RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 12a0119p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
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FREDERICK N. BONDURANT; MALCOLM D.
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CORNER; ROBERT F. HOLLIKER; MARK E.
KUNNEN; DAVID P. MATHISON; Estate of -
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No. 10-1904
WILLIAM E. THOMPSON III,
Plaintiffs-Appellants, ,>
-
-
-
v.
-
-
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AIR LINE PILOTS ASSOCIATION,
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INTERNATIONAL; NORTHWEST AIRLINES
Defendants-Appellees. -
MASTER EXECUTIVE COUNCIL,
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N
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 07-15383—Marianne O. Battani, District Judge.
Argued: January 13, 2012
Decided and Filed: May 7, 2012
Before: MERRITT and COLE, Circuit Judges; VARLAN, District Judge.*
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COUNSEL
ARGUED: Stephen K. Christiansen, VAN COTT, BAGLEY, CORNWALL &
McCARTHY, Salt Lake City, Utah, for Appellants. James K. Lobsenz, ALPA LEGAL
DEPARTMENT, Herndon, Virginia, for Appellees. ON BRIEF: Stephen K.
Christiansen, VAN COTT, BAGLEY, CORNWALL & McCARTHY, Salt Lake City,
Utah, for Appellants. James K. Lobsenz, ALPA LEGAL DEPARTMENT, Herndon,
Virginia, Stuart M. Israel, LEGGHIO & ISRAEL, P.C., Royal Oak, Michigan, for
Appellees.
*
The Honorable Thomas A. Varlan, United States District Judge for the Eastern District of
Tennessee, sitting by designation.
1
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 2
_________________
OPINION
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I. Overview
MERRITT, Circuit Judge. The plaintiffs in this case, former Northwest Airlines
pilots, appeal the district court’s grant of summary judgment in favor of the defendants,
the Air Line Pilots Association and the Northwest Airlines Master Executive Council
(collectively “the union”). On appeal, the plaintiffs assert that the district court
improperly granted summary judgment to the union in the face of record evidence that
it (1) breached its duty of fair representation, in violation of the Railway Labor Act,
45 U.S.C. § 156 (2006) and (2) discriminated against the plaintiffs based on their age,
in violation of the federal Age Discrimination in Employment Act, 29 U.S.C.
§ 623(c)(1), and Michigan’s Elliot-Larsen Civil Rights Law, MICH. COMP. LAWS
§ 37.2204(a) (1977).
II. Factual Background
This case arises from the 2005 Chapter 11 bankruptcy of Northwest Airlines,
which occurred at about the same time as the bankruptcies of Delta, United, and others.
Prior to and during its reorganization, which was for the purpose of reducing costs,
Northwest extracted concessions from the union that collectively resulted in an
approximate 40% wage cut for all Northwest pilots. These wage concessions were
formalized into three agreements, the third of which superseded the prior two and
granted the union a negotiated $888 million claim in Northwest’s bankruptcy to be
disbursed as shares of Northwest stock. Northwest and the union determined that the
third agreement, termed the Bankruptcy Restructuring Agreement, would run from July
31, 2006 (a crucial date in this case because all of the plaintiffs retired prior to it)
through December 31, 2011. Thus, the entire “concessionary period” – from the
beginning of the first agreement on December 1, 2004 through the end of the Bankruptcy
Restructuring Agreement on December 31, 2011 – totaled 85 months. Various Letters
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 3
of Agreement between the union and Northwest set out the terms of the Bankruptcy
Restructuring Agreement and the wage concessions for which the $888 million claim
was intended to compensate.
For the union, the challenge lay in allocating the claim. Letter of Agreement
2006-03 gave the Master Executive Council, composed of pilot representatives that
coordinated the union’s activities with Northwest, “the authority to determine the
manner of distribution of such claim, including the distribution of equity on account of
such claim, provided that the manner of distribution [was] legal and complie[d] with all
applicable regulations.” Pursuant to that authority, the Master Executive Council
appointed an Eligibility Committee to issue a recommendation on how best to approach
the task of distributing the claim. The Eligibility Committee reasoned that a pilot’s share
of the claim should ideally reflect the amount of time that the pilot worked during the
85-month concessionary period. Under this formula, a pilot would receive one month
of eligibility credit per each month of active duty, entitling a pilot who worked for the
entire 85-month period to a full claim share. However, the Eligibility Committee
concluded that a literal implementation of this strategy would significantly delay
distribution of the claim and create a risk that pilots would end up with worthless equity
if Northwest entered into a second bankruptcy before December 31, 2011. Further, an
early distribution would give pilots the ability to choose whether to participate in any
pre-bankruptcy claim sales or to wait and collect their claims as part of Northwest’s
bankruptcy estate. The Eligibility Committee also sought to avoid litigation by
protecting the interests of participants in the Pilot Early Retirement Program, an early
retirement incentive program available to pilots over the age of 50. Otherwise, the
Eligibility Committee posited, the union could be seen as encouraging early retirement
on the one hand and punishing it on the other.
After weighing these various considerations, the Eligibility Committee ultimately
recommended that the union establish July 31, 2006, the effective date of the Bankruptcy
Restructuring Agreement, as a bright-line cutoff for determining which pilots would be
eligible for full claim shares. The union accepted the recommendation, thereby creating
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 4
an obvious fiction that allowed it to presume that any pilot who was actively employed
on the date when the Bankruptcy Restructuring Agreement became effective would
remain employed through the agreement’s termination more than four years later. By
contrast, any pilot who retired or otherwise left Northwest employment prior to the
cutoff date would receive a share of the claim equal to the actual number of months that
the pilot worked during the 85-month concessionary period. All of the participants in
the Pilot Early Retirement Program were scheduled to and did retire after the cutoff date.
The eligibility formula also created benefits for any older pilots who retired after the
cutoff date or who were selected to continue flying as “Second Officers” past the age of
60, the federally mandated retirement age for all pilots and copilots.1 The plaintiffs are
all normal retirees who reached the age of 60 and left Northwest before July 31, 2006.2
Despite retiring prior to the cutoff date, the plaintiffs initially believed that they
would receive full claim shares.3 However, Mark Shanahan, a member of the Eligibility
Committee, advised them all by early March 2006 that they would each receive only 20
months of eligibility credit, reflecting the number of months of each plaintiff’s active
employment with Northwest during the concessionary period. The difference to each
plaintiff between a full 85/85 share and a 20/85 share was well over $100,000. All of
the plaintiffs voluntarily appealed the union’s calculation of their eligibility credit. At
its April 2007 meeting, the Master Executive Council rejected the plaintiffs’ appeals, a
decision that it made public to Northwest pilots via a “Hotline” announcement that it
issued on April 25. The next day, on April 26, one of the plaintiffs e-mailed a copy of
the “Hotline” announcement to the others. The Master Executive Council subsequently
1
The Federal Aviation Administration (FAA) has since changed the mandatory retirement age
to 65. See 14 C.F.R. § 121.383(d)(1).
2
One plaintiff retired approximately seven weeks before his 60th birthday.
3
Earlier in 2006, all of the plaintiffs opted into a partial claim sale through the union’s website,
which provided them with estimates of their respective claim shares. The website informed them all that
they qualified for the full eligibility period. However, after reviewing the claim share estimates that the
website produced, union decisionmakers corrected “hundreds of errors” including the estimates of the
plaintiffs’ claims. Bondurant v. Air Line Pilots Ass’n, 718 F. Supp. 2d 836, 836, 840 (E.D. Mich. 2010).
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 5
issued official letters to all plaintiffs on May 18 formally advising them that it had
rejected their appeals. This lawsuit followed on November 12, 2007.
III. Standard of Review
This court reviews a district court’s grant of summary judgment de novo. Geiger
v. Tower Auto., 579 F.3d 614, 620 (6th Cir. 2009). Summary judgment is only
appropriate if the moving party can “show that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P.
56(a). In assessing a summary judgment motion, the reviewing court must view all of
the facts in the light most favorable to the non-moving party, and then consider whether
a jury, viewing the facts in that same light, could find in favor of the non-movant.
Bennett v. City of Eastpointe, 410 F.3d 810, 817 (6th Cir. 2005) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).
IV. Duty of Fair Representation Claim
The plaintiffs assert that the union’s decision to create a distribution scheme that
included a cutoff date for full claim eligibility was both arbitrary and discriminatory and
therefore a two-fold breach of the union’s duty of fair representation. They do not allege
that the union acted in bad faith. See Merritt v. Int’l Ass’n of Machinists & Aerospace
Workers, 613 F.3d 609, 619 (6th Cir. 2010) (describing the duty of fair representation
as a conjunctive, “tripartite standard”). The district court concluded that the union’s
allocation of the Northwest claim was neither arbitrary nor discriminatory. We agree.4
With respect to the arbitrariness prong of their claim, the plaintiffs point out that the
cutoff date had the effect of granting full claim eligibility to a number of pilots,
including participants in the Pilot Early Retirement Program, who retired well before
4
As a preliminary matter, the union contends that the plaintiffs’ unfair representation claim is
barred by the six-month statute of limitations. See DelCostello v. Int’l Brotherhood of Teamsters, 462 U.S.
151, 169-70 (1983). The district court did not address the statute of limitations question and instead
proceeded to evaluate the merits of the plaintiffs’ claim. Thus, we assume that the district court decided
to equitably toll the statute of limitations until the plaintiffs received formal notice of the Master Executive
Council’s decision to reject their appeals on May 18, 2007, a date that falls within the scope of the
limitations period. See Robinson v. Cent. Brass Mfg. Co., 987 F.2d 1235, 1242 (6th Cir. 1993) (reasoning
that “whether to toll the limitations period is a question within the discretion of the district court”).
Presuming that the plaintiffs’ unfair representation claim is indeed timely, we agree with the district court
that it nonetheless cannot survive summary judgment on the merits.
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 6
December 31, 2011 but after July 31, 2006. And yet a challenged union action is
arbitrary only if it is “so far outside a wide range of reasonableness” that it is “wholly
irrational.” Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65, 78 (1991) (internal
quotations omitted). This “highly deferential” examination of a union’s performance is
particularly appropriate in the present case. Id. The union, tasked with allocating $888
million in Northwest stock among thousands of pilots, was in a quandary. It wanted the
distribution scheme to be compensatory, i.e., to reflect fairly the amount of time that
each pilot worked during the 85-month concessionary period, but it also wanted to
protect the value of the claim by distributing the shares quickly. The union’s decision
to create an eligibility cutoff date represented an admittedly imperfect compromise
between these two “conflicting goals.” (Br. of Defs.-Appellees 7.) Further, the date that
the union selected, July 31, 2006, coincided with the beginning of the Bankruptcy
Restructuring Agreement and a new round of considerable wage cuts for Northwest
pilots. Thus, although the district court conceded that the union’s allocation of the
Northwest claim “did give an unearned benefit to any pilots who retired after the cutoff
date but before the end of the eligibility period,” it held that the plaintiffs failed to create
“a genuine issue of material fact regarding whether [the union’s] actions were arbitrary.”
Bondurant, 718 F. Supp. 2d at 844, 845. Without endorsing the union’s approach as the
best possible method for allocating the claim, we are also satisfied that the union tried
to distribute the shares “quickly and fairly” and that its selection of the cutoff date was
by no means “wholly irrational.” Id. (internal quotations omitted).
Alternatively, the plaintiffs argue that the union acted arbitrarily because the
schedule attached to Letter of Agreement 2006-03 indicates that the $888 million claim
was intended to compensate pilots for wage concessions made over a 25-month period
between December 1, 2004 and December 31, 2006. Thus, according to the plaintiffs,
the union’s decision to award claim eligibility based on an 85-month concessionary
period that ran through December 31, 2011 was inconsistent with its written policy.
However, the district court correctly reasoned that it was not “wholly irrational” for the
union to conclude that the claim “also was meant to reimburse pilots for all of the
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 7
concessions they offered under the [Bankruptcy Restructuring Agreement], which ran
through December 2011.” Id. at 845 (internal quotations omitted).
The union’s distribution scheme, moreover, did not rise to the level of
discriminatory conduct that breaches the duty of fair representation. Such conduct is
“‘intentional, severe, and unrelated to legitimate union objectives.’” Merritt, 613 F.3d
at 619 (quoting Amalgamated Ass’n of St., Elec. Ry. & Motor Coach Emps. of Am. v.
Lockridge, 403 U.S. 274, 301 (1971)). Although the participants in the Pilot Early
Retirement Program clearly fared better under the union’s distribution scheme than did
the plaintiffs, “there is no requirement that unions treat their members identically as long
as their actions are related to legitimate union objectives.” Vaughn v. Air Line Pilots
Ass’n, Int’l, 604 F.3d 703, 712 (6th Cir. 2010) (“‘The [u]nion was trying to make the
best out of a bad situation, and it was almost inevitable that the [u]nion’s drawing of a
line would hurt someone. Although it is unfortunate that in this case the ultimate harm
fell on appellants, drawing the line elsewhere would, or reasonably could have been
thought would, have caused harm to others.’”) (quoting Ryan v. New York Newspaper
Printing Pressmen’s Union No. 2, 590 F.2d, 451, 457 (2d Cir. 1979)). Unions represent
diverse interests and sometimes have to make decisions that affect certain members more
harshly than others. This proposition is especially true in the context of employer
bankruptcy, which can present unique challenges for a bargaining representative.
In this case, after deciding on a method for allocating the $888 million
Northwest claim, the union was careful to protect the interests of participants in the Pilot
Early Retirement Program because it had, after all, provided special incentives to those
pilots to retire early as part of Northwest’s cost-saving measures. The mere fact that the
plaintiffs, who were older than the early retirees, did not similarly benefit from the
union’s distribution scheme is insufficient to create an inference that the union intended
to discriminate against them because of their age. See id. Moreover, the union also
awarded full claim shares to a number of pilots (those who secured Second Officer
positions) who were older than the plaintiffs – an aspect of the distribution scheme that
considerably weakens any link between the cutoff date and discriminatory age animus.
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 8
And finally, as we discuss in the next section, the plaintiffs’ additional evidence of
intentional age discrimination falls decidedly short. The plaintiffs have presented no
question of material fact about whether the union breached its duty of fair representation.
V. Statutory Age Discrimination Claims
A. Overview
The plaintiffs allege that the union’s conduct violated the Age Discrimination in
Employment Act, 29 U.S.C. § 623(c)(1), and the Michigan state law corollary, the
Elliot-Larsen Civil Rights Act, MICH. COMP. LAWS § 37.2204(a), both of which prohibit
a labor organization from “[e]xclud[ing] or expel[ling] from [] membership, or otherwise
discriminat[ing] against” its members because of their age. The same analysis governs
both claims. See Geiger v. Tower Auto., 579 F.3d 614, 626 (6th Cir. 2009). A plaintiff
can prove an intent to discriminate using either direct or circumstantial evidence. Direct
evidence of intentional discrimination is “evidence which, if believed, requires the
conclusion that unlawful discrimination was at least a motivating factor in the
[defendant’s] actions” whereas circumstantial evidence “allow[s] a factfinder to draw
a reasonable inference that discrimination occurred.” Id. at 620 (internal quotations
omitted). With either direct or circumstantial evidence, the plaintiff bears the burden of
proving “that age was the ‘but-for’ cause of the . . . adverse action[,]” which excludes
“mixed-motive” cases from liability. Gross v. FBL Fin. Servs., Inc., 557 U.S. 167,
129 S. Ct. 2343, 2350, 2351 (2009) (four members of the Court disagreed and would
have allowed liability in mixed-motive cases).
The Age Discrimination in Employment Act also authorizes recovery in a narrow
band of disparate impact cases. See Smith v. City of Jackson, 544 U.S. 228, 236-38
(2005). A plaintiff who proceeds under a theory of disparate impact is not required to
present evidence of a subjective intent to discriminate. Rather, a prima facie showing
of disparate impact requires proof that a challenged practice, neutral on its face, had a
disproportionately adverse effect on the members of a legally protected group. See
Abbott v. Fed. Forge, Inc., 912 F.2d 867, 872 (6th Cir. 1990); Allen v. Sears Roebuck &
Co., 803 F. Supp. 2d 690, 695 (E.D. Mich. 2011). Statistical evidence alone can suffice
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 9
in a disparate impact case if it is of a kind or degree sufficient to correlate a specific
employment or union practice with the complained-of adverse effect. See Kovacevich
v. Kent State Univ., 224 F.3d 806, 830 (6th Cir. 2000); Abbott, 912 F.2d at 872. The
plaintiff, however, is responsible for “isolating and identifying the specific . . . practices
that are allegedly responsible for any observed statistical disparities.” Wards Cove
Packing Co. v. Antonio, 490 U.S. 642, 656 (1989); superseded by statute on other
grounds, 42 U.S.C. § 2000e-2(k); see Meacham v. Knolls Atomic Power Lab., 554 U.S.
84, 100 (2008). The plaintiffs in this case argue that they have furnished material proof
of both intentional discrimination and disparate impact. We address each theory in turn.
B. Evidence of Intentional Age Discrimination
The plaintiffs reassert on appeal that certain statements by union decisionmakers
constitute proof of intentional age discrimination. See Geiger v. Tower Auto., 579 F.3d
614, 621 (6th Cir. 2009) (“Statements by nondecisionmakers, or statements by
decisionmakers unrelated to the decisional process itself [cannot] suffice to satisfy the
plaintiff’s burden . . . of demonstrating animus.”) (internal quotations omitted)
(alterations in original). However, even when viewing the evidence in the light most
favorable to them, no intent to exclude or otherwise discriminate against the plaintiffs
emerges. If anything, the statements evince the union’s willingness, albeit grudging, to
grant certain Northwest pilots (including Second Officers and participants in the Pilot
Early Retirement Program) full claim shares despite the fact that many of these pilots
would retire well before the Bankruptcy Restructuring Agreement’s termination in
December 2011. For example, Eligibility Committee Member Bill Bartels indicated that
“‘the really bad news is . . . that many pilots retiring soon will get full credit for the
concession period. We tried to find a way around it but couldn’t.’” (Br. of Pls.-
Appellants 32.) Similarly, Master Executive Council Vice Chairman Ray Miller wrote
an e-mail to a colleague resignedly stating that “‘I didn’t write the law; and it doesn’t
matter how either of us feel with regard to the [Age Discrimination in Employment Act]
. . . We are concerned about potential (and possibly successful) litigation.’” Id.
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 10
Because these allegedly discriminatory remarks did not relate to the plaintiffs and
actually indicate the union’s recognition of the need to comply with applicable law and
avoid discrimination based on age, we agree with the district court that they cannot be
construed as clear, direct evidence of discrimination. See Bondurant, 718 F. Supp. 2d
at 842. Further, contrary to the plaintiffs’ assertions, the statements also fail to support
an inference that the union used active employment status as a pretext to hide age animus
when it created the claim eligibility rules. See Allen v. Highlands Hosp. Corp., 545 F.3d
387, 395 (6th Cir. 2008). It was reasonable for the union to provide some distinction
based on the amount of time that a pilot worked during the seven-year concessionary
period. The plaintiffs’ age discrimination claims, insofar as they rely on evidence of the
union’s subjective intent to discriminate, do not present any trial-worthy questions of
fact.
C. Age Discrimination Based On Disparate Impact
Next, the plaintiffs invoke statistical evidence to support their age discrimination
claims based on a theory of disparate impact. They indicate that out of a pool of
approximately 6,000 pilots, only 176 younger pilots (who quit or otherwise left
Northwest employment prior to the cutoff date) received smaller claim shares than the
plaintiffs, and only 73 older pilots (presumably those who secured Second Officer
positions after reaching the then-mandatory FAA retirement age of 60) received larger
claim shares than the plaintiffs. (Br. of Pls.-Appellants 36.) Thus, according to the
plaintiffs’ interpretation, “the correlation between money received and age held true
95% of the time.” Id. But of course, the plaintiffs’ statistic fails to capture the fact that
any older pilot who reached the age-60 threshold and retired after July 31, 2006 received
a full claim share. So even though the cutoff date may have harmed the plaintiffs, it
benefitted many more older pilots than the plaintiffs’ statistic suggests.
No. 10-1904 Bondurant, et al. v. Air Line Pilots Ass’n, Int’l, et al. Page 11
However, even if we presume, without deciding, that the plaintiffs have put forth
sufficient statistical evidence to survive summary judgment, the Age Discrimination in
Employment Act explicitly states that an employer or union may avoid liability if it can
show that the challenged action was “based on reasonable factors other than age.”
29 U.S.C. § 623(f)(1). The “reasonable factors other than age” clause – an affirmative
defense rather than an element of the discrimination claim that a plaintiff must disprove
– indicates that “Congress took account of the distinctive nature of age discrimination,
and the need to preserve a fair degree of leeway for employment decisions with effects
that correlate with age. . . .” Meacham, 554 U.S. at 102; see Allen, 545 F.3d at 404
(“[O]nce a plaintiff has satisfied the nontrivial burden of identifying a specific
employment practice, the burden of persuasion shifts to the employer to show that the
practice is supported by a [reasonable factor other than age].”). Notably, the inquiry is
one of reasonableness, and “[u]nlike the business necessity test [applicable to Title VII
cases], which asks whether there are other ways for the employer to achieve its goals that
do not result in a disparate impact on a protected class, the [reasonable factors other than
age test] includes no such requirement.” City of Jackson, 544 U.S. at 243. The then-
mandatory, FAA age-60 retirement rule is an example of such a factor.
Applying this statutory provision to the present case, the plaintiffs’ age
discrimination claims fail. The union was forced to come up with some method for
distributing the $888 million Northwest claim. Its decision to create an eligibility cutoff
date that was based on active employment and that coincided with the beginning of the
Bankruptcy Restructuring Agreement was a reasonable, although imperfect, attempt to
reconcile conflicting objectives. Specifically, it was a mechanism that allowed the union
to distribute the claim shares quickly while avoiding a “‘full credit for all approach’
[that] would have given a pilot active for one month the same share (worth more than
$100,000) as one working 85 months.” (Letter Br. of Defs.-Appellees 2.) Thus, while
it may have created effects that correlated with age, the union has met its burden of
demonstrating that the distribution scheme was based on reasonable other factors. See
29 U.S.C. § 623(f)(1). We understand why the plaintiffs look longingly at the pilots who
reached age 60 only a few months after the cutoff date, and feel underpaid by
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comparison. But we do not think that this line-drawing exercise as applied to older
pilots was the result of discrimination. It was based on reasonable factors arising from
limited bankruptcy funds to be distributed according to written criteria.
For the foregoing reasons, we affirm the decision of the district court.