NEWSLETTER

Executive Summary:  The Eighth Circuit Court of Appeals recently upheld a federal trial court's determination that a pilot's ERISA lawsuit based on his termination was not precluded by the Railway Labor Act (RLA) and that the employer did not violate ERISA when it discharged the pilot shortly after he was arrested for possession of marijuana.  See Sturge v. Northwest Airlines, Inc. (8th Cir. Oct. 7, 2011).  The trial court's decision is discussed in our May 2009 Airline Newsletter.

Background

In July 2003, a pilot employed by Northwest Airlines was placed on long-term medical leave as a result of injuries he suffered outside of work.  On October 8, 2003, he applied for disability retirement benefits available pursuant to the Northwest Airlines Pension Plan for Pilot Employees.  A few days after he applied for disability retirement, the pilot was arrested for possession of marijuana.  After being informed of the arrest, Northwest began an investigation, during which the pilot admitted to possessing and using marijuana.  Subsequently, the airline discharged him.  The discharge was grieved and upheld by a system board of adjustment.

Although the pilot had been discharged, Northwest continued to process his application for disability retirement and ultimately approved the application, determining that his "retirement date" was the date he was terminated.  However, as a result of his termination for cause, the pilot was not eligible for some of the benefits ordinarily available to pilots on disability retirement, such as accrual of seniority, the right to return to work, or pass privileges.  Additionally, because he was terminated before he had attained 15 years of employment with Northwest, he was not eligible for company-paid medical insurance premiums.  The pilot also claimed that he received a lower disability retirement pension income because he was terminated before he reached 15 years of employment.

ERISA Claims

The pilot subsequently sued Northwest, claiming he was terminated in retaliation for exercising his rights under an employee benefit plan and in order to interfere with his rights under the plan, in violation of ERISA.  The Eighth Circuit upheld the trial court's determination that the pilot's ERISA claims were not preempted by the RLA and that his discharge did not violate ERISA. 

No RLA Preemption

The RLA establishes a "mandatory arbitral mechanism for the prompt and orderly settlement of two classes of disputes" between air carriers and their employees: major disputes and minor disputes.  "Major disputes" generally involve the negotiation or renegotiation of collective bargaining agreements.  Parties to a major dispute are required to pursue a lengthy process of bargaining and mediation.  Minor disputes are controversies arising out of the application or interpretation of collective bargaining agreements.  Minor disputes must be resolved only through mechanisms required by the RLA, including the carrier's internal dispute-resolution processes and an adjustment board established by the employer and the union.  The adjustment board has mandatory, exclusive jurisdiction over minor disputes; thus, state and federal courts lack jurisdiction over claims based on minor disputes.  However, the RLA does not deprive courts of jurisdiction over disputes that do not fall into one of these categories.

The court held that the plaintiff's ERISA claims were not precluded by the RLA because, to resolve these claims, the court was not required to determine whether he was entitled to benefits under the pension plan or whether his termination was proper under the CBA.  Instead, the court was required to determine whether the plaintiff was terminated in retaliation for claiming ERISA-protected benefits.  The court held that that was a purely factual question regarding the employer's conduct and motives. 

Additionally, the court held that it was not required to interpret the CBA's provisions regarding fitness for duty and the rules of conduct regarding drug use because, according to the court, Northwest did not dispute that the pilot would have been entitled to the benefits he sought if he had not been terminated for cause. 

The court also held that the evaluation of the plaintiff's proposed comparator evidence did not require it to interpret a term of the CBA, but instead required, at most, reference to the CBA. 

The Plaintiff's Discharge did not Violate ERISA

The court also held that Northwest did not violate ERISA when it discharged the plaintiff.  To prevail under the retaliation prong of the statute, the plaintiff was required to show a causal connection between his termination and his application for ERISA-protected benefits.  To prevail under the interference prong, the plaintiff was required to show a causal connection between the termination and the likelihood, at the time he was fired, that he would receive disability retirement benefits in the future. 

In support of his claims of interference and retaliation, the plaintiff relied on the testimony before the system adjustment board of the person who discharged him.  That individual testified that the plaintiff was not eligible for Northwest's Pilot Assistance Program because that program only applies if the pilot is a "pre-duty violator."  The plaintiff, he testified, was not a pre-duty violator because, among other reasons, "he was on a long-term sick leave with no … possibility of assignment to any kind of flight duty in the near future."  The court held that this testimony did not support a reasonable inference that this individual had an unlawful motive for the termination.  The court held that the evidence, when considered in the light most favorable to the plaintiff, showed only that management considered the plaintiff's long-term medical leave to determine whether he was eligible for the Pilot Assistance Program and did not support a finding of impermissible motive in the termination decision.

The court also held the plaintiff's allegations regarding Northwest's conduct in processing his application for disability retirement did not support his retaliation or interference claims because the alleged conduct occurred ten months after his termination and there was no evidence connecting the discharge to the processing of the plaintiff's application for disability retirement. 

Executive Summary:  In a case handled by Ford & Harrison attorneys, a federal trial court recently held that an airline services company did not violate the Railway Labor Act (RLA) when it discharged an employee based on its belief the employee accessed pornography and other inappropriate content on company computers.   

Background

The plaintiff began his employment with the airline services company at its Asheville, North Carolina station and transferred to its Columbia, Missouri station in December of 2009.  The plaintiff's supervisor in Columbia was the Station Manager.  The plaintiff was a former member of the Steelworkers Union and discussed the union with five co-workers in Columbia.  These conversations occurred outside the open door to his supervisor's office.  The plaintiff did not participate in any organizing efforts other than those conversations.  Neither the employer nor the plaintiff's supervisor ever communicated with the plaintiff regarding unions or union activity.

In February 2010, an employee discovered an inappropriate picture on a computer in the company's Columbia operations room.  The employee reported this to the Station Manager, who searched the computer's internet history.  The search of the computer's history revealed that it had been used to access pornographic web sites and revealed the use of inappropriate search terms.  Around the same time, the computer was used to access the web site of an Asheville, North Carolina radio station.

Based on the employee work schedule, the supervisor determined that only the plaintiff and one other employee were working at the time the pornographic web sites were accessed.  When questioned about the access of pornographic web sites, the plaintiff denied any responsibility for the incident.  He subsequently signed a statement apologizing for his actions "in regards to the sites that were noticed."  Although the plaintiff later claimed he intended to admit only to accessing social networking, personal e-mail, and videogame sites, the company interpreted it as an admission that he had accessed pornographic web sites.  The other employee denied using the computer at the time in question. 

Based on its belief that he had accessed pornographic web sites, the company discharged the plaintiff.  He subsequently sued, claiming he was discharged in violation of the RLA because he engaged in union activities. 

RLA Claims

To establish a prima facie case of wrongful discharge under the RLA, a plaintiff must show that (1) he engaged in union activities; (2) his employer knew of his protected activity; (3) his employer harbored animus toward the activity; and (4) the animus was a causal factor in the termination.  Even if a plaintiff establishes a prima facie case of union animus, an employer still may prevail if it can establish that it would have terminated the plaintiff's employment regardless of any union animus.  The court did not consider whether the plaintiff presented a prima facie case and merely held that the airline services company established that it would have validly and independently terminated him for viewing pornography at work.

In finding that the employer met its burden to show a non-discriminatory reason for the termination, the court noted that after discovering someone had accessed inappropriate materials on a workplace computer, the employer:  (1) narrowed its list of potential users by determining who was on duty when the forbidden web pages were accessed; (2) connected the specific Asheville, North Carolina web site visit to the plaintiff; (3) reviewed the alibi of the other employee on duty when the forbidden pages were accessed; and (4) was told by the plaintiff that he was sorry for his actions related to the web site he had been shown by his supervisor.  Based on this information, the court held that no reasonable juror could conclude that the plaintiff was terminated because his supervisor overheard him talking about the value of unions.  This was especially true because that supervisor did not participate in the decision to terminate the plaintiff and because the employer also terminated other employees accused of similar misconduct. 

The plaintiff argued that the employer's investigation method was so questionable that it suggested the investigation was merely pretextual and that union animus was the true reason he was discharged.  The court rejected this argument, holding that the essential question was not whether the plaintiff violated the employer's computer usage policy, but whether the employer believed in good faith that he violated the policy.  The court held that in light of the evidence, "no reasonable juror could conclude that [the employer] did not have a good faith belief that [the plaintiff] did access pornography."

The court further held that the fact that the plaintiff admitted to violating the employer's policy is an "intervening event" that undermined any causal inference that might be drawn from the temporal proximity between protected activity (discussing the union with his co-workers) and his termination.

Accordingly, the court granted summary judgment in favor of the employer.

Executive Summary:  A federal trial court in Michigan has held that an ERISA lawsuit brought by a former employee of Northwest Airlines is a minor dispute and is preempted by the Railway Labor Act (RLA).  See James v. American General Assurance Co. (Sep. 8, 2011).  Accordingly, the court held that it lacked jurisdiction to hear these claims and dismissed the lawsuit.

Background

James, a former reservations agent for Northwest Airlines, was injured in a car accident and filed a claim for disability pension benefits under Northwest Airlines Pension Plan for Contract Employees (the "Pension Plan").  He also filed a claim for long-term disability benefits under Northwest Airlines Long Term Disability Plan ("LTD Plan").  Both claims were denied and James filed suit in federal court challenging the denials.  Both the Pension Plan and the LTD plan requested the court dismiss the lawsuit for lack of subject matter jurisdiction, claiming these allegations constitute minor disputes that must be resolved pursuant to the RLA's dispute resolution mechanisms.

Pension Plan Claims

The Pension Plan is a tax-qualified defined benefit pension plan for the benefit of eligible union-represented employees of Northwest Airlines.  There was no question that James was eligible to participate in the Pension Plan because it had been adopted by the collective bargaining agreement (CBA) between Northwest and IAM, the union to which James belonged.  James submitted a claim under the process set forth in the Pension Plan and CBA, but it was denied after the first step.  Although James requested IAM file a grievance on his behalf before the system board of adjustment (SBA), it did not do so.  He did not proceed on his own before the SBA, but instead filed suit under ERISA claiming he was improperly denied benefits.  He also sought a determination that he was disabled as that term is defined in the Pension Plan and, accordingly, entitled to disability-pension benefits. 

LTD Claims

James also filed a claim for long-term disability benefits under the LTD plan; however, this claim was denied as untimely.  He did not request that the union represent him before the SBA in connection with his long-term disability claim, but instead filed suit in federal court claiming he was improperly denied benefits under the LTD plan.

Court Determination that Claims are Minor Disputes

Under the RLA, "minor disputes," which are disputes "growing out of … the interpretation or application of agreements concerning rates of pay, rules, or working conditions" must be resolved "only through the RLA mechanisms, including the carrier's internal dispute-resolution processes and an adjustment board established by the employer and the unions." Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 253 (1994).  This means that federal courts lack jurisdiction over actions involving minor disputes.

The court noted that the RLA's mandatory arbitration requirement can apply to pension disputes under ERISA.  However, for the RLA's arbitration requirement to apply in the ERISA context, the pension plan must either be (1) itself incorporated in a CBA, or (2) maintained pursuant to a CBA.  Additionally, under the case law established by the Sixth Circuit Court of Appeals, which was applicable to this case, ERISA benefit denials are minor disputes if resolution of the dispute requires an interpretation of the plan language (in addition to the requirement that the pension plan is either incorporated in a CBA or maintained pursuant to a CBA).  Here, the court held that James' claims against the Pension Plan were minor disputes.  The court found that the Pension Plan was maintained pursuant to the CBA because, first, "the CBA expressly adopts the Pension Plan, along with numerous amendments thereto" and "[s]econd, the Pension Plan references the CBA."  Additionally, the court held that James' claims against the Pension Plan were minor disputes because they required the court to determine whether the plan administrator correctly interpreted the term "disability," as defined in the plan documents. 

The court also held that James' claim under the LTD plan was a minor dispute.  In holding that the LTD plan was incorporated by reference into the CBA and therefore maintained pursuant to the CBA, the court adopted the reasoning and analysis of the court in Pearson v. Northwest Airlines, Inc., 659 F. Supp. 2d 1084, 1092 (C.D. Cal. 2009), which interpreted the same LTD plan and the same CBA at issue in this case. 

James argued that he was entitled to benefits under the LTD plan because, even though his claim was untimely under the terms of the plan, no prejudice resulted from the delay in filing his claim.  To resolve this claim, the court would have been required to interpret the LTD plan's choice of law provision, because whether prejudice must be shown is a matter of state law.  Thus, because the resolution of this claim required an interpretation of a provision of the plan, which was maintained pursuant to the CBA, the court held that the claims under the LTD plan were precluded by the RLA.

No Exceptions to RLA Preemption Apply

The court also found that no exceptions to preemption applied.  First, the court held that there was no evidence that arbitration would be futile.  Futility is established only when, through bias, prejudice or predisposition on the part of the arbitration board, there would be no point in submitting the claim to arbitration.  Additionally, the court held that to invoke the futility exception "there must usually be collusion between the union and the employer."  In this case, there were no allegations pertaining to any sort of animus on the part of the SBA, nor were there any allegations of collusion between Northwest and IAM. "Thus, Plaintiff's reliance on the futility exception is misplaced."

The court also found that James failed to present facts that would support his claim that the union breached its duty of representation, which is another exception to RLA preemption.  To support such a claim in this context, the employee must show:  (1) he or she relied on the union to process his or her grievance; (2) such reliance was reasonable; and (3) such reliance caused the employee's failure to personally present his or her claim to the SBA.  The court held that this exception is applicable only when the union falsely assures the employee "by promising to file a grievance on his or her behalf — and then, unbeknownst to the employee until it is too late — fails to do so."  There was no such evidence in this case since IAM never suggested it would pursue James' claims.  "Because no claim has been advanced against the union in this case, and because there is no allegation that IAM wrongfully refused to process Plaintiff's grievance," the court held that this exception did not apply.

Executive Summary:  A federal trial court recently granted summary judgment in favor of Southwest Airlines on a former reservation agent's claim the airline terminated him in retaliation for his use of leave under the Family and Medical Leave Act (FMLA).  The court held that the former employee failed to dispute the airline's legitimate, non-retaliatory reason for his discharge – that he abused FMLA leave by using it in conjunction with regularly scheduled days off and to take time off on holidays.

Background

Rydalch was employed as a reservations agent for Southwest in Salt Lake City, Utah.  In 2004, Southwest closed its Salt Lake City reservations center and Rydalch transferred to the Houston, Texas office.  His family remained in Salt Lake City.  Because of his seniority, Rydalch had difficulty getting off work on the holidays. 

In 2004, Rydalch suffered a back injury in an automobile accident.  He requested FMLA leave and was permitted to take eight days of leave per month for medical purposes, as he requested. 

In 2007, the airline began to question whether Rydalch was using FMLA leave in conjunction with his time off.  Records from 2007 revealed that Rydalch had used FMLA leave 35 times to excuse himself from work on days just before or after his previously scheduled time off.  Additionally, Rydalch frequently used FMLA leave on important dates and holidays.  The airline also determined that Rydalch had a pattern of taking flights to and from Salt Lake City on days he requested FMLA leave.  A company representative met with Rydalch on more than one occasion to discuss his use of FMLA leave and explain Southwest's Attendance Program, which provides, in part, that the abuse of sick leave will result in termination. 

On December 24, 2007, Southwest learned that Rydalch had not reported to work and had requested FMLA leave to excuse his absence.  Subsequently, the airline determined that Rydalch had purchased a ticket to fly from Houston to Salt Lake City, departing on December 22 and returning on December 27.  The flight had been booked in June 2007.  Rydalch had been scheduled to work December 24, 26 and 27 and made no effort to trade work shifts with other employees.  In addition to missing work on December 24, Rydalch used FMLA leave on December 26 and 27.

After holding a hearing in accordance with the collective bargaining agreement applicable to Rydalch's employment, Southwest terminated him for violating its Attendance Program.

Rydalch subsequently sued Southwest, claiming he was discharged in retaliation for taking FMLA leave.

FMLA Retaliation

Under the FMLA is it unlawful for an employer to "discharge or in any other manner discriminate against any individual for opposing any practice made unlawful by the [FMLA]."  To establish a prima facie case of wrongful termination under the FMLA, a plaintiff must show:  (1) he engaged in a protected activity, (2) the employer took an adverse action, and (3) a causal connection exists between the protected activity and the adverse action.  If the plaintiff establishes a prima facie case, the employer must offer a legitimate, non-retaliatory reason for the adverse action.  If the employer provides such a reason, the plaintiff must provide evidence from which a jury could find by a preponderance of evidence that the employer's proffered reason is pretextual.

Legitimate Reason for Discharge

The court held that Southwest's honest belief that Rydalch abused FMLA leave in violation of its Attendance Program was a legitimate, non-retaliatory reason for discharging him.  "An employer's belief that an employee is misusing FMLA leave provides sufficient justification to terminate his employment if that belief is honest."  The court held that in determining whether an employer's belief of misconduct is honest, it must examine the facts "as they appear to the person making the decision" without a review of the "wisdom or fairness" of the decision.  The court found that Southwest's belief that Rydalch was abusing FMLA leave was honest in light of the fact that the hearing officer, an independent decision-maker, determined that Rydalch abused FMLA leave after reviewing the documentation presented by Southwest and after considering Rydalch's explanation of the events. 

The court also held that Rydalch failed to establish pretext because he did not present any facts suggesting his apparent pattern of misusing FMLA leave had some compelling explanation other than abuse.  The court also held, however, that even if Rydalch had shown some alternative explanation, Southwest's decision was not unworthy of belief. "The existence of alternative, reasonable inferences of evidence does not establish pretext."

FMLA Interference

The court also rejected Rydalch's claim that Southwest violated the FMLA by interfering with his ability to take leave.  The court held that Southwest's decision to terminate Rydalch's employment was not based on his proper exercise of FMLA leave; it was based on his misuse of FMLA leave.  The court rejected Rydalch's argument that the termination of his employment constituted a form of interference because this argument "conflates his discharge claim with his interference claim."  Further, the court held that Rydalch failed to present evidence that Southwest interfered with his exercise of FMLA leave in any way apart from terminating his employment. 

Employers' Bottom Line:

Southwest's ability to support its decision by presenting records demonstrating Rydalch's abuse of FMLA leave was key to the court's ruling in the airline's favor.  Employers should ensure that they have accurate records of their employees' use of FMLA leave and that they enforce their leave policies consistently. 

Atlantic Southeast Airlines
IAM won an election to represent Flight Attendants.  Out of 2,146 eligible employees, 1,757 valid votes were cast.  There were 1,065 votes for IAM, 666 votes for AFA and 26 No votes.  Certification December 22, 2011.

Virgin America
TWU lost an election to represent Flight Attendants.  Out of 610 eligible employees, 547 valid votes were cast.  There were 223 votes for TWU and 324 no votes.  Dismissal December 21, 2011.   

United Air Lines/Continental Airlines
IFPTE lost an election to represent Engineers and Related Employees.  Out of 346 eligible employees, 299 valid votes were cast.  There were 136 votes for IFPTE and 163 no votes.  Dismissal November 29, 2011.

Omni Air International
AFA won an election to represent Flight Attendants.  Out of 355 eligible employees, 284 valid votes were cast.  There were 237 votes for AFA, 0 void votes and 47 no votes.  Certification October 26, 2011.

NetJets Services Inc.
IBT won an election to represent Flight Dispatchers.  Out of 47 eligible employees, 46 valid votes were cast.  There were 24 votes for IBT and 22 no votes.  Certification September 21, 2011.