Petition for Writ of Certiorari — Aviation Associates, Inc. v. Airline Pilots Ass'n International
Supreme Court brief1992
Ask Donna
What actually matters in this document.
Text
Supreme
FLiBD
91-1 896 MAY 26 1992
No.
PORrice OF THE cucex |
IN THE
Supreme Court of Che United States
OCTOBER TERM, i991
AVIATION ASSOCIATES, INCORPORATED,
Petitioner,
AIRLINE PILOTS ASSOCIATION INTERNATIONAL,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
A.J. HARPER II
Counsel of Record
TERI L. DANISH
Fulbright & Jaworski
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
LAWRENCE E. DUFFY
P.O. Box 364423
San Juan, Puerto Rico 00936-4423
Counsel for Petitioner
QUESTIONS PRESENTED
I. Whether an interest arbitrator who determines an
issue Outside the submission of the issues presented by the
parties acts outside his jurisdiction in violation of the Rail-
way Labor Act and the decisions of this Court.
II. Whether a court is required to remand questions of
fact or ambiguities arising out of an arbitrator’s award to the
arbitrator for clarification.
III. Whether a court may disregard the standards for
ruling on summary judgment proceedings promulgated by
this Court in upholding an arbitration award.
TABLE OF CONTENTS
6.8) py eo By |. 1 5 | 2 Rn
py) FP Os Bee sy
TABLE OR AUS ETRE E EES icc ces cceees
CR ERCURPET MT ow i ee ee seneswsnves
PRP So kv eo oA ee ee eK
DEAT A CE COU CUIECT OE 66k so Peo nv enue
SEA TIGR INS GRP ROWE GARE oc eee eee
REASONS FOR GRANTING THE WRIT.......
Ss
II.
III.
THE FIRST CIRCUIT’S HOLDING THAT
THE RETROACTIVE PORTION OF
ARBITRATOR MOORE’S AWARD IS
ENFORCEABLE IS CONTRARY TO THE
DECISIONS OF THIS COURT AND
OTHER CIRCUIT COURTS OF APPEAL ..
A. Arbitrator Moore Acted Outside His
Jurisdiction By Awarding Retroactive
BT n'5 Sw ee ek
B. The First Circuit Failed To Remand This
Case To Arbitrator Moore .............
THE DECISION OF THE FIRST CIRCUIT
FAILS TO FOLLOW THIS COURT’S
MANDATES CONCERNING PROPER
SUMMARY JUDGMENT STANDARDS
AND VIOLATES THE FUNDAMENTAL
PRINCIPLES OF CONTRACT
ieee ly 8 ge yt. are
CAVE fb ey el eae eee
ll
TABLE OF AUTHORITIES
Cases
AFSCME Local Lodge 1803 v. Medical Center,
am wea tone Chtem Cer. 1963) ..............
Affiliated Food Distr., Inc. v. Local No. 229, 483
UM OO, I PO i ei sch eee eco
Anderson Vv. Liberty Lobby, Inc., 477 U.S. 242
I a ie ia’ iv v's vae'k ve
Bell Aerospace Co. Div. of Textron v. Local 516,
Int'l, Etc., 500 F.2d 921 (2d Cir. 1974) ........
es ag Fe R.R., 768 F.2d 914 (7th Cir.
EE RN ct ee te wt wis va «
BRT Vv. Central of Ga. Ry., 415 F.2d 403, 411-12,
415 & n.21 (Sth Cir. 1969) cert. denied, 396
I sn Os wR aw ana cn cae
Bruno’s v. United Food & Commercial Workers
Int'l, 858 F.2d 1529 (11th Cir. 1988)...........
Celotex Corp. Vv. Catrett, 477 U.S. 317 (1986) ....
Consolidated Rail Corp. v. RLEA, 491 U.S. 299,
WO Ms OPT CEOUOD 6 oc ee eee enc aeee
Delta Queen Steamboat Co. v. District 2, Marine
Engineers, 889 F.2d 599 (Sth Cir. 1989) .......
Esplanade Oil & Gas v. Templeton Energy Income,
889 F.2d 621 (Sth Cir. 1989) ................
— Vv. Bank of the United States, 24 U.S. 59, 6
Re cn cau nae cavcuceaee
Franklin Elec. Co. v. U.A.W., 886 F.2d 188 (8th
re ek alge cs
Georgia Pacific Corp. v. Local 27, United
Paperworkers Int'l. Union, 864 F.2d 940 (ist
Ss ee GG Se 2 Ri ne
Gunther v. San Diego & A.E. Ry., 382 U.S. 257
GEE Sg a ee
Hanford v. General Electric Co., 353 F.2d 302
tse ae a ew yi devas bukwes
Hart Vv. Overseas National Airways, Inc., 541 F.2d
ee eck ccc vaca ceeacs
PAGE
Hocker v. New Hampshire Ins. Co., 922 F.2d 1476
Be TEE. Eagar cae Neath ex ne are ne 19
Hoteles Condado Beach v. Union Day Troquistas,
Local 901, 763 F.2d 34 (ist Cir. 1985) ........ 12
IAM Vv. Central Airlines, 372 U.S. 681 (1963).. 2, 10, 11
Int'l Brotherhood of Elec. Wkrs., Loc. 369 v. Olin
Corp., 471 F.2d 468 (6th Cir. 1972)........... 18
Inter-City Gas Corp. V. Boise Cascade Corporation,
845 F.2d 184, 187 (8th Cir. 1988) ............ 12
Jones V. St. Louis-S.F. Ry., 728 F.2d 257, 265
Pe ere eee a eee 6, 14
Kenneth Reed Constr. Corp. v. United States, 475
i & oy «Bo. : 5 ee ene 19
Lane Vv. Bowler Corp., 261 U.S. 387 (1923)....... 9
Local 4830 v. New Idea Farm Equipment, 917
Pe SE a, ID cas ie bea ces 17
Loveless V. Eastern Air Lines, Inc., 681 F.2d 1272
Re as I Sie ei hs ee nh cat 3, 11
Main Cent. R.R. v. Brotherhood of Maintenance of
Way Employees, 653 F. Supp. 425 (D.Me. 1987),
aff'd, 873 F.2d 425 (ist Cir. 1988)............ 12
Matshushita Industrial Co., Ltd. v. Zenith Radio
Ce ee Se I cw cca ences 21
Metropolitan Life Insurance Co. v. R.J.R. Nabisco,
Inc., 906 F.2d 884 (2nd Cir. 1990)............ 14
Newark Morning Ledger v. Local 103, 797 F.2d
ee EE re OES ao xe 8 17, 19
Northwest Airlines v. International Associates of
Machinists District Lodge No. 143, 894 F.2d
ey I is ts we eee 12, 19
Pitts v. American Sec. Life Ins. Co., 931 F.2d 351
I es ge da ce eas 15
Prairie Construction Company V. Operating
Engineers, 425 U.S. 800 (1976)............... 21
Strathmore Paper Co. Vv. United Paperworkers Int'l
Union, 900 F.2d 423 (Ist Cir. 1990) .......... 12
Transportation Union Vv. Union Pac. R.R. Co., 385
ee I oe es wane be eaves 17
UAW v. Yardman, Inc., 716 F.2d 1476 (6th Cir.
1983), cert. demed, 465 U.S. 1007 (1984) | 19
Union Pac. R.R. Co. v. Sheehan, 439 U.S. 89
SEPT C's vs 19g Since ies aa ee 10
United Paperworkers AFL-CIO v. Misco, 484 U.S.
PN ob io ek ee ee Oe ae _ passim
United States Postal Service v. American Postal
Workers, 922 F.2d 256 (Sth Cir.) cert. denied,
mys ee ee i, | ene -« fae ae
United Steel Workers v. Enterprise Wheel & Car
CO, Fas UD. Fee Cee oo cee ike. 11,17
Wilson Vv. Chicago & N.W. Transp. Co., 728 F.2d
at, 2° ae |: Sea 19
Yankton Sioux Tribe of Indians v. United States,
272 U.S. 351, 47 S.Ct. 142 (1926) ..... vee 19
Statutes
me Ue OD ees Fe re eek 2
SS USk. S191 222 eos .. 2,4
43 USL. S833 Fitel ). .. 6. 2... 4, natty passim
45 U.S.C. § 159 Third (b)..... ea
SS Ue Bee ree. Pee. a 2
47 USA. BIS ise 6s: $Me ae 3
Miscellaneous
4 Samuel Williston, A Treatise on the Law of
Contracts, §627 (3d ed. 1991)....... aw 13
4 Williston on Contracts, §601...... | 22
5 Williston on Contracts, §678......... 15
Elkouri & Elkouri, How Arbitration Works,
101-108 (BNA 3d ed., 1985)... .. ieperes =
R.J. Schoonhoven, Ed., Fairweather’s Practice
and Procedure in Labor Arbitration, 368, n.31
(BNA 3d ed. 1991)............. ae 15-16
Restatement (Second) of Contracts, § 270. ay 19
No.
IN THE
Supreme Court of The United States
OCTOBER TERM, 1991
AVIATION ASSOCIATES, INCORPORATED,
Petitioner,
Ve
AIRLINE PILOTS ASSOCIATION INTERNATIONAL,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
Aviation Associates, Inc. (“AAI” or the “Company”)!
petitions this Court for a writ of certiorari to review the
judgment of the United States Court of Appeals for the First
Circuit.
OPINIONS BELOW
The opinion of the Court of Appeals (App.A)’ is reported
at 955 F.2d 90, and the First Circuit’s Order denying AAI’s
petition for rehearing is reprinted at App.B. The opinion of
the United States District Court for the District of Puerto
Rico is reported at 762 F.Supp. 6 and is reprinted infra at
' Pursuant to Rule 29.1, Aviation Associates, Inc., petitioner
herein, was at all times material to this suit a wholly-owned
subsidiary of Metro Airlines, Inc. Subsequent to the events at
issue in this suit, all of the stock of Aviation Associates, Inc.
has been transferred to private individuals.
? References to (App. __) are to the Appendix to this petition.
App.C. The arbitrator’s award at issue is unreported, and is
reprinted infra at App.D.
JURISDICTION
The judgment of the Court of Appeals (App.A) was
entered on January 28, 1992, and AAI’s petition for rehear-
ing and suggestion for rehearing en banc were denied by the
Court of Appeals on February 24, 1992 (App.B). The juris-
diction of this Court is invoked under 28 U.S.C. § 1254(1).
STATUTES INVOLVED
The pertinent provisions of the Railway Labor Act, 45
U.S.C. § 151, et seg. are set out below:
If any employee or group of employees, or any
Carrier, is aggrieved . . . by any of the terms of an
award or by the failure of the division to include
certain terms in such award, such employee or
group of employees or carrier may file in any
United States District Court in which a petition
under paragraph (p) could be filed, a petition for
review of the division’s Order . . . The court shall
have jurisdiction to affirm the Order of the division
or to set it aside, in whole or in part, or it may
remand the proceeding to the division for such
further action as it may direct. On such review, the
findings and Order of the division shall be conclu-
sive on the parties, except that the Order of the
division may be set aside, in whole or in part, or
remanded to the division, for failure of the division
to comply with the requirements of this chapter, for
failure of the Order to conform, or confine itself, to
matters within the scope of the division’s jurisdic-
tion... The judgment of the Court shall be subject
to review as provided in §§ 1291 and 1254 of Title
28.
45 U.S.C. § 153 First (q).°
> While § 153 does not directly apply to air carriers, 45 U.S.C.
§ 181, this Court has held that the review and standards in the
airline industry are to conform with the purposes and stand-
ards of the Act. JAM v. Central Airlines, 372 U.S. 681 (1963):
2
Such petition for the impeachment or contesting of
any award so filed shall be entertained by the Court
only on one or more of the following grounds:
(a) that the award plainly does not conform to the
substantive requirements laid down by this chapter
for such awards, or that the proceedings were not
substantially in conformity with this chapter:
(b) that the award does not conform, nor confine
itself to the stipulations of the agreement to
arbitrate...
45 U.S.C. § 159 Third (b).4
The purpose and Congressional intent underlying Rule 56
of the Federal Rules of Civil Procedure are also involved in
this case, but no specific statutory provisions are controlling.
STATEMENT OF THE CASE
AAI is a United States certificated carrier by air operating
as a scheduled commuter airline in the Caribbean area. As
see also Consolidated Rail Corp. v. RLEA, 491 U.S. 299, 109
S.Ct. 2477, 2480-81 (1989) (all “Boards” under Act subject to
limited statutory grounds for review). Generally stated, the
“see for review are whether the arbitrator’s decision (1) is
eyond the scope of the contractual limitations placed upon his
authority, Loveless v. Eastern Air Lines, Inc., 681 F.2d 1272,
1276 (11th Cir. 1982); (2) ignores the plain and unambiguous
provisions of the contract, United Paperworkers AFL-CIO vy.
Misco, 484 U.S. 29 (1987); (3) imposes a remedy that is
expressly excluded by the agreement or submission, Bruno’s y.
United Food & Com. Wkrs. Int'l, 858 F.2d 1529 (J 1th Cir.
1988); or (4) is wholly baseless and without reason, Gunther v.
San Diego & A. E. Ry., 382 U.S. 257 (1965).
There is no dispute here as to the standards under which this
case was decided. The standards are whether the arbitrator
exceeded his jurisdiction as set (a) by the parties’ submission to
him (§ 159(b)) and/or (b) acted outside his jurisdiction by
disregarding the explicit contractual mandates under which the
case was conducted. Also involved is the failure of the courts
below to remand the controversy to the arbitrator for his con-
sideration (§ 153, First (q)).
* The instant interest arbitration was not conducted under the
provisions of 45 U.S.C. §§ 157-159. Because it was conducted
under the Railway Labor Act, however, the statutory standards
of review for such arbitrations is material. See Consolidated
Rail Corp., supra; Central Airlines, supra; and other cases cited.
3
such, it is subject to the Railway Labor Act, 45 U.S.C. § 151,
et seq. (the “Act’’). The Airline Pilots Association (““ALPA’’)
is a labor organization which represents the pilots of air
carriers.
AAI, at the time relevant to this proceeding, was a wholly-
owned subsidiary of Metro Airlines, Inc. (““Metro’’). Metro
also owned several other air carriers which operated in vari-
ous areas of the United States. In April 1989, pursuant to
collective bargaining negotiations with ALPA, an agreement
was reached covering certain of these operations.»
Contemporaneously with the execution of this agreement,
based upon voluntary recognition of ALPA by AAI, AAI and
ALPA entered into an agreement (the AAI “‘side letter’’) that
certain terms of the April, 1989 agreement would apply to its
operation, that certain provisions would not apply, and the
parties would negotiate thereon. If negotiations failed to
produce an agreement, the parties agreed to submit the
dispute to a neutral, interest arbitrator under the standards
set forth in Article 1,§ 6 of the April 1989 agreement.
The parties were unable to resolve all open issues and the
case was submitted to Preston J. Moore, who was selected as
the interest arbitrator. The hearing date initially selected was
canceled due to the devastation caused by Hurricane Hugo
and was ultimately heard some 85 days later.
The precise issues submitted to the arbitrator for decision
were submitted by stipulation. Retroactivity of the award (or
any portion thereof) was not included in the submission.
Retroactivity was not raised by ALPA during the hearing or
in its closing submission.® Indeed, it was not until ALPA
> Metroflight, Inc., Metro Express, Inc. and Chaparral Airlines,
Inc. were the subsidiaries covered by the agreement.
* As noted by both Arbitrator Moore and the district court, the
delay in the hearing was not the fault of either party. Rather,
the delay in the hearing was caused by an external event which
impacted upon the parties’ intent in issuance of the award.
Hurricane Hugo did not impact the contractual provision
specifying the date upon which the award was to be effective.
4
submitted its post-hearing brief that retroactive application
was requested.’ However, ALPA’s request was simply an
alternative prayer. The issue of retroactivity was not
presented in ALPA’s substantive arguments. ALPA’s prayer
initially requested the award be made effective as of the
April 1989 execution of the contract.
On March 7, 1990, the arbitrator entered his award,
directing that the pay rates were to be retroactive to
October 15, 1989. The arbitrator’s award contained no justi-
fication or rationale for the retroactivity — simply the one
sentence declaration.
AAI promptly requested the arbitrator to reconsider the
retroactive portion of the award. The basis of the request
was jurisdictional — that the agreement explicitly provided
for prospective relief only. Initially, the arbitrator granted
the request. ALPA objected, asserting that the neutral no
longer had jurisdiction (‘‘functus officious’’). Subsequently,
the arbitrator agreed and withdrew his modification. AAI
declined to comply with that portion of the award requiring
retroactive payment, resulting in a lawsuit filed by ALPA.
The pertinent contractual language, under which the inter-
est arbitration was conducted,® provides:
In the event that the parties do not reach agreement
within one hundred twenty (120) days of the start
of negotiations, the parties agree that all open issues
shall be determined by final and binding arbitra-
tion. The arbitrator shall be selected from a panel of
five (5) arbitrators to be provided by the FMCS,
consisting of members of the National Academy of
Arbitrators with experience in the airline industry.
The arbitrator shall have the authority, in consulta-
tion with the parties, to establish procedural rules
"At the close of the hearing, the parties and arbitrator
procedurally agreed that simultaneous post-hearing briefs to
the arbitrator would be filed.
* The AAI-ALPA side letter provided that the issues unresolved
in negotiations were to be arbitrated pursuant to the provisions
of Article 1, § 6(a) and (b) of the basic agreement.
5
for an expeditious hearing and decision upon the
issues. The arbitrator shall take into account and
must base the decision upon average competitive
conditions in the geographic area for wages and
working conditions for comparable operations,
including any ALPA collective bargaining agree-
menis. The intent of this provision is that a deci-
sion shall be issued within one hundred eighty (180)
days after date of acquisition or start-up. Any award
shall be effective on the first day of the next month
which starts thirty (30) days after issuance and shall
run concurrently with the duration of this agree-
meni. (Emphasis added).
Both parties moved for summary judgment based upon
essentially undisputed facts. By Memorandum Opinion and
Order, the district court for the District of Puerto Rico
granted ALPA’s motion and enforced the award. In its rul-
ing, the district court construed the contract as requiring
that an award be issued within one hundred eighty (180)
days. The district court held that the delay caused by Hurmi-
cane Hugo created a “latent ambiguity” in the contract.
Specifically, the district court found that although Article 1,
§ 6(b) was explicit as to when the arbitration award was to be
effective, the immediately preceding sentence concerning the
parties’ intent as when the award should issue could not be
enforced due to Hurricane Hugo, thus creating a latent
ambiguity in the contract.’ The district court made this
ruling despite the fact that the arbitrator no where in his
award undertook to interpret any ambiguity or otherwise
indicated that any ambiguity existed in the contract.
* This rulin 7 elevated the importance of the parties’ intent as to
the time frame for an award into a jurisdictional limitation,
thus creating the purported conflict with the clear jurisdictional
requirement as to when the award was to be effective. In ruling
that the parties’ intent on when an award should issue was a
“jurisdictional” requirement, the decisions below inappropri-
ately equated the parties’ precetory intent with the mandatory
jurisdictional requirements. See Jones v. St. Louis-S.F. Ry., 728
F.2d 257, 265 (6th Cir. 1984) (“goal” of when award is to be
issued is not a jurisdictional requirement unless expressly
stated by parties).
In addition, the district court ruled that the issue of retro-
activity was properly before the arbitrator. The district court
acknowledged that retroactivity of the award was never an
issue submitted to the arbitrator for decision at any point in
the proceedings, but proceeded to rely on ALPA’s prayer for
relief in its post-submission brief (App.C: 762 F.Supp. at 8).
On appeal, the First Circuit Court of Appeals affirmed the
district court’s findings. Like the district court, the First
Circuit acknowledged that “the issue of retroactivity was not
considered during the [arbitration] hearing” (App.A; 955
F.2d at 92). However, in upholding the arbitrator’s award,
the First Circuit ruled that the arbitrator had the authority
to resolve any ambiguity in the contract. By so holding, the
First Circuit completely miscast the question before it. First,
the arbitrator was never presented with nor considered the
issue; it was the trial court that created this interpretive
ambiguity. Second, the question presented on appeal was
not whether the arbitrator had the authority to resolve
ambiguities. Rather, the question was whether the arbitrator
had the jurisdictional authority to provide retroactive relief.
The First Circuit affirmed the trial court’s award based on
the trial court’s created ambiguity in the contract, com-
pletely ignoring the fact that the arbitrator was admittedly
never presented with, nor considered or interpreted, the
contractual language and did not find that an ambiguity
existed. Further compounding this error, the First Circuit
then refused to construe the court-created ambiguity in favor
of AAI, in complete disregard of this Court’s well-estab-
lished summary judgment standards. The First Circuit also
dismissed AAI’s request for remand to allow the arbitrator
to resolve the issue of whether the contract was in fact
ambiguous, and, if so, how that ambiguity was to be
resolved, in accordance with this Court’s teaching in United
Paperworkers AFL-CIO vy. Misco, 484 U.S. 29 (1987).!°
The conclusions of the First Circuit and the grounds
underlying those conclusions are at odds with the applicable
decisions of this Court, the mandates of the Act and are in
conflict with the law of other circuits. For the reasons dis-
cussed below, AAI respectfully submits that this Court
should grant the instant Petition, and review and reverse the
decision of the First Circuit.
REASONS FOR GRANTING THE WRIT
THE FIRST CIRCUIT’S HOLDING THAT THE
RETROACTIVE PORTION OF ARBITRATOR
MOORE’S AWARD IS ENFORCEABLE IS
CONTRARY TO THE DECISIONS OF THIS COURT
AND OTHER CIRCUIT COURTS OF APPEAL.
It should be beyond dispute that the arbitrators’ jurisdic-
tion in this case was limited to the issues submitted to him
by the parties. See, e.g., 45 U.S.C. § 159 Third (b). However,
the First Circuit upheld the arbitrator’s award on an issue
completely outside the parties’ submission. Moreover, the
First Circuit ignored the procedures specified in the Act
(§ 153(q)) and endorsed by this Court by refusing to remand!
the question to Arbitrator Moore. In so holding, the appel-
late court ignored the established standards for summary
judgment proceedings, and acted contrary to the law of this
Court, the express mandates of the Act and the established
'0 Misco arose under the Labor Management Relations Act. Its
teaching, however, is totally consistent with the statutory stand-
ards set forth in the Act. 45 U.S.C. § 153 First (q); See, e.g.,
Part II, infra.
precedent of other circuit courts in the United States federal
judicial system. !!
A. Arbitrator Moore Acted Outside His Jurisdiction By
Awarding Retroactive Relief.
This case involves an interest arbitration award, not the
more traditional contract interpretation award. In interest
arbitration, the arbitrator is undertaking to determine and
set the contractual terms and conditions of employment
which will govern the parties’ relationship in the future. See
generally, Elkouri & Elkouri, How Arbitration Works.
101-108 (BNA 3d ed., 1985) (herein *“Elkouri’’).
Because there is no contractual term to be interpreted as
such in interest arbitration, the parties’ submission of the
issues to be determined is critical. See, e.g., 45 U.S.C. § 159
Third (b). Indeed, it is the arbitrator’s role to set the terms
on the specific issues presented. The issues submitted for
decision are a limit on the jurisdiction of the arbitrator. An
interest arbitrator simply has no jurisdiction to decide an
issue not submitted. For example, an interest arbitrator
asked solely to set a future wage rate by the parties would
clearly lack the authority to award additional holidays. In
the present case, the parties specifically set forth by stipula-
tion the issues to be decided. The effective date of the award
was not one of the issues submitted. !2
'' Under Supreme Court Rule 10.1, these events justify the grant
of this Petition. There are special and important reasons there-
fore. There is a conflict with applicable decisions of this Court;
there is a conflict with other circuit decisions: the decisions
below have so far departed from established legal standards
that this Court’s exercise of supervision is called for. Further,
the issues involved are of public importance because they
involve administration of the legal standards under the Act
concerning review of arbitratic® awards. See. e.g., Lane vy.
Bowler Corp., 261 U.S. 387, 393 (1923).
? The issue of retroactivity was not submitted because, as dis-
cussed infra, the contract clearly and unambiguously specified
when the award would become effective.
9
The issues submitted are not, however, the only limitation
on authority. The standards by which the issues submitted
are to be resolved are also a limitation. See, e.g., Elkouri,
p. 102. The standards to be applied by Arbitrator Moore in
reaching his decision were set forth in Article 1, §6
of the agreement. These standards were the jurisdictional
framework by which Arbitrator Moore was required to
decide the issues presented. They were not merely “proce-
dural rules” to be applied by Arbitrator Moore in reaching
his decision.'’ As an example, had Arbitrator Moore entered
an award on wages based upon the conclusion that AAI
‘could afford it,” he would have clearly violated the contrac-
tual mandate specified.
While the differences in the types of arbitration are impor-
tant, there is, as noted supra, a substantial similarity in the
standards of review applied to arbitration awards under the
Act. See 45 U.S.C. § 153 First (q), § 159 Third (b). AAI
recognizes that judicial review of arbitrator’s award is con-
ducted within a narrow framework.'4 In this case, Arbitrator
Moore’s award clearly violated the statutory mandates. Spe-
cifically, Arbitrator Moore’s award failed to conform or con-
fine itself to matters within the scope of his jurisdiction and
exceeded the parties’ stipulation of the agreed issues to be
arbitrated. Simply put, the retroactive portion of Arbitrator
Moore’s award clearly exceeded his grant of jurisdiction.
Indeed, in the words of this Court in Gunther v. San Diego &
A. E. Ry., 382 U.S. 257 (1965), the award is “wholly baseless
' Indeed, the standards in this case required that the “proce-
dural” rules be set by the arbitrator “in consultation with the
parties” (Article 1, § 6(b)).
'* There is no dispute over the standards of review applicable
under the Act. An arbitration award may be set aside for
(1) failure to comply with the requirements of the Act; (2) fail-
ure of the arbitrator to conform, or confine, himself to matters
within the scope of his jurisdiction; and (3) fraud or corruption.
See 45 U.S.C. § 153 First (q), § 159 Third (b); see, e.g., Union
Pac. R.R. Co. v. Sheehan, 439 U.S. 89, 99 (1978); Consolidated
Rail Corp., supra; Central Airlines, supra.
10
EEE ee
(under the contract’s express provisions] and “without
reason.”
In light of the agreement’s unambiguous language and the
absence of submission of the issue, Arbitrator Moore’s
award was clearly outside his jurisdictional authority. In
upholding this extra-jurisdictional award, the First Circuit
failed to follow this Court’s decisions, acted contrary to the
decisions of its sister circuits and clearly ignored and frac-
tured the explicit mandate of the Act which should have
guided its decision.
As this Court has dictated and the Act requires, an arbitra-
tor is not free to disregard or ignore plain and unambiguous
provisions of a collective bargaining agreement. United
Paperworkers AFL-CIO v. Misco, 484 U.S. 29 (1987). This
Court has also firmly stated that “when an arbitrator’s award
manifests an infidelity to [his] obligation, courts have no
choice but to refuse enforcement of the award.” United Steel
Workers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597
(1960).'° Indeed, “an arbitrator is confined to interpretation
of the collective bargaining agreement: he does not dispense
his own brand of industrial justice.” 363 U.S. at 597. In line
with these holdings, the appellate courts (including the First
Circuit) consistently hold that if the arbitrator “interprets
unambiguous language in any way different from its plain
'’ While this Court has not ruled on this issue under the Act. it
has emphasized that review and enforcement of awards under
the Act is comparable to review of an award under an LMRA
contract. See Central Airlines, supra, at 362: BLE v. Santa Fe
R.R., 768 F.2d 914, 921 (7th Cir. 1985): Loveless v. Eastern
Airlines, Inc., 681 F.2d 1273, 1276 (11th Cir. 1985): BRT vy.
Central of Ga. Ry., 415 F.2d 403, 411-12, 415 & n.21 (Sth Cir.
1969), cert. denied, 396 U.S. 1008 (1970). Because the statutory
standards at issue have not been directly addressed in the
context of contractual limitations on an arbitrator’s (system
board’s) jurisdiction, this Petition should be granted to address
and resolve this important issue.
1]
meaning, [the arbitrator] amends or alters the agreement and
acts without authority.”’'®
The limits on an arbitrator’s contractual authority apply
with equal force to the remedy awarded. It is well-settled
that an arbitrator may not impose a remedy that is expressly
excluded by the agreement or submission. United States
Postal Service, supra, 922 F.2d at 259-60; Bruno’s v. United
Food & Commercial Workers Int'l, 858 F.2d 1529 (11th Cir.
1988); Main Cent. R.R. v. Brotherhood of Maintenance of
Way Employees, 653 F. Supp. 425 (D.Me. 1987), aff'd, 873
F.2d 425 (1st Cir. 1988). Indeed, even the First Circuit has
recognized that an arbitrator’s jurisdictional authority lies
within the arbitration agreement. In Strathmore Paper Co. v.
United Paperworkers Int'l Union, 900 F.2d 423 (Ist Cir.
1990), the court specifically stated:
An arbitrator does not have unfettered discretion, and
may not impose a remedy which directly contradicts the
express language of the agreement. Nor can he or she
interpret a clause or provision when its language is clear,
unequivocal and unambiguous.
Article 1, Section 6(b) under which the arbitration was
conducted is explicit as to when the arbitration award is to
be effective:
Any award shall be effective on the first day of the next
month which starts thirty (30) days after issuance...
(Emphasis added).
The requirement of § 6(b) is mandatory. In this explicit
provision, the arbitrator’s authority was limited to an award
of prospective relief only.
The First Circuit’s infidelity to this Court’s decisions is
manifest in its opinion. By stating that the arbitrator had the
'© Northwest Airlines v. International Associates of Machinists Dis-
trict Lodge No. 143, 894 F.2d 998 (8th Cir. 1990); United States
Postal Service v. American Postal Workers, 922 F.2d 256 (Sth
Cir.), cert. denied __ U.S. __, 112 S.Ct. 297 (1991); Inter-City
Gas Corp. v. Boise Cascade Corp., 845 F.2d 184, 187 (8th Cir.
1988); Hoteles Condado Beach v. Union Day Troquistas, Local
901, 763 F.2d 34, 41 (ist Cir. 1985).
12
authority to resolve any ambiguities in the contract, the First
Circuit miscast the question before it. The question
presented was not whether Arbitrator Moore had authority
to resolve ambiguities which were not presented to him.
Rather, the question was whether Arbitrator Moore had the
authority to provide retroactive relief. 7 nis Oversight
resulted in the courts below departing from the standards set
by this Court and the Act. Initially, the First Circuit
acknowledged that the “issue of retroactivity was not consid-
ered during the [arbitration] hearing.” It proceeded to ignore
the Act’s mandate that only issues presented can be decided.
45 U.S.C. § 153 Third (b).
Moreover, the First Circuit ignored the fact that Arbitra-
tor Moore never ruled on any perceived ambiguity. Instead,
the First Circuit relied upon the district court’s ruling that
the provisions of the collective bargaining agreement, “while
Originally unambiguous, had been rendered ambiguous by
events.”'’ The First Circuit also relied upon its belief that
the district court felt that Arbitrator Moore could have
resolved this “ambiguity.” Although the record is clear that
this purported ambiguity and issue of retroactivity was not
submitted to him for decision!® and is completely devoid of
any facts showing that Arbitrator Moore ever addressed any
ambiguities, the district court, followed by the First Circuit,
took it upon themselves to ‘“‘create” an ambiguity where
'’ Because no ambiguity appeared on the face of the contract, the
asserted ambiguity is properly characterized as a “latent ambi-
uity.” 4 Samuel Williston, A Treatise on the Law of Contracts,
627 (3d ed. 1991) (herein “Williston on Contracts”). How-
ever, the district court and the First Circuit simply ee
the cr sam parameters of the doctrine. While a court is free to
consider extrinsic evidence in an attempt to interpret a latently
ambiguous provision, the court cannot use extrinsic evidence
to modify unambiguous portions of the contract. Instead, the
doctrine of partial impossibly applies. See Part II, infra.
“Contrary to the position of the district court and the First
Circuit, raising an issue in a post-hearing brief is not a submis-
sion of that issue. See footnote 13, infra.
13
none existed.'? The district court then based its ruling in
favor of ALPA on this court-created ambiguity. This course
of action is clearly improper and contrary to the decisions of
other circuit courts, in addition to prior decisions of the
First Circuit.”? It is clear that in making its ruling, the First
Circuit relied upon a factual inference on a theory created by
the district court, rather than the actual facts presented.
The question of Arbitrator Moore’s jurisdiction is simple:
if he makes a determination on an issue not in the submis-
sion, he acts outside of his jurisdiction. 45 U.S.C. § 159,
Third (b). By ignoring the express provisions of the contract
as to when the award was to be effective, Arbitrator Moore
clearly acted outside of his jurisdictional authority. Neces-
sarily, when an arbitrator rules on issues outside of his
jurisdiction, he “manifests an infidelity to his obligation,”
and his award simply cannot stand. In this case, the district
court and the First Circuit acknowledged that the issue of
'9 The lower courts, in conflict with the Sixth Circuit’s decision in
Jones v. St. Louis-S.F. Ry., supra, simply elevated a “goal” of
the parties into a jurisdictional directive, thus creating the
purported conflict with the contract’s clear mandate as to when
the award was to be effective. Properly recognized a3 a “goal,”
the provision on the time for issuance of an award affected by
Hurricane Hugo, creates no latent ambiguity. The “goal” was
not met due to external events, but this does not grant license
to ignore or modify the other, clear and unambiguous terms of
a contract. See, e.g., cases cited footnote 20, infra.
20 Metropolitan Life Ins. Co. v. R.J.R. Nabisco, Inc., 906 F.2d 884
(2nd Cir. 1990) (parties’ rights under unambiguous contracts
should be interpreted from terms in instrument rather than
from extrinsic evidence or judicial views as to what terms
might be preferable); Esplanade Oil & Gas v. Templeton Energy
Income, 889 F.2d 621 (Sth Cir. 1989) (disputes about contrac-
tual provisions do not render provisions ambiguous; court
must give effect to ordinary meaning of words and may not
create ambiguity where none exists); Georgia Pacific Corp. v.
Local 27, United Paperworkers Int'l. Union, 864 F.2d 940
(Ist Cir. 1988); Franklin Elec. Co. v. U.A.W., 886 F.2d 188
(8th Cir. 1989) (award that exceeds arbitrator’s contractual
authority fails to draw its essence from the agreement and must
be vacated, despite usual deference given to arbitrators).
14
retroactivity was not presented in the parties’ submission
nor considered during the arbitration hearing.”!
Despite acknowledgement at every stage of these proceed-
ings that Arbitrator Moore considered an issue not submit-
ted to him, the First Circuit affirmed his “infidelity to his
obligation” and permitted Arbitrator Moore to “dispense his
own brand of industrial justice.”*? In sum, the First Circuit
expressly failed to follow prior decisions of this Court and its
21
tw
Despite at least three distinct opportunities to raise the issue
(in the submission of issues, during its opening remarks and in
its final written proposal to the arbitrator), ALPA never raised
retroactivity as an issue.
Presumably based on ALPA’s alternative prayer for relief in the
post-submission brief, the First Circuit attempted to justify its
departure from the acknolwedged legal precepts by articulating
a “waiver” theory. The affidavit upon which it purported to
rely does not support the First Circuit’s holding either factually
or legally. The affidavit of A.J. Harper II relied upon by the
First Circuit reads: “Rather, ALPA’s only comment to counsel
for AAI — but not the arbitrator — was that it might seek to
have the arbitrator make a retroactive award to compensate for
the delay in the holding of the hearing. | advised ALPA it was
free to present the issue to the arbitrator if it so desired. It did
not do so until its post hearing brief’ (emphasis added).
The First Circuit’s holding that AAI “waived” the right to
object to the arbitrator’s retroactivity award is utterly without
merit. Although several definitions of the waiver doctrine exist,
the fundamental elements of waiver require that a party “‘vol-
untarily and intentionally relinquish a known right.” See 5
Williston on Contracts, § 678; Pitts v. American Sec. Life Ins.
Co., 931 F.2d 351, 357 (Sth Cir. 1991). Merely stating in an
affidavit that ALPA could raise an issue concerning the time of
delay in hearing (85 days) before the arbitrator if it chose to do
SO is not a conscious waiver of a known right (i.e., no retroactiv-
ity under the contract). AAI simply had no right to preclude
ALPA from raising the issue. Its statement is not a concession
that ALPA’s position was correct nor that AAI was waiving its
insistence that no such right existed.
Moreover, the First Circuit completely ignored the argument in
response to the rationale created by the district court, that AAI
had no opportunity to contest ALPA’s “argument” (if the
Prayer for Relief can be so construed) for retroactivity. The
parties, by agreement and with the concurrence of the arbitra-
tor, did not procedurally allow reply briefs. Only briefs-in-
chief, simultaneously filed, were authorized. This procedure is
the norm in arbitration. See R.J. Schoonhoven. Ed..
15
decision conflicts with the well-established law of other cir-
cuit courts of appeal. A court cannot uphold an arbitration
award which ignores the plain and unambiguous provisions
of a collective bargaining agreement. Nor can a court uphold
an award which is outside the submission to and jurisdiction
of the arbitrator. Arbitrator Moore’s award of retroactivity is
contrary to both these precepts established by decisions of
this Court and the Act. Not only do the lower courts’ deci-
sions conflict with the decisiuns of this Court, other circuit
courts and the Act, but the issues decided are of public
importance to the administration of the Act and standards
for review of arbitration awards which warrant review by
this Court. This Petition should be granted.
B. The First Circuit Failed To Remand This Case To
Arbitrator Moore.
Fundamentally, the courts below were striving to create a
rationale by which the award could be sustained. Stated
differently, the courts below were trying to articulate a basis
upon which the arbitrator could have reached his result
concerning retroactivity of the award, had it it in fact been
presented to him, even though both courts admitted this was
not the case. Rather than undertaking to create an ambiguity
by which a rationale for the award is sought, the proper
course is that dictated by this Court in United Paperworkers
Int'l. v. Misco, 484 U.S. 29, 42 (1987) and specifically
endorsed by the Act, § 153, First (q). The courts below
simply ignored this Court’s teachings and the Act’s
mandate.”
Fairweather’s Practice and Procedure in Labor Arbitration, 368,
n.31 (BNA 3d ed. 1991); Elkouri, p. 274, n.213.
°3 The decisions below also conflict with the decisions of the other
circuits which have confronted an award under the Act con-
taining an apparent ambiguity or award outside the grant of
jurisdiction. The other circuits have uniformly held in such
circumstances that remand to the arbitrator for clarification
and resolution is required. See, e.g., cases cited footnotes 24 &
25, infra.
16
na
Assuming that an ambiguity existed, the First Circuit
ruled that the district court resolved this “latent ambiguity”
(created by external events) and purportedly relied upon this
Court’s holding in Misco. However, the First Circuit misap-
plied the holding of Misco to the present case by failing to
remand questions of fact to the arbitrator.
As this Court has repeatedly stated, disputes of fact may
not be addressed by the district court even if the court is
convinced that the arbitrator committed serious error.
Misco, supra; Enterprise Wheel, supra. Although correctly
noting this mandate, the First Circuit failed to address the
procedure specifically endorsed by the Act and this Court in
Misco, requiring remand to the arbitrator if ambiguities in a
labor contract are presented. In Misco, this Court expressly
Stated that before disposing of a case where ambiguities
exist, “the proper course would [be] remand to the arbitrator
for definitive construction of a contract.” Misco, supra at 42.
Indeed, this course has been consistently adopted by the
circuit courts of appeal.”4
In addition, the Act specifically endorses remand to the
arbitrator for clarification of vague awards. See 45 U.S.C.
§ 153 First (q); Transportation Union v. Union Pac. R.R., 385
U.S. 157, 165 n.4 (1986). In fact, other circuit courts have
held consistently that remand is especially appropriate to
clarify questionable jurisdictional or vague remedy awards
rendered under the Act.”°
*4 Local 4830 v. New Idea Farm Equipment, 917 F.2d 964 (6th
Cir. 1990) (courts may not go beyond an award to decide
questions that the arbitrator did not decide; ambiguous award
may not be enforced and should be remanded for clarification);
Newark Morning Ledger v. Local 103, 797 F.2d 162 (3rd Cir.
1986) (district court compelled to modify arbritrator’s award
where no rational basis for award exists); AFSCME Local
Lodge 1803 v. Medical Center, 715 F.2d 1517 (11th Cir. 1983)
(when terminology in award can be interpreted in a variety of
ways, “normal course” is to remand the arbitrator for pine ag
tion). See also footnote 25, infra.
°S See Hart v. Overseas National Airways, Inc., 541 F.2d 386 (3d
Cir. 1976) (if vague damage award not remanded. district court
17
Highlighting the reasons for this Court’s doctrine regard-
ing remand and the flaws in the lower courts’ erstwhile effort
to create a rationale is the First Circuit’s express recognition
that the award is erroneous and contrary to the agreement,
even under the district court’s supplied rationale (App. A, 955
F.2d at 94).°° Despite this recognition, the First Circuit
refused to remand this award to the arbitrator, or to reform
the award to reflect the contractual mandate contained in
Article 1, § 6(b). In so ruling, the court’s opinion is in con-
flict with this Court’s opinion in Misco and the holdings of
its sister circuits, noted supra, holding that remand to the
arbitrator or reformation of the award is required. The fail-
ure to remand or reform the award does violence not only to
this Court’s directions and the Act’s mandates, but is a gross
misapplication of the doctrine upon which the courts below
purported to rely.
The courts below used an external event (Hurricane Hugo)
to create an “ambiguity” not found within the express terms
of the contract, /.e., a latent ambiguity. However, this latent
ambiguity affected only the provision of the contract relating
to the parties’ “intent” that an award issue within 180 days.
Hurricane Hugo did not impact and left completely
untouched the precise, unambiguous provision concerning
when the award is to be effective. The external event, thus.
did not create conflicting contractual provisions. Instead, the
external circumstances rendered the parties’ intent as to the
issuance of the award incapable of being performed, giving
rise to the doctrine of partial impossibility. The doctrine of
“would be preempting the fact finding functions which had
been assigned by the parties to the referee, a preemption which
is neither sound nor appropriate’). The result is the same
under the LMRA. Bell Aerospace Co. Div. of Textron v. Local
516, Int'l, Etc., 500 F.2d 921 (2d Cir. 1974); Int’l Brotherhood
of Elec. Wkrs., Loc. 369 v. Olin Corp., 471 F.2d 468 (6th Cir.
$4 Hanford v. General Electric Co., 353 F.2d 302 (9th Cir.
°° As the First Circuit acknowledged, it is clear under the agree-
ment, as interpreted by the courts, the award cannot be effec-
tive prior to December 1, 1991.
18
partial impossibility can excuse performance of the promise
to which it relates; it is not to be used to modify other
unambiguous contractual provisions capable of perform-
ance. Restatement (Second) of Contracts, § 270. Indeed, this
Court established long ago that where one of alternative
promises is at the time, or subsequently becomes, impossible
of performance, the parties to a contract are not relieved
from performing the other. Yankton Sioux Tribe of Indians
v. United States, 272 U.S. 351 (1926).2’ Clearly, then, the
First Circuit had the obligation not to attempt to seize upon
the inability to perform one promise as a justification for
disregarding or modifying another clear and unambiguous
provision. This action is at odds with the decisions of this
Court,”8 as well as with other courts of appeal.?°
a Here, as discussed supra, the courts below elevated the parties
“goal” of when an award was to issue into a distinct and
Separate promise from that specifying when the award was to
be effective. In so doing, the courts below not only created an
ambiguity where none existed, but also violated the well-estab-
lished principle that general provisions (here, the parties’
intent) must give way to specific provisions (i.e., the mandatory
provision concerning when the award was to be effective). See
generally, Affiliated Food Distr., Inc. v. Local Union No. 229,
483 F.2d 418 (3d Cir. 1973); Kenneth Reed Constr. Corp. y.
United States, 475 F.2d 583 omg 1973); United States Postal
Serv. v. American Postal Workers, 922 F.2d 256 (Sth Cir. 1991).
28 Misco, supra, at 38 (if language of an agreement is clear and
unequivocal, an arbitrator cannot give it a meaning other than
that expressed by the agreement).
9 See, e.g., Newark Morning Ledger, supra; Delta Queen
Steamboat Co. v. District 2, Marine En ineers, 889 F.2d 599,
602 (Sth Cir. 1989) (arbitrator may look beyond written con-
tract only if the instrument is ambiguous or silent upon a
precise question); UAW vy. Yardman, Inc., 716 F.2d 1476, 1480
(6th Cir. 1983), cert. denied, 465 U.S. 1007 (1984)(court is to
construe contract's provisions consistently with one another to
avoid rendering a provision nugatory); Northwest Airlines, Inc.
v. Int'l Assoc. of Machinists, 894 F.2d 998, 100 (8th Cir. 1990)
(arbitrator may not disregard or modify ee contract
provisions); Hocker v. New Hampshire Ins. Co., 922 F.2d 1476
1482 (10th Cir. 1991)(contractual terms are not to be given
Strained readings to create ambiguities where none exist); Wi/-
son v. Chicago & N.W. Transp. Co., 728 F.2d 963. 967 (7th Cir.
1984) (Board attempt to alter clear contractual provision
19
As noted above, the record is completely devoid of any
ruling by the arbitrator on a perceived ambiguity in a con-
tract created by external events.*’ Indeed, the First Circuit
acknowledged that “the arbitrator never explicity construed
the contract.”” Absent such a ruling, the proper course was
for the district court to remand the matter to the arbitrator
for a determination on whether ambiguities in the contract
existed and to resolve those ambiguities, if any. By failing to
address the absence of a definitive ruling by the arbitrator
and the recognized contravention of the contract terms on
when an award was to be effective, the First Circuit clearly
misapplied the teaching of this Court in Misco.*'
In summary, the First Circuit’s decision represents a radi-
cal departure from established Supreme Court precedent.
Moreover, the First Circuit’s decision is in conflict with the
established law of several other circuit courts of appeal, and,
accordingly, review by this Court is warranted. Indeed, AAI
respectfully submits that the decision is so clearly erroneous
and so clearly at odds with established legal principles that
this Court may reverse simply on this petition and any
response thereto without the need for further briefing and
exceeded its jurisdiction and failed to comply with the require-
ments of the Act.)
30 As discussed in Part II, infra, the courts below violated the
well-settled principles of contract interpretation in their effort
to provide a rationale to the decision. If an ambiguity is found
to exist rs issue of law), resolution of the ambiguity is for the
finder of fact. In this case, the fact-finder is the arbitrator. The
teaching of Misco is consistent with this principle. The deci-
sions below are not.
3! Indeed, the course of remand dictated by Misco is consistent
with summary judgment standards, and following that decision
would have obviated the perceived need by the First Circuit to
not apply the correct summary judgment standards. See Part II,
infra. It also would have avoided the court’s paradoxical posi-
tion that the award did not conform to the contractual
mandates, as construed by the court, on when the award was to
be effective (December 1), but, nonetheless was to be enforced.
(App. A, 955 F.2d at 94).
20
argument. Prairie Constr. Co. vy. Operating Engineers, 425
U.S. 800 (1976).
Il.
THE DECISION OF THE FIRST CIRCUIT FAILS TO
FOLLOW THIS COURT’S MANDATES
CONCERNING PROPER SUMMARY JUDGMENT
STANDARDS AND VIOLATES THE FUNDAMENTAL
PRINCIPLES OF CONTRACT INTERPRETATION.
In addition to contorting the clear and concise language in
the contract, the First Circuit found it necessary to acknowl-
edge that it was disregarding the legal standards for sum-
mary judgments promulgated by this Court. This clearly
contravenes the requirement of Rule 56 of the Federal Rules
of Civil Procedure and this Court’s decisions interpreting
Rule 56.
In a trilogy of cases, this Court addressed and clarified the
standards by which a district court (and subsequently an
appellate court) should consider a motion for summary judg-
ment, as well as the burdens placed on both the moving and
non-moving parties. According to this Court. a party oppos-
ing a properly supported summary judgment motion “must
set forth specific facts showing that there is a genuine issue
for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986); Matshushita Industrial Co., Ltd. vs. Zenith Radio
Corp., 475 U.S. 574 (1986). Moreover, the record must be
viewed in the light most favorable to the party opposing the
motion for summary judgment and the court must indulge
all inferences in favor of the non-moving party. Celotex
Corp. vs. Catrett, 477 U.S. 317 (1986). The teachings of these
decisions established that a reviewing court must grant all
inferences in favor of a non-moving party.
As the non-movant in this case, AAI was entitled to have
all inferences granted in its favor. However. the record
clearly demonstrates that the district court created and con-
Strued the alleged ambiguity against AAI. In affirming the
21
district court’s judgment, the First Circuit also failed to
grant inferences in favor of AAI in disregard of well-estab-
lished standards for summary judgment proceedings. Specif-
ically, the First Circuit stated that “the ordinary analysis of
motions under F.R.C.P. 56 is not particularly helpful...”
(App. A, 955 F.2d at 94). Had the courts below heeded the
Act’s and Misco’s directive, there would have been no need
to fracture the well-established standards of Rule 56. The
erroneous failure to remand to the arbitrator does not excuse
the compounded failure to adhere to this Court’s summary
judgment standards. Indeed, the teachings of Misco and
authority interpreting the Act are consistent with the Court’s
summary judgment standards and those holdings are implic-
itly grounded on their foundation. If an ambiguity is
perceived, remand to the fact finder is required.
Misco and Rule 56 standards in this context are also firmly
embedded in the fundamental cannons of contract interpre-
tation. Whether a contract is ambiguous (or whether an
award is inconsistent with the contract) is an issue of law for
the courts. 4 Williston on Contracts, § 601. However, once
that determination is made (and here it is clear that the
courts below acknowledged the issue of retroactivity was not
submitted to nor decided by the arbitrator), its resolution is
for the fact finder in the first instance. /d.; Etting v. Bank of
the United States, 24 U.S. 59, 6 L.Ed. 419, 423 (1826). The
fact finder in this case is Arbitrator Moore and remand is
required. The failure to do so was contrary to Misco, Celotex
and other decisions of this Court, and, thus, clear error.
At this time, there is an opinion of the First Circuit Court
of Appeals that stands for the proposition that this Court’s
decisions allocating the burdens of proof in summary judg-
ment proceedings need not be followed; that Misco’s and the
Act’s directives may be ignored, and that the well-settled
legal principles concerning ambiguous contracts are simply
not applicable. Consequently, AAI respectfully submits that
Certiorari is clearly warranted in this case and this Petition
should be granted.
22
SSSI
III.
CONCLUSION
Based upon the foregoing, Petitioner Aviation Associates,
Inc., respectfully requests that this Petition for Writ of Certi-
Orari be granted.
Respectfully submitted
“HARPE
-ounsel of Record
TERI L. DANISH
1301 McKinney Street, Suite 5100
Houston, Texas 77010-3095
LAWRENCE E. DUFFY
P.O. Box 364423
San Juan, Puerto Rico 00936-4423
Attorneys for Petitioner
APPENDIX A
i i
AIR LINE PILOTS ASSOCIATION INTERNATIONAL,
Plaintiff, Appellee,
¥,
AVIATION ASSOCIATES INC., d/b/a
SUNAIRE EXPRESS,
Defendant, Appellant.
No. 9-653.
UNITED STATES COURT OF APPEALS,
FIRST CIRCUIT.
Heard Nov. 5, 1991.
Decided Jan. 28, 1992.
Rehearing and Rehearing En Banc
Denied Feb. 24, 1992.
A.J. Harper, II with whom Teri L. Danish, Fulbright &
Jaworski, Houston, Tex., and Lawrence E. Duffy, San Juan,
P.R., were on brief for Aviation Associates, Inc.
Suzanne L. Kalfus with whom Gary Green, Elizabeth A.
Ginsburg, Washington, D.C., Ginoris Vizcarra de Lopez-Lay
and Lopez-Lay & Vizcarra, Santurce, P.R., were on brief for
Air Line Pilots Ass’n Intern.
Before CAMPBELL, Circuit Judge, BOWNES, Senior Cir-
cuit Judge, and SKINNER,* District Judge.
SKINNER, District Judge.
This appeal is from a summary judgment of the district
court enforcing an arbitrator’s award. It requires us to con-
sider the effect of one of the minor derangements caused by
“Hugo,” a fierce hurricane which devastated the Virgin
Islands and Puerto Rico in September 1989.
Air Line Pilots Association International (‘‘AAI’’), the
defendant-appellant. Labor relations between the parties are
governed by the Railway Labor Act, 45 U.S.C. § 151, et seg.
* Of the District of Massachusetts, sitting by designation.
A-]
by virtue of § 187 thereof.' Under the April, 1989 collective
bargaining agreement between ALPA and AAI’s parent com-
pany, wages and other conditions of employment of the AAI
pilots were to be negotiated separately, and if negotiations
failed, they were to be submitted to binding interest
arbitration.
Negotiations did indeed fail, and in July of 1989 the
parties selected Preston J. Moore as the sole arbitrator. The
parties agreed to begin hearings on September 25, 1989, on
St. Croix, but the destruction wrought by the hurricane
made it impossible to hold hearings as scheduled. ALPA
suggested moving the hearing to another location, but AAI
wished to continue it to another time. There was a further
delay, apparently due to the unavailability of one of AAI’s
witnesses. ALPA consented to these delays but advised
counsel that !t was its position “that any award should be
retroactive to compensate for the delays,”’ according to the
affidavit of James L. Dabney, the contract administrator for
ALPA. Further, “AAI’s representative acknowledged
[ALPA’s] position, but did not express agreement or disa-
greement.” This view of these communications is contested
in the affidavit of A.J. Harper II, the chief negotiator for
AAI, who gives the foliowing account:
Rather, ALPA’s only comment to counsel for
AAI — but not the arbitrator — was that it might
seek to have the arbitrator make a retroactive
award to compensate for the delay in the holding of
the hearing. I advised ALPA that it was free to
present the issue to the arbitrator if it so desired. It
did not do so until its post hearing brief.
' The parties have ignored the provisions of § 157 and § 159, but
these provisions may be waived by the parties. Compliance
with the statute is not a prerequisite to the exercise of jurisdic-
tion by the district court. Kreiter v. Lufthansa German Airlines,
Inc., 558 F.2d 966 (9th Cir. 1977).
A-2
Eventually the hearing was held in San Juan, Puerto Rico,
on December 18 and 19, 1989. Difficulty in obtaining the
transcript of the hearing caused additional delay. The arbi-
trator issued his decision on March 7, 1990, awarding pay
increases to the employees represented by ALPA, among
other things. The issue of retroactivity was not considered
during the hearing, and was called to the arbitrator’s atten-
tion for the first time by ALPA’s post-hearing brief:
Additionally, The Association submits that new
pay rates should be effective April 13, 1989, the
date that the collective bargaining agreement was
signed.
In no case should new pay rates be effective later
than October 15, 1989 — the end of the 180 period
[sic] that the parties set out in Article | for resolu-
tion of remaining open items and receipt of an
arbitrator’s award.
On March 7, 1990, the arbitrator issued his decision,
making the new pay rates retroactive to October 15, 1989.
He noted the delay in the proceedings with the following
comment:
None of the above is the fault of either party but is
simply noted for the reason that the parties had
agreed this matter should be resolved within
180 days as was set out in Article | of the resolution
of the open items and receipt of the arbitrator’s
award.
In Article 1(b) of the collective bargaining agreement,
which established the arbitration procedure, the last two
sentences are devoted to timing:
The intent of this provision is that a decision shall
be issued within one-hundred-eighty (180) days
after date of acquisition or Start-up. Any award
shall be effective on the first day of the next month
period which starts thirty (30) days after issuance
and shall run concurrently with the duration of this
agreement.
A-3
Upon receipt of the arbitrator’s decision, counsel for AAI
wrote the arbitrator on March 16, 1990, that the retroactive
application of the new pay rates violated the second quoted
sentence of Article I(b) and requested that the award be
modified so that the pay rates would become effective on
May 1, 1990. ALPA had received a copy of this letter on
March 20 but had not replied by March 25. On March 25,
1990, the arbitrator issued an amended award, making the
new pay rates effective on May 1, 1990.
On March 30, 1990, ALPA wrote the arbitrator that the
original award was final and binding, that once the award
issued the arbitrator became functus officio and that the
amendment must be rescinded. On April 2 the arbitrator
replied to ALPA that he now considered the amendment to
be invalid and improper. He withdrew the amendment and
reinstated the original award. AAI refused to pay the new
rates for any period prior to May 1, 1990, however, and
ALPA brought this action in the district court of Puerto Rico
to enforce the original award. The district court allowed
ALPA’s motion for summary judgment and ordered AAI to
pay the new wage rates retroactively as required by the
award. AAI appeals from that judgment.
Summary judgment is clearly an appropriate mode for the
resolution of an action to enforce an arbitrator’s award. The
ordinary analysis of motions under Fed.R.Civ.P. 56 is not
particularly helpful, because the enforcement proceeding is
by nature summary. Disputes of fact should have been
resolved by the arbitrator, and may not be addressed by the
district court, even if the court is convinced that the arbitra-
tor committed serious error. See United Paperworkers Inter-
national v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 371,
98 L.Ed.2d 286 (1987).
A-4
The district judge ruled that the timing provisions of the
collective bargaining agreement, while Originally unambig-
uous, had been rendered ambiguous by events. In his view
the arbitrator had resolved the ambiguity reasonably, and
according to Misco, supra, ALPA was entitled to a judgment
enforcing the award.
An award, even though reasonable, is not automatically
entitled to enforcement. An award should not be enforced if
is tainted by fraud or corruption, see Misco, 484 U.S. at 38,
108 S.Ct. at 371, if the contract itself contravenes public
policy, see id. at 42, 108 S.Ct. at 373 (citing W.R. Grace &
Co. v. Rubber Workers, 461 U.S. 757, 766, 103 S.Ct. 2177,
2183, 76 L.Ed.2d 298 (1983)), or if the arbitrator exceeds his
authority, see Georgia-Pacific Corp. v. Local 27, United
Paperworkers Int'l Union, 864 F.2d 940, 944 (1st Cir. 1988)
(citing United Steelworkers vy. Enterprise Wheel & Car Corp.,
363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424
(1960)). The first two conditions do not apply to this case,
but AAI contends that the arbitrator had no authority to
order retroactive application of the award because the agree-
ment contained no ambiguity.
The authority of an arbitrator is derived from the agree-
ment of the parties. See Strathmore Paper Co. v. United
Paperworkers Int'l Union, 900 F.2d 423, 426 (1st Cir.1990):
Georgia-Pacific, 864 F.2d at 944. No question of retroactiv-
ity appears in the underlying agreement in this case because
it was contemplated that the arbitration would proceed
according to schedule. As the district judge correctly
observed, however, while the original language was facially
unambiguous, an ambiguity was created by subsequent
events. There was, moreover, a subsequent understanding
between the parties that the issue of retroactivity could be
presented to the arbitrator. Paragraph 7 of the affidavit of
A-5
A.J. Harper II, the attorney for AAI, recites the following
exchange:
Rather, ALPA’s only comment to counsel for
AAI — but not the arbitrator — was that it might
seek to have the arbitrator make a retroactive
award to compensate for the delay in the holding of
the hearing. J advised ALPA it was free to present the
issue to the arbitrator if it so desired. It did not do so
until its post hearing brief. [Emphasis supplied.]
Clearly the parties contemplated raising the issue of retroac-
tivity before the arbitrator. Furthermore, in his letter to the
arbitrator of March 16, 1990, Attorney Harper refers to the
arbitrator’s “retention of jurisdiction” for the purpose of
correcting the effective date. AAI is, at the very least,
estopped to deny jurisdiction in view of Attorney Harper’s
statement and subsequent letter. We rule that under these
circumstances, the arbitrator had the authority to resolve
any ambiguity in the contract language and render a decision
on the retroactive application of his award.
AAI argues, however, that there was no ambiguity because
the thirty day provision is stated in mandatory terms (““Any
award shall be effective ... [etc]””), while the 180 day provi-
sion is cast in terms of the intent of the parties. Hence, the
thirty day provision is controlling. The assignment of rela-
tive importance to these two sentences, however, is for the
arbitrator in the first instance. See International Brotherhood
of Electrical Workers, Local 1228 v. WNEV-TV. New
England Television Corp., 778 F.2d 46, 48 (1st Cir.1985).
Intent of the parties is, after all, a principal criterion in the
construction of contracts. See, e.g., Restatement (Second) of
Contracts § 202(1).
In this case, the arbitrator arrived at his _ several
determinations of effective date without the benefit of a
hearing. Even given the desirability of a retroactive date,
October 15, 1989 does not fit APLA’s theory that one should
A-6
assume that the decision was rendered on the last day of the
180 day period. Under Article '(b) award would still not be
effective until “the first day of the next month period which
Starts thirty (30) days after issuance,” i.e., December 1.
1989. As far as the record shows, the arbitrator never explic-
itly construed the contract or took testimony concerning the
intention of the parties as evidenced by their communica-
tions prior to the hearing in December 1989.
In our opinion, however, the arbitrator did rule on retro-
activity, albeit without a great deal of consideration and, as
to the six-week discrepancy between October 15 and
December 1, 1989, in apparent disregard of Article 1(b).
Since we are not dealing with an omission or refusal to make
a finding, or with “uncertainty,” 45 U.S.C. § 159(c), we are
required by the imperatives of Misco, supra, to affirm the
judgment of the district court.
AFFIRMED.
A-7
APPENDIX B
United States Court of Appeals
FOR THE FIRST CIRCUIT
No. 91-1653
AIR LINE PILOTS ASSOCIATION INTERNATIONAL,
Plaintiff, Appellee,
AVIATION ASSOCIATION, INC., D/B/A SUNAIRE EXPRESS,
Defendant, Appellant.
Before
BREYER, Chief Judge,
CAMPBELL AND BOWNES, Senior Circuit Judges,
TORRUELLA, SELYA AND Cyr, Circuit Judges,
AND SKINNER,” District Judge.
ORDER OF COURT
Entered: February 24, 1992
The panel of judges that rendered the decision in this case
having voted to deny the petition for rehearing and the
suggestion for the holding of a rehearing en banc having
been carefully considered by the judges of the Court in
regular active service and a majority of said judges not
having voted to order that the appeal be heard or reheard by
the Court en banc,
* Of the District of Massachusetts, sitting by designation.
B-!
It is ordered that the petition for rehearing and the sugges-
tion for rehearing en banc denied.
By the Court:
FRANCIS P. SCIGLIANO
Clerk
B-2
APPENDIX C
cess i
AIR LINE PILOTS ASSOCIATION INTERNATIONAL,
Plaintiff
V.
AVIATION ASSOCIATES, INC., d/b/a
EASTERN METRO EXPRESS,
Defendant.
Civ. No. 90-2055 GG.
UNITED STATES DISTRICT CourRT,
D. PUERTO RICO.
March 28, 1991.
Gary Green, Elizabeth Ginsburg, Washington, D.C.,
Ginoris Vizcarra De Lopez-Lay, Santurce, Puerto Rico, for
plaintiff.
A.J. Harper, II, Houston, Tex., Lawrence E. Duffy, San
Juan, Puerto Rico, for defendant.
OPINION AND ORDER
GIERBOLINI, District Judge.
The issue before the court is the proper role of labor
arbitrators in resolving issues submitted for arbitration. Spe-
cifically, we must determine whether the arbitrator in the
instant case acted beyond his authority in making an award
retroactive.
I. BACKGROUND
Plaintiff Air Line Pilots Association International
(“ALPA”) brought this action to enforce an arbitration
award against Aviation Associates, Inc., pursuant to the
Railway Labor Act, 45 U.S.C. § 151 et seg. ALPA is the labor
organization designated for collective bargaining purposes as
the exclusive representative of the pilots employed by
C-1
defendant Aviation Associates, Inc. (““AAI’’), an airline oper-
ating company.' ALPA has filed a motion for summary
judgment which argues that the award was properly made
retroactive by the arbitrator. Defendant opposes plaintiff's
motion and has filed a cross-motion for summary judgment
which argues that in making the award retroactive, the arbi-
trator exceeded his contractual authority, or alternatively,
that the issue of retroactivity was outside the issues submit-
ted for resolution. For the reasons stated below, we grant
plaintiffs motion for summary judgment.
Il. SUMMARY JUDGMENT
In determining whether summary judgment is appropri-
ate, the court must view the record in the light most
favorable to the party opposing the motion, and indulge all
inferences favorable to that party. Celotex Corp. v. Catrett,
477 U.S. 317, 324-25, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d
265 (1986); Santiago Hodge v. Parke Davis & Co., 909 F.2d
628, 633-34 (1st Cir.1990); Amsden v. Moran, 904, F.2d 748
(1st Cir. 1990), cert. denied, __ U.S. —, 111 S.Ct. 713, 112
L.Ed.2d 702 (1991). Summary judgment may be granted
only “if the pleadings, depositions, answers to interrogato-
ries, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a
matter of law.”” Fed.R. Civ.P. 56(c); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202
(1986); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct.
2548, 91 L.Ed.2d 265 (1986); Brennan vy. Hendrigan, 888
F.2d 189, 191 (1st Cir.1989).
Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598,
26 L.Ed.2d 142 (1970) establishes that the party moving for
summary judgment has the initial burden of showing “the
' AAI is a subsidiary of Metro Airlines, Inc.
C-2
absence of a genuine issue concerning any material fact.” /d.
at 159, 90 S.Ct. at 1609. If the movant shows that there is an
absence of evidence to support the non-moving party’s case,
the burden shifts to the non-movant to establish the exis-
tence of a genuine issue of material fact. Celotex, 477 U.S. at
324, 106 S.Ct. at 2553.* The materiality of a fact is deter-
mined according to the substantive law that governs the
dispute. A fact is material only if it affects the outcome of
the suit. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. A
material fact creates a genuine issue for trial “if the evidence
is such that a reasonable jury could return a verdict for the
nonmoving party.” 477 U.S. at 248, 106 S.Ct. at 2510.
In deciding ALPA’s motion for summary judgment, we
examine the facts in the light most favorable to the non-
moving party, in this case, AAI. Celotex Corp. v. Catrett, 477
U.S. 317, 324-25, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265
(1986); Santiago Hodge v. Parke Davis & Co., 909 F.2d 628,
633-34 (ist Cir.1990); Roy v. Augusta, 712 F.2d 1517 (ist
Cir.1983). Applying this standard, and after an extensive
review of the record, and according the non-moving party
the indulgence required, we find that AAI has not presented
specific facts showing a genuine issue for trial. Medina
Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (lst
Cir.1990); Garside v. Osco Drug, Inc., 895, F.2d 46, 48 (ist
Cir. 1990).
2 See generally Louisell, Hazard & Tait, Cases and Materials on
Pleading and Procedure: State and Federal 170 (6th ed. 1989)
(“[A]s the Court stated in Ce/otex, the nonmoving party does
not necessarily have to produce evidence in a form that would
be admissible at trial. And, as the Adickes Court said, the
-nonmoving party does not have to adduce evidence at all until
the moving party satisfies its initial burden of showing the
absence of a genuine issue of fact’’).
C-3
Ee
lil. FACTS
ALPA and AAI negotiated and executed a collective bar-
gaining agreement governing certain terms and conditions of
employment for, among others, the AAI pilots. In a separate
Letter of Agreement (the “Side Letter”), ALPA and AAI
agreed to negotiate separately wage rates, scheduling and
bidding rights, training and other economic benefits. In the
event that those negotiations failed to result in an agree-
ment. ALPA and AAI agreed to submit the unresolved issues
to final and binding arbitration.
The Side Letter provides:
1. Within ten (10) days subsequent to the signing
of the Agreement representatives of the Company
and Association shall meet to negotiate a side letter
agreement containing exceptions to the basic Agree-
ment which shall apply to the operations of Avia-
tion Associates, Inc. only. Such exceptions shall be
limited to necessary modifications of Articles 5, 6,
10, 12 and 20 and shall be limited to aircraft of less
than fifty-one (51) seats.
2. In the event no agreement is reached within
ten (10) days of the commencement of negotiations,
either party hereto may invoke final and binding
arbitration of the unresolved issues. The selection
of the neutral and subsequent arbitration, decision
and implementation shall take place as set forth in
Article 1, Section 6(a) and (b) of the Agreement.
Article 1, section 6(b) referred to in the Side Letter is the
relevant arbitration clause of the Basic Agreement. It
provides:
In the event that the parties do not reach agreement
within one-hundred-twenty (120) days of the start
of negotiations, the parties agree that all open issues
shall be determined by final and binding arbitra-
tion... The arbitrator shall have the authority, in
C-4
consultation with the parties, to establish proce-
dural rules for an expeditious hearing and decision
upon the issues... The intent of this provision is
that a decision shall be issued within one-hundred-
eighty (180) days after date of acquisition or start-
up. Any award shall be effective on the first day of
the next month period which starts thirty (30) days
after issuance and shall run concurrently with the
duration of this Agreement.
In May and June 1989, the parties held negotiations, but
eventually reached an impasse. In accordance with the Side
Letter, the parties selected an arbitrator, Preston Moore, and
scheduled a hearing on September 25, 1989 in the Virgin
Islands. With the advent of Hurricane Hugo, the hearing had
to be postponed. It was finally held in San Juan on
December 18 and 19.
During the hearing the question of when the award should
become effective did not arise. The issue of retroactivity was
first raised by ALPA in a post-hearing brief. ALPA requested
that the new rates to be set by Arbitrator Moore be made
retroactive to October 15, the last day of the 180-day period
of negotiation and arbitration contemplated by Article 1,
Section 6 of the Basic Agreement. AAI did not respond to
ALPA’s retroactivity argument.
Arbitrator Moore issued his decision on March 7, 1990.
The Arbitrator ruled on the various pay-related issues and
with respect to the effective date of the award, he noted that
the resolution of the matters in contreversy had been
delayed by Hurricane Hugo and the court reporter’s failure
to present the transcript to the parties in a reasonable period
of time. Presumably relying on the argument made in
ALPA’s post-hearing brief, Arbitrator Moore ruled that the
hew pay rates be made retroactive to October 15, 1989.
Upon receipt of the award, AAI promptly wrote to the
Arbitrator stating that insofar as the award made retroactive
C-5
_
the pay rates, it was contrary to the provisions of Article 1,
Section 6(b) of the Collective Bargaining Agreement. AAI
requested the Arbitrator to modify the award to be effective
beginning May 1, 1990. Ten days later, Arbitrator Moore
issued a purported amendment to the award, reversing his
decision on retroactivity and setting May 1, 1990, as the
effective date of the award. Upon ALPA’s objection to the
amendment, Arbitrator Moore held the amendment invalid
and improper.
AAI refused to implement the retroactive portion of the
award and this suit followed.
IV. ANALYSIS
We begin by noting that the Arbitrator’s decision consti-
tutes a reasonable interpretation of two conflicting provi-
sions in Article 1, section 6(b) of the Basic Agreement. These
two conflicting statements follow each other. The parties
contended that an arbitr&l decision on these matters would
“be issued within one hundred-eighty (180) days...* And
‘“fajny award shall be effective on the first day of the next
month period which starts thirty (30) days after
issuance... ” Art. 1, Sec. 6(b).
In the instant case, the Arbitrator interpreted this provi-
sion in the Collective Bargaining Agreement as setting the
effective date for the award to commence at the expiration of
the 180 days.
Arbitrators have to interpret contracts submitted for their
resolution and we must give substantial deference to their
interpretation. United Steelworkers v. American Mfg., 363
U.S. 564, 568, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960)
(“[T]he courts, therefore, have no business ... determining
whether there is particular language in the written instru-
ment which will support the claim.”’). The issue in this case
is not whether Arbitrator Moore rendered the most correct
C-6
| ~
or reasonable decision on the issue of retroactivity, but
whether his decision constitutes a manifest error of law or a
gross error of fact. Maine Cent. R. v. Broth. of Maintenance
of Wary Emp., 663 F.Supp. 425, 429 (D.Me.1987) (citations
omitted). The narrow scope of judicial review of labor arbi-
tration awards is designed to further the federal policy of
resolving labor disputes by arbitration. Misco, 484 U.S. at
36, 108 S.Ct. at 369 (quoting Steelworkers v. Enterprise
Wheel & Car Corp., 363 U.S. 593, 596, 80 S.Ct. 1358, ©
4 L.Ed.2d 1424 (1960)).
The Supreme Court has used sweeping language to
describe the role of arbitrators in resolving disputes like the
one in question. In United Paperworkers International
Union v. Misco, Inc., 484 U.S. 29,108 S.Ct. 364, 98 L.Ed.2d
286 (1987), the Court held that “‘[a]s long as the arbitrator is
even arguably construing or applying the contract and acting
within the scope of his authority, that a court is convinced
he committed serious error does not suffice to overturn his
decision.” 484 U.S. at 38, 108 S.Ct. at 371. “It is a firm
principle of federal labor laws that where parties agree to
submit a dispute to binding arbitration, absent unusual cir-
cumstances, they are bound by the outcome of said proceed-
ings.” Posadas de Puerto Rico Ass’n, Inc. v. Asociacion de
Empleados de Casino de Puerto Rico, 821 F.2d 60, 61 (ist
Cir. 1987).
AAI contends that the award exceeded the Arbitrator’s
contractual authority and it should not be enforced as to its
retroactive effect. We disagree. The language of Article 1,
Section 6(b) as to when the award is to be effective seems on
the surface clear and unequivocal. However, this case shows
that even clear and unequivocal language may become
ambiguous under certain circumstances. Due to Hurricane
Hugo and the delay by the court reporter, the resolution of
those matters went beyond the 180-day limit prescribed
C-7
a a a ee
under Article 1, Section 6(b). Although AAI interpretation of
the language of Section 6(b) may be correct, we find that the
language of Section 6(b) under the circumstances of this case
is ambiguous. We hold that Arbitrator Moore’s interpreta-
tion of the award to have a retroactive effect to October 15,
1989 is more than plausible. United States Postal Serv. v.
National Ass’n of Letter Carriers, 789 F.2d 18, 20
(D.C.Cir.1986); Hughes Aircraft Co. v. Electronic & Space
Technicians Local 1553, 822 F.2d 823, 826 (9th Cir.1987). It
was reasonable to respect the bargained for provision stating
that the parties’ intent was to ensure a decision of disputed
matters within 180 days. See Berklee College of Music v.
Local 4412, 858 F.2d 31 (1st Cir.1988), cert. denied, __ U.S.
—. 110 S.Ct. 53, 107 L.Ed.2d 22 (1989) (Arbitrator’s inter-
pretation that untimeliness of a grievance filing was de
minimis is not unreasonable).
Alternatively, AAI contends that retroactivity of the
award was not one of the issues presented for decision. We
think AAI’s contention gives more importance to labels than
to logic. As the Ninth Circuit has stated: “[I]f the evidence
before the Court for purpose to exclude a particular claim
from arbitration is not sufficiently forceful, the result .. . is
that the answer has been found and that the underlying
dispute is arbitrable.” Communications Workers v. Pacific
Northwest Bell Tel. Co., 337 F.2d 455, 459 (9th Cir.1964).
The fact retroactivity was not explicitly submitted for resolu-
tion does not mean that retroactivity was not clearly before
the Arbitrator. The Arbitrator had a duty to construct the
agreement and decide when the award become effective. See
John Wiley & Sons v. Livingston, 376 U.S. 543, 557, 84 S.Ct.
909, 918, 11 L.Ed.2d 898 (1964) (“procedural questions
which grow out of a dispute and bear on its final disposition
should be left to the arbitrator.) Indeed, AAI should have
C-8
ws pe
raised the issue of retroactivity after ALPA had argued for it
in its post-hearing brief.
Vv. CONCLUSION
We think that the parties could have used different lan-
guage to avoid drawing the conflicting interpretation that
Article 6, Section b manifest. Berklee College of Music, 858
F.2d at 33. The following language would have made the
provision less ambiguous: “The intent of this provision is
that a decision upon the issues be issued within one-hun-
dred-eighty (180) days...[{Notwithstanding the above],
[aJny award shall be effective on the first day of the next
month period which starts thirty (30) days after
issuance... ” Article 1, section 6(b) contains no such
express constraint on the authority of the arbitrator to inter-
pret it.
In short, Arbitrator Moore’s decision on the issue of
whether the award should be effective retroactively is not
unfounded in reason and fact or “mistakenly based on a
crucial assumption which is ‘concededly nonfact,’” Bet-
tencourt v. Boston Edison Co., 560 F.2d 1045, 1050 (ist
Cir.1977) (citation omitted). As the Supreme Court recently
stated “The courts are not authorized to reconsider the
merits of an award even though the parties may allege that
the award rests on errors of fact or on misinterpretation of
the contract.” Misco, 484 U.S. at 36, 108 S.Ct. at 370.
For the foregoing reasons, AAI’s cross motion for sum-
mary judgment is hereby DENIED. ALPA’s motion for sum-
mary judgment is hereby GRANTED. The clerk shall enter
judgment accordingly.
SO ORDERED.
C-9
APPENDIX D
ARBITRATION OPINION AND AWARD
In the Matter
of the
Arbitration
between
AVIATION ASSOCIATES, INC.
and
AIR LINE PILOTS ASSOCIATION
RE: INTEREST ARBITRATION
COP “OP (OP (OP? CO? (OD (OD (Or
APPEARANCES
A. J. HARPER II, for the Company
BRUCE A. YorRK, for the Union
BACKGROUND
The parties to this proceeding — Metroflight, Inc., Metro
Express, Inc., Chaparral Airlines, Inc. Aviation Associates,
Inc. and the Air Line Pilots Association, International —
signed a new collective bargaining agreement on April 13,
1989 after lengthy negotiations. The parent of these airline
subsidiaries, Metro Airlines, Inc., also agreed to be bound by
the provisions of the Red Book “‘as if references to ‘Com-
pany’ read Metro Airlines, Inc.”
During these negotiations the parties were unable to agree
on all contractual provisions for AAI, the company subsidi-
ary providing air services in the Caribbean. They therefore
executed contemporaneously the Aviation Associates Excep-
tions Letter of Agreement. This letter established a proce-
dure for negotiation and then arbitration of all remaining
issues.
D-|
a
POSITION OF THE COMPANY
The Company takes the positior that the decision regard-
ing each of the issues involved is controlled by the standard
set forth in Article 1, Section 6(b) of Joint Exhibit No. 1. The
Company points out the relevant portion thereof reads as
follows:
“Articles 5, 6, 10, 12 and 20 shall not be applicable. . .
The arbitrator shall take into account and must base the
decision upon average competitive conditions in the
geographic area for wages and working conditions for
comparable operations. . .”
The Company urges that above standard is expressly made
applicable to this case by virtue of the “Aviation Associates
Exceptions Side Letter,” paragraph 2, which provides:
“The .. . arbitration, decision and implementation shall
take place as set forth in Article 1, Section 6(a) and (b)
of the Agreement.”
The Company points up that Metro is a holding company
and is not an air carrier. The Company urges it currently
Owns six separately incorporated operating companies, each
of which has its own D.O.T. operating certificate, separate
FAA approved manuals and separate management. The
Company alleges that each operating subsidiary is separately
and independently responsible for its own costs and opera-
tions. Management notes that FAA approved manuals of
each is distinct and different, and two of the operating
subsidiaries are not parties to, and pilots of these operations
have no rights under the Agreement.
The Company notes that AAI is in a “hybrid”’ position in
that it is a party to a part of the Agreement but is not
covered by several of its provisions, i.e., Articles 5, 6, 10, 12
and 20 are not applicable to AAI.
AAI recognizes that much of the dispute and evidenciary
debate centers on the appropriate standards to be applied for
D-2
the decision. AAI urges that Article 1, Section 6 is unambig-
uous and the standard to be used in reaching a decision is
clear. AAI notes that the arbitration is occurring pursuant to
Paragraph 2 of the Side Letter, which expressly incorporates
Article 1, Section 6(A) and (b). AAI urges that the testimony
and ALPA Exhibits No. | and 2 support the fact that the
standard is clear and unambiguous. On the basis AAI con-
tends that the arbitrator must base his decision upon the
“average competitive conditions in the geographic area for
wages and working conditions for comparable operations.”
In this regard AAI notes the standard defines the basis for
comparison and decision as being “average competitive con-
ditions” and defines the specific segment of the industry to
be used (comparable carriers), the geographical area to be
considered (the Caribbean area where AAI operates) and the
comparators to be used (wages and working conditions).
In this context AAI urges that an agreement is not
ambiguous if the arbitrator can determine its meaning with-
out any other guides and a knowledge of the simple facts on
which its meaning depends. AAI urges the issue is not ambi-
guity in the contractual standard but is the application of
that standard to the evidence which is involved. AAI urges
that neither cost-of-living factors nor profitability factors are
included in the contractual standard. Rather it is urged the
evidence as to wages and working conditions of AAI’s com-
petitors, and what that evidence established as the average
competitive conditions should govern the resolution of this
case.
AAI contends that much of the data contained in ALPA’s
Exhibits No. 4, 5, 7 and 8 concerning carriers operations in
locations other than the Carribean is not probative evidence
of the issue presented, and that data such as that contained
in ALPA Exhibits No. 9, 10, 11 and 12 is not provative
evidence of the issue presented for decision. AAI also notes
D-3
that ALPA Exhibits No. 6 and 17 appear to be designed to
indicate that Metro can afford the cost of increasing the
block rates of AAI pilots to those set forth in Joint Exhibit |
(Article 3). Management notes it is AAI, not Metro, that
would pay the cost, and secondly the amount of costs
involved represents an increase of over 50 percent of AAI’s
current crew costs. On that basis the Company contends
there is simply no justification or evidentiary basis to justify
their claims.
AAI also notes that ALPA Exhibits 18 through 20 propose
to measure cost-of-living differentials between San Juan-
St. Croix and Dallas-Atlanta. AAI contends that even assum-
ing arguendo that the total accuracy of the data as presented
is correct, such is not relevant to the issue presented for
decision. The Company alleges that the cost-of-living differ-
entials and stateside rates of pay are not the measure for a
decision.
I. REPOSITIONING PAY ISSUE:
AAI notes that AAI pilcts reposition aircraft at San Juan
by taxing from customs (after deplaning passengers) to the
passenger departure gate. It is noted that under the collective
bargaining agreement Article 2, “block-to-block” is defined
as movement of the aircraft “for the purpose of flight.”” The
Company alleges that Article 5, Section | limits flight pay to
“scheduled block-to-block hours only.” The Company
recognizes that ALPA seeks to modify these provisions by
including aircraft repositioning for pay purposes.
AAI contends that the evidence establishes that reposi-
tioning occurs without flight pay at other companies covered
by Joint Exhibit No. 1. Management recognizes that such is
not with the same frequency. Also AAI alleges that the data
available from competitive carriers in the geographic area
does not support a claim for repositioning pay. AAI notes
D-4
that ALPA presented no evidence that any competitive car-
rier pays repositioning pay.
II and III. FLIGHT PAY FOR CAPTAINS AND
FIRST OFFICERS:
AAI alleges that wages and working conditions in this
industry are tied together. The Company points to evidence
that a spectrum of wages and working conditions (scheduled
days available for duty, etc) exists among the various car-
riers. AAI alleges that the approach used by ALPA carries a
risk of magnified distortion since it enhances the block rate
for carriers whose scheduled flight hours covered by the
guarantee are higher, e.g., (Crown Air and Windward), but it
debases the block rate for carriers whose guaranteed hours
are lower (e.g. Air Anguilla and Aero Virgin Island). Further
it is urged that such is an artificial measure, at best, in the
case of carriers whose salary guarantees turn on days of duty
(e.g. Executive Air, Flamenco and Virgin Air).
The Company submits that to obtain a truer, more accu-
rate measure, the various pay systems must be converted to
a common base on a demonstrable, objective bases. AAI
alleges that its methodology utilized in Exhibit A in their
brief is appropriate, since where assumptions or proxys are
used, they are identified and the basis therefore stated. It is
urged the resulting figures show comparable data based on
AAI’s guarantee and duty day availability. It is noted that
Executive Air guarantees 8 to 10 days off per month, and
Virgin Air requires 5 days of work per week, and those who
require less days or less hours pay less. It is noted for
example that Flamenco requires only 15 days of work per
month but pays only $1,200.00. AAI notes that it guarantees
pay for 80 hours and has agreed it will schedule pilots for an
average of 10 days per month. On that basis it is urged the
arbitrator must establish block rates balanced by those con-
siderations. Also in establishing block rates, AAI suggests
D-5
that the crew cost must be considered. On that basis AAI
urges the total crew cost should remain comparable.
AAI further notes that longevity must also be considered.
It is noted that-Executive Air caps increases at three years;
Virgin Air caps at two years; Flamenco provides no longev-
ity increases; and Windward extends out to ten years and
Crown extends for six years. In view of the above considera-
tions AAI contends the Company is clearly within the aver-
age competitive conditions among the competing carrier in
the Caribbean.
IV. BLOCK RATES FOR LONGEVITY
INCREMENTS:
AAI contends that Captain’s rates should be based on time
in grade since this represents the average wage and working
conditions existing at the predominant number of com-
parable operations in AAI’s geographical area.
V. WHAT PORTION OF HEALTH AND LIFE
INSURANCE PREMIUMS ARE TO BE PAID BY
THE COMPANY:
AAI again contends that this request of ALPA should be
denied and that AAI’s current practice awarded (50 percent
of premiums Company paid for pilot only) since it reflects
the average wage and working conditions of comparable
carriers in AAI’s market area.
VI. CROSS BIDDING:
AAi alleges that the potential implications of and the
impact on safety of costs to AAI is substantial. It is urged
there is no evidence of cross bidding being allowed in AAI’s
geographical area of operations. It is pointed out that none
exists as to any other Caribbean commuter air carrier. It is
noted that it does not exist as between or among all Metro
D-6
operating subsidiaries. The Company urges there is no evi-
dentiary justification for finding it proper as to AAI. Man-
agement alleges the provisions authorizing cross bidding are
among those explicitly excluded from application to AAI
and open before the arbitrator. The Company suggests the
burden of proof is upon ALPA in order for the arbitrator to
grant cross bidding.
AAI alleges that cross bidding carries several large nega-
tives which directly impact its operation. It is noted that
cross bidding would really only be applicable to Captains
since First Officers generally have low flight time and could
not meet the minimum total flight time qualifications
required under the operating manuals of the other operating
companies.
AAI notes that cross bidding has a direct cost impact on
the Company in that it must replace the departing pilot and
must train the replacement. It is noted that a cross bidding
pilot for training purposes is treated as a new-hire.
POSITION OF THE UNION
ALPA points up that prior to commencement of arbitra-
tion the parties executed the Aviation Associates Side Letter
(Joint Exhibit No. 2). It is urged this agreement should not
be confused with the Aviation Associates Exceptions agree-
ment found at the back of the Red Book which acknowledges
that “the parties have reached agreement on certain neces-
sary exceptions to the collective bargaining agreement and
contemporaneous side letters of agreement.” The Union
alleges the necessary exceptions include, among other things,
provisions granting the Company added flexibility in the
area of training, crew scheduling, bidding, construction of
lines, sick leaves and many more. Also the Association
alleges AAI’s Side Letter lists the six issues which remain
open for resolution by the arbitrator.
D-7
The Association notes the negotiations for the working
agreement continued for three or four years. The Association
urges that Pilots’ negotiating efforts centered around two
issues, pay and scope protection. In the area of scope the
Pilots contend they wanted to include all of Metro Airlines’
subsidiaries and newly acquired companies under one col-
lective bargaining agreement, and many scope proposals and
counter proposals were made by each side.
ALPA urges that particularly relevant to this arbitration
are two Company proposals, i.e., the Company proposal
dated November 7, 1989 and the Company proposal dated
December 9, 1989. It is urged both proposals sought to
narrow the contractual standard used in this case, and
thereby limit the arbitrator’s discretion to fashion an award
based on a comprehensive review of the data. It is pointed
up that the Association rejected both proposals. It is urged
that in its November 7 proposal the Company tried to cap its
operating costs at the level of its competitors.
The Association also points up that the parties signed a
Letter of Agreement dealing specifically with AAI and this
arbitration on April 13, 1989 and such letter entitled Avia-
tion Associates Exceptions letter of agreement states in rele-
vant part:
“the parties acknowledge that certain exceptions to
the provisions of the Agreement are necessary for
the success of the operations of Aviation
Associates, Inc., ... Such exceptions shall be limi-
ted to necessary modifications of Articles 5, 6, 10,
12 and 20 and shall be limited to aircraft of less
than 51 seats.”
ALPA contends that by any measure Metro has been one
of the stars of the regional industry. In this regard ALPA
points up that Air Transport World and National Aviation
Weekly ranked Metro Airlines first in the country based on
D-8
————
passengers carried. It is further pointed up that the Com-
pany’s annual report corroborates industry observers.
ALPA also points up that with the exception of AAI Metro
Airlines pilot compensation has, like the Company’s per-
formance, been at the top of the regional industry. It is urged
that Metroflight, Metro Express, Chaparral and Metro
Northeast have the highest pay in the regional industry for
five year Captains flying 19 seat equipment. It is also urged
that the same holds true for First Officers’ hourly pay at
Metro Airlines. ALPA introduced charts in support of that
position. ALPA points up that the pay for Captains at
Metroflight, Chaparral, Metro Express and Metro Northeast
is almost 55 percent higher than pay on the same aircraft for
the Captains at AAI. It is also urged the same holds true for
two year First Officers.
The Association contends that air carriers in the Carib-
bean have come and gone during the time the Company has
operated but points up that the Company stated in its annual
report:
“Metro’s Caribbean operations achieved record
passenger boardings and operating profits during
fiscal 1989 despite increased competition and
uncertainties with Eastern Air Lines, Metro’s affil-
iate at the San Juan hub.”
ALPA also urges that in comparing the first half of 1989 to
the first half of 1988, passenger enplanements increased on
AAI, their load factor increased, and AAI’s share of
scheduled departures in their markets increased. ALPA fur-
ther contends that AAI’s available seats compared with the
rest of the industry increased dramatically.
ALPA contends that pay for AAI pilots is at the bottom of
the barrel for carriers operating in the Caribbean. ALPA
introduced into evidence Exhibit No. 13 which indicates
that Windward Captains made $33 per hour: CMR $28.05
D-9
per hour; LIAT $27.46 per hour; CRWN $25.94 per hour;
EXEC $24.94 per hour; SEAPL $22.86 per hour and AAI
$22.81 per hour. Also it is urged the same relation applies to
First Officer pay. ALPA contends their charts compared
apples to apples since they used pilot pay rates for 19 seat
aircraft only. ALPA notes that all of the source material for
these charts was turned over to the Company on their
request.
ALPA notes no source documents were presented by the
Company in their use of Exhibits No. 2 through No. 11. Also
it is noted the Company used many different size aircraft as
comparisons. ALPA contends that only two of the carriers
the Company used as a comparison, Windward Air and
Executive Air, had equipment similar to that used by AAI.
ALPA further contends that the similarity between U.S.
and Caribbean carriers are very much the same and notes
the rates in pay for Captains on 19 seat equipment ranges
from approximately $22 per hour on the low end to approxi-
mately $33 or $34 per hour on the high end.
ALPA urges that only necessary exceptions to the Red
Book should be permitted and notes that negotiations were
limited to Sections 5, 6, 10, 12 and 20 of the working
agreement. ALPA points up that if the parties could not
resolve those issues, they agreed to invoke arbitration. The
Association urges that the Aviation Associates Exception
Letter of Agreement requires that the party seeking an
exception from the contract must show that such change is
“necessary to the success of the operation of Aviation
Associates, Inc.”» The Association points up that the changes
are limited to “necessary modifications” of the Red Book,
and such is reiterated in paragraph 1 of the Letter. ALPA
points up it is repeated again in the Aviation Associates Side
Letter executed just before the start of arbitration in San
Juan. The Association urges it is clear from the parties’
D-10
a
:
language that they wanted changes to the Red Book confined
to these of demonstrated need. On that basis it is urged the
arbitrator must given effect to the parties’ express language
and manifestations of intent.
The Association contends their interpretation of the stan-
dard is correct, but assuming arguendo that the arbitrator
finds to the contrary, application of the standard found in
Article 1, Section 6 to the open issues should be the next
step. ALPA urges that the arbitrator must understand what
the parties meant by this provision before he can apply that
standard to the open issues in the case. The Union urges that
this standard is ambiguous. The Association urges the terms
“average competitive conditions” and “comparable opera-
tions” and “geographic area” are ambiguous. It is pointed
up there is no language in the collective bargaining agree-
ment which clarifies those phrases. Also the Association has
urged there was no testimony from witnesses during the
hearing on the meaning of those clauses. The Union does
point up there were two negotiating proposals made by the
Company and rejected by the Association which prove that
the Company’s anticipated interpretation is in error and the
Association’s version is correct.
On the above basis ALPA alleges the Company did not
present evidence which supported its proposals on hourly
pay, longevity pay or the costs of dependent medical insur-
ance coverage which required necessary deviations from the
Red Book. On that basis the Union urges the arbitrator
should reject the Company’s proposals on these issues.
I. REPOSITIONING PAY ISSUE:
The Association alleges that the proposed changes by the
Association are necessary in regard to repositioning of air-
craft after clearing customs in San Juan. The Association
points up that difference is based upon the operation of AAI
vs its mainland counterparts. ALPA points up that AAI
D-11
iceman
Pilots must drop off passengers at Customs and then reposi-
tion the aircraft to the gate, the Pilots receive no compensa-
tion for the time spent repositioning the aircraft. ALPA
points up that the Company’s own witness admitted this
might occur six times per day.
II and 11]. FLIGHT PAY FOR CAPTAINS AND
FIRST OFFICERS:
The Association urges that “comparable operations”
means those carriers having the same type of business and
flying approximately the same 19 passenger equipment. It is
also urged that “geographic area” means the general geo-
graphic vicinity and not necessarily the same actual markets
or city pairs. The Association contends the carriers which
fall within those parameters are Windward, LIAT, Crown
and Searlane Shuttle flying Twin Otters, Comair flying
19 passenger ‘““Metro’s” and Executive Air flying 19 passen-
ger CASA 212’s.
The Association points up that AAI used Virgin Air even
though they fly single pilot Piper Apaches with less than nine
seats and the mail carrier Flamenco flying nine seat
Islanders, and the defunct DC-3 operator Virgin Air. ALPA
again stresses that the Company proposed that the arbitra-
tor’s decision could not exceed the average compensation
and working conditions existing in the geographic area, and
such was rejected by ALPA.
The Association points up their proposal for AAI Captains
flying 19 passenger equipment should be $30 per hour for a
one year Captain, $31 per flight hour for a two year Captain,
$32 per hour for a three year Captain, $33 per hour for a
four year Captain, and $34 per hour for a five year Captain.
The Association urges all Pilots with five or more years of
seniority would be paid $34 per flight hour no matter how
long they have been with the Company. The Association
urges this proposal falls squarely within the range of hourly
D-12
pay rates for other Captains at typical carriers in the geo-
graphic vicinity flying 19 seat aircraft. The Association has
pointed to the fact that the evidence established that
Captains at Windward Islands Airways flying the Twin
Otter, the exact same aircraft the Company operates, are
paid $33 per flight hour in their fifth year. Also the Associa-
tion notes that Windward Captains continue to receive lon-
gevity pay raises through their tenth year of service. ALPA
notes that the 3% to 5% increase which the Company sug-
gests would only increase the hourly pay rates for Captains
at AAI from $22.81 to $23.49 or $23.95.
6 ct AMINED sl
The Association notes that their proposals raising the
Captains’ and First Officers’ rates to parity with the Red
Book would increase Metro Airlines’ operating costs less
than one-fourth of one per cent. The Association proposes
that AAI First Officers be paid the same rates found in the
Red Book for other Metro First Officers flying 19 passenger
equipment. The Association points up that under their pro-
posal First Officers would be paid $14 per flight hour from 0
to 6 months; $17 per flight hour from 7 to 12 months: $17.10
per flight hour from | to 2 years. The Association contends
that the graph presented in evidence indicates that such
would fal! within the parameters of other typical carriers in
the geographic area and what they are paying First Officers
on the very same equipment. ALPA notes that second year
First Officers are paid $18.56 on the Twin Otter at Wind-
ward Island Airways, $16.25 at Crown Air/Dorado Wings,
and $15.90 for two year Twin Otter First Officers at LIAT.
The Association contends that the Company presented no
evidence or testimony in opposition to the Association’s
proposal. The Association points to an award by Arbitrator
James Healy wherein he held that other factors and con-
siderations can buttress and guide the arbitrator’s decision
D-13
ee
in similar circumstances. ALPA points up that in the West-
ern Air Lines case Arbitrator Healy stated that the arbitrator
could not ignore the presence of Delta and the importance of
expeditiously bringing the Western Pilots’ work rules in line
with those pertaining to the Delta Pilots in a feasible
manner.
The Association urges it is even more compelling in the
instant case since Metro Airlines bought AAI in 1985, and
there have been no attempts, and certainly no expeditious
attempts, to bring the AAI Pilots’ work rules and pay in line
with those in place for their brothers and sisters at other
Metro carriers. The Association notes that both Captains
and First Officers have not received a pay increase since
1985.
It is also pointed up that the cost of food, lodging and
other essentials in the Caribbean is outrageous. ALPA points
up that the cost of living in San Juan is 115.7 percent greater
than the cost of living at Metro Airlines base in Atlanta and
120.1 percent greater than the cost of living for Metro Pilots
based in Dallas.
ALPA concludes by submitting that the award should
grant the new pay rates effective April 13, 1989, the date the
collective bargaining agreement was signed, and in no case
should become effective later than October 15, 1989 which
was the end of the 180-day period the parties set out in
Article 1 for resolution of the remaining open items and
receipt of an arbitrator’s award.
IV. BLOCK RATES FOR LONGEVITY
INCREMENTS:
ALPA proposes that AAI Pilots be paid longevity pay in
accordance with the provisions of Article 5, Section 6 of the
Red Book. The Association notes this provision pays all
other Metro Pilots longevity based on their total time with
D-14
the Company rather than their “time in grade” as a Captain
like the Company proposed. ALPA alleges the evidence of
record establishes it is a practice in the industry to calculate
longevity in accordance with the Red Book and the Associa-
tion’s proposal, i.e., based on a Pilot’s time with the Com-
pany. ALPA urges that all of the Metro carriers and all of
the carriers used in the Association’s comparison of “region-
als” with the exception of AAI, paid Pilots based on their
total time with the Company. The Association urges that
both parties had difficulty in obtaining reliable information,
but the same appeared to be true for Carriers operating in
the Caribbean. It is urged that at least three, and possibly
five, of the carriers used in the Association’s comparison of
Caribbean regional carriers paid their Pilots based on time
with the Company. The Association urges the evidence from
the Company was to the fact that they were not aware of any
company in the area calculating longevity differently than
AAI, but upon cross-examination, the Company admitted
they had no knowledge one way or the other as to what the
practice was for other carriers in the area.
V. WHAT PORTION OF HEALTH AND LIFE
INSURANCE PREMIUMS ARE TO BE PAID BY
THE COMPANY:
The Association contends that the provisions found in
Article 10, Section 1 of the Red Book regarding medical
coverage apply equally to the Pilots at AAI. The Union has
urged their proposal would appear to follow in the range of
competitive conditions in the Caribbean for comparable
carriers. It is pointed out that Windward Island Airways has
much more generous insurance benefits than Metro Airlines
has under the Red Book. It is then pointed out that Wind-
ward pays the entire cost of medical coverage, including
dependents, and also Windward pilots are covered for loss of
license.
D-15
The Association contends that the evidence presented by
the Company is ambiguous and is inadequate. The Associa-
tion urges that the Company failed to show that exceptions
from the Red Book are necessary with regard to medical
coverage for dependents and urges the arbitrator to award
the provisions found in the Red Book for other Metro Pilots.
The Association contends that the Company apparently is
proposing that AAI Pilots absorb the total cost of dependent
medical coverage even after the expiration of the two year
waiting period under the Red Book. The Association urges
the Company has not asserted any justification for an excep-
tion from the Red Book, and further such a proposal is
inconsistent with the benefits provided Pilots at the other
Metro carriers and Windward Airways, which are the only
companies for which adequate information was presented.
VI. CROSS BIDDING.
ALPA alleges the Company attempted to establish that a
deviation from the Red Book was necessary in regard to the
right of AAI Pilots to cross bid for vacancies in the Metro
Airlines system. ALPA urges the estimated cost of training
was much in excess of what the actual cost would be. ALPA
also notes that a side letter to the Comair working agreement
permitted Pilots to transfer back and forth between divisions
in many circumstances. ALPA urges the Company has not
demonstrated the necessity for such exceptions, and there-
fore they should be rejected by the arbitrator.
The Association submits this proposal would be with-
drawn if the arbitrator awards the rates of pay found in the
Red Book for other Metro Airline Pilots. The Association
contends that if AAI Pilots are paid less than their
counterparts on the same type of equipment at other Metro
Airlines subsidiaries, then an exception to the Red Book is
necessary to enable them to access those higher pay rates
without restriction.
D-16
:
4
j
x
t
OPINION
This matter has been delayed by Hurricane Hugo. Hearing
was originally scheduled in September but had to be
postponed for the above reason. The decision was further
delayed by the Court Reporter’s failure to present the tran-
script to the parties in a reasonable period of time. None of
the above is the fault of either party but is simply noted for
the reason that the parties had agreed this matter should be
resolved within 180 days as was set out in Article | of the
resolution of the open items and receipt of the arbitrator’s
award. The briefs of the parties were received on
February 26.
The standard or factors to be used by the arbitrator in
reaching a decision are of prime importance in this matter.
The Association has cited the Letter of Agreement dealing
specifically with AAI and this arbitration dated April 13,
1989 and contends that either party seeking an exception
from the contract is required to establish that such change is
“necessary to the success of the operation of Aviation
Associates, Inc.” On the foregoing basis the Association has
urged that its position on hourly pay, longevity pay and the
cost of dependent medical insurance coverage are necessary
deviations from the Red Book.
The arbitrator has studied the standard to be applied and
finds that such is controlled by Paragraph 2 of the Side
Letter dated April 13, 1989. That portion of the Side Letter
of Agreement expressly incorporates Article 1, Section 6(a)
and (b) which reads:
“the arbitrator shall take into account and must base the
decision upon average competitive conditions in the
geographic area for wages and working conditions for
comparable operations including any ALPA collective
bargaining agreements.”
D-17
The Association has urged that the standard expressed is
ambiguous. The basis for this proposition is understood.
However no ambiguity is detected in Paragraph 2 of the Side
Letter or Article 1, Section 6(a) and (b) which directed the
arbitrator to base his decision upon the average competitive
conditions as measured by wages and working conditions of
comparable carriers in the AAI market. Perhaps it should be
noted that the Association points to the November 7 and
December 9, 1989 proposals by the Company which were
rejected by the Union and has urged this supports their
interpretation of the standards. The two proposals have been
studied and the arbitrator finds that they are substantially
different in language from the Side Letter of Agreement
dated April 13, 1989 which was finally agreed upon between
the parties and which is controlling herein.
I. REPOSITIONING PAY ISSUE:
The evidence submitted does not warrant a modification
of this provision or the addition of this provision to the
agreement.
II. and II. FLIGHT PAY FOR CAPTAINS AND
FIRST OFFICERS:
There are many factors which had to be studied and
considered in determining this question. The other carriers
cited by both parties had many other economic issues
involved beside the simple hourly block rates. The yearly
wages, even the monthly wages, could not be specifically
determined from the evidence. Some of the carriers did not
guarantee as many hours as those guaranteed by AAI. Also
some of the other carriers had more economic benefits which
must be taken into consideration. Some of the evidence
presented did not include comparable equipment.
All of the data presented by both parties was carefully
studied and considered before a decision was reached in this
D-18
matter. AAI has suggested that a 3% to 5% increase in wages
is reasonable. The average competitive conditions and com-
parable operations of other carriers in the geographic area
were considered. Although others were recognized and con-
sidered, those of principal importance were Windward,
LIAT, Crown and Seaplane Shuttle flying Twin Otters,
Comair flying 19 passenger Metro’s and Executive Air flying
19 passenger Casa 212’s.
The present rate for Captains is $22.81. A 5% increase
would raise that hourly pay rate for Captains to $23.95. A
5% increase is not comparable to the pay rate for Captains at
other comparable carriers in the geographic area. The arbi-
trator is prohibited by the agreement between the parties
from considering AAI’s ability to pay and the fact that
Captains have not received a raise for several years. Under
the guidelines set forth above, it is the opinion of the arbitra-
tor that the following pay scales be established for Captains
on zero to twenty seat equipment based on time in grade:
YEARS PAY SCALE
ae eh cee eee cces $26.00
Py . ox Suk ee es $27.00
| aa $28.00
co Sa $29.00
4 years and over............ $30.00
Based on the same criteria as set forth for Captains, the
pay scale for First Officers will be established as:
YEARS PAY SCALE
1. oS eee $12.75
?. See eee $13.25
ro 2) Fee $14.00
fo $14.00
4 years and over........... $14.00
IV. BLOCK RATES FOR LONGEVITY:
The evidence is insufficient to establish justification for
modifying the block rates for longevity increments.
Captains’ rates will continue to be based on time in grade.
V. WHAT PORTION OF HEALTH AND LIFE
INSURANCE PREMIUMS ARE TO BE PAID BY
THE COMPANY:
The evidence regarding comparable carriers in the geo-
graphic area is mixed. Under the evidence presented the
arbitrator finds there should be no modification of the health
and life insurance premiums paid by the Company.
VI. CROSS BIDDING:
Management has contended that the provisions authoriz-
ing cross bidding are among those explicitly excluded from
application to AAI and open before the arbitrator. Regard-
less of this factor, there is no evidence which would support
justification for the arbitrator to find that cross bidding
should be authorized. On that basis there will be no modifi-
cation of the agreement in this regard.
The new pay rates will be retroactive to October 15, 1989.
If the parties are in disagreement as to the application of
this award, the arbitrator will retain jurisdiction for sixty
days.
PRESTON J. MOORE,
Arbitrator
March 7, 1990
D-20
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.