28 NMB No. 80

July 17, 2001

Mr. Duane Woerth, President
Jonathan A. Cohen, Esq.
Director - Legal Department
Elizabeth Ginsburg, Esq.
Senior Attorney
Legal Department
Seth D. Rosen, Esq.
Director - Rep. Department
Air Line Pilots Association
1625 Massachusetts Ave., NW.
Washington, DC 20036

Mr. Patrick J. Burke, President
Independent Association of Continental Pilots
3808 World Houston Parkway, Suite A
Houston, TX 77032

Re: File No. C-6722/Case Nos. R-6193 and R-6717
Independent Association of Continental Pilots/Air Line Pilots Association

Gentlemen and Ms. Ginsburg:

This determination addresses the joint request from the Independent Association of Continental Pilots (IACP) and the Air Line Pilots Association (ALPA) to transfer IACP's certifications in NMB Case Nos. R-6193, covering the pilot craft or class, and R-6717, covering the flight instructor craft or class, to ALPA. For the reasons discussed below, the National Mediation Board (Board) grants the requests and transfers IACP's certifications to ALPA.

I.

The Joint Request for Transfer of Certification

IACP was certified to represent Continental Airlines, Inc./Continental Express, Inc. (Continental or Carrier) pilots in NMB Case No. R-6193. Continental Airlines, Inc./Continental Express, Inc., 20 NMB 570 (1993). Later, IACP was certified to represent the Carrier's flight instructors in NMB Case No. R-6717. Continental Airlines, Inc./Continental Express, Inc., 28 NMB 1 (2000).

The May 23, 2001, joint request is signed by Patrick J. Burke, President, IACP and Duane Woerth, President, ALPA, and states, in pertinent part:

We write to request that the Board transfer certification to represent the pilots and flight instructors of Continental Airlines and Continental Express for purposes of collective bargaining from the Independent Association of Continental Pilots ("IACP") to the Air Line Pilots Association ("ALPA"). The officers of both unions make this request pursuant to the terms of the Merger Agreement entered into by the parties. . . . The Agreement becomes effective on June 1, 2001. . . .

The parties have met all requirements under their Merger Agreement for transfer of certification. Consistent with their respective Constitutions and By-laws, the governing bodies of both unions have approved the Agreement, and the members of the IACP have voted by secret ballot to ratify it and transfer representation rights to ALPA. . . . Following the ratification vote, ALPA's Executive Board ratified the Merger Agreement on May 22, 2001.

The joint request includes the following supporting documents:

• The Merger Agreement between the ALPA and the IACP signed by Woerth and Burke;
  
  
• The American Arbitration Association certification of election results form establishing that there were 3,238 "yes" votes for the Merger Agreement; 2,034 "no" votes against the Merger Agreement; one blank ballot; and 3 void ballots; and
  
  
• The May 22, 2001, resolution of the ALPA Executive Board approving the Merger Agreement.

In a June 7, 2001, letter to the Board, Continental Airlines, Inc./Continental Express, Inc. (Carrier) states:

Continental regards the merger of the Independent Association of Continental Pilots into the Air Line Pilots Association as an internal union matter. Accordingly, it takes no position and has no comment regarding the Union's application appended to your letter, other than to note that it intends to continue to treat and bargain in good faith with the pilots' duly certified employee representative, as determined by the National Mediation Board.

II.

Employee Submissions

From May 11, 2001, through June 4, 2001, the Board received submissions from approximately 35 employees concerning the merger of IACP and ALPA. Some of these submissions were signed by several employees, but most were from individuals. Most of the submissions included an identical cover letter and a "Complaint" (Complaint I) claiming "fraud and gross abuse" in the merger process. Complaint I's cover letter identified Gerald Ross as the point of contact for questions. A few submissions included another cover letter and a different "Complaint" (Complaint II) also claiming "fraud and gross abuse" in the merger process, but only as to the flight instructor craft or class. Complaint II's cover letter identified David Little as the point of contact.

On June 28, 2001, the Investigator separately contacted Ross and Little to discuss the Board's investigation. Ross and Little agreed that further submissions, particularly of substantive evidence supporting the claims, would be due by 4 p.m. EDT, Monday, July 2, 2001. Ross and Little were reminded that, as representatives, each must file a "Notice of Appearance" and that, pursuant to the Board's Representation Manual (Manual) Section 1.302, copies of submissions must be served simultaneously on all other representatives by the same method used to serve the Board. This deadline for additional submissions and further details on the Board's procedures were reiterated in a June 28, 2001, letter from the Investigator which was FAXED and mailed to Ross and Little.

The Investigator contacted ALPA's representative and established a deadline for a response to any Ross or Little submission by 4 p.m. EDT, Thursday, July 5, 2001.

On July 2, 2001, the Board received Ross' request for an extension to file additional submission in support of his complaint until July 13, 2001. Board guidelines establish that, absent extraordinary circumstances, no request for an extension of a deadline which is received on the date a submission is due will be considered. However, Ross was granted a brief extension until 4 p.m. EDT, Tuesday, July 3, 2001. Similarly, ALPA's response deadline was extended to 4 p.m. EDT, Friday, July 6, 2001.

Little filed a "Notice of Appearance" and a submission in support of Complaint II on July 2, 2001. On July 3, 2001, he filed a request for continuance of the investigation and an extension to file additional supportive documents.

On July 5, 2001, Ross filed a late submission with the Board. ALPA responded to both complaints on July 6, 2001. Ross filed a "Notice of Appearance" on July 11, 2001.

A.

Complaint I

Complaint I asserts eight claims concerning merger process which the complaint argues constitute "fraud and gross abuse." Broadly, the claims are as follows:

• IACP "officials used union assets to promote ALPA."
  
  
• IACP officials were reimbursed for flight loss pay by ALPA. ⁽¹⁾
  
  
• IACP elected officials used their positions to condone and approve the merger, and thereby improperly influenced the rank-and-file.
  
  
• IACP officials failed or refused "to obtain a showing of interest from the members for ALPA" prior to forcing the merger election.
  
  
• IACP officials created "hurdles" and "roadblocks," including a "censorship committee," to suppress the interests of the employees opposed to the merger and who "want[ed] to maintain the status-quo with IACP."
  
  
• IACP officials failed "to examine the financial books of ALPA" in a manner that satisfied a "due diligence" requirement.
  
  
• The merger agreement violates ALPA's constitution and by-laws.
  
  
• IACP officials "may have doctored the books to preclude a refund to agency-shop fee payers for non-germane expenses."

Complaint I requests that the Board "act to set aside or otherwise invalidate the results of this [merger] election" or refuse ALPA's request "to amend, change or alter the certifications of collective bargaining representative status . . . originally granted" to the IACP.

B.

Complaint II

Complaint II asserts three claims concerning the merger process relating only to the flight instructor craft or class. Broadly, the claims are as follows:

• "bait and switch" by running a representation campaign "to entice Continental Flight Instructors to vote for IACP . . . [when IACP officials knew] that there would be an internal representational vote where ALPA would be a candidate."
  
  
• "duplicitous statements" by IACP officials "tout[ing] [IACP's] merits and benefits that the [flight instructors] could not get along without" while "depreciating and denigrating the same IACP benefits hawked to the [flight instructors] for the sake of promoting ALPA to the Pilots."
  
  
• "manipulation of representation" when the IACP President appointed a temporary pro-merger "status representative" for the newly certified flight instructor craft or class when an election of the representative was required by the IACP constitution and by-laws.

Complaint II requests that "the Board revoke, rescind or otherwise invalidate the 'Flight Instructor' . . . certification" or "reject or refuse any request or demand . . . to transfer" the flight instructor certification from IACP and ALPA.

III.

ALPA's Response

ALPA's response to the complaints is supported by declarations and supporting exhibits from Jalmer Johnson, ALPA General Manager, and Nicholas Tulloh, IACP Secretary-Treasurer. ⁽²⁾ Johnson was the lead staff member with the responsibility for the merger discussions between ALPA and IACP. Tulloh was the IACP representative who participated in discussions on issues to be addressed if the merger was approved by the IACP and ALPA. ALPA responds to the complaints as follows:

A.

Complaint I

• There is no evidence supporting the claim of misuse of IACP assets to promote ALPA and no law prohibiting the use of union assets or the advocacy by IACP officers to support the IACP/ALPA merger.
  
  
• "ALPA did not at any time provide flight loss or paid Association leave to any IACP officials in compensation for their time spent working on the merger." ALPA also asserts this claim "is unsubstantiated and completely false."
  
  
• ALPA says that there is no legal theory preventing IACP officers from expressing views supporting the merger and the IACP constitution and by-laws does not require a membership vote for a "showing of interest" as required for a Board election.
  
  
• Citing the Tulloh declaration, ALPA says that the IACP took extraordinary steps to ensure the membership received a "balanced presentation" on merger issues. Tulloh states that pilots opposed to the merger were placed on flight loss pay and union leave, and received office space and facilities to distribute information to IACP members.
  
  
• IACP says that the "due diligence" procedures were approved by IACP and ALPA. ALPA argues that the Johnson declaration and exhibits, which includes two letters from the IACP auditors, establishes both IACP and ALPA officials were satisfied that the "due diligence" procedures were met.
  
  
• Citing the Johnson declaration, ALPA says that the IACP/ALPA Merger Agreement, consistent with the ALPA constitution and by-laws, established "transition appointments" to fill offices until election could be held.
  
  
• ALPA states that the claim that ALPA "may have doctored" financial records "is nothing more than unsubstantiated suspicion" and offers "absolutely no evidence to support [the] charges."

B.

Complaint II

• The claim states that there was considerable discussion about the merger as early as May 2000, but the merger was still uncertain at the time of the flight instructors' representation election. "Thus, while the possibility of an ALPA merger remained widely discussed, the matter was uncertain during the [flight] instructors' election. Furthermore, the merger was voted on by IACP Board two months after the flight instructors' election."
  
  
• "[T]here is nothing inconsistent or duplicitous about some IACP officials expressing the view that joining IACP was a improvement over having no representation, and also expressing the view that merging with ALPA would further improve their representation."
  
  
• The interim appointment of a flight instructors' representative complied with the IACP constitution and by-laws.

ALPA says that on July 6, 2001, it received the late submission from Ross and that submission offered no evidentiary support or legal basis for Complaint I. ALPA concludes that neither complaint establishes fraud or gross abuse in the merger process and the joint request to transfer of certification should be granted.

IV.

DISCUSSION

The RLA requires only that the Board investigate a transfer of certification based on a union merger rather than mandating any procedures for such an investigation. Consolidated Rail Corp., 28 NMB 30 (2000) (citing Continental Airlines, Inc., v. National Mediation Board, 793 F. Supp. 330 (D.D.C. 1991), aff'd mem., 957 F.2d 911 (D.C. Cir. 1992), cert. denied, 493 U.S. 974 (1992)). The Board views an organization's decision to merge into another organization as an internal union matter and the Board will grant requests for transfers of certification based on union mergers unless there is evidence of fraud or gross abuse in the merger or election. Northwest Airlines, Inc., 18 NMB 446 (1991).

The Board generally grants a transfer request based upon assertions contained in the request letters. Big Sky Transportation Company, 25 NMB 376 (1998); Desert Sun Airlines, 24 NMB 137 (1997); Northwest Airlines, above at 448; Transtar Airlines, 14 NMB 377 (1987); Brotherhood of Railway, Airline & Steamship Clerks, 13 NMB 408 (1986); Railroad Yardmasters of America, 13 NMB 6 (1985).

The Board's investigation revealed that on March 9, 2001, Ross and four other employees filed suit in the United States District Court, Southern District of Texas (Houston), against the IACP and five named IACP officers claiming that the IACP-ALPA merger process violated the IACP's constitution and by-laws. Minjares, et al. v. IACP, et al., Civil No. H-01-9820 (S.D. Tex. 2001) (Minjares). A trial was held on April 9, 2001. On April 11, 2001, the court concluded that "the proposed IACP-ALPA merger does not violate the Constitution and By-laws of the IACP." On May 21, 2001, the court entered an Amended Final Judgment ordering "that Defendants are granted a judgment on Plaintiff's claim regarding the unconstitutionality of the Independent Association of Continental Pilots' proposed merger with the Air Line Pilots Association."

Complaint I and Complaint II's assertions include claims that the merger process violated the IACP or ALPA constitution and by-laws. The Minjares court decision establishes that the merger process did not violate the IACP constitution and by-laws. ALPA's submission, including the organization's constitution and by-laws, establishes that the merger process did not violate the ALPA constitution and by-laws.

Central to both complaints is the assertion that the merger process constituted a representation election pursuant to the Railway Labor Act (RLA). Board precedent establishes that an organization's decision to merge into another organization as an internal union matter. Therefore the merger process has no relationship to the RLA representation process. Northwest Airlines, Inc., above. The assertions are without merit.

Even after reviewing the late submissions, the remainder of the claims in both Complaints are circumstantial, conclusionary, speculative, and lack materiality. Based on the record as a whole, the Board finds that there is no merit to any of the claims that there was fraud and gross abuse in the IACP/ALPA merger or election process.

V.

CONCLUSION

Based on its investigation, the Board finds that there is no evidence of fraud or gross abuse in the merger or election processes. Since the IACP has merged into ALPA, the joint request for transfer of certifications is granted. The Board's records are revised to reflect the transfer of the certifications issued to IACP in NMB Case Nos. R-6193 and R-6717 to ALPA.

By direction of the NATIONAL MEDIATION BOARD.

Stephen E. Crable
Chief of Staff

Copies to:

Michael H. Campbell
Daniel P. Casey
Jeffrey D. Wall, Esq.
Mr. Gerald S. Ross
Mr. David R. Little

1. Flight loss pay occurs when Union officials' representational duties conflict with their work schedules. At Continental, the carrier continues to compensate the employee and bills the labor organization for the lost wages.

2. The Tulloh declaration was prepared by ALPA during the litigation in Minjares, et al. v. IACP, et al., Civil No. H-01-9820 (S.D. Tex. 2001), a suit brought by Ross and other employees, challenging the merger. The declaration includes documents relevant to the merger process.