It does not matter where in the airplane the seat is open. Even if, at the gate, someone in the back elects to upgrade to first, their original coach seat will be empty then. Where you may have a problem with that is if coach is already oversold. When that medallion member etc upgrades to first then their leftover seat in the back will be taken by a paying pax that may have originally not been able to get on. If that is NOT the case, then the empty seat, first or coach, will be given to a NON-REV in order of seniority. Most senior on the list will get the open first seats until first is full, then the coach cabin empties are filled by non-rev's and so on down the list until either the plane is full or no more non-rev's left.

EX: when all is said and done and it's time for non-revs there are:

-5 first class available seats/10 coach seats open and 3 standbys waiting.
all three standbys, considering they are w/in the guidelines (not kids or dressed like thugs) will get the first class seats

-Same senario but 10 standbys waiting:
the most senior 5 on the list will get first and the remaining 5 will be in coach

-Same senario but 20 standbys waiting:
most senior 5 in first, 10 in coach(in order of seniority) and the last 5(least senior on the list) will have to wait for the next flight and try again.

Seniority at the gate depends on Hire date and can be manipulated by priority code used.
EX: Someone who was hired in 2002 vs Someone who was hired in 2003

-if the same priority code is used then the 2002 hire will out rank the 03 hire
-however if the 03 hire is able to use a better priority code than the 02 hire then the 03 can out rank the 02

General codes are as follows in order of most importance:

HK... PAYING PAX THAT HAS BEEN BUMPED FROM A PREV FLIGHT
S1 REQUIRES MANAGER APPROVAL
S2 HIGH PRIORITY
S3 GENERAL DELTA EMPLOYEE PRIORITY
S3B
S3C
S3CR --- ALL THREE OF THESE ARE GENERALLY USED BY PARENTS OF EMPLOYEES OR "DELTA CONNECTION" EMPLOYEES

S4 BUDDY PASS

So if you work for a regional and are say... s3b priority. Even if you had been at that regional for 20 years.. an actual delta employee who has only been there for 6 mos will out rank you. Not based on hire date but on priority code.