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February 19, 1975

Japan Air Lines Company, Ltd., Plaintiff
International Association of Machinists and Aerospace Workers, AFL-CIO ("IAM") et al., Defendants

Ward, D.J.

The opinion of the court was delivered by: WARD

WARD, D.J. :

Plaintiff, Japan Air Lines Company, Ltd. ("JAL"), a carrier engaged in the operation of an airline system for the carriage by air of passengers, property and mail in overseas and foreign commerce, and subject to the provisions of the Railway Labor Act ("RLA"), 45 U.S.C. §§ 151-52, 154-63, 181-88, commenced this action against defendant International Association of Machinists and Aerospace Workers, AFL-CIO ("IAM"), the collective bargaining representative of certain of its employees in the United States. In addition to IAM, the complaint names as defendants IAM District Lodge No. 151 ("District 151") which has jurisdiction over the members of the IAM employed by JAL in the United States and certain individuals who represented JAL employees in negotiations over proposed changes in the existing labor agreement between JAL and IAM. The individual defendants who are employed by JAL are also sued as representatives of a class consisting of all employees of JAL represented by IAM.

 The complaint charges that throughout negotiation and mediation of proposed changes in the aforementioned labor agreement IAM has insisted on an unlawful change in the "Scope" clause of the agreement as a condition of reaching a new agreement. It is alleged that the IAM proposal that JAL hire its own employees to perform work which has never been performed by JAL employees, but which has heretofore been contracted out, is directed towards expansion of the IAM's own membership and its control of work, not its representation of employees and that the proposal is not related to the rates of pay, rules or working conditions of JAL's present employees within the meaning of RLA §§ 2, First, 6, 45 U.S.C. §§ 152, First, 156.

 It is further alleged that the IAM, by its proposed change in the "Scope" clause of the agreement, seeks to bargain with JAL over fundamental management decisions unrelated to rates of pay, rules or working conditions of JAL's present employees and that JAL has no obligation under the RLA to bargain with the IAM over this proposed change. JAL seeks to enjoin a strike by defendants on the ground that a strike would be unlawful under the RLA because (1) defendants have not fulfilled their statutory obligation to make every reasonable effort to reach an agreement and (2) an object of such strike would be to force acceptance by JAL of the IAM's allegedly unlawful demand.

 The defendants, by their answer, deny that they have violated § 2, First of the RLA. They allege that the "Scope" changes proposed by the IAM's § 6 Notice are bargainable and that JAL has violated its § 2, First duty in refusing to negotiate with the defendants over these proposals. They further allege that although changes of the sort contemplated by the IAM's § 6 Notice were the subject of prior negotiations between the parties and formed part of the last collective bargaining agreement and negotiations for a new collective bargaining agreement commenced Nevember 6, 1973, plaintiff did not maintain that the "Scope" proposal was a nonbargainable management right until November 13, 1974. They, therefore, allege that plaintiff is not entitled to equitable relief because it does not come into this Court with "clean hands."

 This action was commenced after negotiations which had been conducted intermittently over a fourteen-month period failed to achieve an agreement. Plaintiff applied for a temporary restraining order which, after an evidentiary hearing on notice to defendants and their attorneys, was granted on January 22, 1975, one day before the expiration of the 30-day "cooling-off" period provided by RLA § 5, First, 45 U.S.C. § 155, First.

 The written agreement between the parties covering JAL's United States employees in the craft or class of airline mechanics, including ground service and ramp employees, became effective March 1, 1972, was to continue in effect until October 31, 1973 and thereafter was subject to change as provided by RLA § 6, 45 U.S.C. § 156. On or about September 28, 1973, pursuant to Article XXII of the agreement and RLA § 6, IAM served JAL with notice of approximately 75 proposed changes in the agreement. By letter dated October 1, 1973, JAL served notice of approximately 40 changes which it proposed.

 Negotiations began on or about November 6, 1973 in Honolulu at which time defendant Fusao Ogoshi, on behalf of IAM, read and explained all of the union's section 6 proposals, including four proposed changes in Article I. *fn1" The dispute in this Court focuses on the IAM's proposed change in Article I, Paragraph D, of the existing agreement ("the Scope proposal" or "Scope").

 To understand the dispute, it is necessary to know something about the JAL operation in the United States. In connection with flights to Honolulu, New York, San Francisco, Los Angeles and Anchorage, JAL requires services in the following classifications: "Maintenance," "Plant Maintenance," "Ramp Service" and "Stores." JAL employees who are part of the bargaining unit represented by the IAM perform these services except that since the inception of its routes to the latter four cities, JAL has subcontracted its "Maintenance" requirements at all four cities, its "Plant Maintenance" requirements at San Francisco, Los Angeles and Anchorage, its "Ramp Service" requirements at Los Angeles and Anchorage, and its "Stores" requirements at Anchorage.

 In 1972 the IAM, in its § 6 Notice to JAL, proposed modifications of Article I of the existing collective bargaining agreement, specifically, to provide that JAL employ at all locations in the United States its own personnel in the aforementioned classifications. Citing economic considerations, JAL declined to modify Article I. The National Mediation Board ("NMB") accepted jurisdiction of the dispute and appointed a mediator. Accepting a suggestion by the mediator, the parties agreed to the adoption of Appendices "D" and "E", letter agreements which became a part of the collective bargaining agreement. *fn2" As a result of the implementation of Appendix "D", the "maintenance work" performed on equipment in the Cargo Warehouse in New York which had been subcontracted to Mohawk Air Service is now being performed by JAL employees who are part of the IAM's bargaining unit.

 Although American counsel had been consulted in 1972, and had allegedly rendered an opinion relating to JAL's legal obligation to bargain on "Scope", this opinion was never communicated to the IAM.

 On November 6, 1973, as negotiations opened, the IAM proposed that during the life of the new agreement, JAL phase out the subcontracting of work in the aforementioned classifications at New York, San Francisco, Los Angeles and Anchorage, and employ its own personnel, represented by the IAM, to perform such services.

 The parties met again on November 7, 1973 at which time Mas Yonemura, an attorney representing JAL, read and explained the company's Section 6 proposals, none of which concerned "Scope" except insofar as JAL proposed eliminating the no furlough provision contained in Appendix "E" of the existing agreement. The parties continued meeting on November 8, 1973 but discussed only outstanding grievances.

 These grievances were again discussed when the parties next met in San Francisco on November 26, 1973. The following day, November 27, the parties discussed proposed changes in the agreement including not more than ten minutes devoted to the union's "Scope" proposal.

 The testimony is in conflict as to whether JAL made any response to the latter proposal. Defendants' witnesses testified that JAL made no response.

 The evidence, viewed in the light most favorable to plaintiff, indicates that JAL's response was that it wished to make no change in the "Scope" article. Although the negotiations continued on November 28, "Scope" was not discussed.

 The meetings were recessed until December 15, 1973, at which time the parties resumed negotiations in San Francisco. In the course of meetings which took place on December 16 and 17, the IAM "Scope" proposal was again raised. According to plaintiff's witnesses, JAL's spokesman, Mr. Yonemura, replied that there was no change in the company's position with regard to this issue. Mr. Yonemura stated that JAL currently planned construction of a new cargo facility at San Francisco, where it planned to house its own plant mechanics but that JAL had no other plans to open new facilities due to uncertainty of future flight schedules, the fuel crisis, and a mounting operating deficit. The IAM requested information regarding the number of man hours included in the services rendered by Mercury Air Service and United Airlines, contractors performing services for JAL at Los Angeles and San Francisco. The company refused to divulge this information, stating it was confidential, a position which it again took at the hearing on its motion for a preliminary injunction. The IAM explained that it was concerned with the possibility of lay-offs of JAL employees as a result of the fuel crisis and that it considered it unfair for union employees to be laid off while similar work was being performed by subcontractors. So far as the testimony reveals, this was the extent of the discussions concerning the "Scope" proposal. According to Wayne Kuramoto, a witness called by plaintiff, at most 15 or 20 minutes was devoted to this subject.

 The final direct negotiations took place in Honolulu between January 15 and January 19, 1974. In the course of these sessions, "Scope" was again raised by the IAM and JAL once more indicated that its position with regard to this subject had not changed. According to the defendant Ogoshi, JAL's representatives never stated that the company could not or would not bargain on "Scope". *fn3" On the contrary, according to Mr. Ogoshi, the company gave reasons for not wanting to accept the union's "Scope" proposal, specifically, that it needed flexibility in relation to use of its manpower. In all, not more than 20 minutes were devoted to discussion of this subject. The remainder of the negotiations were devoted to other subjects. At the conclusion of this round of negotiations, the parties determined that they were deadlocked.

 The Court finds as a fact that during each round of the direct negotiations the IAM raised the question of "Scope" and asked JAL to bargain on its "Scope" proposal. The Court further finds that JAL consistently refused to bargain on this issue at least to the extent that it insisted there should be no change in the existing agreement and that it refused to make any offer or counter-proposal with regard to this subject.

 On January 25, 1974, JAL applied to the NMB, pursuant to 45 U.S.C. § 155, invoking the mediation service of the NMB with respect to the dispute over the proposed changes in the agreement. The NMB accepted jurisdiction of the dispute, docketed it as Case No. A-9520, and appointed a mediator.

 The initial mediation session was scheduled to be held between June 25 and 29, 1974. On the first day, each side explained its proposals and "Scope" was discussed for 10-15 minutes. JAL was asked if it had any offer on "Scope" and indicated that because of its "economic situation" it did not. After the first day, the mediator became ill and the parties ...

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