Sturge v. Nw. Airlines Inc.

• Decision Date: 07 October 2011
• Docket Number: Nos. 10–2813,10–2973.,s. 10–2813
• Citation: 161 Lab.Cas. P 10412,658 F.3d 832,191 L.R.R.M. (BNA) 2897
• Parties: Caleb R. STURGE, Appellant/Cross–Appellee,v.NORTHWEST AIRLINES, INC., Appellee/Cross–Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

658 F.3d 832

191 L.R.R.M. (BNA) 2897

161 Lab.Cas. P 10,412

Caleb R. STURGE, Appellant/Cross–Appellee,

v.NORTHWEST AIRLINES, INC., Appellee/Cross–Appellant.

Nos. 10–2813

10–2973.

United States Court of Appeals, Eighth Circuit.

Submitted: June 17, 2011.Filed: Oct. 7, 2011.

Richard Thompson Wylie, argued, Minneapolis, MN, for appellant.Timothy Robert Thornton, argued, Minneapolis, MN, Molly Borg Thornton, on the brief, Wayzata, MN, for appellee.Before COLLOTON and BENTON, Circuit Judges, and KOPF,¹ District Judge.

COLLOTON, Circuit Judge.

Caleb Sturge was terminated for cause from his employment with Northwest Airlines, Inc., shortly after he was arrested for possession of marijuana. At the same time, Sturge had pending with Northwest a request for disability retirement benefits. Northwest later granted Sturge's request, but he was ineligible for certain retirement benefits as a result of the termination. Sturge sued Northwest, claiming that the termination violated section 510 of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1140. The district court ² denied Northwest's motion to dismiss for lack of subject-matter jurisdiction, but granted its motion for summary judgment. Both parties appeal, and we affirm.

I.

Sturge began working for Northwest on February 17, 1989.³ At the time of his termination, he was employed as first officer on Boeing 747 aircraft. His employment with Northwest was subject to a collective bargaining agreement (“CBA”) negotiated by the Air Line Pilots Association, the exclusive bargaining representative of Northwest pilots.

On July 17, 2003, Sturge was placed on long-term medical leave as a result of injuries he suffered outside of work. On October 8, 2003, Sturge applied for disability retirement benefits. Disability retirement benefits are available pursuant to the Northwest Airlines Pension Plan for Pilot Employees (“Pension Plan”). A pilot on disability retirement is entitled to pension income based on the amount of the pilot's salary. Such a pilot ordinarily is entitled to several other benefits, pursuant to the CBA: continued accrual of seniority; a right to return to work if the disability ceases; pass privileges (discounted rates on Northwest flights) for the pilot and qualifying members of his family; and company-paid medical insurance for the pilot and qualifying members of his family, if the pilot worked for Northwest for at least 15 years before electing disability retirement. Sturge would have attained 15 years of employment in January 2004 if he had not been terminated.

On October 17, 2003, Sturge was arrested for possession of marijuana. Northwest pilots are subject to a drug policy that prohibits the possession of controlled substances, so after law enforcement officials informed Northwest of the arrest, the company began an investigation. During the investigation, Sturge admitted to possessing and using marijuana. Northwest then terminated Sturge's employment on October 31, 2003. Sturge grieved the termination, and it was upheld by a system board of adjustment on October 5, 2004.

Despite the termination, Northwest continued to process Sturge's application for disability retirement. Northwest approved the application on November 22, 2004, and determined that Sturge's “retirement date” was October 31, 2003—the date of his termination. But as a result of his termination for cause, Sturge was not eligible for some of the benefits ordinarily available to pilots on disability retirement, namely, accrual of seniority, the right to return to work, or pass privileges. So too, because Sturge was terminated before he had attained 15 years of employment with Northwest, he was not eligible for company-paid medical insurance premiums. Sturge also claims that because his disability retirement pension income is based on his salary prior to taking disability retirement, and because pilots typically receive an increase in salary upon reaching 15 years of employment, his pension income is lower than it would have been without the termination.

Sturge sued Northwest in August 2005, alleging that the company terminated him in violation of section 510 of ERISA. The case was administratively terminated in September 2005, due to Northwest's then-pending bankruptcy proceedings. When the case was reopened in May 2008, Northwest moved to dismiss for lack of subject-matter jurisdiction. The district court denied that motion, but later granted Northwest's motion for summary judgment.

Sturge appeals the grant of summary judgment. Northwest cross-appeals the denial of its motion to dismiss for lack of subject-matter jurisdiction.

II.

A.

We first address Northwest's appeal of the district court's order denying the motion to dismiss, because it implicates our subject-matter jurisdiction. The Railway Labor Act (“RLA”), 45 U.S.C. §§ 151–188, governs labor relations in the airline industry. See Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 248, 114 S.Ct. 2239, 129 L.Ed.2d 203 (1994). It “establishes a mandatory arbitral mechanism for the prompt and orderly settlement of two classes of disputes” between air carriers and their employees: major disputes and minor disputes. Id. at 252, 114 S.Ct. 2239 (internal quotations omitted); see 45 U.S.C. § 151a.

“ ‘Major’ disputes involve ‘the formation of collective bargaining agreements or efforts to secure them.’ ” Taggart v. Trans World Airlines, Inc., 40 F.3d 269, 272 (8th Cir.1994) (quoting Consol. Rail Corp. v. Ry. Labor Execs.' Ass'n, 491 U.S. 299, 302, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989)). Parties to a major dispute are required to pursue “a lengthy process of bargaining and mediation.” Consol. Rail. Corp., 491 U.S. at 302, 109 S.Ct. 2477. Minor disputes are “controversies arising out of the application or interpretation of [a] collective bargaining agreement.” Gore v. Trans World Airlines, 210 F.3d 944, 949 (8th Cir.2000). Minor disputes “must be resolved only through the RLA mechanisms, including the carrier's internal dispute-resolution processes and an adjustment board established by the employer and the unions.” Hawaiian Airlines, 512 U.S. at 253, 114 S.Ct. 2239; see 45 U.S.C. § 184. The adjustment board has “mandatory, exclusive, and comprehensive jurisdiction over minor disputes,” Hastings v. Wilson, 516 F.3d 1055, 1059 (8th Cir.2008) (internal quotation omitted), and state and federal courts lack subject-matter jurisdiction over claims based on minor disputes. Deneen v. Nw. Airlines, Inc., 132 F.3d 431, 439 (8th Cir.1998). The RLA does not, however, deprive courts of jurisdiction over disputes that do not fall within either category. Cf. Hawaiian Airlines, 512 U.S. at 266, 114 S.Ct. 2239.⁴

Northwest contends that Sturge's claims are based on minor disputes, and that the district court therefore lacked subject-matter jurisdiction. A dispute between an air carrier and an employee is a minor dispute if its resolution “depends on an interpretation of [a] CBA.” Hawaiian Airlines, 512 U.S. at 261, 114 S.Ct. 2239. As such, “[c]ourts can resolve questions of federal or state law involving labor claims only if the issues do not require the court to construe the collective bargaining agreement.” Deneen, 132 F.3d at 439. Courts may, however, resolve issues that require mere reference to a collective bargaining agreement. Hawaiian Airlines, 512 U.S. at 261 n. 8, 114 S.Ct. 2239; Thomas v. Union Pac. R.R. Co., 308 F.3d 891, 893 (8th Cir.2002). Likewise, the RLA does not deprive courts of jurisdiction to decide “ ‘purely factual questions' about an employee's conduct or an employer's conduct and motives” that “do not ‘requir [e] a court to interpret any term of a collective-bargaining agreement.’ ” Hawaiian Airlines, 512 U.S. at 261, 114 S.Ct. 2239 (quoting Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 407, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988)) (alteration in original).

In light of these principles, we have held that an ERISA claim may be a minor dispute, subject to the RLA's arbitration requirement, if the pension plan on which the claim is based “is (1) itself a collective bargaining agreement or (2) maintained pursuant to a collective bargaining agreement.” Hastings, 516 F.3d at 1059. But even if the relevant plan is created or maintained pursuant to a collective bargaining agreement, “[t]he district court, rather than the RLA arbitration board, has jurisdiction over ERISA claims that are independent of an interpretation or application of any collective bargaining agreements.” Id.

According to Northwest, the benefits that are the subjects of Sturge's claims are available to eligible retirees pursuant to the Pension Plan, which Northwest describes as a collectively bargained agreement, or pursuant to the CBA itself. Northwest argues that a court will have to interpret those agreements to resolve three issues raised by Sturge's claims: (1) whether Sturge is eligible for the benefits at issue in this case, despite his for-cause termination; (2) whether Sturge is eligible for the benefits despite his use of illegal drugs; and (3) whether certain comparator evidence offered by Sturge to support his claim that Northwest acted with improper motivation is entitled to any weight.

Northwest's contention regarding the first issue—whether Sturge's termination affects his eligibility for the benefits at issue in this case—cannot succeed in light of Sturge's claims. Sturge concedes that a terminated pilot is not entitled to the benefits. He also concedes that his termination for a violation of Northwest's drug policy was proper under the CBA. Sturge argues only that Northwest acted with an improper purpose: to retaliate against him for claiming ERISA-protected benefits, or to interfere with his receipt of those benefits. The questions whether Sturge is entitled to benefits despite his termination, and whether the termination was proper under the CBA, are therefore irrelevant to the resolution of Sturge's claims. Similarly,...