IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO
Civil Action No. ______
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AIRLINE DIVISION Plaintiff, v.
FRONTIER AIRLINES, INC.,
REPUBLIC AIRWAYS HOLDINGS, INC., and
FAPAInvest, LLC,
Defendants.
COMPLAINT
NATURE OF THE ACTION
1. This is an action under the Railway Labor Act, 45 U.S.C. §§ 151 et seq. (“RLA”),
to invalidate unlawful agreements among Republic Air Holdings, Inc. (“RAH”), Frontier
Airlines, Inc. (“Frontier”), Frontier Airline Pilots Association (“FAPA”), and FAPAInvest, LLC that became effective June 17, 2011 and June 24, 2011, a few days prior to plaintiff, International
Brotherhood of Teamsters, Airline Division (“IBT”), replacing FAPA as the certified exclusive
bargaining representative of pilots employed by Frontier.
JURISDICTION AND VENUE
2. This Court has jurisdiction pursuant to the Railway Labor Act, 45 U.S.C. §§ 151
et seq., and 28 U.S.C. §§ 1331 and 1337(a).
1 3. Venue of this action is proper in the District of Colorado pursuant to 28 U.S.C. §
1391(b) because a substantial part of the events giving rise to the claims alleged herein occurred within this district and defendants may be found within this district.
PARTIES
4. Defendant Frontier is a common carrier by air engaged in interstate commerce within the meaning of Section 201 of the RLA, 45 U.S.C. § 181, and does business within this district.
5. Defendant RAH is a holding company and corporation organized under the laws of Delaware with principal offices located in Indianapolis, Indiana and does business within this district. At all relevant times herein, Chautauqua Airlines, Inc. ("Chautauqua"), Republic
Airlines, Inc. ("Republic"), Shuttle America Corp. ("Shuttle"), Midwest Airlines, Inc.
("Midwest"), Lynx Aviation, Inc. ("Lynx") and Frontier were subsidiaries of RAH and common carriers by air engaged in interstate or foreign commerce within the meaning of Section 201 of the RLA, 45 U.S.C. § 181, and were under the common control of RAH.
6. Defendant FAPAInvest, LLC (“FAPAInvest”) is a limited liability company, the
Articles of Organization of which were filed with the Colorado Secretary of State on June 24,
2011. The principal office of FAPAInvest is within this district. FAPAInvest is named herein as a Federal Rule of Civil Procedure 19 defendant.
7. Plaintiff IBT is a labor organization. At all times relevant herein, IBT has been the exclusive bargaining representative of pilots employed by RAH subsidiaries Chautauqua
Republic, and Shuttle (collectively referred to hereinafter as “the Republic subsidiaries”). On
June 28, 2011, IBT was designated by the National Mediation Board (“MNB”) to be the
2 exclusive bargaining representative of a combined craft or class of pilots employed by the
Republic subsidiaries, Frontier, Midwest and Lynx following an election held among the pilots of said RAH subsidiaries in which IBT was supported by a majority of the voting pilots to be their representative. Republic Airlines, 38 NMB 245 (June 28, 2011)
FACTUAL ALLEGATIONS COMMON TO ALL COUNTS
8. In or about 2006, Frontier and Lynx became wholly-owned subsidiaries of
Frontier Airline Holdings, Inc. ("Frontier Holdings"), a holding company organized under the
laws of the State of Delaware.
9. Effective on or about July 31, 2009, RAH acquired Midwest Air Group, Inc., the
parent corporation of Midwest, and Midwest pursuant to an Agreement and Plan of Merger.
10. Effective on or about October 1, 2009, RAH acquired Frontier Holdings, Frontier,
and Lynx pursuant to an agreement approved by a bankruptcy court in bankruptcy proceedings
of Frontier Holdings, Frontier and Lynx.
11. At all times relevant herein prior to June 28, 2011, but not thereafter, FAPA was
the exclusive bargaining representative of the Frontier pilots and was a party to a collective
bargaining agreement with Frontier governing the terms and conditions of employment of the
Frontier pilots.
12. On or about October 10, 2010, the IBT applied to the NMB for a finding that the
Republic subsidiaries, Frontier and Lynx comprised a “single transportation system” for RLA
representation purposes of the pilots employed by said RAH subsidiaries.
3 13. FAPA was a party to the NMB single transportation system proceedings initiated
by the IBT. It was FAPA’s position in said NMB proceedings that Frontier was a separate
carrier that was not part of a single transportation system including the Republic subsidiaries.
14. On April 7, 2011, the NMB determined that a single transportation system exists
for a single combined craft or class of pilots employed by the Republic subsidiaries, Frontier,
Midwest and Lynx. The NMB’s single transportation system determination is reported at
Republic Airlines, Inc., et. al., 38 NMB 138 (2011), and a true and correct copy of said NMB
determination is attached hereto as Exhibit 1.
15. Among the facts relied upon by the NMB in finding a single transportation system
consisting of the Republic subsidiaries, Frontier, Midwest and Lynx were (1) that the same
senior managers oversee all the operating carriers; (2) the same individuals were the CEOs,
COOs and Vice Presidents of Labor Relations and Human Resources at all the operating carriers;
(3) it is represented to the public on both RAH and Frontier websites that Frontier’s “branded”
operations are flown by Frontier, Lynx, Republic, and Chautauqua; (4) the employees of all of
the operating carriers are subject to the same operational policies and most labor relations
policies (except for differences due to different collective bargaining agreements); and (5)
employment opportunities on all carriers are listed and recruitment is handled through a single
RAH website.
16. On April 11, 2011, FAPA requested reconsideration of the NMB’s single carrier
determination. The NMB denied FAPA’s reconsideration request on April 21, 2011. Republic
Airlines, Inc., et. al., 38 NMB 175 (2011)
4 17. IBT was the only labor organization that established at least a thirty-five percent
(35%) showing of interest of the combined class or craft required under NMB rules to initiate a
representation investigation by the NMB.
18. On May 2, 2011, the NMB authorized an election to select an exclusive
bargaining representative for the combined craft or class of pilots employed by the Republic
subsidiaries, Frontier, Midwest and Lynx. IBT was the only labor organization that appeared on
the ballot. Republic Airlines, Inc., et. al., 38 NMB 175 (2011)
19. On May 3, 2011, the NMB scheduled a June 1 – 27, 2011 voting period and a
June 27, 2011 ballot tally.
20. Because a majority of voting pilots in the combined craft or class were employed
by the Republic subsidiaries and were represented by IBT, RAH, Frontier and FAPA anticipated that IBT would prevail in the representation election.
21. On or about June 10, 2011, FAPA and Frontier agreed in Letter of Agreement 67
(“LOA 67”), which became effective June 17, 2011 following ratification by FAPA-represented
Frontier pilots, to amend their collective bargaining agreement to, among other things, grant wage and benefit concessions to Frontier, grant an equity position in Frontier for FAPA- represented pilots, and establish a Frontier profit-sharing plan for FAPA-represented pilots.
Frontier further agreed that Frontier and RAH would make a good faith effort to reduce RAH’s equity position in Frontier to forty-nine percent (49%) or less. A true and correct copy of the tentative agreement of LOA 67 ratified by Frontier pilots, and which became effective June 17,
2011, is attached hereto as Exhibit 2.
5 22. Frontier and FAPA further agreed in the ratified version of LOA 67 that became
effective June 17, 2011 (Ex. 2) that Frontier would “[i]mmediately redevelop a unique Frontier
Airlines, Inc. websites for all sales, operational and recruitment purposes,” and
The following steps shall be taken no later than December 31, 2011 so long as this agreement is in effect:
a) Separate the management structure to include (at a minimum):
b) Appointment of a separate Frontier Airlines Inc. Chief Operating Officer,
c) Flight Operations (including all FAA required positions) shall report to the Frontier Airlines, Inc. COO,
d) Appoint an independent Director of Labor Relations for Frontier Airlines which shall report to the Frontier Airlines COO.
e) Separate Human Resource and Payroll functions from Republic Airways Holdings, or contract said functions to a third party on behalf of Frontier Airlines, Inc.
f) Maintain a separate and unique Employee Handbook for Frontier Airlines, Inc. employees.
g) Document arms-length agreements (e.g. pro-rate agreements), consistent with agreements with other contracted airlines, with any Republic Airways Holdings Inc. subsidiary that operates on behalf of the Company such that any profits or losses from the agreement shall be charged to that certificate rather than the Company.
23. On June 22, 2011, relying upon the attached Exhibit 2, “the Company” made a
request to the NMB that the tally of ballots for the election, “currently scheduled for June 27,
2011, be postponed pending the Board’s consideration of whether a corporate restructuring and planned divestiture of majority ownership of Frontier Airlines, Inc. (Frontier”) affects the Board determination that Frontier is part of a single transportation system with the Republic Airways
Holding, Inc. (RAH) operating subsidiaries (Republic Airlines, Chautauqua, Shuttle America and
6 the former Lynx Aviation).” A true and correct copy of “the Company’s” June 22, 2011 request to the NMB is attached hereto as Exhibit 3.
24. On June 24, 2011, the NMB denied the June 22, 2011 request of RAH to postpone the June 27, 2011 tally of ballots for the election. Republic Airlines, Inc., et. al., 38 NMB 242
(2011)
25. On June 24, 2011, FAPA and Frontier entered into a revised LOA 67, a true and
correct copy of which is attached hereto as Exhibit 4.
26. Also on June 24, 2011, FAPAInvest, LLC was formed by a filing with the
Secretary of State of Colorado, with Jeffrey Thomas, then-President of FAPA, as managing
member of the limited liability company.
27. On June 24, 2011, FAPAInvest, Frontier and RAH entered into a “Commercial
Agreement,” a true and correct copy of which is attached hereto as Exhibit 5.
28. On June 27, 2011, the NMB tallied the ballots of the scheduled election and,
because IBT was the preferred representative by a majority of voters, the NMB certified IBT as the exclusive bargaining representative of a combined craft or class of pilots employed by all
RAH carrier subsidiaries on June 28, 2011. Republic Airlines, Inc., et. al., 38 NMB 245 (2011)
COUNT I Invalidity of LOA 67 and Commercial Agreement Because of RLA Section 2, Fourth
29. In entering into LOA 67 (Exs. 2, 4) and the Commercial Agreement (Ex. 5), it
was a purpose and intent of RAH and Frontier to interfere with and prevent the anticipated
election of IBT as the exclusive bargaining representative of a combined craft or class of pilots
7 employed by all RAH carrier subsidiaries on June 27, 2011, and to assist FAPA to remain the exclusive bargaining representative of Frontier pilots beyond June 27, 2011.
30. By reason of the foregoing, RAH and Frontier have violated Section 2, Fourth of the RLA, 45 U.S.C. § 152, Fourth.
31. By reason of the foregoing, LOA 67 and the Commercial Agreement should be declared null and void.
COUNT II Invalidity of LOA 67 and Commercial Agreement Because of RLA Sections 2, Third and Fourth
32. IBT realleges and incorporates by reference paragraphs 1 through 28 inclusive herein.
33. In entering into LOA 67 (Exs. 2, 4) and the Commercial Agreement (Ex. 5), it was a purpose and intent of RAH and Frontier to interfere with the RAH subsidiaries’ pilots’ choice of IBT to be their representative, and to assist a FAPA claim in a future NMB proceeding that Frontier has become a carrier separate, for representation purposes, from other RAH operating carrier subsidiaries and that FAPA should be designated by the NMB to be the bargaining representative of a craft or class of pilots employed by Frontier.
34. By reason of the foregoing, RAH and Frontier have violated Sections 2, Third and
Fourth of the RLA, 45 U.S.C. §§ 152, Third and Fourth.
35. By reason of the foregoing, LOA 67 and the Commercial Agreement should be declared null and void.
8 COUNT III Invalidity of LOA 67 and Commercial Agreement Because of RLA Section 2, Ninth
36. IBT realleges and incorporates by reference paragraphs 1 through 28 inclusive herein.
37. RAH and Frontier know that FAPAInvest is controlled by and is an alter ego of
FAPA.
38. In entering into LOA 67 (Ex. 2, 4) and the Commercial Agreement (Ex. 5), it was a purpose and intent of RAH and Frontier to (1) preclude IBT from negotiating any changes to the Commercial Agreement; (2) preclude IBT from having any role in negotiating the future
“equity participation agreement” contemplated by the Commercial Agreement; (3) preclude IBT from having any role in representing the interests of Frontier pilots in “any matter” related to the
Commercial Agreement; and (4) to treat with FAPA on all matters related to the Commercial
Agreement.
39. By reason of the foregoing, RAH and Frontier have violated Section 2, Ninth of the RLA, 45 U.S.C. §§ 152, Ninth.
40. By reason of the foregoing, LOA 67 and the Commercial Agreement should be declared null and void.
COUNT IV Invalidity of LOA 67 and Commercial Agreement Because of RLA Sections 2, Third and Fourth
41. IBT realleges and incorporates by reference paragraphs 1 through 28 inclusive, 37 and 38 herein.
9 42. By reason of the foregoing, RAH and Frontier have violated Sections 2, Third and
Fourth of the RLA, 45 U.S.C. §§ 152, Third and Fourth.
43. By reason of the foregoing, LOA 67 and the Commercial Agreement should be
declared null and void.
COUNT V Invalidity of LOA 67 and Commercial Agreement Because of RLA Sections 2, First and 6
44. IBT realleges and incorporates by reference paragraphs 1 through 28 inclusive
herein.
45. At all relevant times since RAH’s acquisition of Frontier, IBT’s collective
bargaining agreement with the Republic subsidiaries prohibits RAH from maintaining or
operating Frontier as an air carrier separate, for representation purposes, from other RAH air
carrier subsidiaries. Attached hereto as Exhibit 6 are true and correct copies of the provisions of the IBT’s collective bargaining agreement which so provide.
46. IBT’s collective bargaining agreement with the Republic subsidiaries became amendable within the meaning of the RLA on October 17, 2007, and the parties have, since that date, been engaged in major dispute resolution procedures.
47. In entering into and complying with LOA 67 (Exs. 2, 4) and the Commercial
Agreement (Ex. 5), it was a purpose and intent of RAH and Frontier to operate Frontier as an air
carrier separate, for representation purposes, from other RAH air carrier subsidiaries in violation
of IBT’s collective bargaining agreement.
48. By reason of the foregoing, RAH and Frontier have violated and are violating
Section 2, First of the RLA, 45 U.S.C. § 152, First, and Section 6, 45 U.S.C. § 156.
10 49. By reason of the foregoing, LOA 67 and the Commercial Agreement should be
declared null and void.
COUNT VI RAH and Frontier’s Refusal to Treat With IBT Regarding the Commercial Agreement In Violation of RLA Section 2, Ninth
50. This Count VI is brought in the alternative to Counts I through V inclusive herein.
51. IBT realleges and incorporates by reference paragraphs 1 through 28 inclusive and paragraphs 37 and 38 herein.
52. RAH and Frontier have informed IBT that RAH and Frontier will not treat exclusively with IBT regarding matters concerning the Commercial Agreement, and that
FAPAInvest has authority to represent the interests of Frontier Pilots in matters related to the
Commercial Agreement.
53. By reason of the foregoing, RAH and Frontier have violated Sections 2, Third,
Fourth and Ninth of the RLA, 45 U.S.C. §§ 152, Third, Fourth and Ninth.
PRAYER FOR RELIEF
WHEREFORE, IBT requests that judgment be entered in favor of IBT and against defendants on Counts I through V inclusive, and that IBT be awarded the following relief on
Counts I through V inclusive:
A. A declaratory judgment declaring that LOA 67 and the Commercial Agreement are null and void;
B. A preliminary and permanent injunction barring RAH, Frontier and FAPAInvest from taking any actions in compliance with LOA 67 and the Commercial Agreement without the
Court’s prior approval;
11 C. An award of costs incurred by IBT in bringing this action, including reasonable attorney’s fees; and
D. For such other relief the Court deems equitable and just.
Alternatively, IBT requests that judgment be entered in favor of IBT and against defendants on Count VI, and that IBT be awarded the following relief on Count VI:
A. A declaratory judgment declaring that FAPAInvest shall not have any authority to represent the interests of any Frontier Pilots in any matter related to the Commercial Agreement;
B. A preliminary and permanent injunction requiring RAH and Frontier to treat exclusively with IBT regarding the interests of all Frontier Pilots in any and all matters concerning the Commercial Agreement;
C. An award of costs incurred by IBT in bringing this action, including reasonable attorney’s fees; and
D. For such other relief the Court deems equitable and just.
Dated: August 3, 2011
Respectfully submitted,
/s/ William R. Wilder______William R. Wilder BAPTISTE & WILDER, P.C. 1150 Connecticut Avenue, N.W. International Brotherhood of Suite 315 Teamsters, Airline Division Washington, D.C. 20036 25 Louisiana Ave, N.W. Tel: 202-223-0723 Washington, D.C. 20001 Fax: 202-223-9677 [email protected] Counsel for International Brotherhood of Teamsters, Airline Division
12