## Facts

- United purchased Pan Am’s Pacific Division and agreed to hire Pan Am flight attendants, recognizing prior service for seniority purposes subject to collective bargaining with the Association of Flight Attendants (AFA).
- A letter of agreement, incorporated into United’s collective bargaining agreement with AFA, required arbitration to integrate seniority between 1,202 incoming former Pan Am flight attendants and incumbent United flight attendants.
- The former Pan Am flight attendants elected a Pan Am Seniority Arbitration Committee, participated in selecting the arbitrator and developing positions, appeared through counsel, and presented evidence and arguments.
- The former Pan Am flight attendants did not object during the arbitration to the arbitrator’s authority or to being bound by the arbitration process.
- The arbitrator issued a seniority-integration award granting the former Pan Am flight attendants less seniority credit than they sought.
- The former Pan Am flight attendants filed a class action seeking to vacate the award and to recover damages for alleged breach of the duty of fair representation, unlawful compulsory union membership, improper dues practices, and improper financial assistance by United.

## Issues

1. Whether employees who were not signatories to the arbitration agreement were nevertheless bound by the seniority-integration award due to their voluntary and active participation in the arbitration.
2. Whether claims for breach of the duty of fair representation, unlawful compulsory union membership, and improper financial assistance were barred by the applicable statute of limitations.
3. Whether a claim alleging an unlawful union dues increase under the LMRDA was timely and, if timely, whether it had merit.
4. Whether the award should be vacated for fraud based on nondisclosure of an amended union constitutional provision.

## Decision

- The court affirmed dismissal of the action.
- The former Pan Am flight attendants were bound by the arbitration award because they voluntarily and actively participated in the arbitration without objection.
- The duty-of-fair-representation, compulsory-membership, and improper-financial-assistance claims were time-barred under a six-month limitations period.
- The LMRDA dues-increase claim was not time-barred, but failed on the merits because the invoked provisions did not apply to the plaintiffs’ hiring circumstances.
- The court rejected vacatur based on alleged fraud, concluding the nondisclosure did not justify setting aside the award.

## Legal Principles

- In labor arbitration, a non-signatory may be bound by an arbitration award when the party’s conduct shows assent, including voluntary, active participation in the arbitration and failure to object to the arbitrator’s authority.
- Duty-of-fair-representation claims under the Railway Labor Act are subject to a six-month limitations period, running from when plaintiffs knew or should have known of the union conduct challenged.
- Related claims tied to the same core union/employer conduct (including compulsory-membership and employer-assistance allegations) are likewise time-barred when brought outside the six-month period.
- Certain LMRDA dues-related claims may be governed by a longer limitations period, but still fail absent a showing that the challenged dues action violated applicable union rules or statutory requirements.
- Vacatur for fraud in the arbitration process requires a strong showing; nondisclosure that does not amount to actionable fraud or likely affect the outcome does not warrant setting aside a labor arbitration award.

## Conclusion

The Second Circuit held that the former Pan Am flight attendants, by voluntarily and actively participating in the seniority arbitration without objection, were bound by the resulting award; it also upheld dismissal because the core representation and related claims were untimely, the dues-increase claim failed on its substance, and the alleged nondisclosure did not justify vacating the award for fraud.


Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100 (2d Cir. 1991)