Gvozdenovic v. United Air Lines, Inc.

United Air Lines, Inc. (United) (defendant) purchased a division of Pan American World Airways (Pan Am) and agreed to hire the Pan Am division’s flight attendants. United negotiated a new collective-bargaining agreement with the Association of Flight Attendants (AFA) (defendant), the union for United’s incumbent flight attendants. The collective-bargaining agreement contained various terms and conditions of employment for the former Pan Am flight attendants set to be hired by United. An issue arose concerning the seniority status of the incoming flight attendants and how that would impact the seniority status of United’s incumbent flight attendants. United and AFA agreed that the seniority status issue would be resolved by arbitration paid for by United. United sent conditional offers of employment to the former Pan Am flight attendants and notified them about the arbitration. A total of 1,202 former Pan Am flight attendants accepted United’s employment offer. A committee was appointed to represent those newly hired flight attendants at the arbitration. United gave the committee money to cover expenses associated with the arbitration. The committee retained counsel who argued that the incoming flight attendants should be fully credited for their time of employment with Pan Am in assessing their seniority status upon hire with United. After a hearing, the arbitrator decided that the incoming flight attendants’ seniority status would be determined by a certain integration formula. Zlatko Gvozdenovic and three other former Pan Am flight attendants hired by United (dissatisfied flight attendants) (plaintiffs) filed suit against United and AFA, alleging breach of contract and a host of statutory violations, and petitioned the district court to vacate the arbitration award on the grounds that the dissatisfied flight attendants were not parties to, and thus not bound by, the arbitration agreement between United and AFA and were not employees of United nor members of AFA when the arbitration agreement was reached. The dissatisfied flight attendants never raised any objections to arbitration prior to the lawsuit. The district court dismissed the suit. The dissatisfied flight attendants appealed.