United States District Court, N.D. Georgia, Atlanta Division
CHRISTOPHER P. JAMISON, et al., Plaintiff,
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL and LEE MOAK, as President of Air Line Pilots Association, International, Defendants.
RICHARD W. STORY, District Judge.
This case comes before the Court on Defendants' Motion for Summary Judgment . After reviewing the record, the Court enters the following Order.
This case arises out of the merger between AirTran Airlines ("Airtran") and Southwest Airlines ("Southwest"). The merger precipitated integration of the two airlines' pilot seniority lists. The parties agree that relative ranking on a seniority list is critically important to a pilot's employment conditions and opportunities. This suit arises specifically out of the integration process of AirTran and Southwest's pilot seniority lists.
Plaintiffs are pilots who were employed by AirTran at the time of the merger with Southwest. (Compl., Dkt.  ¶ 3.) In September 2010, Southwest announced an agreement to purchase AirTran's assets and equity. (Def.'s SOMF, Dkt. [21-2] ¶ 6.) In the merger, all AirTran pilots, including Plaintiffs, were represented by Defendant Air Line Pilots Association, International ("ALPA") while the Southwest pilots were represented by Southwest Pilots Association ("SWAPA"). (Id. ¶¶ 7-8.) Plaintiffs bring their claims in this action based on ALPA's representation during the merger negotiations.
The AirTran pilots' terms and conditions of employment were circumscribed by a collective bargaining agreement between AirTran and ALPA (the "AirTran Collective Bargaining Agreement"). (Id. ¶ 8.) Under the terms of the AirTran Collective Bargaining Agreement, a pilot's work opportunities-including domicile location, flying schedules, and furloughs-are determined by his seniority ranking. (Id.) The AirTran Collective Bargaining Agreement also provides that ALPA is governed by a Master Executive Council ("MEC"), comprised of AirTran pilots elected by the AirTran pilot membership. (Id. ¶ 12.) In addition, the AirTran Collective Bargaining Agreement states that the agreement shall bind any successor. (Id. ¶ 9.) When Southwest and AirTran merged, Southwest agreed to be bound by the AirTran Collective Bargaining Agreement. (Id. ¶ 10.)
Concurrent with the corporate merger negotiations and transactions, in the fall of 2010 ALPA and SWAPA entered into negotiations to combine the AirTran and Southwest pilot seniority lists. (Id. ¶¶ 13-14.) ALPA's MEC appointed a Merger Committee (the "AirTran Merger Committee") to act on its behalf in the negotiations. (Id.) Similarly, SWAPA appointed a Merger/Negotiations Committee (the "Southwest Merger Committee"). (Id.)
The AirTran and Southwest Merger Committees reached a "Process Agreement" on April 14, 2011. (Id. ¶ 14.) The Process Agreement provided three avenues for integration of the two seniority lists: (1) negotiations; (2) mediation, if negotiations failed; and (3) arbitration, if both alternatives failed. (Id. ¶ 15.) Southwest, as the acquiring entity, agreed to accept the integrated list created pursuant to the Process Agreement. (Id.)
The two Merger Committees began to negotiate in the spring and summer of 2011, seeking resolution of a "complete agreement" that would be submitted to AirTran and Southwest's pilot memberships for a ratification vote. (Id. ¶ 16.) The governing provisions of AirTran and Southwest's Collective Bargaining Agreements required: first, negotiation by both Merger Committees to reach a tentative agreement; second, consideration and acceptance by the ALPA's MEC and its counterpart, SWAPA's Board of Directors; and third, if both governing bodies approved,  ratification by AirTran and Southwest's pilot groups. (Id. ¶ 17.) Southwest joined ALPA's and SWAPA's Merger Committees in negotiations, and on July 12, 2011 presented a proposed Comprehensive Agreement (the "First Proposed Comprehensive Agreement"), which contained a proposed integrated seniority list and changes to the parties' Collective Bargaining Agreements that included pay raises for the AirTran pilots. (Id. ¶ 19.)
The AirTran Merger Committee presented the First Proposed Comprehensive Agreement to ALPA's MEC. (Id. ¶ 20.) ALPA's MEC informed Southwest that the First Proposed Comprehensive Agreement was unacceptable. (Id.)
Following the informal rejection of the First Proposed Comprehensive Agreement, Southwest and SWAPA requested a meeting with ALPA's MEC and the AirTran Merger Committee. (Id. ¶ 21.) On July 14, 2011 in a meeting held at Southwest's headquarters, Southwest officials presented the First Proposed Comprehensive Agreement in hopes of convincing the AirTran representatives to accept the proposal. (Id. ¶ 22.) Southwest CEO Gary Kelly spoke about the First Proposed Comprehensive Agreement, but the parties disagree about what Kelly said.
Defendants claim that Kelly "expressed (i) a desire to have the pilot group vote on an integration agreement, (ii) concerns with AirTran's Boeing 717 aircraft and possible future fuel cost increases, and (iii) an intent to integrate the two airlines." (Id. ¶¶ 22-23.) Plaintiffs, however, reference additional comments made by Kelly that AirTran representatives interpreted "as threats to [AirTran] pilot job security." (Pls.' Mem. of Law in Opp'n to Defs.' Mot. for Summary J. ("Pls.' Opp'n Mem."), Dkt.  at 12; Pls.' Resp. to Defs.' SOMF, Dkt. [42-1] ¶ 22.) Plaintiffs claim that Kelly made comments regarding: disfavor of the B717, which made up the majority of AirTran's fleet; a possible rescission of the proposal if a deal was not reached quickly; the possibility that a spike in fuel prices could prevent a later offer on these terms; and pay parity, claiming that pay increases for AirTran pilots would only be offered to avoid "labor strife." (Pls.' Opp'n Mem., Dkt.  at 12-13.) Most distressingly to Plaintiffs, Kelly made comments regarding a "Plan B, " or the possibility that the two pilot groups would not be integrated or would only integrate through an arbitrated deal that would be less favorable to AirTran pilots. (Id. at 13; Pls.' Resp. to Defs.' SOMF, Dkt. [42-1] ¶ 22.) Even so, both Plaintiffs and Defendants agree that Kelly's comments overall indicated that he and Southwest were in favor of integration and negotiation.
After the July 14 meeting, Southwest and AirTran's Merger Committees engaged in further negotiations with Southwest, reaching an Agreement in Principle on July 16, 2011 (the "Second Proposed Comprehensive Agreement"). (Defs.' SOMF, Dkt. [21-2] ¶ 28.) AirTran's Merger Committee considered the Second Proposed Comprehensive Agreement's seniority integration as less favorable to the AirTran pilots than that in the First Proposed Comprehensive Agreement. (Id. ¶ 29; Pls.' Resp. to Defs.' SOMF, Dkt. [42-1] ¶ 29.) The Second Proposed Comprehensive Agreement was, however, sufficiently counterbalanced by other terms such that AirTran's Merger Committee accepted the Second Proposed Comprehensive Agreement overall. (Defs.' SOMF, Dkt. [21-2] ¶ 29.)
AirTran and Southwest officials required that the Second Proposed Comprehensive Agreement be approved by both SWAPA's Board of Directors and ALPA's MEC before it could be submitted to the pilots for a ratification vote. (Id. ¶ 31.) The Second Proposed Comprehensive Agreement was converted into six separate documents ("Integration Agreement #1"); concurrently, one of the six documents entitled "Side Letter 9" was approved by SWAPA's Board of Directors. (Id. ¶¶ 32-33.) Side Letter 9 contained the integrated seniority list for the Southwest and AirTran pilots. (Id. ¶ 33.) After SWAPA's Board of Directors approved Side Letter 9, Southwest and AirTran pilots were able to see the integrated list. (Id.) The remaining documents of Integration Agreement #1 were provided to ALPA's MEC on August 10, 2011; AirTran pilots could view the documents online the following day. (Id. ¶ 34.)
In the days between reaching the Second Proposed Comprehensive Agreement in principle on July 16, 2011 and finalizing Integration Agreement #1's language on August 10, 2011, members of AirTran's Merger Committee and ALPA's MEC communicated with AirTran pilots in person, in online forums, and via phone and email regarding the proposed terms and whether the MEC should approve the agreements. (Id. ¶¶ 35-37.) Again, without the MEC's approval, Integration Agreement #1 would not be submitted to the AirTran pilots for a ratification vote. (Id. ¶¶ 39-40.)
ALPA's MEC met from August 16-18, 2011 to debate Integration Agreement #1. (Id. ¶ 41.) The meeting included closed sessions-attended only by ALPA's MEC, the AirTran Merger Committee, and advisors-and an open session on August 17 attended by many AirTran pilots. (See id. ¶ 41 (claiming "several hundred" AirTran pilots attended); cf. Pls.' Resp. to Defs.' SOMF, Dkt. [42-1] ¶ 41 (claiming around 200 of approximately 1700 AirTran pilots attended the session).) During the August 17 open session, the AirTran Merger Committee briefed the pilots on Integration Agreement #1 and related issues. (Defs.' SOMF, Dkt. [21-2] ¶ 42.) Among the materials presented to the pilots was a PowerPoint slide titled "Risk, " which included the text: "Questions about whether AirTran and Southwest operations would be integrated or whether the integration could be delayed." (Id.)
During both the periods from July 16 to August 10 and from August 16 to 18, AirTran pilots expressed varied opinions regarding Integration Agreement #1. (Id. ¶¶ 38, 43-44.) ALPA's MEC members "held good faith differences of views" about what a fair and equitable integration would look like, whether Integration Agreement #1 should be submitted for a ratification vote, and the significance of Kelly's comments at the July 14 meeting with Southwest. (Id. ¶ 44.) On August 18, 2011, ALPA's MEC rejected Integration Agreement #1 by a vote of 7-1. (Id. ¶ 46.) All eight voting members had been present at the July 14, 2011 meeting with Kelly. (Id.)
After ALPA's MEC rejected Integration Agreement #1, the AirTran Merger Committee prepared to continue working toward an integration agreement pursuant to the terms of the Process Agreement-first, negotiation; second, meditation; third, arbitration. (Id. ¶ 47.)
On August 21, 2011, Southwest formally revoked its agreement to Integration Agreement #1. (Id. ¶ 48.) The next day, Kelly wrote in a letter to the AirTran and Southwest pilots that because the negotiations had failed to yield an agreement, "[Southwest] will continue to consider all other options, in addition to arbitration.... Simply put, reevaluating the integration plan is mandatory in this economic climate." (Id. ¶ 49.) In the days following, ALPA's MEC received numerous letters from pilots urging the MEC to quickly conclude an integration agreement and submit it to the pilots for a ratification vote. (Id. ¶ 50.) In response to the pilots, ALPA's MEC "passed a resolution to the effect that it would send out the second proposal for pilot ratification." (Pls.' Resp. to Defs.' SOMF, Dkt. [42-1] ¶ 50.)
On September 1, 2011, Southwest presented another proposal. (Defs.' SOMF, Dkt. [21-2] ¶ 52.) The revised integration agreement "made some improvements" to the integrated list, eliminated some of Integration Agreement #1's conditions and restrictions benefitting AirTran pilots, and deferred application of Southwest pay rates to AirTran pilots from April 2012 until January 2015. (Id.) Accordingly, the revised integration agreement was not as favorable to AirTran pilots as Integration Agreement #1. (See Pls.' Resp. to Defs.' SOMF, Dkt. [42-1] ¶ 52 ("The differences between the first and the second proposals were that all of the beneficial Conditions & Restrictions were gone from the second agreement, and seniority remained about the same as ...