## Facts

- Continental Airlines filed for Chapter 11 bankruptcy and repudiated its collective-bargaining agreement with the Air Line Pilots Association, International (ALPA).
- A prolonged and contentious strike followed; Continental hired replacement pilots and reemployed some crossover strikers.
- During the strike, Continental issued a system-wide vacancy bid (“85-5 bid”) for pilot positions; although ALPA authorized strikers to bid, Continental awarded the positions to working pilots.
- ALPA and Continental later negotiated a settlement to end the strike, resolve related disputes, and reallocate some 85-5 bid positions.
- The settlement offered striking pilots three choices: (1) settle all claims and participate in the reallocation; (2) decline to return and receive severance; or (3) keep individual claims but become eligible to return only after all settling pilots were reinstated.
- Former striking pilots sued ALPA, alleging the settlement and allocation decisions favored working pilots and breached ALPA’s duty of fair representation.

## Issues

1. What standard governs whether a union’s collective-bargaining or strike-settlement decision is “arbitrary” under the duty of fair representation.
2. Whether ALPA’s strike-ending settlement and related allocation of the 85-5 bid positions could be found arbitrary or discriminatory so as to breach the duty of fair representation.

## Decision

- The Supreme Court unanimously reversed the Fifth Circuit and reinstated summary judgment for ALPA.
- The Court held that “arbitrary” conduct, in this context, means conduct so far outside a wide range of reasonableness as to be irrational.
- Applying that deferential standard, the Court concluded ALPA’s settlement choices were within permissible bargaining discretion and did not violate the duty of fair representation.
- The Court rejected the Fifth Circuit’s approach as insufficiently deferential to the tradeoffs unions must make among competing member interests.

## Legal Principles

- A union breaches the duty of fair representation only by conduct that is arbitrary, discriminatory, or in bad faith.
- In reviewing collective-bargaining and strike-settlement decisions, “arbitrary” is limited to actions that are irrational—outside a wide range of reasonableness allowed to bargaining representatives acting in good faith.
- Courts may not second-guess a union’s negotiated compromise by substituting a court-preferred bargain or by comparing the agreement to speculative hypothetical alternatives.
- Differential effects on groups of employees do not establish unlawful discrimination absent improper motive or invidious treatment; unions may make rational distinctions to resolve disputes and end strikes.

## Conclusion

The Court held that ALPA’s strike-ending settlement with Continental fell within the wide latitude afforded unions in bargaining and did not amount to irrational, bad-faith, or unlawfully discriminatory conduct; summary judgment for ALPA was therefore proper.


Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65 (1991)