Kerri Gallagher writes:

The Bankruptcy Court for the Southern District of New York recently dismissed claims in an adversary proceeding commenced by pilots against the pilots’ union and an airline in connection with the airlines’ rejection of an old collective bargaining agreement (“Old CBA”), and negotiation of a new collective bargaining agreement (“New CBA”) that eliminated certain job protections that the pilots held under the Old CBA.  In addition, the airline entered into a letter agreement with the pilots’ union that permitted an arbitration proceeding to create new job protections for the pilots who lost the protections under the Old CBA.

In prior proceedings the bankruptcy court dismissed many of plaintiffs’ claims, leaving only a claim for breach of duty of fair representation against the pilots’ union, and a collusion claim against an airline.  Defendants sought summary judgment and dismissal of these remaining claims, which the bankruptcy court granted.

In so holding, the bankruptcy court found, among other things: (i) plaintiffs failed to put forward evidence demonstrating a causal connection for their various claims under any causation standard, and (ii) plaintiffs failed to provide sufficient basis for their “sweeping denials” of the facts that defendants contended were undisputed.

With respect to the fair representation claim, the bankruptcy court rejected a number of plaintiffs’ arguments.  For example, plaintiffs argued that the pilots’ union breached its duty of fair representation by wrongfully structuring the arbitration to permit two separate pilot committees to submit two competing proposals rather than one unified pilot position. The bankruptcy court rejected this argument because it was raised for the first time in plaintiffs’ responses to the summary judgment motions. The court further reasoned that “[e]ven if this argument were not waived, however, it would fail because the lack of a unified position was not discriminatory, arbitrary, or in bad faith.”  In addition, the plaintiffs argued that the pilots’ union failed to replicate certain protections under the Old CBA. The bankruptcy court again rejected this argument noting that it had been raised and rejected in the prior proceedings.

With respect to the collusion claim, the bankruptcy court held that in order to prove collusion, plaintiffs must prove a breach of duty of fair representation. Since the breach of duty claim failed, the bankruptcy court determined that the collusion claim failed as well.

Read the full opinion here.

Kerri Gallagher is a summer associate in Fox Rothschild’s Philadelphia office.