Continental Airlines v. Air Line Pilots Ass'n

• Decision Date: 13 January 2009
• Docket Number: No. 07-20835.,07-20835.
• Citation: 555 F.3d 399
• Parties: CONTINENTAL AIRLINES, INC., Plaintiff-Appellee, v. AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

555 F.3d 399

CONTINENTAL AIRLINES, INC., Plaintiff-Appellee, v. AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, Defendant-Appellant.

No. 07-20835.

United States Court of Appeals, Fifth Circuit.

January 13, 2009.

Teresa S. Valderrama (argued), Jackson Lewis, Houston, TX, for Plaintiff-Appellee.

Julie Glass, Elizabeth Ginsburg, Air Line Pilots Ass'n Intern., Washington, DC, Matthew Edgar Babcock (argued), James W. Johnson, Air Line Pilots Ass'n, Herndon, VA, Patrick M. Flynn, Houston, TX, for Defendant-Appellant.

Appeal from the United States District Court for the Southern District of Texas.

Before KING, HIGGINBOTHAM, and WIENER, Circuit Judges.

WIENER, Circuit Judge:

Captain Ronald McWhirter, represented by the Air Line Pilots Association ("ALPA"), appeals an order by the district court reversing the reinstatement order of the System Board of Adjustment ("SBA"), a creature of the Collective Bargaining Agreement ("CBA") between his employer, Continental Airlines, Inc. ("Continental") and ALPA. He claims that the district court failed to give the proper deference owed to the decision of the SBA and that the SBA decision does not contravene public policy. Concluding that the district court was without a statutory basis for its reversal and that its order cannot be sustained on grounds of public policy, we reverse the district court's reversal of the SBA and remand with instructions to vacate a portion of the SBA order and remand the matter to the SBA.

I. FACTS AND PROCEEDINGS

McWhirter was hired by Continental as a pilot in 1984. He was discharged on February 23, 2005 for refusing to take a no-notice alcohol test. At the time of his discharge he was on long-term disability status and was not qualified to fly.

McWhirter's trouble with alcoholism first came to Continental's attention in 1999 when he sought voluntary assistance from Continental's Peer Pilot Program. After fits and starts toward sobriety, he tested positive during a no-notice alcohol test on September 21, 2000, a day on which he was scheduled to fly. Pursuant to the CBA between Continental and ALPA,¹ he entered into a Last Chance Agreement ("LCA") on October 18, 2000. In addition to other requirements, such as submitting to evaluation and rehabilitation treatment by Continental's Employee Assistance Program ("EAP"), the LCA required McWhirter to agree to submit to no-notice testing as often as Continental directed for five years after he completed formal rehabilitation. He was reinstated to flight status in June or July of 2001, but was placed on long-term disability status in late March or early April of 2004 for hypertension.

On February 10, 2005, while still subject to the LCA's no-notice testing provisions, McWhirter refused a no-notice alcohol test. After Continental discharged him, ALPA filed a grievance on his behalf and the case wound its way though the CBA's review process. Ultimately, his grievance — that he was discharged without just cause — was heard by the SBA.

At a two day hearing in January 2006, at which both parties presented evidence to the SBA, McWhirter claimed that he refused the February 10, 2005 test because, inter alia, he was upset that Continental had not told him the results of a no-notice test from January 2005. That test had been ordered after Continental received an allegation that McWhirter had been drinking with a fellow pilot. At the meeting after which the January no-notice test was ordered, McWhirter was threatened with termination if the test came back positive. He testified that he had become extremely frustrated not to have been promptly informed of the results. The test results were supposed to be available in a week; at the time of McWhirter's refusal to be retested, almost a month had passed. As it turns out, Continental had received a negative result on the alcohol test a week before his refusal to be retested but had not so informed him.

After considering the other explanations offered by McWhirter, for example, that he did not believe that he was subject to no-notice testing based on his leave status, the SBA concluded that McWhirter knowingly refused to take the no-notice test. The SBA also concluded that under the mitigation provisions of the CBA (in particular, Section 15,² Part 5, Sub-part 8(B)), McWhirter's refusal was an understandable, if not entirely rational, response to Continental "dropping the ball" on the January 2005 test results. The SBA ordered McWhirter's reinstatement, conditioned on his participation in Continental's EAP and Peer Pilot Program for two years. Continental was ordered to reinstate him to the status he held prior to discharge, viz., non-flying under either long-term disability leave or the Family Medical Leave Act.

Continental commenced suit in district court to vacate the SBA's order. After the parties cross-moved for summary judgment, the district court granted Continental's motion and reversed the SBA's reinstatement order. This timely appeal by ALPA on McWhirter's behalf followed.

II. ANALYSIS

McWhirter contends that the district court failed to defer to the SBA decision as required by the Railway Labor Act (the "RLA")³ and that no judicially enforceable public policy precludes his reinstatement. We address each contention in turn.

A. The RLA

1. Standard of Review

We review a district court's grant of summary judgment de novo.⁴ Summary judgment is appropriate when the

record indicates no genuine issue of material fact, and that the moving party is entitled to judgment as a matter of law. In considering summary judgment, we must view the evidence in the light most favorable to the nonmoving party. Yet, the nonmoving party must set forth specific facts showing the existence of a genuine issue concerning every essential component of its case.⁵

2. Applicable Law

This is a dispute over a grievance that involves the interpretation and application of the Continental-ALPA CBA and of the LCA entered into by McWhirter and Continental. As such, it is classified as a "minor dispute" under the RLA.⁶ Minor disputes must be resolved through compulsory and binding arbitration before the SBA.⁷ "Judicial review of [SBA] decisions arising from the terms of a[CBA] is narrowly limited, and courts should afford great deference to arbitration awards."⁸ The standard for this review is "among the narrowest known to the law"⁹ and flows from the RLA's "preference for the settlement of disputes in accordance with contractually agreed-upon arbitration procedures."¹⁰ We will defer to an SBA decision based on any reasonable ground presented by the parties, even if not relied on by the SBA in its decision.¹¹

We may decline to defer to a decision of the SBA only if (1) the SBA failed to comply with the RLA, (2) there is evidence of fraud or corruption in the SBA, or (3) the order by the SBA did not "confine itself to matters within the scope of [the SBA's] jurisdiction."¹² Absent one of those exclusive grounds, or a judicially created exception for public policy concerns, we must defer to the SBA's decision.¹³ Continental does not contend that the SBA failed to comply with the RLA or that there is evidence of fraud or corruption in the SBA. Accordingly, only Continental's contention that the SBA failed to conform or confine itself to its jurisdiction is at issue.

The jurisdiction of the SBA and the limits of that jurisdiction arise out the CBA.¹⁴ The SBA therefore fails to conform or confine itself to its jurisdiction if it issues a decision that is contrary to an unambiguous provision of the CBA¹⁵ or an LCA.¹⁶ An LCA is a supplement to the CBA, and its terms are just as binding on an arbitrator as those of the CBA: Unambiguous provisions of an LCA may not be ignored.¹⁷

This is a narrow exception, however, and "`a court should not reject an award on the ground that the [SBA] misread the contract[s].'"<sup>18</sup> The SBA's decision need only "`draw its essence from the contracts[s] and [not] simply reflect the [SBA's] own notions of industrial justice,'"¹⁹ so that the decision is "grounded in the [contracts]."²⁰ That is, "`as long as the arbitrator is even arguably construing or applying the contract[s] and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision.'"²¹ The SBA "may look beyond the written contract when interpreting a collective bargaining agreement if the instrument is ambiguous or silent upon a precise question."²²

If we determine that the SBA has exceeded its authority, we are empowered to vacate or modify the SBA's ruling, or to remand to the SBA for further proceedings.²³ "Even in the very rare instances when [SBA] procedural aberrations rise to the level of affirmative misconduct, as a rule the court must not foreclose further proceedings by settling the merits according to its own judgment of the appropriate result...."²⁴ To do so "would improperly substitute a judicial determination for the [SBA's] decision that the parties bargained for."²⁵ "[T]he court should simply vacate the award, thus leaving open the possibility of further proceedings if they are permitted under the terms of the agreement... [or] remand when this step seems appropriate."²⁶

3. Analysis

It is clear from the foregoing that we must defer to the SBA's decision if it may be supported by any analysis of the LCA and CBA, whether or not relied on by the SBA, that "arguably construes" those agreements. Even if the chain of reasoning is not correct, and the SBA's decision appears to us to be a serious error, we must defer as long as no step in the reasoning process ignores an unambiguous provision of the LCA and CBA.

Continental asserts that the SBA exceeded its jurisdiction in three ways: (1) The SBA should not have considered McWhirter's non-medical explanation for his refusal to take the no-notice test; (2) the SBA was without power to order McWhirter's reinstatement based on his non-medical explanation; and (3) the...