Tombs v. Northwest Airlines, Inc.
| Decision Date | 13 December 1973 |
| Docket Number | No. 42904,42904 |
| Citation | 83 Wn.2d 157,516 P.2d 1028 |
| Parties | , 86 L.R.R.M. (BNA) 2444, 72 Lab.Cas. P 14,211 Stanley E. TOMBS, Respondent, v. NORTHWEST AIRLINES, INC., Appellant. |
| Court | Washington Supreme Court |
Newman & Bradshaw, Inc. P.S., Russell W. Newman, Seattle, for appellant.
Skeel, McKelvy, Henke, Evenson & Betts, Frederick V. Betts, Seattle, for respondent.
This is an appeal by Northwest Airlines, Inc. (Northwest) from a judgment of the trial court sitting without a jury. The court awarded retirement benefits to Stanley A. Tombs under its interpretation of a series of collective bargaining agreements between Northwest and the Airline Pilots' Association of which Tombs was a member.
The issues presented on appeal are the nature of the court's jurisdiction, if any, under the arbitration clause of the Northwest Airlines, Inc., Pilots' Pension Plan (Plan) and the duty of the Retirement Board (Board) established by that agreement to promulgate rules and procedures. We affirm the unpublished opinion of the Court of Appeals and remand the case to the Retirement Board to establish rules of procedure and to give Tombs a hearing consistent with basic due process.
The collective bargaining agreements were negotiated between Northwest and the Airline Pilots' Association (ALPA), of which Tombs was a member in good standing at all pertinent times. Tombs was employed as an airline pilot by Northwest on August 5, 1940, and worked in that capacity until he went on sick leave December 22, 1962, as a result of a nervous disorder. This sick leave was extended from time to time until December 22, 1967, when Tombs retired and subsequently applied for retirement benefits under the pilots' pension plan. By a letter to Tombs dated April 1, 1968, the secretary of the Board set forth a computation of the benefits to which Tombs was entitled and enclosed checks representing sums due him under the retirement plan. Tombs disagreed with the computation of benefits which apparently was based upon a conclusion by the Board that his date of retirement was May 1, 1963. The Board's computation based his retirement on the date on which his paid sick leave benefits expired, rather than December 22, 1967, the date on which he left extended medical sick leave. Tombs consulted his attorney who wrote to the secretary on April 9, 1968, advising him, in relevant part, that there was 'no basis' for the Board's conclusion that Tombs retired in 1963 and stating:
It is necessary therefore that Mr. Tombs bring an action against Northwest Airlines under the retirement contract to establish his retirement in accordance with the actual date of retirement in December of 1967, rather than the assumed date of 1963.
Although the Retirement Board met on April 18, 1968, and declined to change its ruling as to Tombs' retirement date, this was not communicated to Tombs' attorney until July 17, 1968. In the interim, on May 2, 1968, Tombs commenced the lawsuit which is the subject of this appeal.
Section 17 of the Plan provides that the Retirement Board, consisting of four members and two alternates equally divided to represent Northwest and ALPA, has the responsibility for 'Development of all rules and procedures not otherwise specified in This Plan itself' and for the 'Arbitration of disputes arising out of the application and interpretation of This Plan.' Section 17 sets forth a 2-step process for the resolution of such a dispute. First, the dispute is submitted to the Retirement Board for decision. If the Board is able to reach a decision, the decision is final and binding on all concerned. Second, in the event the Board is unable to reach a decision, the matter is to be referred to an impartial neutral to be selected by the Board. If the Board is not able to agree upon the selection of an acceptable neutral, then such neutral is to be selected by the National Mediation Board. The dispute is then determined by arbitration before the Retirement Board with the designee of the National Mediation Board as a neutral fifth member. When the Board as thus constituted reaches a decision by a majority of three of the five persons, such decision is final and binding upon all parties.
Tombs did not request arbitration under section 17 of the Plan when he disputed the retirement date assigned him, but instead, gave notice through his attorney's letter of April 9, 1968, of his intention to bring a lawsuit to resolve the dispute concerning his retirement benefits. At the same time, the Retirement Board did not advise Tombs that the dispute must be resolved by arbitration, but rather considered the letter from Tombs' attorney and subsequently advised him that the Board declined to change its ruling as to Tombs' retirement date. In this connection, the trial court found:
That the defendant NORTHWEST AIRLINES, INC., and the Pension Board created in said contract have never adopted any rules or regulations for an arbitration hearing.
Finding of fact No. 8.
That no arbitration hearing was ever held on the plaintiff's claim for full benefits under the Plan.
Finding of fact No. 9.
Northwest may enter into an arbitration agreement with an association of employees such as ALPA providing for
any method and procedure for the settlement of existing or future disputes and controversies, and such procedure shall be valid, enforceable and irrevocable save upon such grounds as exist in law or equity for the revocation of any agreement.
RCW 7.04.010. Section 17 of the Plan constitutes a 'method and procedure' within the meaning of the statute for the settlement of disputes over retirement benefits, notwithstanding the trial court's finding that the Board has never adopted specific rules or regulations for an arbitration hearing.
It is apparent from the record that neither party to this lawsuit made a meaningful effort to invoke the arbitration provisions of the Plan. Tombs never requested a hearing before the Board; he simply rejected the benefits tendered and gave notice through his attorney's letter of April 9, 1968, of his intention to file suit. The Board never advised Tombs that he should have his dispute resolved pursuant to the provisions of section 17 of the Plan; it simply met on April 18, 1968, and rejected Tombs' contention that he was entitled to a computation of benefits based upon the 1967 retirement date.
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