RLA UPDATE: Seventh Circuit Upholds Federal Court Jurisdiction to Issue Preliminary Injunction over Representation Dispute

The Railway Labor Act (“RLA”) gives the National Mediation Board (“NMB”) exclusive jurisdiction to decide “whether or by what representative” employees are represented for purposes of collective bargaining. In International Brotherhood of Teamsters v. Frontier Airways, Inc. (“Frontier”), No. 10-2291 (7th Cir. Dec. 13, 2010), the Seventh Circuit reaffirmed the NMB’s exclusive jurisdiction over representation disputes. However, the court ruled that a federal court has jurisdiction to issue a preliminary injunction requiring a carrier to continue recognizing an incumbent union and the applicable collective bargaining agreement pending disposition of a representation dispute that could result in loss of the union's representation rights. The Seventh Circuit ruled that any such injunction should be conditioned upon prompt submission of the representation dispute to the NMB by the union, as the RLA provides no administrative mechanism by which a carrier (rather than a union or group of employees) can bring a question of representation (known as a “representation dispute”) before the NMB.

The representation dispute in Frontier arose because of a transfer of work between affiliated carriers. In October 2009, Republic Airways Holding, Inc. acquired Frontier Airlines. Republic later announced that it was shifting maintenance work on Frontier’s aircraft from Frontier’s Teamster-represented facility to a nonunion facility of another airline owned by Republic. The Teamsters filed suit, claiming that Frontier violated the RLA and created a "major dispute" by abrogating the Frontier labor contract. Republic moved to dismiss the complaint, arguing that the Frontier mechanics were part of a “single transportation system” comprised of Frontier and Republic’s other airline operations, and that the NMB had exclusive jurisdiction to decide that question of representation. If Republic’s "single system" argument prevailed, then Frontier’s mechanics would comprise less than a majority of a much larger system-wide craft or class, and the Teamsters would not have the right to represent them. The RLA permits the NMB to certify representatives only on a system-wide basis, and not on a location-by-location basis, as is common under the National Labor Relations Act.

The case went to the Seventh Circuit on review of a preliminary injunction ordering Frontier to continue recognizing the Teamsters as representative of Frontier’s mechanics and to honor the Teamsters contract with Frontier. However the injunction contained no expiration date nor did it have a mechanism for compelling resolution of the underlying representation dispute. Thus the injunction produced a “standoff” in which the carrier had no mechanism to bring the representation dispute to the NMB, and the union — which had such a mechanism at its disposal — had no incentive to initiate an NMB proceeding. So long as the “preliminary” injunction remained in effect, the Teamsters would continue to represent Frontier’s mechanics, even though Frontier’s mechanics might properly be treated as a minority within a larger craft or class.

On appeal, the Seventh Circuit upheld the district court’s authority to issue an injunction in a representation dispute. However the court ruled that the injunction should be modified to condition the order on the Teamsters “prompt application” to the NMB for a ruling on the representation issue. By limiting the duration of the injunction, the Seventh Circuit reasoned, the “standoff” would be resolved and the federal court injunction would not have the effect of deciding the ultimate question of the representation of Frontier’s mechanics.

The Frontier Airlines decision is important because it upholds federal jurisdiction to issue a preliminary injunction in the context of a representation dispute. The Seventh Circuit expressly disagreed with other courts that have held that courts must dismiss, for lack of jurisdiction, any complaint that involves questions of representation under the RLA. Nevertheless, the Seventh Circuit emphasized that any such injunction must be preliminary — not final — and that resolution of the merits of the representation dispute must occur at the NMB.

The decision is also important because it allows a carrier, in an appropriate case, to force resolution of a representation dispute even though the carrier has no right to seek an NMB election in its own right. By taking the position that the Frontier mechanics were part of a "single transportation system" the carrier provoked a lawsuit that ultimately may force the Teamsters to initiate a representation proceeding through which the carrier should be able to litigate its “single transportation system” argument.

Finally, the decision is important because it contains broad language stating that courts have jurisdiction to issue injunctions to preserve the status quo over contract interpretation disputes (“minor disputes”). While the language relating to minor disputes is arguably dicta — and the court did not question the strict standards traditionally applied to such injunction requests — the Seventh Circuit's language will likely be cited by parties seeking interim relief during grievance/arbitration proceedings.