Reference no: EM131455388

Question: Air Line Pilots Association, International v. O'Neill 499 U.S. 65 (1991)

There was a bitter strike between the Air Line Pilots Association, International (ALPA), and Continental Airlines, Inc., after Continental filed for reorganization under Chapter 11 of the Bankruptcy Code and repudiated its collective bargaining agreement with ALPA. The strike went on for over two years, during which time Continental hired replacement workers and many pilots crossed the picket lines to go to work for Continental. Eventually the union negotiated a deal with Continental that allowed some of the striking pilots to return to work. However, the terms of the settlement were less favorable than a complete surrender to Continental would have been, particularly as it related to seniority for the striking pilots, which was the basis of their duty assignment system. The striking pilots did not like the deal that was struck between the union and management and alleged that in reaching the agreement, the union breached its duty of fair representation. The U.S. Supreme Court held that a union has done its job as long as the union's settlement with the employer is not "wholly irrational or arbitrary."
Stevens, J. ALPA's central argument is that the duty of fair representation requires only that a union act in good faith and treat its members equally and in a nondiscriminatory fashion.

The duty, the union argues, does not impose any obligation to provide adequate representation. The District Court found that there was no evidence that ALPA acted other than in good faith and without discrimination. The union maintains, not without some merit, that its view that courts are not authorized to review [whether] the rationality of good-faith, nondiscriminatory union decisions is consonant with federal labor policy. The Government has generally regulated only "the process of collective bargaining,". . .but relied on private negotiations between the parties to establish "their own character for the ordering of industrial relations,". . .As we have previously stated, "Congress intended that the parties should have wide latitude in their negotiations, unrestricted by any governmental power to regulate the substantive solution of their differences." There is, however, a critical difference between governmental modification of the terms of a private agreement and an examination of those terms in search of evidence that a union did not fairly and adequately represent its constituency. Our decisions have long recognized that the need for such an examination proceeds directly from the union's statutory role as exclusive bargaining agent. Just as fiduciaries owe their beneficiaries a duty of care as well as a duty of loyalty, a union owes employees a duty to represent them adequately as well as honestly and in good faith.

ALPA suggests that a union need owe no enforceable duty of adequate representation because employees are protected from inadequate representation by the union political process. ALPA argues that employees "do not need protection against representation that is inept but not invidious" because if a "union does an incompetent job its members can vote in new officers who will do a better job or they can vote in another union." [W]e have repeatedly identified three components of the duty [of fair representation], including a prohibition against "arbitrary" conduct. Writing for the Court in the leading case in this area of the law, Justice White explained: The statutory duty of fair representation was developed over 20 years ago in a series of cases involving alleged racial discrimination by unions certified as exclusive bargaining representatives under the Railway Labor Act,. . .and was soon extended to unions certified under the N.L.R.A.. . . under this doctrine, the exclusive agent's statutory authority to represent all members of a designated unit includes a statutory obligation to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct. Congress did not intend judicial review of a union's performance to permit the court to substitute its own view of the proper bargain for that reached by the union.

Any substantive examination of a union's performance, therefore, must be highly deferential, recognizing the wide latitude that negotiators need for the effective performance of their bargaining responsibilities. For that reason, the final product of the bargaining process may constitute evidence of a breach of duty only if it can be fairly characterized as so far outside a "wide range of reasonableness," that it is wholly "irrational" or "arbitrary." For purposes of decision, we may assume that the Court of Appeals was correct in its conclusion that, if ALPA had simply surrendered and voluntarily terminated the strike, the striking pilots would have been entitled to reemployment in the order of seniority. Moreover, we may assume that Continental would have responded to such action by rescinding its assignment of all the bid positions to working pilots. After all, it did rescind about half of those assignments pursuant to the terms of the settlement. Thus, we assume that the union made a bad settlement-one that was even worse than a unilateral termination of the strike. Nevertheless, the settlement was by no means irrational. A settlement is not irrational simply because it turns out in retrospect to have been a bad settlement. Viewed in light of the legal landscape at the time of the settlement, ALPA's decision to settle rather than give up was certainly not illogical. At the time of the settlement, Continental had notified the union that all of the. . .bid positions had been awarded to working pilots and was maintaining that none of the strikers had any claim on any of those jobs. The suggestion that the "discrimination" between striking and working pilots represented a breach of the duty of fair representation fails. REVERSED and REMANDED

1. Do you agree that the Court should not look into the substance of complaints about the union's duty of fair representation?

2. For the striking pilots who feel they were discriminated against, what are the drawbacks of the union?

3. Considering that the union had been on strike for over two years and management had hired replacement workers and nonstriking employees, what sort of position do you think that management was in when negotiating with the union?