fed- eral court.”). Employees may not strike over a minor dispute, and the parties are ordinarily not required to maintain the status quo during arbitration. CSX, 327 F.3d at 1320. There is a limited excep- tion: district courts may issue a status-quo injunction if needed to preserve the adjustment board’s jurisdiction “by preventing injury so irreparable that a decision of the Board in the unions’ favor would be but an empty victory.” Bhd. of Locomotive Eng’rs v. Mo.-Kan.-Tex. R.R. Co., 363 U.S. 528, 534 (1960). But the Supreme Court has “never recognized” a general right to a status-quo injunc- tion over a minor dispute where the employer does not also seek a strike injunction. Conrail, 491 U.S. at 304. In any event, that USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 7 of 15

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“extremely narrow” ground for an injunction, Int’l Bhd. of Team- sters Local 19 v. Sw. Airlines Co., 875 F.2d 1129, 1136 (5th Cir. 1989), is not relevant to this appeal because the union does not ar- gue that it is entitled to injunctive relief if the dispute is minor. By contrast, when either party seeks to change “agreements affecting rates of pay, rules, or working conditions,” section 6 of the Act requires the party that seeks the change to give 30 days’ written notice to the other party. 45 U.S.C. § 156. The parties then bargain over the proposed change, and either side can request the services of a mediation board. Id. These major-dispute procedures are “purposely long and drawn out,” and the parties must “refrain from altering the status quo . . . while the Act’s remedies [a]re be- ing exhausted.” Shore Line, 396 U.S. at 148–49 (citation omitted); see 45 U.S.C. § 156. And in these cases, federal courts may enjoin a violation of the status quo “without the customary showing of ir- reparable injury.” Conrail, 491 U.S. at 303. When a dispute under the Act “reaches a federal court, [the court’s] central responsibility is that of taxonomist—classifying the dispute as major or minor.” BLET GCA UP, Cent. Region v. Union Pac. R.R. Co., 988 F.3d 409, 413 (7th Cir. 2021) (internal quotation marks and citation omitted). “[A] union will typically claim a dis- pute is major because it is permissible to strike if the carrier insists on implementing a certain policy. Conversely, a carrier will insist the dispute is minor because it can proceed with the policy while the parties” arbitrate. CSX, 327 F.3d at 1320. If either side has filed a section 6 notice proposing to amend an existing agreement or to USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 8 of 15

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establish a new agreement, classification is easy: the dispute is ma- jor. But when neither side has filed a section 6 notice, the issue re- quires more analysis. The distinction “between major and minor disputes does not turn on a case-by-case determination of the importance of the issue presented or the likelihood that it would prompt the exercise of economic self-help.” Conrail, 491 U.S. at 305. Instead, the ques- tion is “whether a claim has been made that the terms of an existing agreement either establish or refute the presence of a right to take the disputed action.” Id. “Where 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’ collec- tive-bargaining agreement. Where, in contrast, the employer’s claims are frivolous or obviously insubstantial, the dispute is ma- jor.” Id. at 307. A party that argues that a dispute is minor—typi- cally the carrier—has only a “light” burden of proof. Id. at 307 (ci- tation omitted). And “if a reasonable doubt exists as to whether the dispute is major or minor, [the courts] will deem it to be minor.” CSX, 327 F.3d at 1321 (citation omitted). This dispute is minor. Spirit’s unilateral decision to open a second control center is arguably justified by the terms of the exist- ing collective bargaining agreement. Even if its contractual-inter- pretation arguments eventually fail on the merits, its arguments are not “frivolous or obviously insubstantial.” See Conrail, 491 U.S. at 307. USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 9 of 15

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The collective bargaining agreement includes a manage- ment-rights provision that states that “[e]xcept as restricted by an express provision of this Agreement, the Company shall retain all rights to manage and operate its business and workforce, including but not limited to the right . . . to transfer operations or part of op- erations.” The union stresses that Spirit has never before operated two control centers. But the right to transfer “part” of operations plausibly includes the right to have two control centers. Although the union argues that the rights “retain[ed]” by the management- rights clause must originate in the Act or in caselaw, Spirit’s argu- ment that it retained the rights it had prior to the dispatch officers’ unionization is not obviously unfounded, so the parties’ disagree- ment about the scope of the management-rights clause does not make this a major dispute. It follows from the management-rights provision that if Spirit has a not-insubstantial argument that there is no express provision that restricts its right to transfer operations in part, its actions are arguably justified under the agreement. Spirit has satisfied its burden. To answer whether there is any express restriction on Spirit’s right to transfer operations, both parties focus on section 6 of the agreement. That section states that “[w]here the Company opts to relocate the dispatch office to a new domicile more than fifty . . . miles from its current location, the parties will meet to dis- cuss and agree upon moving expenses for affected employees.” The union contends that the relocation-expenses provision does not apply here because Spirit is not moving “the” dispatch office. USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 10 of 15

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Spirit, for its part, argues that the use of “opts” in the provision im- plies that it can decide unilaterally whether to relocate its opera- tions and that the requirement that the parties bargain over mov- ing expenses for “affected” employees implies that some employ- ees may be “unaffected”—as would be the case if operations were relocated only in part. Because the management-rights provision reserves the right to transfer operations, in whole or in part, absent an express re- striction on that right, it does not matter for purposes of this appeal whether section 6 of the agreement itself recognizes a right to transfer. That section 6 does not clearly restrict Spirit’s asserted right to open a second control center is enough for Spirit’s position to be arguably justified by the agreement. The union does not iden- tify any other provision that expressly restricts the right to transfer operations. Spirit reasonably contends that the parties “already bar- gained over and reached agreement on Spirit’s right to make uni- lateral changes, including the right to transfer part of its opera- tions.” The Supreme Court has explained that employers and un- ions may bargain for terms “that grant management the power to respond flexibly to changing circumstances.” Conrail, 491 U.S. at 309. Employers are not required “rigidly to maintain the status quo pending arbitration of their right to be flexible.” Id. Regardless of which party’s interpretation of the management-rights provision ultimately prevails, the only question for this Court is whether USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 11 of 15

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Spirit’s position is “frivolous or obviously insubstantial.” See Con- rail, 491 U.S. at 307. It is not. The union next argues that the management-rights provi- sion cannot reserve to Spirit the unilateral right to transfer opera- tions. It contends that the Supreme Court has “explicitly ruled that carriers do not hold a retained right . . . to change employee[s’] work assignments in the absence of an explicit or implied contract provision prohibiting [them] from doing so.” This argument fails. We agree with the district court that the union misreads the precedents it cites. Those precedents concern the scope of the sta- tus-quo requirement during a major dispute, not the threshold ju- risdictional question whether a dispute is major or minor. They have no bearing on our inquiry. The union first points to Shore Line, in which the Supreme Court held that the Act required a railroad to refrain from estab- lishing new work assignments while the parties exhausted the sec- tion 6 procedures. 396 U.S. at 152–53. The Supreme Court held that the status-quo provisions of the Act applied “regardless of the fact that the railroad was not precluded from making these assignments under the existing agreement.” Id. at 154. In this appeal, the union points to that holding to argue that the decision “clearly excludes the existence of ‘retained rights.’” The problem for the union is that in Shore Line the Supreme Court explained that the question before it was “the extent to which the [Act] imposes an obligation upon the parties . . . to USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 12 of 15

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maintain the status quo while the purposely long and drawn out procedures of the Act are exhausted.” Id. at 143 (internal quotation marks and citations omitted). Everyone agreed that the dispute was major and section 6 applied; the only issue was the scope of the status-quo requirement. See id. at 152–53. The Court answered that when the Act’s status-quo requirements are “properly in- voked,” both parties must maintain “actual, objective working con- ditions and practices,” not only those working conditions expressly provided for by agreement. Id. at 153. Shore Line is unlike this ap- peal, in which we must first decide whether the status-quo require- ment has been properly invoked. The union next relies on Order of Railroad Telegraphers v. Chicago & North Western Railway Co., 362 U.S. 330 (1960). There, the railroad sought to close some of its stations. In response, the union notified the railroad, pursuant to section 6 of the Act, that it wanted to negotiate to amend the collective bargaining agreement so that the railroad could not abolish any jobs without the union’s consent. Id. at 332. The railroad argued that it had a managerial prerogative to close the stations and that the union’s request to amend the agreement did not raise a bargainable issue under the Act. Id. at 332, 336. The Supreme Court rejected that argument. Id. at 336. Importantly, the Supreme Court did not hold that no mana- gerial prerogatives exist; it held that the union’s request in that case was not “an attempt to usurp legitimate managerial prerogative,” id. at 336, but instead was an attempt to settle a labor dispute USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 13 of 15

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consistent with the requirements of the Act, id. at 339. And because the union was trying “to change the ‘terms’ of an existing collective bargaining agreement,” that labor dispute was major. Id. at 336; see also id. at 341. Here, by contrast, Spirit has never contended that the dispute is not covered by the Act, and neither party has given a section 6 notice. Finally, the union argues that a later precedent, Pittsburgh & Lake Erie Railroad Co. v. Railway Labor Executives’ Associa- tion, 491 U.S. 490 (1989), “instructs that the holding in Shore Line is not limited only to the breadth of the status quo requirement in disputes where [s]ection 6 has been invoked,” “erod[ing]” any dis- tinction between Shore Line and this appeal. The union contends that “[i]t is of no significance that [s]ection 6 notices had been served in Shore Line, but not here.” But the union misreads the footnote on which it relies. Pittsburgh & Lake Erie explained the reasoning in Shore Line: when a union files a section 6 notice, the status-quo provision applies to all conditions objectively in existence at the time of filing, even if those conditions “otherwise could be changed without vio- lating any agreement.” Pittsburgh & Lake Erie, 491 U.S. at 506. And it “extended the relevant language of [section] 156 to its outer lim- its.” Id. In the footnote on which the union relies, the Court rea- soned that because section 6 of the Act deals with “intended changes in agreements,” one arguable interpretation is that it “would not require the status quo with respect to working condi- tions that have never been the subject of an agreement . . . and that, USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 14 of 15

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if no notice of changes had been served by the union, could be changed by the carrier without any bargaining whatsoever.” Id. at 506 n.15. “Shore Line rejected that construction.” Id. The union reads this footnote to mean that “changes in work conditions not addressed in the agreement” are also “within the scope of the bargaining and status quo requirements,” even when no party has filed a section 6 notice. That reading is plainly incorrect. Shore Line, as explained in Pittsburgh & Lake Erie, con- cerned the scope of the status-quo provision in a major dispute, not the classification of a dispute as major or minor. Pittsburgh & Lake Erie explained that the status-quo provi- sion applies whenever the bargaining requirement applies, even when the carrier’s action, considered alone, would not trigger the bargaining requirement. But there still must be some “intended change in agreements affecting rates of pay, rules, or working con- ditions” for a labor dispute to trigger the bargaining requirement in the first place—such as a section 6 notice from the union. 45 U.S.C. § 156 (emphasis added). Pittsburgh & Lake Erie explained that Shore Line extended the status-quo provision to “conditions ‘objectively’ in existence when the union’s notice was served . . . that otherwise could be changed without violating any agree- ment.” Pittsburgh & Lake Erie, 491 U.S. at 506 (emphasis added). This appeal presents the “otherwise” scenario Pittsburgh & Lake Erie envisioned. The union has not filed a section 6 notice of a proposed change to the agreement, and Spirit has reasonably ar- gued that its action does not violate the agreement. The bargaining USCA11 Case: 22-11341 Document: 26-1 Date Filed: 03/08/2023 Page: 15 of 15

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requirement was not triggered. Shore Line’s holding on the scope of the status-quo provision during bargaining is inapplicable. IV. CONCLUSION We AFFIRM the judgment dismissing the action for lack of subject-matter jurisdiction.