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October 25, 1999


The opinion of the court was delivered by: Joyce Hens Green, District Judge.


This matter involves a dispute between the plaintiff, Atlas Air, Inc. ("Atlas"), and the defendant, Air Line Pilots Association, International ("ALPA"), concerning Atlas' denial of profit sharing payments to its recently unionized flight deck crew members pursuant to a provision in Atlas' profit sharing plan that excludes unionized employees from benefits. After ALPA was certified as the bargaining agent for Atlas flight deck crew members, Atlas, in accordance with the profit sharing plan, immediately withdrew all profit sharing benefits to the crew members. Atlas subsequently filed a declaratory judgment action in this Court seeking an order declaring that Atlas' withdrawal of benefits was not unlawful, and that Atlas is under no obligation to maintain "the status quo of the rates of pay, rules and working conditions of its flight deck crew members during negotiations toward an initial collective bargaining agreement between Atlas and ALPA." Complaint at 7.

ALPA filed a first amended counterclaim asserting (1) that Atlas improperly coerced, interfered with, discriminated against, intimidated or retaliated against the flight deck crew members for choosing to organize and bargain collectively, (2) that Atlas' request for a declaratory judgment stating Atlas has the right to make unilateral changes during the initial collective bargaining is improper in that it seeks an advisory opinion concerning unspecified future actions and, in any event, such unilateral changes are unlawful, and (3) that if the Court finds that Atlas has a right to make unilateral changes, ALPA seeks a judgment that it has the right to respond with its own self-help actions, including the right to strike.

Currently pending before the Court are three motions: ALPA's motion for a preliminary injunction restraining Atlas from continuing to deny profit sharing benefits to unionized flight deck crew members;*fn1 Atlas' motion to dismiss ALPA's counterclaims; ALPA's motion for summary judgment.

I. Procedural Matters

Both parties argue this case should be resolved as a matter of law, but only ALPA has filed a formal motion for summary judgment on its counterclaims. Atlas has filed a motion to dismiss the counterclaims, but has not filed a cross motion for summary judgment on its complaint. Instead, Atlas argues in its opposition to ALPA's summary judgment motion that "Atlas, not ALPA is entitled to judgment as a matter of law that Atlas is entitled to make changes to pilots' wages and working conditions prior to entering into an initial contract," and that "ALPA's counterclaims to the contrary must be dismissed, and judgment entered on Atlas's behalf." Opp. to Mot. for Summ. J. at 24.

The Court cannot decide ALPA's motion for summary judgment on its counterclaim without deciding, as a matter of law, whether Atlas was entitled to make the unilateral changes to the profit sharing plan. Thus, the Court is in the unusual position of having to make a finding as a matter of law on an issue for which summary judgment has not been formally sought. However, this Court possesses the authority to enter summary judgment sua sponte against a party "so long as the losing party is on notice that she had to come forward with all her evidence." Athridge v. Rivas, 141 F.3d 357, 361 (D.C.Cir. 1998) (citations omitted). This sua sponte authority is especially appropriate when one party has moved for summary judgment and there has been no cross-motion. "When there has been a motion but no cross-motion, the judge already is engaged in determining whether a genuine issue of material fact exists and the parties have been given an opportunity to present evidence designed either to support or refute the request for the entry of judgment." 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 2720, at 346 (3d ed. 1998).

Here, both parties have exhaustively addressed the legal issues pertaining to Atlas' contention that it is entitled to make unilateral changes to the profit sharing plan. As ALPA states,

  the effect of the parties' motions is to now bring
  before the Court all of the legal issues in this case
  — not only those raised by ALPA's counterclaim but
  also those raised in Atlas' complaint. Moreover, the
  parties' motion papers reveal that there are no
  genuine issues of material fact in this case, but
  only issues of law. The parties do not disagree as to
  what Atlas has done; they only disagree as to whether
  what Atlas has done is inherently unlawful or
  permitted by the Railway Labor Act.

Mot. for Summ. J. at 1. Given the statements made by both ALPA and Atlas concerning the procedural posture of this case, the Court will sua sponte enter summary judgment in favor of Atlas and issue a judgment declaring that Atlas acted lawfully when it made unilateral changes to the profit sharing plan after ALPA was certified as the collective bargaining agent for the crew members, but before collective bargaining had commenced. The Court will dismiss for lack of jurisdiction Atlas' request for an order declaring that Atlas has no obligation to maintain the status quo during future bargaining negotiations. The dismissal of the complaint regarding future status quo obligations renders Counts II and III of the counterclaim moot.*fn2 Count I of the counterclaim seeks a permanent injunction enjoining Atlas from denying or continuing to deny profit sharing benefits to crew members and ordering Atlas to reinstate the profit sharing payments nunc pro tunc to the date of termination of the benefits. The sought after remedy is contrary to the Court's ruling that Atlas was permitted to withdraw the payments post-certification. For the reasons discussed below, Count I of the counterclaim is dismissed as moot. In addition, ALPA's motion for a preliminary injunction and for summary judgment on the counterclaim are also denied as moot.

II. Background

The following facts, unless indicated otherwise, are undisputed. Atlas is a "cargo airline which transports goods throughout the world." Opp. to Mot. for Prelim. Inj. at 5. It has approximately 1,100 employees, about half of whom are flight deck crew members consisting of pilots and flight engineers. See Ebeling Decl. at ¶ 2.

On June 30, 1994, Michael Chowdry, Atlas' Chairman (also President and CEO), sent a letter to employees explaining that Atlas was in the process of instituting a profit sharing plan that, for the first year, would have a minimum guaranteed payment of seven percent of annual pay. See Allen Decl. at ¶ 5 and Attachment 1. Mr. Chowdry claimed he was instituting the guaranteed payment for the first year because he wanted employees to feel comfortable with the concept of profit sharing, especially because so many other carriers had promised profit sharing, but then failed to provide it. See id. He noted he was "willing to demonstrate [his] faith in [Atlas'] ability to achieve profitability by having Atlas guarantee 7% profit sharing for this, a transition year." Id.

The profit sharing plan, dated January 1, 1995, provided for semi-annual payments based upon the company's pre-tax profits for the period beginning June 30, 1994 through December 1995 and continuing yearly thereafter. See Krieger Decl. Attachment 1. Payments were due on December 15 (based on preliminary unaudited results of the year's profits), and May 15 (adjustments based on a final audit). See id. The plan applied only to "eligible employees," who were defined as

  any full-time (more than 20 hours per week) Employee
  employed by the Company who has met the requirements
  for participation in the Plan, except for those who
  are subject to a collective bargaining agreement or
  who have been certified by the National Mediation
  Board ["NMB"] or any such other regulatory agency,
  for representation.

Id. According to ALPA, at the time the profit sharing plan was implemented, no employees of Atlas were unionized and the language excluding such employees from the profit sharing plan was "understood to operate as a threat of retaliation against any employees who might exercise their statutory right to obtain union representation and bargain collectively." Mot. for Prelim. Inj. at 4; Ebeling Decl. at ¶ 7. Atlas claims the plan was not implemented to thwart union efforts as demonstrated by the fact that the entire plan, including the exclusion for unionized employees, was put into effect on July 1, 1994 before Atlas had notice or knowledge of any union organizing campaign. See Allen Decl. at ¶ 4. Atlas further claims that while there was a movement in late July 1994 by the Teamsters to unionize Atlas flight deck crew members, that effort ended prior to the first distribution of profit sharing checks in December 1994. See Allen Decl. at ¶ 6.

Although there is some indication that organizing activity occurred at Atlas as early as 1994, it was not until 1996 that "ALPA intensified its organizing drive among the Atlas flight deck crew members." Ebeling Decl. at ¶ 6. On September 30, 1996, Atlas sent a letter to all employees for the stated purpose of providing the employees "with a straightforward explanation of the profit sharing plan — how it has worked in the past and how it will work in the future." Ebeling Decl. at Attach. 1. Included with the letter was, among other things, a document entitled "Rules for Employee Eligibility." This document provided sample calculations of benefits for employees and stated that employees who were subject to a collective bargaining agreement would be excluded from the plan. See id. The document further noted the "exclusion is very common in unionized organizations where the compensation plans for unrepresented employees are kept separate and apart from those of unionized employees." See id. According to ALPA, this document was understood by Atlas employees as a threat of retaliation against employees who elected union representation. See Ebeling Decl. at ¶ 7.

On April 21, 1997, a letter was sent by Atlas to the flight crew members announcing a new flight crew compensation program, which included a modification to the profit sharing plan. According to the letter, the plan was implemented in response to employee concerns and questions, and was "designed to balance the needs expressed by crew members with Atlas' need to maintain our cost competitiveness in the marketplace." Ebeling Decl. Attach. 2. The new plan provided for a guaranteed profit sharing plan of 20% for Captains and 10% for other flight crew members, regardless of company profit, for the years 1997, 1998 and 1999. See id. The new plan included examples of benefits based on sample pay scales. There is a notation with the first example that

  profit sharing, including the guaranteed portion,
  ceases upon certification of a union by the NMB. Upon
  certification, Atlas will review all existing and
  future wages and benefits, work rules and working
  conditions, including the 10-year pay scale; and, the
  foregoing will become subject to the collective
  bargaining process.

Ebeling Decl. Attach. 2 at 9.

According to ALPA, at the time this modified plan was announced in April 1997, "organizing efforts by ALPA were in high gear; ALPA was collecting authorization cards for a NMB representation election." Ebeling Decl. at ¶ 8. Atlas claims it was unaware of any such organizing efforts at that time. See Allen Decl. at ¶ 8. Atlas states that while it was aware that organizing efforts had been conducted by ALPA in the summer of 1996, in a November 11, 1996 letter addressed to Atlas air crew members, ALPA noted that the crew member response "falls short of the level we [ALPA] like to see before petitioning the National Mediation Board to conduct a secret ballot representation election." See Allen Decl. at Attach. 2. Atlas understood this letter to mean that "ALPA would not pursue its campaign unless this trend [an insufficient showing of interest] reversed." Allen Decl. at ¶ 8. Thus, according to Atlas, because Atlas believed in April 1997 that the ALPA campaign was over, the revisions to the profit sharing plan could not have been related to any organizing activity.*fn3 Id.

On November 14, 1997, ALPA obtained authorization from the NMB to hold a representation election. See Ebeling Decl. at ¶ 12. On December 2, Atlas distributed to its crew members a flight crew policy manual marked "draft — for review and comment only." Ebeling Decl. Attach. 3 at 1. In the section discussing the profit sharing plan, a table showing a ten-year salary scale, including guaranteed profit sharing payments, is included with a notice similar to the others that profit sharing ceases upon certification with the NMB. See id. at 22. According to ALPA, the communications from Atlas were considered to be threats that "intimidated flight crew members as they considered whether to vote for ALPA." Ebeling Decl. at ¶ 13; Fields Decl. at ¶ 2. Election ballots were subsequently issued to Atlas crew members approximately two weeks after the draft policy manual was issued. See Ebeling Decl. at ¶ 12. ALPA lost the election by 24 votes when the results were tallied in late January 1998. See Allen Decl. at ¶ 9; 25 N.M.B. 195. ALPA claims it lost the election because of Atlas' threats to discontinue profit sharing benefits. See Ebeling Decl. at ¶ 13. Nonetheless, no claim of election interference was brought at that time before the NMB or the Courts by ALPA or Atlas employees.

In February 1999, ALPA filed another application for representation with the NMB. See Ebeling Decl. at ¶ 14. On February 17, 1999, Atlas sent a letter to flight crew members for the stated purpose of providing them with some information to assist in "understand[ing] a couple of things about collective bargaining and [the airline] business." Ebeling Decl. at Attach. 4. The letter states the collective bargaining process is "complex and emotional," with negotiations sometimes turning "confrontational." Id. The letter advises the flight crew members they have a right to choose union representation and the company must respect that right and bargain with the union representatives, but that Atlas has the unilateral right to change conditions of employment after certification of a union. See id. In bold letters, Atlas notes

  One area that will change if a union is certified is
  profit sharing. Our Profit Sharing Plan says clearly
  that employees who have been certified by the
  National Mediation Board for representation are not
  eligible for profit-sharing (Article 2.6, Page 1.) Of
  course, a union could choose to bargain for profit
  sharing in subsequent negotiations, but it could be
  years ...

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