Am. Airlines, Inc. v. Mawhinney

• Decision Date: 26 September 2018
• Docket Number: No. 16-56638, No. 16-56643,16-56638
• Citation: 904 F.3d 1114
• Parties: AMERICAN AIRLINES, INC., Plaintiff-Appellee, v. Robert Steven MAWHINNEY, Defendant-Appellant. Transport Workers Union, Local 591, Plaintiff-Appellee, v. Robert Steven Mawhinney, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

904 F.3d 1114

AMERICAN AIRLINES, INC., Plaintiff-Appellee,

v.Robert Steven MAWHINNEY, Defendant-Appellant.

Transport Workers Union, Local 591, Plaintiff-Appellee,

v.Robert Steven Mawhinney, Defendant-Appellant.

No. 16-56638

No. 16-56643

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 11, 2018 Pasadena, California

Filed September 26, 2018

Robert Steven Mawhinney (argued), La Jolla, California, pro se Defendant-Appellant.

John D. Hayashi (argued), Morgan Lewis Bockius LLP, Costa Mesa, California; Robert Jon Hendricks, Morgan Lewis Bockius LLP, San Francisco, California; for Plaintiff-Appellee American Airlines, Inc.

Lee Saham (argued) and Lucas K. Middlebrook, Seham Seham Meltz & Petersen LLP, White Plains, New York; Nicholas P. Granath, Seham Seham Meltz & Petersen LLP, Minneapolis, Minnesota; for Plaintiff-Appellee Transport Workers Union, Local 591.

Before: Marsha S. Berzon and N. Randy Smith, Circuit Judges, and P. Kevin Castel,^* District Judge.

BERZON, Circuit Judge:

In these related appeals, we consider whether the district court properly compelled arbitration of Robert Steven Mawhinney’s claims for whistleblowing retaliation, brought under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century ("AIR21"), 49 U.S.C. § 42121. With respect to the retaliation claim against Mawhinney’s employer, American Airlines ("the Airline"), we affirm. The Airline did not waive its right to arbitrate by waiting to move to compel until after an agency investigation into its conduct was complete, nor is there reason to believe private AIR21 retaliation claims are inherently nonarbitrable. With respect to the retaliation claim against Mawhinney’s union, Transportation Workers Union, Local 591 ("the Union"), we reverse. The Union is not a party to the arbitration provision at issue in these cases and is not otherwise entitled to enforce the provision.

I

Mawhinney is an aircraft maintenance technician formerly employed by American Airlines in San Diego. He was fired by the Airline in 2001—according to Mawhinney, in retaliation for protected whistleblowing activity. Shortly after his discharge, Mawhinney filed a complaint with the Department of Labor ("DOL"), invoking the whistleblower protections of AIR21.

As here relevant, AIR21 bars air carriers from firing or otherwise penalizing workers for alerting the air carrier or federal agencies to "any violation or alleged violation of any order, regulation, or standard of the Federal Aviation Administration or any other provision of Federal law relating to air carrier safety."

49 U.S.C. § 42121(a)(1). "A person who believes that he or she has been discharged ... may ... file ... a complaint with the [DOL] alleging such discharge ...." 49 U.S.C. § 42121(b)(1). AIR21 provides that DOL must then issue, for each retaliation complaint it resolves, "a final order providing ... relief ... or denying the complaint." 49 U.S.C. § 42121(b)(3)(A). If the order is later violated, "[a] person on whose behalf" the order was issued may invoke AIR21 in federal district court to "commence a civil action ... to require compliance with [the] order." 49 U.S.C. § 42121(b)(6)(A).

In December 2002, Mawhinney reached a settlement agreement ("the Agreement") with the Airline on his retaliation complaint. DOL issued an order formally approving the Agreement. The Agreement reinstated Mawhinney to his former position. See Mawhinney v. Am. Airlines , No. 15-cv-0259-MMA (BGS), 2015 WL 13604265, at *1 (S.D. Cal. Aug. 13, 2015). It also contained an arbitration provision:

In the event of any dispute as to the compliance by either party with the terms of this Agreement, or in the event of any dispute arising at any time in the future between the Parties (including but not limited to the Released Parties, and any [of] their past, present or future successors, and their past, present or future officers, directors, employees, agents and representatives) involving Plaintiff’s employment which may lawfully be the subject of pre-dispute arbitration agreements, and which Plaintiff chooses not to grieve under any Collective Bargaining Agreement governing his employment, Plaintiff and American Airlines agree to submit such dispute to final and binding arbitration ("Private Arbitration") for resolution. Private Arbitration shall be the exclusive means of resolving any such disputes and no other action will be brought in any other forum or court. ... The arbitrator shall have the authority to order any legal and or equitable relief or remedy which would be available in a civil or administrative action on the claim.

Also included in the Agreement was a California choice-of-law clause.

Between 2010 and 2011, Mawhinney received several disciplinary letters related to his management style. These disciplinary letters culminated in a "career decision advisory" in which Mawhinney was given the choice of (1) signing a letter committing to abide by the Airline’s policies, (2) resigning with severance in exchange for a promise not to exercise grievance rights, or (3) being fired without relinquishing grievance rights. Mawhinney refused to accept the career decision advisory, believing it motivated by his renewed whistleblowing activities in 2010 and 2011. Mawhinney was then terminated.

In September and October of 2011, Mawhinney initiated parallel proceedings based on his new allegations of retaliation. One proceeding was an arbitration covering state law claims for retaliation, wrongful termination, breach of contract, fraud, harassment, and intentional infliction of emotional distress. The other was an administrative proceeding before DOL, again invoking the whistleblower protections of AIR21. In his complaint to DOL, Mawhinney named as respondents both the Airline and the Union, as Mawhinney believed the two joined in the alleged retaliation against him.

The arbitration and DOL proceedings unfolded separately, both along bumpy paths. In November 2011, the Airline petitioned for bankruptcy. The arbitration was then stayed, but DOL’s independent investigation of Mawhinney’s AIR21 retaliation complaint was not. In mid-2012, DOL concluded that there was "no reasonable cause to believe" the Airline or the Union retaliated against Mawhinney, as the Airline had supplied clear and convincing evidence that Mawhinney’s disciplinary action was the result of his "poor judgment and deficient leadership." See 49 U.S.C. § 42121(b)(2)(B)(iv) ; 29 C.F.R. §§ 1979.104(c), 1979.105(a). DOL advised Mawhinney that he had the right to "appeal" DOL’s investigation by making objections and requesting a hearing before an administrative law judge ("ALJ"). See 29 C.F.R. § 1979.106(a). However, DOL also noted that, as it had not reached a finding in his favor, it would not conduct any further investigation on its own, and any adversary proceedings against the Airline or Union would be Mawhinney’s sole responsibility. See also 29 C.F.R. § 1979.108.

Mawhinney pursued adversary proceedings against the Airline and Union by filing objections to DOL’s investigation and requesting a hearing before an ALJ. The ALJ then split the retaliation action. As to the Airline, the ALJ stayed the case in view of the pending bankruptcy. As to the Union, the ALJ dismissed Mawhinney’s claim, concluding that the Union fell outside the scope of AIR21. As here relevant, AIR21 bars retaliation by an "air carrier or contractor or subcontractor of an air carrier." 49 U.S.C. § 42121(a). A "contractor" is defined as "a company that performs safety-sensitive functions by contract for an air carrier." 49 U.S.C. § 42121(e). According to the ALJ, the Union was not a "company" within the meaning of AIR21.

Mawhinney appealed the ALJ’s decision in his now-separate retaliation action against the Union to DOL’s Administrative Review Board ("ARB"). The ARB reversed and remanded to the ALJ for reconsideration, reasoning that, at their broadest, the generic terms "contractor" and "company" can include labor unions. In particular, the ARB concluded that a "contractor" is potentially any party to a contract, and so a union may be a "contractor" by virtue of being party to a collective bargaining agreement with an employer.

With respect to the Airline, proceedings resumed, both in arbitration and before the ALJ, after the bankruptcy stay was lifted in late 2013. The arbitration of Mawhinney’s state law claims was resolved in short order; in November 2014, the Airline prevailed in full. The Southern District of California then confirmed the arbitral award, and a panel of this court affirmed. Mawhinney v. Am. Airlines, Inc. , 692 F. App’x 937 (9th Cir. 2017).

The proceedings before DOL, however, turned more complex. In April 2014—several months after the bankruptcy stay was lifted, and while the arbitration of the state law claims was still pending—the Airline filed a motion to compel arbitration of the action pending before the ALJ. The Airline argued that, like the factually related state law claims, the administrative action fell within the 2002 Agreement approved by DOL. The ALJ granted the motion to compel arbitration the following month. Mawhinney then appealed the order compelling arbitration to the ARB, which in January 2016 reversed.

In reversing, the ARB reasoned that the Airline’s demand for arbitration could be viewed equally as a breach of the Agreement or as a breach of the DOL order approving it.¹ With respect to the former, the ARB concluded that the issue was essentially one of contract "construction and enforcement ... dictated by principles of contract law," such that the proper forum for addressing the Airline’s demand was a judicial rather than an administrative proceeding. With respect to the latter, the ARB noted that, under AIR21, the only specified federal forum for enforcing a DOL order disposing of a retaliation complaint is a district court, see 49 U.S.C. § 42121(b)(6)(A) ; the statute makes no mention of enforcement of a DOL order in proceedings before...