Loveless v. Eastern Air Lines, Inc.

• Decision Date: 02 August 1982
• Docket Number: No. 80-5920,80-5920
• Citation: 681 F.2d 1272
• Parties: 111 L.R.R.M. (BNA) 2001, 95 Lab.Cas. P 13,726, 3 Employee Benefits Ca 1963 John R. LOVELESS, Claude W. Bowman & John P. Hall, Plaintiffs-Appellees, v. EASTERN AIR LINES, INC., et al., Defendants-Appellants, Charles G. Dyer, S. T. Belastock and George Smith, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1272

681 F.2d 1272

111 L.R.R.M. (BNA) 2001, 95 Lab.Cas. P 13,726,

3 Employee Benefits Ca 1963

John R. LOVELESS, Claude W. Bowman & John P. Hall, Plaintiffs-Appellees, v. EASTERN AIR LINES, INC., et al., Defendants-Appellants, Charles G. Dyer, S. T. Belastock and George Smith,

Defendants-Appellants.

No. 80-5920.

United States Court of Appeals, Eleventh Circuit.

Aug. 2, 1982.

Gary Green, Legal Dept., Air Line Pilots Assoc., Int'l, Daniel S. Kozma, Washington, D. C., Manners, Amoon, Whatley & Tucker, George H. Tucker, Miami, Fla., for Charles G. Dyer et al.

Blackwell, Walker, Gray, Powers, Flick & Hoehl, James E. Tribble, Todd A. Cowart, Miami, Fla., for Eastern Air Lines.

Robert E. Kusch, Vero Beach, Fla., for plaintiffs-appellees.

Appeals from the United States District Court for the Southern District of Florida.

Before VANCE, HATCHETT and ANDERSON, Circuit Judges.

VANCE, Circuit Judge:

The district court vacated the decision of an arbitration panel which denied supplementary retirement benefits to three employees of appellant, Eastern Airlines, Inc. (hereinafter "Eastern"). The court held that the panel had exceeded its jurisdiction by failing to apply unambiguous language in the collective bargaining agreement that clearly entitled the employees to benefits. We conclude that the district court erred in vacating the arbitral award, and we therefore reverse its judgment.

The dispute in this case centers around the interpretation of Eastern's retirement plan, established in 1947 as part of the collective bargaining agreement between Eastern and the Air Line Pilots Association (hereinafter "ALPA"). The retirement plan contains two definitions that are central to the determination of eligibility for benefits. Article I, section 1.15 of the plan defines "normal retirement age":

"Normal Retirement Age" for any Participant means the 60th anniversary of his date of birth.

The plan then defines "normal retirement date" in Article I, Section 1.16:

"Normal Retirement Date" means the first day of the month coinciding with or next following the Participant's attainment of his normal retirement age.

The interplay between these two sections creates two possible groups of employees for purposes of retirement eligibility. One group, consisting of employees whose birthday falls on the first of the month, becomes entitled to benefits immediately upon their sixtieth birthday. The remaining employees are not eligible for benefits until the first day of the month following their sixtieth birthday.

In 1977 Eastern and ALPA agreed to provide supplemental retirement benefits for various classes of employees. The plan amendment had an "effective date" of May 1, 1977 and specifically provided increased benefits for employees "who have a 'normal retirement date' on or after May 1, 1977."

The appellees in this case, three retired pilots covered under the plan, became sixty years old after April 1, 1977 and before May 1, 1977. ¹ According to the terms of Article I, sections 1.15 and 1.16, their normal retirement date was May 1, 1977. Under the plain meaning of the language of the amendment, therefore, they were entitled to supplemental retirement benefits.

Eastern, however, refused to pay appellees the supplemental benefits. It claimed that the intent of the company and the union was to grant the benefits to employees who became sixty years old on or after the effective date of the amendment, May 1, 1977. This dispute was referred to an arbitration panel created by Article X of the retirement plan ² and empowered by Article XI to resolve all disputes arising under the plan. ³ The panel, consisting of two members chosen by Eastern and two members chosen by ALPA, heard extensive evidence concerning the intent of the negotiators of the 1977 amendment. The evidence included actuarial projections used by the negotiators to determine the cost of the supplemental benefits that took into account only those pilots who would become sixty on or after May 1, 1977. ⁴ The arbitration panel found unanimously that the three Eastern pilots were not entitled to supplemental benefits. ⁵

I. STATUTORY BACKGROUND

Eastern is an air carrier operating in interstate commerce and is therefore covered by provisions of the Railway Labor Act, 45 U.S.C. §§ 151-188. See 45 U.S.C. § 181; I.A.M. v. Central Airlines, Inc., 372 U.S. 682, 685, 83 S.Ct. 956, 958, 10 L.Ed.2d 67 (1963). The arbitration panel is a system adjustment board created by the parties to the collective bargaining agreement. See 45 U.S.C. § 184; Reed v. National Air Lines, Inc., 524 F.2d 456, 459 (5th Cir. 1975); de la Rosa Sanchez v. Eastern Airlines, Inc., 574 F.2d 29, 31 (1st Cir. 1978). A court may overturn the decision of an airline system adjustment board only on the basis of one of the grounds listed in 45 U.S.C. § 153 First (q). ⁶ See Singer v. Flying Tiger Line, Inc., 652 F.2d 1349, 1355-56 (9th Cir. 1981); Northwest Airlines, Inc. v. Air Line Pilots Association International, 530 F.2d 1048, 1050 & n.9 (D.C.Cir.), cert. denied, 426 U.S. 942, 96 S.Ct. 2663, 49 L.Ed.2d 394 (1976).

II. STANDARD OF REVIEW OF ARBITRAL DECISIONS

The exceedingly narrow scope of judicial review of labor arbitration decisions is tailored to suit the vital role that the arbitrator plays in the scheme of federal labor law. Not only is the arbitrator himself a linchpin of the ongoing collective bargaining relationship, the expeditiousness and the finality of the arbitration process serve to defuse the chronic crises that inhere in the labor setting and thereby prevent these crises from developing into labor unrest. See United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578-81, 80 S.Ct. 1347, 1350-52, 4 L.Ed.2d 1409 (1960). To the extent that the courts intrude into this scheme, they detract both from the central role of the arbitrator and the palliative effect of the arbitration process. See United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 598-99, 80 S.Ct. 1358, 1361-62, 4 L.Ed.2d 1424 (1960).

In recognition of the limited judicial role in the arbitration process, courts have typically confined their scrutiny of awards to the broad contours of procedural fairness and arbitral impartiality. See, e.g., 45 U.S.C. § 153 First (q); Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976); Sam Kane Packing Co. v. Amalgamated Meat Cutters, 477 F.2d 1128 (5th Cir.), cert. denied, 414 U.S. 1001, 94 S.Ct. 355, 38 L.Ed.2d 237 (1973); Bieski v. Eastern Automobile Forwarding Co., 396 F.2d 32 (3d Cir. 1968). Cf. United States Arbitration Act, 9 U.S.C. § 10 (commercial arbitration awards can be vacated, inter alia, for corruption or fraud, evident partiality of the arbitrator, and prejudicial misbehavior of the arbitrator). ⁷ It is thus firmly established that courts will not review the substance of a labor arbitration award for ordinary error and that courts will not vacate an award because a judge might have reached a different result. See Safeway Stores v. American Bakery Workers, Local 111, 390 F.2d 79, 82-83 (5th Cir. 1968); Francesco's B., Inc. v. Hotel Employees Union, Local 28, 659 F.2d 1383, 1388-89 (9th Cir. 1981); R. Gorman, Basic Text on Labor Law 585-86 (1976). See also S.Rep.No.1201, 89th Cong., 2d Sess. 3 (1966), reprinted in 1966 U.S.Code Cong. & Ad.News 2285, 2287 (Senate Labor Committee rejected version of Railway Labor Act that would have permitted courts to vacate arbitral awards on grounds of "arbitrariness or capriciousness").

The substantive grounds for vacating labor arbitral awards that do exist are extremely narrow. In the railway labor field, 45 U.S.C. § 153 First (q) provides that an arbitral award may be vacated for failure "to conform, or confine itself, to matters within the scope of the division's jurisdiction." See also 9 U.S.C. § 10 (commercial arbitration award can be vacated when arbitration panel exceeds its jurisdiction). The courts have determined that this provision of section 153 is, in effect, a statutory codification of certain substantive grounds that would justify the vacation of an arbitral award in other areas of labor law. See Brotherhood of Railroad Trainmen v. Central of Georgia Ry., 415 F.2d 403, 410 (5th Cir. 1969), cert. denied, 396 U.S. 1008, 90 S.Ct. 564, 24 L.Ed.2d 500 (1970). As exposited by the courts, there appear to be three interrelated grounds for such substantive review of arbitral awards:

(1) whether the award is irrational, see, e.g., Gunther v. San Diego & Arizona E. Ry., 382 U.S. 257, 261, 86 S.Ct. 368, 370, 15 L.Ed.2d 308 (1965) ("wholly baseless and completely without reason"); Safeway Stores v. American Bakery Workers, Local 111, 390 F.2d at 82 ("if ... no judge, or group of judges, could ever conceivably have made such a ruling"); S.Rep.No.1201, supra, at 3, reprinted in 1966 U.S.Code Cong. & Ad.News, at 2287 ("actually and indisputably without foundation in reason or fact");

(2) whether the award draws its essence from the letter or purpose of the collective bargaining agreement, United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. at 597, 80 S.Ct. at 1361; see Brotherhood of Railroad Trainmen v. Central of Georgia Ry., 415 F.2d at 412 (arbitrator's award "must have a basis that is at least rationally inferable, if not obviously drawn, from the letter or purpose of the collective bargaining agreement"); St. Antoine, Judicial Review of Labor Arbitration Awards: A Second Look at Enterprise Wheel and its Progeny, 75 Mich.L.Rev. 1137, 1147 (1977); and

(3) whether the arbitrator conformed to a specific contractual limitation upon his authority, see, e.g., Magnavox Co. v. International Union of Electrical Workers, 410 F.2d 388, 389 (6th Cir. 1969); Torrington Co. v. Metal Products Workers Union Local 1645, 362 F.2d 677, 680 (2d Cir. 1966); Textile Workers Union v. American Thread Co., 291 F.2d 894, 899-900 (4th Cir. 1961).

Although these interrelated grounds for...