By Joe Forward, Legal Writer, State Bar of Wisconsin

Dec. 14, 2010 – Using equity principles, a three-judge panel for the Seventh Circuit Court of Appeals has untangled a procedural delay in the representation dispute between the International Brotherhood of Teamsters and Republic Airways Inc., the parent holding company of subsidiary Frontier Airlines, Inc.

Republic Airways (Republic), which owns a number of airlines, acquired Frontier Airlines (Frontier) in October 2009 and announced plans to shift Frontier’s maintenance work from its hub in Denver to Milwaukee. Maintenance is performed by nonunion workers in Milwaukee, but the Teamsters Union represents Denver’s maintenance crews.

As a result of the acquisition, Republic argues that Frontier became part of a “single transportation system” under the Railway Labor Act (RLA), which governs labor relations in the airlines industry.

If deemed part of a single transportation system, the Teamsters Union would not represent a majority of its members, and would not be authorized to represent Frontier’s workers. That would allow Republic to alter the working conditions of the formerly represented workers.

However, the Teamster’s argue that Republic is not a single transportation system, and thus Frontier’s union maintenance workers constitute a separate bargaining unit and the union is its lawful representative. In that situation, RLA process governs collective bargaining disputes.

The U.S. District Court for the Eastern District of Wisconsin issued a preliminary injunction forbidding Republic from altering pay, work rules, or working conditions until the National Mediation Board rules on the issue of whether Frontier is a single transportation system.

In Int’l Brotherhood of Teamsters Airline Division v. Frontier Airlines, Inc., No. 10-2291 (De. 13, 2010), the Seventh Circuit Appeals panel vacated the injunction, and ordered reissuance with instructions for modification based on equitable principles.

In the opinion written by Judge Richard Posner, the panel concluded that the district court’s injunction maintained “what may well be an illegal status quo – a union supported by only a fourth of the bargaining unit yet acting as the bargaining representative of that minority.”

The injunction created a procedural quagmire, the panel explained, because Republic cannot invoke the National Mediation Board’s jurisdiction to resolve representation disputes. The union can invoke the Board’s jurisdiction but won’t, the court explained, because it has no incentive “to lose its status as the bargaining representative for Frontier’s mechanics.” The panel also noted that the district court’s injunction was indefinite.

“Fortunately this perverse result can be avoided by the application of age-old equitable principles,” Posner wrote. “What could be less equitable than to allow the union, having obtained an injunction in its favor, to foreclose by deliberate inaction a determination of whether it remains the legally authorized bargaining representative of the Frontier mechanics?”

The panel ruled that the injunction must be modified to condition continuance on the Teamster Union’s prompt application to the National Mediation Board for a ruling on its representation status. Thus, the union’s status quo representation will be continued if the condition is met.