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On appeal, the Fifth Circuit affirmed. The court rejected Audibert's argument that the district court's limitations on discovery were responsible for the lack of evidence, and observed, “a summary judgment can be decided without any discovery.” The Court further noted that “a plaintiff's entitlement to discovery prior to a ruling on a motion for summary judgment is not unlimited, and may be cut off when the record shows that the requested discovery is not likely to produce the facts needed by the plaintiff to withstand a motion for summary judgment.”

The court further held that Audibert had failed to establish a prima facie case of gender discrimination, inasmuch as she could not prove that she was qualified for the job, or that similarly situated employees outside the protected class were treated more favorably.

Seventh Circuit Approves Affirmation of United Airlines' Settlement with PBGC

The Seventh Circuit has held that United Airlines' settlement granting the Pension Benefit Guaranty Corportion's (PBGC), the governmental insurer of failed pension plans, take-over of its obligations to plan participants did not impermissibly settle litigation to which the Association of Flight Attendants (the Union) was a party, nor did it violate any duty United owed to the Union not to unilaterally modify the collective bargaining agreement (the CBA) or bargain in good faith. In re UAL Corporation, et. al., 2005 WL 2848938 (7th Cir. Nov. 1).

After entering Chapter 11 bankruptcy, United Airlines agreed to a settlement with the PBGC, which gave it the discretion to determine whether to terminate and take over the pension plan of United's flight attendants. The Union objected to the agreement, but both the bankruptcy court and the district court affirmed the validity of the settlement.

Because pension liability is a major impediment to exiting bankruptcy, for many months prior to its involvement with the PBGC, United attempted to amicably negotiate with the Union in order to reduce its pension liability. When these discussions proved unsuccessful, United filed a motion to reject the CBA under 11 U.S.C. ' 1113(c) and to terminate the plan under 29 U.S.C. ' 1341 (c). Section 1341 is part of Title IV of the Employee Retirement Income Security Act (ERISA), allows an employer to terminate a pension plan without sufficient assets in a “distress situation,” but obligates the employer to first reject the operating collective bargaining agreement under Section 1113(c) of the Bankruptcy Code. Once a plan without sufficient assets is terminated under Title IV, the PBGC takes over as trustee and is given an alternative to waiting for a plan to be terminated under Section 1341(c). Congress, through 29 U.S.C. ' 1 342, allows the PBGC to terminate a plan “regardless of any provision in a union's collective bargaining agreement” and without consultation with a union. United's settlement with the PBGC allowed it “to begin its administrative process of evaluating whether it could or should terminate” the flight attendants' pension plan, but “did not require PBGC to terminate the plan.” After the PBGC completed its review of the plan, however, it found that it was in the best interest of the pension plan system as a whole to terminate, and it did so effective June 30.

In affirming the bankruptcy and lower court's decisions, the Seventh Circuit found that because the settlement agreement between United and the PBGC neither settled United's ''1113(c)/1341(c) motion against the Union, nor did it terminate the pension plan, the Union did not need to be a party to the litigation in which the bankruptcy court approved the settlement. Further, recognizing that Title IV of ERISA provides an alternative to Sections 1113 and 1341, the Seventh Circuit determined that the under Section 1342, “PBGC can terminate a plan irrespective of a particular collective bargaining agreement … and further, through ' 1367, Congress has authorized settlement arrangements between PBGC and those who may become liable to PBGC as the result of a termination.” Therefore, this court determined that “United … did not unilaterally modify the CBA, nullify judicial review, nor violate its duties to bargain in good faith with the exclusive representative of its flight attendants over terms and conditions of their employment.” Further, the Seventh Circuit determined that because “the settlement agreement only called for PBGC to evaluate whether a ' 1342 termination was appropriate” and because “at the time of the agreement, PBGC's termination of the plan was not a sure thing,” United did not violate any duty to the Union by terminating the plan unilaterally. Ultimately, “[b]y declining to pursue its '' 1113(c)/1341(c) options once its ' 1367 negotiations with PBGC raised the possibility of a ' 1342 termination,” United did not default on any of its obligations to its unionized flight attendants.

Sex Discrimination Plaintiff Entitled to Appropriate Discovery

The Fifth Circuit has affirmed a grant of summary judgment against an employee who claimed that the federal district court had denied her appropriate discovery in her gender discrimination case. Audibert v. Lowe's Home Centers, Inc., 2005 WL 2850978 (5th Cir. Nov. 1).

Audibert began working with Lowe's Home Centers, Inc. (Lowe's) in February 2002 as a cabinet specialist. She was terminated 6 months later, and brought suit under Title VII for gender discrimination. Her complaint alleged that she was “supervised by white males who failed to provide her with adequate training, issued spurious disciplinary reports, stalked, watched, followed, spied on, talked to differently, harassed her throughout her tenure, and fired her on the basis of sex.” Audibert presented little evidence, only a two-page affidavit from her former supervisor at Lowe's. Further Audibert's discovery requests, which were very broad, were denied by the court (These included requests for “full records for several former co-workers,” and “biographical and statistical information for every Lowe's kitchen design employee in the United States”). The federal district court granted Lowe's motion for summary judgment.

On appeal, the Fifth Circuit affirmed. The court rejected Audibert's argument that the district court's limitations on discovery were responsible for the lack of evidence, and observed, “a summary judgment can be decided without any discovery.” The Court further noted that “a plaintiff's entitlement to discovery prior to a ruling on a motion for summary judgment is not unlimited, and may be cut off when the record shows that the requested discovery is not likely to produce the facts needed by the plaintiff to withstand a motion for summary judgment.”

The court further held that Audibert had failed to establish a prima facie case of gender discrimination, inasmuch as she could not prove that she was qualified for the job, or that similarly situated employees outside the protected class were treated more favorably.

Seventh Circuit Approves Affirmation of United Airlines' Settlement with PBGC

The Seventh Circuit has held that United Airlines' settlement granting the Pension Benefit Guaranty Corportion's (PBGC), the governmental insurer of failed pension plans, take-over of its obligations to plan participants did not impermissibly settle litigation to which the Association of Flight Attendants (the Union) was a party, nor did it violate any duty United owed to the Union not to unilaterally modify the collective bargaining agreement (the CBA) or bargain in good faith. In re UAL Corporation, et. al., 2005 WL 2848938 (7th Cir. Nov. 1).

After entering Chapter 11 bankruptcy, United Airlines agreed to a settlement with the PBGC, which gave it the discretion to determine whether to terminate and take over the pension plan of United's flight attendants. The Union objected to the agreement, but both the bankruptcy court and the district court affirmed the validity of the settlement.

Because pension liability is a major impediment to exiting bankruptcy, for many months prior to its involvement with the PBGC, United attempted to amicably negotiate with the Union in order to reduce its pension liability. When these discussions proved unsuccessful, United filed a motion to reject the CBA under 11 U.S.C. ' 1113(c) and to terminate the plan under 29 U.S.C. ' 1341 (c). Section 1341 is part of Title IV of the Employee Retirement Income Security Act (ERISA), allows an employer to terminate a pension plan without sufficient assets in a “distress situation,” but obligates the employer to first reject the operating collective bargaining agreement under Section 1113(c) of the Bankruptcy Code. Once a plan without sufficient assets is terminated under Title IV, the PBGC takes over as trustee and is given an alternative to waiting for a plan to be terminated under Section 1341(c). Congress, through 29 U.S.C. ' 1 342, allows the PBGC to terminate a plan “regardless of any provision in a union's collective bargaining agreement” and without consultation with a union. United's settlement with the PBGC allowed it “to begin its administrative process of evaluating whether it could or should terminate” the flight attendants' pension plan, but “did not require PBGC to terminate the plan.” After the PBGC completed its review of the plan, however, it found that it was in the best interest of the pension plan system as a whole to terminate, and it did so effective June 30.

In affirming the bankruptcy and lower court's decisions, the Seventh Circuit found that because the settlement agreement between United and the PBGC neither settled United's ''1113(c)/1341(c) motion against the Union, nor did it terminate the pension plan, the Union did not need to be a party to the litigation in which the bankruptcy court approved the settlement. Further, recognizing that Title IV of ERISA provides an alternative to Sections 1113 and 1341, the Seventh Circuit determined that the under Section 1342, “PBGC can terminate a plan irrespective of a particular collective bargaining agreement … and further, through ' 1367, Congress has authorized settlement arrangements between PBGC and those who may become liable to PBGC as the result of a termination.” Therefore, this court determined that “United … did not unilaterally modify the CBA, nullify judicial review, nor violate its duties to bargain in good faith with the exclusive representative of its flight attendants over terms and conditions of their employment.” Further, the Seventh Circuit determined that because “the settlement agreement only called for PBGC to evaluate whether a ' 1342 termination was appropriate” and because “at the time of the agreement, PBGC's termination of the plan was not a sure thing,” United did not violate any duty to the Union by terminating the plan unilaterally. Ultimately, “[b]y declining to pursue its '' 1113(c)/1341(c) options once its ' 1367 negotiations with PBGC raised the possibility of a ' 1342 termination,” United did not default on any of its obligations to its unionized flight attendants.