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Krakowski v. Allied Pilots Association

United States District Court, E.D. Missouri, Eastern Division

March 22, 2019

JOHN KARKOWSKI, individually, and on behalf of all others similarly situated, Plaintiff,
v.
ALLIED PILOTS ASSOCIATION, Defendant,

          OPNNION, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendant's Motion to Dismiss, or in the alternative, Motion for Summary Judgment, [Doc. No. 30]. Plaintiff opposes the Motion. For the reasons set forth below, the alternative Motion for Summary Judgment will be granted.

         Background

         Plaintiff has filed a Second Amended Complaint alleging a breach of the duty of fair representation by Defendant, (Count 1); violation of the Labor-Management Reporting and Disclosure Act, (Count 2); breach of contract, (Count 3); conversion, (Count 4); and unjust enrichment, (Count 5). Plaintiff filed the Second Amended Complaint on behalf of himself and all others similarly situated.

         Plaintiff and the Class are pilots at American Airlines, Inc. (American). Plaintiff and Class claim that APA improperly collected and retained 1% agency fees/dues, as set out in APA's Constitution and Bylaws (C&B), from a Global Profit Sharing Plan (the Plan) introduced by American.

         Facts and Background

         Plaintiff is an airline pilot employed by American Airlines, Inc. (“American”), and purports to represent a putative class consisting of all American pilots. APA is a labor organization and the certified collective bargaining representative of the American pilots.

         The terms and conditions of employment for American pilots are contained in a collective bargaining agreement between APA and American (the “CBA”). The CBA defines itself as the body of the CBA and all supplements and letters of agreement between the APA and the Company. The CBA provides that the “Agreement” shall supersede and take precedence over all “Agreements” concerning the same subjects previously executed.

         Pursuant to Section 25 of the CBA, APA is authorized to receive dues from its members and agency fees from non-member pilots in return for APA's collective bargaining services. The vast majority of American pilots elect to have American withhold dues from the compensation they receive from American, which remits the dues directly to APA. The remaining pilots elect to receive an invoice from APA and directly pay APA each month.

         On the subject of dues, the APA's Constitution & Bylaws (“C&B”) provides as follows:

Members shall pay dues at the rate of one percent (1%) on current monthly income. Dues at the rate in effect at the time any such payments are received by the member shall be collected on all contractual pay, including Variable Compensation, cash bonuses, and cash profit sharing.

         In 2016, American established the American Airlines Group Inc. Global Profit Sharing Plan (the “Plan”) to provide profit sharing awards to American employees who are “Participant[s]” in the Plan in the form of “a lump-sum cash payment on or prior to March 15th of the immediately following Plan Year.” The Plan expressly conditioned the issuance of payments to employees represented by a labor union, including the APA, on the requirement that “such union has agreed to the Employees' participation in this Plan.” As the Plan required, on October 20, 2016, APA entered into a letter of agreement with American to that effect, thereby making APA-represented pilots- including Plaintiff-eligible for cash profit sharing distributions from the Plan. The October 2016 LOA confirmed APA's and American's “understanding regarding profit sharing” and provided that it “shall remain in effect for the duration of the Joint Collective Bargaining Agreement dated January 30, 2015.” On March 10, 2017, American made its first cash profit sharing distribution pursuant to the Plan. APA received dues based on that distribution, either by deduction from pilot compensation by American or by invoice to pilots by APA. APA did not respond to Plaintiff's demands for the return of the 1% dues attributable to the distribution.

         In April 2017, two members of APA's Board of Directors (“BOD”) introduced a resolution to refund to each pilot any and all dues/agency fees collected on the cash profit sharing distributions. That resolution included the following whereas clauses:

WHEREAS, the Company established a profit sharing arrangement … for all employees and offered the Plan to APA for consideration and acceptance; and,
WHEREAS, at the Fall 2016 Board of Directors meeting, the APA Board moved to direct the President “…to sign the profit sharing LOA as presented by the Negotiating Committee.”; and,
WHEREAS, dues and/or agency shop fees have been withheld and/or billed to pilots who received compensation ...

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