Bernard v. Alaska Airlines, Inc.

• Decision Date: 12 February 2016
• Docket Number: No. S–15592.,S–15592.
• Citation: 367 P.3d 1156
• Parties: Pierre BERNARD, Appellant, v. ALASKA AIRLINES, INC., Appellee.
• Court: Alaska Supreme Court

367 P.3d 1156

Pierre BERNARD, Appellant,

v.ALASKA AIRLINES, INC., Appellee.

No. S–15592.

Supreme Court of Alaska.

Feb. 12, 2016.

Vikram N. Chaobal, Anchorage, and Frederick W. Triem, Petersburg, for Appellant.

Gregory S. Fisher and Elizabeth P. Hodes, Davis Wright Tremaine LLP, Anchorage, for Appellee.

Before: FABE, Chief Justice, WINFREE, STOWERS, MAASSEN, and BOLGER, Justices.

OPINION

MAASSEN

, Justice.

I. INTRODUCTION

A former airline employee sued his former employer for wrongful termination without first attempting to arbitrate his claims under the provisions of a collective bargaining agreement subject to the federal Railway Labor Act. The superior court dismissed the employee's complaint for failure to exhaust his contractual remedies. It also denied him leave to amend his complaint a second time—to add a claim against his union for breaching its duty of fair representation—on the ground that the six-month limitations period for such claims had expired. We hold that the employee's right to bring his claims in state court was not clearly and unmistakably waived under the collective bargaining agreement and he therefore should have been allowed to pursue them. We agree with the superior court, however, that the employee's claim that the union breached its duty of fair representation was time-barred. We therefore affirm in part and reverse in part the judgment of the superior court.

II. FACTS AND PROCEEDINGS

In June 2011 Alaska Airlines charged that Pierre Bernard, one of its baggage handlers, had taken part in drafting and sending a threatening text message to a co-worker and had then deleted a recorded conversation relevant to the ensuing investigation. The company terminated Bernard's employment.

The employment's terms and conditions were governed by a collective bargaining agreement (sometimes abbreviated "CBA") negotiated by Bernard's union, the International Association of Machinists and Aerospace Workers, pursuant to the federal Railway Labor Act (RLA).¹ The collective bargaining agreement provided a three-stage process for grieving termination decisions. The first two stages consisted of an "initial hearing" and a "secondary hearing," each presided over by a representative of Alaska Airlines, with a union representative in attendance to represent the employee. The result of a secondary hearing could be appealed to the System Board of Adjustment, a three-member arbitration panel consisting of "a Company member, a Union member[,] and a neutral referee."²

Bernard initiated the grievance process through his union, and over the next two months Alaska Airlines held two hearings, each time in the presence of a union representative. The presiding company officers issued written decisions after both hearings upholding Bernard's termination—though the second decision, in August, offered him "the opportunity to resign in lieu of termination," an offer he did not accept.

A few weeks after the August decision a union representative wrote to Bernard informing him that "[i]f the Union brings your case to an arbitration, there is paperwork you must fill out," and advising him that he "may acquire a lawyer at any time." The union's written notice to Bernard that it had decided not to appeal is dated November 14, 2011, nearly two months after the 30–day appeal deadline had expired. The union informed Bernard that it had thoroughly reviewed his case, concluded that "we could not sustain our position before the System Board of Adjustment," and closed its file.

In August 2013, two years after the unappealed decision of the secondary hearing, Bernard filed a complaint against Alaska Airlines in the superior court. He alleged a background to his termination: that in 2009 he had filed a sexual harassment complaint against a supervisor and was ostracized as a result; that he was later unfairly disciplined after a co-worker imposed upon him with inappropriate personal demands; and that the allegedly threatening text message for which he was discharged in 2011 had actually been "sent in jest" in response to "a hostile and threatening text from another employee." He alleged that his termination was in retaliation for his reports of sexual harassment and therefore violated the covenant of good faith and fair dealing.

Alaska Airlines filed a motion to dismiss under Alaska Civil Rule 12(b)(1)

,³ arguing that (1) the RLA preempted Bernard's claim; and (2) even if not preempted, his claim was precluded because he had failed to exhaust available remedies under the collective bargaining agreement.

Bernard opposed the motion and filed an amended complaint, adding allegations that Alaska Airlines had violated a state employment discrimination statute⁴ and public policy. Alaska Airlines renewed its motion to dismiss on the exhaustion-of-remedies theory, arguing that because the collective bargaining agreement incorporated the company's anti-discrimination policies, Bernard was required to seek relief through contractual remedies even for statutory claims, which he had not done.

Bernard moved for leave to file a second amended complaint, this time to add a claim that the union had breached its duty of fair representation by failing to notify him of its decision not to pursue arbitration with the System Board of Adjustment until after the appeal deadline. The superior court denied Bernard leave to add this claim, concluding that it was barred by the six-month statute of limitations for "hybrid claims."⁵

The superior court also dismissed Bernard's state law claims under Rule 12(b)(1)

for lack of subject matter jurisdiction. It first decided that his state law claims were "not pre-empted to the extent that they plead an independent state law claim for retaliatory discharge" but were preempted "[t]o the extent they rest on contractual rights that Mr. Bernard enjoyed under the CBA." The court went on to conclude that to the extent not preempted, Bernard's state law claims were nonetheless subject to the mandatory arbitration provisions of the collective bargaining agreement because he had clearly and unmistakably waived his right to pursue judicial remedies instead. The court held that he had "a personal right to submit his claim to the National Railroad Adjustment Board (NRAB)" but had not done so, and that his alleged ignorance of this avenue was not an excuse.

Bernard appeals.

III. STANDARDS OF REVIEW

The superior court dismissed Bernard's action for lack of subject matter jurisdiction pursuant to Rule 12(b)(1)

. "We review de novo a superior court's decision to dismiss a complaint for lack of subject matter jurisdiction."⁶ "In exercising our independent judgment, we will adopt the rule of law that is most persuasive in light of precedent, reason, and policy."⁷

This appeal also requires us to interpret a collective bargaining agreement. "Contract interpretation presents a question of law that we review de novo."⁸ "When interpreting contracts, the goal is to ‘give effect to the reasonable expectations of the parties.’ "⁹ "In determining the intent of the parties the court looks to the written contract as well as extrinsic evidence regarding the parties' intent at the time the contract was made."¹⁰ "Where there is conflicting extrinsic evidence the court, rather than the jury, must nonetheless decide the question of meaning except where the written language, read in context, is reasonably susceptible to both asserted meanings."¹¹

Finally, this appeal requires us to interpret the RLA. "We decide questions of law, including statutory interpretation, using our independent judgment. We will adopt the most persuasive rule of law in light of precedent, reason, and policy."¹² "This requires us, when interpreting statutes, to ‘look to the meaning of the language, the legislative history, and the purpose of the statute.’ "¹³

IV. DISCUSSION

A. Bernard's Claims Were Not Subject To Arbitration.

The superior court ruled that Bernard's claims were preempted to the extent they relied on the contract and not preempted to the extent they existed independent of the contract. Because it went on to hold that Bernard was required to exhaust his contractual remedies as to both kinds of claims, it did not need to differentiate further between the preempted claims and the non-preempted claims. But because we hold that Bernard was not required to exhaust his contractual remedies, we must begin by deciding whether any of his claims were preempted.

1. The RLA did not preempt Bernard's state law claims.

The RLA provides a "mandatory arbitral mechanism for ‘the prompt and orderly settlement’ of two classes of disputes."¹⁴ The first class, deemed "major" disputes, relates to "the formation of collective agreements or efforts to secure them."¹⁵ The second class, deemed "minor" disputes, includes "controversies over the meaning of an existing collective bargaining agreement in a particular fact situation."¹⁶ Alaska Airlines contends that the conflict over Bernard's firing is a minor dispute that may be resolved only through the mechanisms provided by the RLA, including the collective bargaining agreement's internal grievance process culminating in arbitration before a System Board of Adjustment. We agree with the superior court, however, that "the underlying conduct for [Bernard's] claims [was] that Alaska [Airlines] allegedly retaliated against Mr. Bernard for reporting sexual harassment," and that these claims were not preempted to the extent they pleaded an independent state law claim for retaliatory discharge.

As a general rule, "the RLA's mechanism for resolving minor disputes does not pre-empt causes of action to enforce rights that are independent of the CBA."¹⁷ In the wrongful termination context, a state law claim may be "pre-empted, not because the RLA broadly pre-empts state-law claims based on discharge or discipline, but because the employee's claim was firmly rooted in a breach of the CBA itself."¹⁸ But when the collective bargaining agreement is not the "only source" of the...