                    United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 00-3051
                                   ___________

David H. Conrad,                     *
                                     *
      Plaintiff - Appellant,         *
                                     *
      v.                             * Appeal from the United States
                                     * District Court for the
International Association of         * Western District of Missouri.
Machinists and Aerospace Workers,    *
AFL-CIO; Trans World Airlines, Inc., *
                                     *
      Defendants - Appellees,        *
                                ___________

                             Submitted: April 18, 2003

                                  Filed: August 5, 2003
                                   ___________

Before LOKEN, Chief Judge, HANSEN and RILEY, Circuit Judges.
                             ___________

LOKEN, Chief Judge.

      Trans World Airlines (“TWA”) fired mechanic David H. Conrad for failing to
pay dues to the International Association of Machinists and Aerospace Workers (the
“IAM”), as required by the collective bargaining agreement between the IAM and
TWA (“the Agreement”). Conrad then commenced this action against the IAM and
TWA, alleging that their refusal to permit him to pay agency fees -- the reduced sums
owed by an employee who does not wish to finance a union’s political activities --
through the collectively bargained checkoff procedure breached the Agreement and
the IAM’s duty of fair representation, and violated the Railway Labor Act, 45 U.S.C.
§§ 151 et seq., and the First Amendment. The district court1 granted summary
judgment dismissing these claims, and Conrad appealed. We stayed the appeal and
then dismissed TWA because of its June 2001 bankruptcy and subsequent sale to
American Airlines. We now affirm the grant of summary judgment to the IAM.

                                           I.

       In 1951, Congress amended the Railway Labor Act to permit “union shop”
collective bargaining agreements, that is, “agreements, requiring, as a condition of
continued employment, that . . . all employees shall become members of the labor
organization representing their craft or class.” Act of Jan. 10, 1951, ch. 1220, 64 Stat.
1238, adding § 2, Eleventh (a), to the Railway Labor Act, codified at 45 U.S.C. § 152,
Eleventh (a). At the same time, Congress authorized carriers and unions to agree to
dues checkoffs, that is, procedures “providing for the deduction by such carrier . . .
from the wages of its . . . employees . . . of any periodic dues, initiation fees, and
assessments . . . uniformly required as a condition of acquiring or retaining
membership” in the union. 45 U.S.C. § 152, Eleventh (b).

       Some years later, the Supreme Court considered the question whether § 152,
Eleventh (a), may be applied to require an employee to pay union dues to finance
political activities the employee opposes in order to retain his job in a collectively
bargained union shop. To avoid the First Amendment issues such an interpretation
would raise, the Court construed the union shop authorization in § 152, Eleventh (a),
to “deny the unions, over an employee’s objection, the power to use his exacted funds
to support political causes which he opposes.” Int’l Ass’n of Machinists v. Street,
367 U.S. 740, 768-69 (1961). However, to carry out Congress’s intent in


      1
      The HONORABLE GARY A. FENNER, United States District Judge for the
Western District of Missouri.

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authorizing union shops in § 152, Eleventh (a), the Court held that employees who
object to paying full union dues must nonetheless “pay their fair share of union
expenditures ‘necessarily or reasonably incurred for the purpose of performing the
duties of an exclusive representative of the employees in dealing with the employer
on labor-management issues.’” Air Line Pilots Ass’n v. Miller, 523 U.S. 866, 873
(1998), quoting Ellis v. Bhd. of Ry., Airline & S.S. Clerks, 466 U.S. 435, 448 (1984).
Such payments have become known as agency fees.

        In this case, when TWA assigned Conrad to a mechanic position in May 1996,
he became subject to Article 26 of the Agreement, which contained a union security
clause requiring each mechanic to join the IAM and to remain a member in good
standing and a checkoff clause authorizing TWA to deduct IAM dues from the wages
of its members. Conrad joined the IAM and signed a checkoff form authorizing TWA
to deduct $37.70 per month from his wages “to cover standard monthly membership
dues.” Some months later, Conrad learned that he could become an agency fee payer
if he objected to paying dues to cover IAM expenses not germane to the collective
bargaining process. In November 1997, Conrad requested that the IAM place him on
agency fee payer status.

       When the IAM placed Conrad on agency fee status, it notified TWA to stop
deducting union dues from his wages. When Conrad learned of this, he advised the
IAM that he would pay agency fees only if TWA deducted them directly from his
wages. The IAM requested that TWA deduct a reduced agency fee rather than
Conrad’s full union dues. But TWA refused, citing the provision in Article 26 that
it need only deduct monthly dues that conform “to the applicable rates for employees
of his classification at his point on the system.” Conrad persisted in refusing to pay
agency fees directly to the IAM. After unsuccessful efforts to resolve the dispute
informally, the IAM requested that TWA terminate Conrad for failure to pay union
dues, as required by Article 26 of the Agreement. Accordingly, TWA informed
Conrad that he was being terminated.

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       Conrad challenged the termination and requested a hearing before the TWA-
IAM System Board of Adjustment established pursuant to the Agreement and the
Railway Labor Act. See 45 U.S.C. §§ 153, 184. After a hearing, the Board rejected
his grievance, concluding that termination was proper because TWA’s checkoff
obligations were limited to its undertakings in the Agreement, and Article 26 only
authorized payroll deductions of “standard monthly membership dues.” TWA then
terminated Conrad. This lawsuit followed.

      In his complaint, Conrad alleged that the IAM violated its duty of fair
representation, TWA breached the Agreement and violated the RLA, and both the
IAM and TWA violated his First Amendment rights. In opposing defendants’
motions for summary judgment, Conrad framed the issues as follows:

      The key question is whether the Railway Labor Act entitles Conrad to
      tender his agency fee to the Union in the same manner that non-
      objectors tender their union dues. If the answer to this question is in the
      affirmative, it follows that TWA breached the collective bargaining
      agreement when it terminated Conrad because the agreement provides
      . . . that the checkoff authorization shall be in accordance with the RLA.
      It also follows that IAM violated its duty of fair representation by
      demanding that TWA terminate Conrad’s employment.

             On the other hand, if the RLA is construed to permit TWA and
      IAM to deny Conrad the opportunity to tender his agency fee in the
      same manner that non-objectors tender their union dues, the question
      then becomes whether this denial constitutes an unconstitutional
      infringement of Conrad’s First Amendment . . . rights.

     The district court granted summary judgment. The court concluded that the
IAM did not breach its duty of fair representation, either when it negotiated the
Agreement, or when it insisted that Conrad pay agency fees and urged his discharge
when he refused to pay. The court further concluded there was no Railway Labor Act


                                         -4-
or First Amendment violation because “the IAM was not responsible for the system
which rendered [Conrad] unable to satisfy his dues obligation by having it withheld
from his paycheck. Rather, TWA was responsible for that inability because of its
antiquated payroll system.” Moreover, the court observed, “the alleged infringement
[of Conrad’s First Amendment rights] cannot possibly be characterized as severe”
because the lack of a payroll deduction “merely meant that [he] would have to pay his
agency fees by check or cash, the same way most bills are paid.”

                                           II.

       On appeal, Conrad first argues that the district court erred in granting summary
judgment because “the claimed inability of TWA’s payroll system to accommodate
payroll deduction of objectors’ fees” is a disputed issue of material fact. Even if this
fact is genuinely disputed, we conclude it is not material. The System Adjustment
Board determined that TWA acted in accordance with the Agreement when it refused
to deduct an amount less than full union dues under the checkoff provision. Conrad
could have but did not seek judicial review of that determination. See 45 U.S.C.
§ 153, First (q); Sorensen v. Chicago & N.W. Transp. Co., 627 F.2d 136, 138 (8th
Cir. 1980). Thus, the contract interpretation issue has been finally determined,
without regard to TWA’s reason for its refusal. In addition, TWA has been dismissed
from the appeal, so any errors in granting summary judgment on Conrad’s claims
against that defendant are moot.

       Likewise, we fail to see how this fact issue is material to Conrad’s claim that
the IAM breached its duty of fair representation. “A breach of the statutory duty of
fair representation occurs only when a union’s conduct toward a member of the
collective bargaining unit is arbitrary, discriminatory, or in bad faith.” Vaca v. Sipes,
386 U.S. 171, 190 (1967). As the district court noted, the IAM did not breach its duty
in negotiating the Agreement some years before this dispute arose. Union shop and
dues checkoff provisions are expressly authorized by § 152, Eleventh, and by

                                          -5-
numerous Supreme Court decisions. See, e.g., Felter v. S. Pac. Co., 359 U.S. 326,
333 (1959). Even if the IAM had a duty to bargain for a checkoff provision
accommodating existing agency fee payers who desired special payroll deductions
(an issue we do not consider), the record does not reveal whether the TWA work
force included any such employees when the Agreement was negotiated. Cf. Nielsen
v. Int’l Ass’n of Machinists, 94 F.3d 1107, 1115 (7th Cir. 1996) (upholding the facial
validity of an unqualified union security clause), cert. denied, 520 U.S. 1165 (1997).
In addition, the IAM did not breach its duty when Conrad requested agency payer
status. It promptly granted his request and permitted him to pay only the agency fee
rather than requiring payment of full union dues subject to a later rebate, the more
onerous procedure at issue in Ellis, 466 U.S. at 443-44, and discussed at length in
Chicago Teachers Union v. Hudson, 475 U.S. 292, 304-09 (1986), which involved
First Amendment limitations on union shop agreements binding public employees.

       Nor did the IAM breach its duty of fair representation when Conrad demanded
that he be permitted to pay agency fees through payroll deductions. The IAM asked
TWA to deduct Conrad’s agency fees. TWA refused, as the System Adjustment
Board later determined it was entitled to do under Article 26 of the Agreement. A
dues checkoff provision is merely authorized by § 152, Eleventh (b); it “is purely a
creature of contract.” Trans World Airlines, Inc. v. Indep. Fed’n of Flight Attendants,
809 F.2d 483, 491 (8th Cir. 1987), aff’d by an equally divided court, 485 U.S. 175
(1988). Thus, TWA was not obligated to modify the Agreement at the IAM’s request.
When negotiating such issues, the duty of fair representation requires only that unions
“make such concessions and accept such advantages as, in the light of all relevant
considerations, they believe will best serve the interests of the parties represented.”
Ford Motor Co. v. Huffman, 345 U.S. 330, 337-38 (1953). Absent evidence of union
bad faith, the reason TWA refused to modify its contractual checkoff obligation is
not material to whether the IAM breached its duty of fair representation when
negotiating the issue.



                                         -6-
       Finally, Conrad argues that, because the term “periodic dues” is found in both
subsections (a) and (b) of 45 U.S.C. § 152, Eleventh, the agency fee limitations
adopted by the Supreme Court in construing subsection (a) apply equally to checkoff
procedures authorized by subsection (b), and therefore the full-dues-only checkoff
limitation in the Agreement violates the Railway Labor Act. We disagree with the
statutory premise of this argument. “The [Railway Labor] Act makes no formal
relationship between a union-shop arrangement and a checkoff arrangement; under
it the parties can negotiate either one without the other, if they are so disposed.”
Felter, 359 U.S. at 337 n.12. Moreover, even if the First Amendment concerns that
drove the Court’s interpretation of subsection (a) limit the types of checkoff clauses
permitted by subsection (b), the grant of summary judgment was not improper in this
case. We agree with the district court that TWA’s adherence to the full-dues-only
payroll deduction clause left Conrad with the minimal burden of paying agency fees
directly to the IAM for the remainder of the Agreement’s term. TWA was under no
statutory or constitutional duty to save Conrad this burden at its own expense.
Rather, TWA was entitled to insist that the IAM and Conrad adhere to the terms of
an agreed checkoff clause that was expressly authorized by the Railway Labor Act.
The IAM is not liable to Conrad because TWA chose to exercise its contractual right
under the Agreement.

      The judgment of the district court is affirmed.

      A true copy.

             Attest:

                CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.




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