Spellacy v. Airline Pilots Ass'n-International

156 F.3d 120
CourtCourt of Appeals for the Second Circuit
DecidedAugust 12, 1998
DocketNo. 97-7666
StatusPublished
Cited by73 cases

This text of 156 F.3d 120 (Spellacy v. Airline Pilots Ass'n-International) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spellacy v. Airline Pilots Ass'n-International, 156 F.3d 120 (2d Cir. 1998).

Opinion

BACKGROUND

McLAUGHLIN, Circuit Judge.

Pan American Airlines (“Pan Am”) went bankrupt. Plaintiffs-Appellants are 88 of the approximately 1600 pilots who used to fly for Pan Am. These pilots were represented by the Airline Pilots Association-International (“ALPA”), the certified collective bargaining representative for pilots employed by all the major airlines operating in the United States. Under ALPA’s union structure, the pilots for each airline elect a Master Executive Committee (“MEC”), of pilots. Subject to ALPA’s oversight, the MEC makes the collective bargaining decisions for the union in negotiations between the airline and its pilots.

The MEC for Pan Am pilots had three officers and four elected representatives. At all times relevant to this appeal, Richard Burke, Robert Anderson, and Gordon Little-field were, respectively, the Chairman, Vice-Chairman and Secretary-Treasurer of the MEC. The four elected representatives were Sigfried Hauck, Kenneth Lankford, Robert Bible, and G. Hart Kelley.

Pan Am occupies a venerable position in the history of American aviation. In the late 1960’s, however, Pan Am ran into financial turbulence. After struggling to survive for two decades, Pan Am began to sell assets. In 1985, it sold its Pacific routes to United Airlines (“United”). In late 1990, Pan Am sold additional aircraft and routes to United. However, these asset sales merely delayed the inevitable. In January 1991, Pan Am filed for reorganization under Chapter 11 of the bankruptcy laws.

While in reorganization, Pan Am continued to search for potential buyers of its remaining assets. In early July 1991, the MEC informed Pan Am pilots that Delta Airlines (“Delta”) had agreed to buy Pan Am’s North Atlantic routes and “shuttle” operation. Under the proposed Asset Purchase Agreement (“APA”), Pan Am would sell its entire fleet of Airbus 310 (“A-310”) aircraft and up to 19 of its Boeing 727 (“B-727”) aircraft to Delta. In return, Delta would sponsor and fund Pan Am’s reorganization as a going airline, purchase a 45% equity stake in Pan Am, and establish a marketing alliance with Pan Am.

[124]*124Pan Am also agreed to supply Delta with nearly 800 pilots who were “current and qualified” on those two planes. A “current and qualified” pilot is one who is trained to fly a particular airplane and has made three takeoffs and landings on that plane within the last ninety days. Delta needed approximately 494 qualified pilots for the A-310 aircraft and 280 for the B-727. Since Pan Am did not have enough “current and qualified” pilots to satisfy Delta’s needs, it needed to train some of its pilots for transfer to Delta. Pan Am and Delta agreed that the transfer of pilots and assets would occur no later than November 1,1991.

On July 20, 1991, Pan Am’s crew chief, Vito Cutrune, presented a proposal to Pan Am, Delta, and the MEC that would allow Pan Am to offer pilot training on a strict seniority basis. He concluded that Pan Am had enough money and flight simulator capacity to complete 120 “long course” training programs for the A-310 and 22 long course programs for the B-727. Long course programs were designed for pilots who had never before flown the A-310 or B-727. Accordingly, since every Pan Am pilot would be eligible for training under Cutrune’s proposal, the training would be offered on a strict seniority basis.

The long course training proposal was consistent with the seniority-based methodology by which most Pan Am pilot assignments were determined. The Phot Working Agreement (“PWA”), the collective bargaining agreement between Pan Am and its pilots, provided that whenever Pan Am projected a major change or “shift” in its flight operations, it announced the change to the pilots and issued a “proffer.” See PWA §§ 3, 5. The new flight positions were posted in the proffer and pilots had an opportunity to “bid” for these positions. Pan Am then issued “awards” to the pilots, based on their seniority. See id.

On July 24, 1991, as Pan Am and Delta were finalizing the APA, Pan Am rejected the strict seniority plan. Pan Am explained that it could not accept the long course proposal because: (1) there was insufficient time to train the requisite number of pilots before Delta’s deadline; and (2) even if the training could be accomplished in time, training by seniority would decimate the ranks of senior Pan Am captains needed to continue Pan Am’s operations after the sale.

The MEC sought to accommodate Pan Am by presenting an alternate plan, entitled the “System Seniority Transfer Plan.” Under this plan, pilots could gain eligibility for transfer by training after the November 1, 1991 deadline set by Pan Am and Delta. Upon completion of their training, these pilots would transfer to Delta, thereby bumping to the bottom of Delta’s seniority list junior pilots who had transferred on November 1,1991. On July 31,1991, Delta rejected the System Seniority Transfer Plan, explaining that training after November 1, 1991 conflicted with its plan for a “turn-key” operation and would result in too many senior pilots being hired, adversely affecting the normal Delta cross-section and profile of airmen.

On August 2, 1991, the MEC met to discuss how pilots would be trained for transfer to Delta. After debating various training and transfer plans, it presented a new plan calling for “short course” training on the A-310. Short course training is a refresher course for pilots who had once flown, but are no longer qualified to fly, a particular airplane. Under the short course plan, only pilots who had previously flown the A-310 were eligible for training. While few Pan Am pilots had experience flying the A-310, four members of the MEC had flown this plane.

The short course plan was supported by Cutrune, Pan Am’s crew chief, who told Pan Am executives that his original training proposal, long course training, was simply not feasible. He said that under his “revised analysis,” the necessary simulator time for long course training on the A-310 could not be arranged before the date of sale. Cu-trune explained, however, that the short course plan could be accomplished. On August 8, 1991, Pan Am and Delta decided to adopt the short course plan for the A-310.

Rather than informing the pilots that a training plan had now been adopted, the MEC told the pilots that Delta was still open [125]*125to alternative plans. They assured the pilots that Delta would listen to any plan designed to preserve the integrity of the seniority system. The MEC also told the pilots that, rather than deciding which of the competing plans it would endorse, ALPA and the MEC would let an arbitrator decide which plan best served the union’s "interests. However, since Pan Am and ALPA had agreed in principle on a plan governing retraining on the A-310, the only issue presented to the arbitrator was the B-727 training. The arbitrator recommended a training plan for the B-727 based on strict seniority.

Following the arbitrator’s decision, ALPA, Pan Am, and Delta entered into a formal agreement defining the training for Pan Am pilots. ALPA agreed that the short course training would be used for the A-310, but a strict seniority system would be used to select pilots for B-727 training. The Bankruptcy Court approved this agreement. When Pan Am sold the planes and routes in November 1991, six of the seven MEC members were on the list of pilots to be transferred to Delta. Shortly thereafter, Pan Am went out of business.

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156 F.3d 120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spellacy-v-airline-pilots-assn-international-ca2-1998.