Fairbairn v. United Air Lines, Inc.

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

DAVID L. FAIRBAIRN, 

Plaintiff-Appellee,

v.



UNITED AIR LINES, INCORPORATED,

Defendant-Appellant. No. 00-1438

INTERNATIONAL ASSOCIATION OF

MACHINISTS AND AEROSPACE

WORKERS, AFL-CIO,

Amicus Curiae.



DAVID L. FAIRBAIRN, 

Plaintiff-Appellee,

v.



UNITED AIR LINES, INCORPORATED,

Defendant-Appellant. No. 01-1082

INTERNATIONAL ASSOCIATION OF

MACHINISTS AND AEROSPACE

WORKERS, AFL-CIO,

Amicus Curiae.



Appeals from the United States District Court

for the Eastern District of Virginia, at Alexandria.

James C. Cacheris, Senior District Judge.

(CA-99-43-A)

Argued: February 26, 2001

Decided: May 4, 2001

Before WILKINS, NIEMEYER, and LUTTIG, Circuit Judges.

2 FAIRBAIRN v. UAL, INC.

Reversed and remanded by published opinion. Judge Niemeyer wrote

the opinion, in which Judge Wilkins and Judge Luttig joined.

COUNSEL

ARGUED: Roy Theodore Englert, Jr., MAYER, BROWN &

PLATT, Washington, D.C., for Appellant. John O’Brien Clarke, Jr.,

HIGHSAW, MAHONEY & CLARKE, Washington, D.C., for Appel-

lee. ON BRIEF: Andrew A. Nicely, MAYER, BROWN & PLATT,

Washington, D.C.; James W. Gladden, Jr., Kristen W. Crosby,

MAYER, BROWN & PLATT, Chicago, Illinois, for Appellant. Rob-

ert A. Bush, Ira L. Gottlieb, Joseph A. Kohanski, GEFFNER &

BUSH, Burbank, California, for Amicus Curiae.

OPINION

NIEMEYER, Circuit Judge:

We must decide in this case whether an employment dispute

between United Air Lines, Inc. ("United") and an employee whom

United discharged was subject to compulsory arbitration before an

appropriate adjustment board by virtue of the Railway Labor Act

("RLA"), 45 U.S.C. § 151 et seq., when the employee was not cov-

ered by any collective bargaining agreement nor represented by any

union. Based on the fact that United had posted a notice in the work-

place that "all disputes" would be "handled in accordance with the

requirements of the Railway Labor Act" and a United supervisor’s

affirmation of that notice in a deposition, the district court ordered

that the employment dispute be resolved as a "minor dispute" through

compulsory arbitration under the RLA. Because we conclude that the

compulsory arbitration requirements of the RLA do not extend to dis-

putes arising under individual employment contracts, we reverse. Our

reasons follow.

FAIRBAIRN v. UAL, INC. 3

I

David Fairbairn was hired by United in December 1991 as a reser-

vations sales and service representative in United’s Sterling, Virginia,

reservations center, and at that time, he signed a two-page employ-

ment contract with United, entitled, "Terms and Conditions of

Employment." In the contract, Fairbairn agreed "to comply with the

Company’s rules and regulations" and manifested his understanding

that his employment could be "terminated by United Air Lines or by

me at any time subject only to applicable requirements of law."

Posted in Fairbairn’s workplace was a "Notice to Employees of Air

Carriers," which stated that "[p]ursuant to the provisions of Section

2, Eighth, Railway Labor Act, as amended . . . you are hereby advised

that all disputes between United Airlines and its employees will be

handled in accordance with the requirements of the Railway Labor

Act." This posting was required by the RLA because of United’s sta-

tus as a "carrier" subject to that Act. See 45 U.S.C. §§ 152 Eighth,

181. Although United was party to collective bargaining agreements

with unions such as the International Association of Machinists and

Aerospace Workers and the Air Line Pilots Association, International,

which were subject to the RLA, Fairbairn did not belong to a union,

nor did any employee at his site. Moreover, his class of employees

was not represented by a union nor covered by any collective bargain-

ing agreement,1 although certain rules and regulations that applied to

Fairbairn were promulgated as a direct result of collective bargaining

between United and unions representing other employees.

During 1996 and 1997, Fairbairn applied for various transfers and

promotions to other jobs available at United, none of which he

received; for some, he was not even granted an interview. Perceiving

these rejections to be unfair, Fairbairn filed several grievances with

United, each of which, he alleges, United routinely denied. On April

30, 1997, Fairbairn met with Bill Koski, his operations supervisor, to

obtain feedback regarding one of his unsuccessful interviews. During

1

Subsequent to the termination of Fairbairn’s employment, the

National Mediation Board issued a decision certifying the International

Association of Machinists and Aerospace Workers as a duly designated

representative of the class of employees to which Fairbairn had

belonged. See In re United Airlines, Inc., 25 N.M.B. 411 (1998).

4 FAIRBAIRN v. UAL, INC.

this meeting, Fairbairn became agitated and upset at United’s man-

agement, including his manager, Diane Hallinan, for "placing road-

blocks and obstacles in his path to success." Fairbairn made several

threatening remarks directed at Hallinan and accused her of lying to

him and arranging for others to make false charges against him. Fair-

bairn contends that Koski and Hallinan conspired to provoke him into

losing his temper so that he could be charged with a violation of Unit-

ed’s rules and regulations and thereby be pretextually discharged. He

maintains the real reason for his subsequent discharge was his disabil-

ity. Fairbairn has a form of epilepsy that causes him to suffer from

seizures and occasional losses of memory.

In response to Fairbairn’s conduct at the April 30 meeting, United

did charge him with a violation of Article 34 of United’s published

rules of conduct, which provides that the "[m]aking or publishing

false, vicious or malicious statements concerning" United or any of

its employees constitutes grounds for termination. After giving Fair-

bairn a hearing, United discharged him by a letter, dated June 13,

1997. After unsuccessfully appealing the termination decision inter-

nally, Fairbairn asked United to submit the dispute to arbitration.

When United declined, Fairbairn filed this action in federal court,

alleging that United not only breached his contract of employment but

also violated the RLA in refusing to provide him the grievance proce-

dure and arbitration mandated for "minor disputes" under that Act.

Fairbairn also alleged in his complaint that United violated the Ameri-

cans with Disabilities Act in denying him transfers and promotions

and in terminating his employment because of his disability and in

retaliation for an earlier lawsuit that he had brought, unsuccessfully,

seeking accommodation of the disability.

The district court entered summary judgment in favor of United on

all of Fairbairn’s claims. Later, however, it modified its judgment on

the claim that the RLA had been violated and ordered the parties to

arbitrate pursuant to that Act. The court stated, "given the notice

posted by [United] and the deposition testimony of Diane Hallinan,

Plaintiff is in fact covered under the RLA. As such, Plaintiff should

be allowed to have his minor disputes heard in arbitration."

United noticed this appeal from the district court’s order directing

it to arbitrate under the RLA, contending that the district court

FAIRBAIRN v. UAL, INC. 5

improperly assumed that the "minor dispute" provision of the RLA

applies to Fairbairn, even though he is not covered by a collective

bargaining agreement or represented by a labor union.2 To express its

agreement with United’s position, the International Association of

Machinists and Aerospace Workers filed a brief as amicus curiae.

II

Fairbairn contends that his dispute over the process through which

his employment was terminated was a dispute "growing out of griev-

ances or out of the interpretation or application of agreements cover-

ing rates of pay, rules, or working conditions," 45 U.S.C. § 151a(5),

and that therefore it must be arbitrated in accordance with the RLA

as a "minor dispute," even though he is not covered by a collective

bargaining agreement nor represented by a union. Drawing on the

broad purposes of the Act to "provide for the prompt and orderly set-

tlement of all disputes growing out of grievances or out of the inter-

pretation or application of agreements covering rates of pay, rules, or

working conditions," id., Fairbairn argues that the compulsory arbitra-

tion provision of 45 U.S.C. § 184 covers any "minor dispute" and that

what constitutes a "minor dispute" is not limited to a dispute arising

under a collective bargaining agreement, but includes also a dispute

arising out of an individual employment contract. If Fairbairn’s posi-

tion is correct, then the district court would not have had jurisdiction

over this claim and its order compelling arbitration therefore would

have been proper. See United Transp. Union v. S.C. Pub. R.R.

Comm’n, 130 F.3d 627, 631-32 (4th Cir. 1997).

United argues that the entire RLA framework "presupposes, and

depends on, the designation of a bargaining representative." Once a

2

Contending that the order to arbitrate was either final or injunctive in

nature, United initially relied on 28 U.S.C. §§ 1291 and 1292(a) for

appellate jurisdiction. Concerned, however, that the order to arbitrate

might not in fact be final or that it might not be appealable as an injunc-

tion under § 1292(a), United also requested that the district court certify

its order for appeal under 28 U.S.C. § 1292(b). On November 29, 2000,

the district court did so, and on January 19, 2001, we granted United per-

mission to appeal. Accordingly, Fairbairn’s motion to dismiss for lack of

jurisdiction is denied.

6 FAIRBAIRN v. UAL, INC.

representative has been properly designated, the RLA classifies labor

disputes between the carrier and the union as the designated bargain-

ing representative into "major disputes," which relate to the formation

or modification of collective bargaining agreements, and "minor dis-

putes," which relate to the interpretation or application of such agree-

ments. As a more directly relevant argument, United asserts that the

Supreme Court has "flatly foreclosed" any conclusion that the com-

pulsory arbitration provisions of the RLA apply to individual employ-

ment agreements. See generally Hawaiian Airlines, Inc. v. Norris, 512

U.S. 246 (1994); Williams v. Jacksonville Terminal Co., 315 U.S. 386

(1942).

The RLA was enacted in 1926, during an era of protracted railway

labor disputes that had adversely affected the national economy, to

"provide for the prompt and orderly settlement of all disputes growing

out of grievances or out of the interpretation or application of agree-

ments covering rates of pay, rules, or working conditions," 45 U.S.C.

§ 151a(5), and to "avoid any interruption to commerce or to the oper-

ation of any carrier engaged therein," id. § 151a(1).3 To achieve its

purposes, the Act treats separately and differently two classes of labor

disputes, which the courts have denominated "major disputes" and

"minor disputes." We have previously explained the distinction as fol-

lows:

The RLA does not explicitly use the terms "major dispute"

or "minor dispute." Rather, these are terms adopted by the

courts from the vocabulary of railroad management and

labor as a shorthand method of describing two classes of

controversies Congress had distinguished in the RLA. . . .

"[M]ajor disputes" seek to create contractual rights, while

"minor disputes" seek to enforce those rights.

United Transp. Union, 130 F.3d at 631. In this case, Fairbairn charac-

terizes his attempt to enforce his individual contract rights as a "minor

3

Although the original Act applied only to rail carriers, in 1936 it was

extended to cover the airline industry. See 45 U.S.C. §§ 181-188. Section

181 extends the original Railway Labor Act, with the exception of § 153,

to "every common carrier by air engaged in interstate or foreign com-

merce." Section 184 replaces § 153 with respect to airlines.

FAIRBAIRN v. UAL, INC. 7

dispute" for which the RLA provides compulsory and binding arbitra-

tion and over which the district court lacks subject matter jurisdiction.

See 45 U.S.C. § 184.

Looking solely at the language of the RLA, it might appear, at first

blush, to authorize any employee to invoke compulsory arbitration

because it appears to cover disputes arising out of any agreement

"concerning rates of pay, rules, or working conditions," without speci-

fying whether the agreement is an individual employment contract or

a collective bargaining agreement. 45 U.S.C. §§ 152 Sixth, 184. But

because we are not interpreting this Act as a matter of first impres-

sion, we need not be concerned with our initial observations about the

text. The Supreme Court has repeatedly addressed the RLA’s scope,

concluding as early as 1942 that the RLA does not apply to all agree-

ments involving rates of pay, rules, or working conditions, but only

to collective bargaining agreements. See Williams, 315 U.S. at 399-

400 ("Independent individual contracts are not affected by the Act.

. . . The crucial § 6 is phrased so as to leave no doubt that only agree-

ments reached after collective bargaining are covered"); see also

Elgin, Joliet & E. Ry. v. Burley, 325 U.S. 711, 723 (1945) (noting that

covered minor disputes "contemplate[ ] the existence of a collective

agreement" (emphasis added)). And this limiting construction of the

Act’s scope has been applied continuously and consistently over the

60 years since. See Bhd. of R.R. Trainmen v. Chicago River & Ind.

R.R., 353 U.S. 30, 33 (1957) (defining minor disputes as "controver-

sies of the meaning of an existing collective bargaining agreement in

a particular fact situation" (emphasis added)); Consol. Rail Corp. v.

Ry. Labor Executives’ Ass’n, 491 U.S. 299, 310 (1989) ("[R]eferring

arbitrable matter to the Board will help to ‘maintain agreements’ by

assuring that collective-bargaining contracts are enforced by arbitra-

tors who are experts in ‘the common law of [the] particular industry’"

(alteration in original) (emphasis added) (quoting Steelworkers v.

Warrior & Gulf Navigation Co., 363 U.S. 574, 579 (1960))); Hawai-

ian Airlines, 512 U.S. at 253 ("Minor disputes involve controversies

over the meaning of an existing collective bargaining agreement in

a particular fact situation" (emphasis added) (internal quotation marks

and citation omitted)); Brown v. Trans World Airlines, 127 F.3d 337,

340 (4th Cir. 1997) ("Hawaiian Airlines instructs that the Railway

Labor Act’s arbitral mechanism does not mandate the arbitration of

8 FAIRBAIRN v. UAL, INC.

state-law claims that exist independently of the collective bargaining

agreement" (emphasis added)).

This restrictive interpretation of the term "agreement" as used in

the RLA is consistent with its purpose of encouraging collective bar-

gaining and resolution of associated disputes to prevent strikes that

adversely affect interstate commerce. Obviously, an individual

employee’s dispute with management regarding that employee’s indi-

vidualized concern is highly unlikely to provoke the collective enthu-

siasm required for a strike and therefore unlikely to adversely affect

interstate commerce. This is especially true when the employee is not

a member of a labor union.

Fairbairn argues nonetheless that his right to arbitrate under the

RLA has been implicitly recognized by the Supreme Court’s decision

in Burley, see 325 U.S. at 728-41, and therefore that the numerous

other references in Supreme Court opinions to the requirement of a

collective bargaining agreement to trigger arbitration are dicta that we

should ignore. He points to Burley’s statement that the RLA’s minor

dispute procedures provide employees with rights that are "separate

and distinct from any the collective agent may have to represent the

collective interest," id. at 738, and to its holding that an employee has

an individual right to utilize the minor dispute procedure against his

employer without the involvement or interference of a union repre-

sentative, see id. at 741. Fairbairn’s argument, however, grossly mis-

characterizes the holding and discussion in Burley and draws

conclusions that are simply not supported by that case. Burley holds

simply that when an employee has a grievance and is represented by

the union, in pursuing resolution of that dispute under the RLA, the

employee may proceed alone and reject the union’s assistance. The

holding is made against the necessary backdrop of a collective bar-

gaining agreement and the collective interests of the union that might

compete with the individual interests that the collective agent simulta-

neously represents. The Court in Burley found the individual’s griev-

ance to be a "minor dispute," characterizing a "minor dispute" as

"contemplat[ing] the existence of a collective agreement already con-

cluded or, at any rate, a situation in which no effort is made to bring

about a formal change in terms or to create a new one." Id. at 723

(emphasis added). Indeed, if the Burley court had even considered the

possibility that an employee not covered by a collective bargaining

FAIRBAIRN v. UAL, INC. 9

agreement could bring a claim under the RLA, it surely would have

mentioned it because such a possibility would have provided disposi-

tive support for its holding that union involvement was not required

by the Act. Instead, the Burley discussion contains the assumption

that RLA-covered employees will be the subjects of collective bar-

gaining agreements and therefore represented by unions generally.

Thus, Burley in fact undermines rather than bolsters Fairbairn’s argu-

ment.

Fairbairn also argues that he was covered by the RLA because

United posted a notice in the workplace saying so. But the terms of

the notice that United posted in the workplace do not support his con-

tention. The notice is a printed form document, general in application,

that is required by the RLA and that notifies employees of covered

carriers that "all disputes between [the carrier] and its employees will

be handled in accordance with the requirements of the Railway Labor

Act." (Emphasis added). The notice both restricts the class of disputes

handled to those between United and "the employees" collectively,

not individually, and makes clear that disputes will be handled under

the RLA only insofar as that Act requires them to be. Thus, by its

own terms, the notice does not substantively alter the coverage of the

RLA. In any case, it could not be read to alter the RLA’s coverage.

Although Fairbairn does not expressly make the argument, he implies

that the posting of the notice and his reliance on it created some form

of a promissory estoppel binding United to arbitrate under the RLA.

This argument, however, has no merit because the RLA’s compulsory

arbitration mechanism is jurisdictional, divesting federal courts of any

power to adjudicate disputes covered by compulsory arbitration. See

Consolidated Rail Corp., 491 U.S. at 303-04; United Transp. Union,

130 F.3d at 631. A private entity cannot, no more than can a court,

override the jurisdictional limits established by Congress. See Finley

v. United States, 490 U.S. 545, 547-48 (1989).

Finally, Fairbairn argues that because some of United’s employees’

policies, which applied to him, were the direct result of collective bar-

gaining, he was somehow covered under the collective bargaining

agreement. It is undisputed, however, that Fairbairn was not repre-

sented by the union, and, of course, any collective bargaining agree-

ment creates rights only between the union on behalf of employees

represented by it and the employer. Although Fairbairn seems to sug-

10 FAIRBAIRN v. UAL, INC.

gest that he was a third-party beneficiary to such an agreement, he

was not a member of the class of employees represented and was

therefore not a direct or intended beneficiary. Any privileges that he

may have obtained did not arise under the collective bargaining

agreement, even if they applied as a consequence of it. The simple

grant of benefits to an unrepresented employee like Fairbairn does not

confer on him standing to enforce the terms of the agreement from

which the benefits originated. This truth is brought into sharp focus

by the fact that Fairbairn’s arguments are rejected and opposed in this

case by both parties to the collective bargaining agreement on which

he relies.

We observe additionally that if we were to extend coverage of the

RLA to every individual employment contract between a carrier and

its individual employees — as Fairbairn’s argument would have us do

— the result would be dramatic, as we would then be required to con-

clude that state law enforcement of all such contracts is preempted.

See Hawaiian Airlines, 512 U.S. at 254. Even if we were confronting

the RLA as a matter of first impression, we would be loath to con-

clude that Congress meant to bring about such a result without clear

language or evidence that it intended the RLA to bring about such a

radical change in the legal landscape. Cf. id. at 255-56 ("[N]o pro-

posed interpretation demonstrates a clear and manifest congressional

purpose to create a regime that broadly preempts substantive protec-

tions extended by the States").

In sum, we conclude that Fairbairn’s employment disputes with

United arising in connection with his individual employment contract

are not "minor disputes" covered by the RLA and therefore that they

are not subject to compulsory arbitration before an appropriate adjust-

ment board. Accordingly, we reverse the contrary ruling of the district

court and remand with instructions to vacate the order compelling

arbitration.

REVERSED AND REMANDED