Petition for Writ of Certiorari — Frontier Pilots Litigation Steering Committee, Inc. v. Continental Airlines, Inc.

| Supreme Court Us. |

FILED

™ JUL 9

‘ 1992

NO. 92 - | OFFICE OF THE Gunn |

= j

IN THE

SUPREME COURT OF THE UNITED STATES

October Term 1992

Frontier Pilots Litigation Steering

Committee, Inc.,

Petitioner,

Vv.

Continental Airlines, Inc.

Continental Pilots Merger Committee,

People Express Pilots Merger Committee,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

John A. McGuinn

Counsei of Record

Schmeltzer, Aptaker &

Shepard

2600 Virginia Avenue, NW

Suite 1000

Washington, D.C. 20037

(202) 333-8800

Attorney for Petitioner

*

July 9, 1992

a

Questions Presented For Review

1. Whether the Court of Appeals

and the District Court invaded the juris-

diction accorded to arbitration in viola-

tion of the decisions of this Court and

other Courts of Appeal by ruling that the

federal judiciary -- rather than an

arbitrator -- should determine the effect

of a prior arbitration award on a subse-

quent arbitration proceeding in circum-

stances where:

-- The ruling denied the pilots of

one carrier (Frontier Airlines) involved

in a seniority integration arbitration

with a major U.S. airline (Continental

Airlines) and deregulation start up

airline (People Express Airlines) of the

fair and equitable seniority integration

mandated by the underlying arbitration

agreement, resulting in permanent career

damage to the Frontier pilots whose 1955-

68 hired captains were inserted on the

integrated list as a class far junior to

the 1980-83 hired People Express captains

despite their vastly greater length of

service and other superior pilot equi-

ties; and

== The arbitrator admitted that

but for the District Court's intrusion

into the arbitration process he would

have ruled in a manner far more favorable

to the former Frontier pilots insofar as

their placement on the integrated senior-

ity list.

YP Whether, in the same circunm-

stances, the District Court and Court of

Appeals abandoned their limited but

proper role in reviewing arbitration

awards by ignoring a gross’ violation of

the District Court's own order prohib-

iting ex parte contacts between the

ii

| 7"

arbitrator and a representative of one of

the parties which occurred at a critical

juncture in the decision making process.

iii

List of Parties to Proceeding

The parties to this proceeding are

the following:

1. People Express Merger Commit-

tee

- Continental Airlines}

3. Frontier Pilots Litigation

Steering Committee

4. Continental Pilots Merger Com-

mittee2

1 Texas Air Corporation was at the

time the action was filed the parent

company of Continental Airlines.

2 Frank Shanley, who appears’ in the

caption of the Third Circuit judg-

ment order, was replaced by the

Continental Pilots Merger Commit-

tee.

iv

ee

TABLE OF CONTENTS

Questions Presented For

ag | ae eo anne

List of Parties to Proceeding..

Table of Contents.......-...cee-

Table of Authorities. ......csse-»

Opinions Below... c.cessescccsacs

PUPILOGISCIGM sc occ esctecssesens

Statute Involved.........ceceee

Statement of the Case..........

Reasons for Granting the

Writ OF COrtlOFari. sccscccanens

I. The Judicial Requirement

That A Subsequent

Arbitrator Be Bound By

The Decision Of A Prior

Arbitrator Is Contrary

To Decision Of This

Court, The Third Circuit

And Other Courts Of

Appeal And Such Intrusion

By The Judiciary In

Substantive Issues

Committed To The

Arbitration Process

Is A Recurring Problem

In The Labor Arbitration

- Process That This Court

Should Address And

COPPGCE +2 cee ei acceesenes

‘

II. To Protect The Integrity

Of The Arbitration

Process And The Parties

To It, This Court Should

Direct The Federal Courts

To Uphold Court Imposed

Bans On Ex Parte

Communications Between

Arbitrators And Parties

To Arbitrations And

Resolve A Conflict

Between The Third

Circuit And The Ninth

Circuit Court Of

ARDMORE. ccc cvvecussseee 48

CONGIUBLOR. ov cccceccweneseueas 56

ABOREEM «60606 kb act ee eh eS A la

vi

TABLE OF AUTHORITIES

ses:

AT&T Technologies v. CWA,

475 U.S. 643 (1986) ..cccccce

Butler Armco Independent

Union v. Armco, Inc.,

701 F.2d 253 (3rd Cir.

SONS. Kecsdatseens

Connecticut Light & Power

Co. v. Local 420, IBEW,

718 F.2d 14 (2a Cir.

Ser

Federal Bearings Co., Inc.,

33 ksh. FRA (3084)...

Hotel Ass'n of Washington v.

Hotel & Restaurant Employees

Union,

F.2d (D.C. Cir.

yy, | ere

et

Local 103, IVE v. RCA Corp.,

516 F.2d 1336 (3rd Cir.

| rae ae

Local 504 v. Roadmaster Corp.,

916 F.2d 1161 (7th Cir.

eee

vii

22,23

34,35,42

39

37

42

36, 37

passim

40

e olita dison Co. v.

NLRB,

663 F.2d 478 (3rd Cir.

1981), aff'd 460 U.S. 693

ei &) PPP rTeTT Terre iaven'e -2aeae

arine & :

Vv ad

s e

868 F.2d 52 (3d Cir.

i PPT Tee ee TCL TTP eee 49,50

Pacific & Artic Ry. & Nav.

Co. v. United Transportation

Union,

952 F.2d 1144 (9th Cir.

Ne ae eS) wg 53,54

Riverboat Casino, Inc. v.

Joint Executive Bd.,

578 F.2d 250 (9th Cir.

a ee etree sy 6 64k bre 39

arine Tug & Barge

v. North Am. Towing,

607 F.2d 649 (5th Cir.

SGU s bac is rae cue ay Oe 49

Transit Mix Concrete Corp.

v. Local 282, :

809 F.2d 963 (2d Cir.

Sg SS Oe RGR A eae area 41,42

U.S. Lines v. Federal

Maritime Commission,

584 F.2d 519 (D.C. Cir.

SPT See ere Kiaeee eens Tine. ae

United Steelworkers of

America v. American Mfg. Co.,

363 U.S. 564 (1960)......... 42,22

viii

aise necs icin mrnnsiervninroani

United Mine Workers of

America v. Consolidation

Coal Co.,

666 F.2d 806 (3rd Cir.

eee eS ee Pere

Westinghouse Broadcasting

vy. Local 804

,

616 F.2d 97 (3rd Cir.

ie ek ever tr ek cek ces

Westi use Elevators Vv.

SIU de Puerto Rico,

583 F.2d 1184 (1st Cir.

ne ee OM RE ee

Other Authority:

The Washington Post, 7/5/92,

p. H1, “Labor Loses the

Strike as a Weapon".........

ix

NO. 92 -

IN THE

SUPREME COURT OF THE UNITED STATES

October Term 1992

Frontier Pilots Litigation Steering

Committee, Inc.,

Petitioner,

Vv.

Continental Airlines, Inc.

Continental Pilots Merger Committee,

People Express Pilots Merger Committee,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

The petitioner respectfully prays

that a writ of certiorari issue to review

a judgment of the United States Court of

Appeals for the Third Circuit.

CC

-2-

Opinions Below

The Order of the District Court

compelling arbitration inthis’ case is

not officially reported but is reprinted

in the Appendix at pp. la-15a.

The Order of the District Court

confirming the Ross arbitration award is

not officially reported, but is reprinted

in the Appendix at pp. i16a-57a.

The Order of the Court of Appeals

affirming the District Court's order is

not officially reported, but is reprinted

in the Appendix at pp. 58a-60a.

The Order of the Court of Appeals

denying rehearing and rehearing in banc

is not officially reported, but is re-

printed in the Appendix at pp. 61la-63a.

Jurisdiction

The judgment of the Court of Appeals

for the Third Circuit was entered on

February 13, 1992. A timely petition for

rehearing and suggestion for rehearing in

banc was denied on April 10, 1992, and

this petition for certiorari is being

filed within 90 days of that date.

The Court's jurisdiction is being

invoked under 28 U.S.C. § 1254(1).

Statute Involved

The statute involved is The United

States Arbitration Act, 9 ae

16(a)(1)(D), which provides:

An appeal may be taken from --

(1) An order --

(D) Confirming or denying

confirmation of an award or

partial award.. ."

Statement of the Case

This cas arises from a lawsuit

_

.

initiated by the People Express Pilots

Merger Committee (PEX pilots) against

Continental Airlines (CAL) seeking, inter

ee

-4-

alia, an order compelling arbitration of

the issue of pilot seniority integration.

The issue arose because of a transaction

in late 1986 by which CAL acquired People

Express, Inc. As a part of that transac-

tion, CAL had filed a Labor Protection

Agreement (LPA) with the Department of

Transportation. The LPA was an agreement

between CAL and People Express, Inc.

providing for a fair and equitable pilot

seniority arbitration with respect to

pilots employed by CAL and pilots "of the

air carrier subsidiaries of" People

Express, Inc.?. At that time, the two

air carrier subsidiaries of People Ex-

press, Inc. were People Express Airlines

and Frontier Airlines.

As a condition precedent to the

acquisition by CAL of People Express,

ENC. CAL acquired Frontier Airlines

(FAL) and all of its common stock. In

connection with that transaction, CAL

required all FAL pilots to execute a

document called the Job Preservation

1 The exact terms of the LPA provided

that:

Following consummation of the

aforesaid Merger Agreement, in

the event of a future merger of

airline operations involving

any air carrier subsidiary of

People Express, Inc., provision

shall be made for fair and

equitable seniority, integra-

tion procedures ... which shall

include as a final step, if

necessary in the absence of

agreement, a final and binding

decision by a neutral mediator

-6-

Agreement (JPA). Side Letter 2 of the

JPA provided, inter alia, for a seniority

integration arbitration, and imposed

conditions to the effect that the arbi-

trator was to take special note of the

fact that Frontier was not operating at

the time of the acquisition and that the

arbitrator should recognize the promo-

tional expectations of Continental pilots

to aircraft on order or on firm option to

CAL as of September 15, 1986.

An arbitration took place pursuant

to the JPA before Arbitrator George

Nicolau who issued his decision on June

15, 1987. In that decision in which

Arbitrator Nicolau noted the JPA's "con-

Siderable and obvious tilt in favor of"

the CAL pilots, Arbitrator Nicolau placed

all FAL captains, regardless of their

“length of service junior to the most

junior CAL captain.? Later in 1987,

CAL unilaterally integrated the PEX

pilots into the Nicolau list and placed

the 1980-1983 hire PEX captains below (or

junior to) the 1955-1968 hire FAL cap-

tains.

Meanwhile, the PEX pilots' suit to

compel arbitration under the LPA went

forward, and on December 9, 1988, the

Frontier Pilots Litigation Steering

Committee (FAL pilots) was granted inter-

vention in order to protect their inter-

ests as one of the two air carrier

subsidiaries of People Express, Inc. who

were entitled to the protection of its

terms.

2 The- FAL pilots subsequently sought

unsuccessfully to vacate Arbitrator

Nicolau's Award under the tradition-

al grounds for vacating an arbitra-

tion award under the Federal

Arbitration Act.

With all relevant and needed parties

then before it, the District Court, after

a bench trial, issued an order on August

Te 1989 compelling arbitration. The

order compelling arbitration tracked the

provisions of the LPA and commanded

that:

The neutral shall consider any

factor relevant to a fair and

equitable integration of the

seniority lists of the People

Express, Frontier and Continen-

tal pilots. The parties are

free to urge the neutral to

consider any factor, and put in

evidence any support, that they

believe is relevant to this

standard.

(Appendix, pp. 8a-9a)

In an apparent contradiction to the

above-stated standard, the District

Court, over the vigorous objection of the

FAL pilots, inserted the following lan-

guage in its order compelling arbitra-

tion:

The Frontier Pilots Litigation

Steering Committee's participa-

tion in this arbitration shall

be circumscribed by the Final

Award of Arbitrator George

Nicolau, dated June 15, 1987.

FAL may not assert a position

inconsistent with that Arbitra-

tion Award but shall, for the

purposes of this arbitration,

be deemed bound by that Award.

The Award of Arbitrator Nicolau

is currently under appeal. In

the event, at any time prior to

the Final Arbitrator's Award in

this matter, the decision of

Arbitrator Nicolau shall be

reversed or modified, any party

may make application to this

Court, on short notice, to

consider the impact of that

determination upon this arbi-

tration proceeding.

(Appendix, pp. 2a-3a)

Subsequent to the issuance of the

order, the FAL pilots requested reconsid-

eration of this provision of the order

based on the uniform line of cases in the

Third Circuit and others that it is for

the arbitrator, not the federal judicia-.-.

ry, to determine what weight, if any, is

to be accorded a prior arbitration award

in a subsequent arbitration proceeding.

When the District Court refused

reconsideration, the FAL pilots requested

that he certify this issue for interlocu-

tory appeal in order to avoid going

through a lengthy and costly proceeding

only to have it reversed on appeal. The

Court rejected this request. After,

nevertheless, appealing to the Third

Circuit, the FAL pilots agreed to with-

draw their appeal because of the lack of

finality of the District Court's order,

and the Clerk's office dismissed the

appeal on October 11, 1989.

Prior to the hearing before Arbitra-

tor Ross, CAL filed a "Motion in Limine"

in which it requested that Arbitrator

Ross formally rule that the FAL pilots

Should be bound by the Nicolau Award.

Arbitrator Ross granted CAL's motion over

pat ere.

Oe ae

-ll-

the objections of the FAL pilots. The

FAL pilots made one last request to the

District Court to change its ruling by

appealing the decision of Arbitrator Ross

granting CAL's motion in Limine. Once

again, the District Court adhered to its

ruling, and 73 days’ of hearings before

Arbitrator Ross commenced.

The several efforts of the FAL

pilots to reverse the District Court's

circumscription language before the

hearing were based on their fear (cor-

rectly founded, as it turned out) that

the Court of Appeals might -- if the

lengthy hearing went forward -- ignore

the relevant law and sweep the errors

under the rug onthe misguided belief

that the. matter should be concluded --

whatever the errors that occurred.

-12-

During the post-hearing but pre-

decision phase of the proceeding, Arbi-

trator Ross admitted (1) that the FAL

pilots were poorly treated in the Nicolau

Award; (2) that the FAL pilots had supe-

rior equities to the PEX pilots; (3) that

he did not apply the fair and equitable

standard in the LPA in comparing the

equities of the FAL and PEX pilots; (4)

that if he had compared such equities,

the FAL pilots would be moved up higher

on the integrated list; (5) that the

Nicolau "caveat" in the Court's order

compelling arbitration prevented him from

moving up the FAL pilots’ on the inte-

grated list; (6) that the FAL pilots

would have been better off if they had

never showed up to partdieiwatle in the

arbitration; and (7) that the FAL pilots

-- and only the FAL pilots -- had "really

taken gas" in his arbitration proceed-

ing.

Also during the post-hearing but

pre-decision phase of the proceeding

called the technical support committee

phase of the proceedings where all par-

ties except their counsel were present

and were discussing the heart of the case

-- how the lists would be integrated --

an admitted ex parte contact occurred

between the arbitrator and the chairman

of the PEX Pilots Merger Committee.

Paragraph II.8(c) of the District

Court order compelling arbitration stat-

ed:

Communication with Neutral.

Neither Continental nor the

committees may communicate with

the neutral, either formally or

informally, outside the pres-

ence of the other parties,

except in writing, with copies

to the other parties, provided,

however, that any party elect-

ing not to be present for a

-14-+

meeting or hearing date waives

any right to be present for

such communications.

(Appendix, p. 13a)

On July 12, 1991, two issues vitally

affecting the FAL pilots were being

discussed. First, whether the ratio of

PEX-CAL captains would be extended down

to the most junior FAL captain (more

favorable to the FAL pilots) or would end

prior to the most senior FAL captain,

thus making all FAL captains the junior

captains on the airline; and, second,

whether the ratio of PEX captains would

start at CAL pilot #1040 or at some point

above that.

On the same day, the PEX technical

support committee members cnventined to

withdraw from further participation in

the technical support process and Arbi-

trator Ross requested that committee to

reconsider.

Later that day, Arbitrator Ross and

PEX merger committee chairman Mackenzie

had a closed door, ex parte meeting

lasting between 15 and 30 minutes.

Immediately after the conclusion of

that ex parte meeting when all members of

the technical support committee met

together in joint session, Arbitrator

Ross informed the committee members that

he had reached a conclusion on the two

issues specified above vitally affecting

the interests of the FAL pilots and both

decisions favored the interests of the

PEX pilots and were detrimental to the

interests of the FAL pilots.

When these decisions favoring the

interests of the PEX pilots were an-

nounced, the PEX committee members did

not follow through on their threat to

boycott the technical support committee

a

meetings, and they attended all _= such

meetings that followed. .

The FAL pilots timely raised the

issue of the July 12, 1991 ex parte

communication in their letter to Arbitra-

tor Ross on July 14, 1991, and in their

_ request of August 12, 1991 that he recuse

himself.

On August 13, 1991, Arbitrator Ross

refused to recuse himself. His letter

did not deny that the ex parte contact

occurred, but claimed rather that no

issue under litigation was discussed.

On August 13, 1991, Arbitrator Ross

issued his decision. In his decision,

Arbitrator Ross completely inverted the

Company's alignment of PEX and FAL cap-

tains on the Company's list and placed

the 1980-1983 hire PEX captains as a

class not only above, but hundreds of

numbers above the 1955-1968 hire FAL

-17-

captains, thus making these veteran FAL

captains the most junior captains on the

entire CAL system, and thereby subjecting

them to the worst schedules and other

working conditions and making them the

first to be downgraded from captain to

first .officer in the event of a contrac-

tion in flying.

After the award issued, the PEX

pilots immediately sought confirmation of

the award in the District Court. The FAL

pilots moved that the award be rejected.

On November 22, 1991, the District

Court entered an order confirming the

Ross Award and followed it with a twenty-

three page letter opinion on November 26.

(Appendix, pp. 16a-57a)

Thereafter, the FAL pilots moved the

Third Circuit for a stay pending appeal

which was initially granted on December

5, 1991 after the Court had received the

opposition papers of Continental and the

PEX pilots. On the next day, Continental

filed an emergency petition for rehearing

and clarification of the stay order.

That petition was granted ex parte in an

oral order issued at approximately 8:30

p.m. on Friday night, December 6, 1991.

When the FAL pilots filed their opposi-

tion -- as the Court had directed -- at

3:55 p.m. on Monday, December 9, 1991,

the Court rejected the FAL pilots opposi-

tion and confirmed its Friday night oral

order by written order issued at 5:19

p.m. on December 9, 1991.

The appeal was nevertheless expe-

dited and oral argument was heard on

Monday, February 10, 1992. On Thursday,

February 13, 1992 the Third Circuit

entered a brief judgment order affirming

the judgment of the District Court.

(Appendix, pp. 58a-62a)

-19-

On April 10, 1992 the Third Circuit

denied the FAL pilots motion for rehear-

ing and/or for rehearing in banc. (Ap-

pendix, pp. 61a-63a)

Reasons for Granting the Writ of

Certiorari

This case presents the Court with a

unique opportunity to exercise its super-

visory powers to correct two unfortunate-

ly common departures from the accepted

and usual course of judicial and arbitral

proceedings which also are in conflict

with the decisions of this Court and the

other circuit courts of appeal.

The first departure is the activist

encroachment of the District Court, with

the approval of the Third Circuit, on

jurisdiction committed by this Court and

the Courts of Appeal to the realm of

arbitration. Specifically, the District

Court encroached onthis' area when its

-20-

order compelling arbitration required the

subsequent arbitrator to be "bound" by

the prior arbitration award of Arbitrator

Nicolau.

The second departure is the abject

failure of the District Court, with the

approval of the Court of Appeals, to

exercise its limited supervision over the

arbitration process to require that

arbitrator abide by court ordered prohi-

bitions against ex parte contacts. This

failure also placed the Third Circuit in

direct conflict with a recent decision of

the Ninth Circuit upholding bans on ex

parte contacts.

In short, we have a case here where

the Court first wrongfully intruded into

the arbitration process and, second,

failed to act when its own order against

ex parte contacts was blatantly defied.

-21i-

I.

The Judicial Requirement That A

Subsequent Arbitrator Be Bound By The

Decision Of A Prior Arbitrator

Is Contrary To Decision Of This Court,

The Third Circuit And Other Courts Of

Appeal And Such Intrusion By The

Judiciary In Substantive Issues

Committed To The Arbitration

Process Is A Recurring Problem In The

Labor Arbitration Process That This

Court Should Address And Correct

Over thirty years ago, this Court

defined the respective roles of the

federal judiciary and arbitrators in

labor arbitration and held that the role

of the federal judiciary was to be mini-

mal.

In United Steelworkers of America v.

ica . Co., 363 U.S. 564 (1960),

this Court specifically rejected a claim

that federal courts could reject arbitra-

tion as ameans for settling a dispute

because the lower court had determined

that the provision involved was “beyond

-22-

dispute" as to its meaning (363 U.S. at

567). Instead, the Court held:

The courts, therefore, have no

business weighing the merits of

the grievance, considering

whether there is equity ina

particular claim, or deter-

mining whether there is partic-

ular language inthe written

instrument which will support

the claim.

363 U.S. at 568. And, finally:

When the judiciary undertakes

to determine the merits of a

grievance under the guise of

interpreting the grievance

procedure of collective bar-

gaining agreements, it usurps a

function which under that

regime is entrusted to the

arbitration tribunal.

363 U.S. at 569.

This principal was forcefully reit-

erated by this Court in AT&T Technologies

v. CWA, 475 U.S. 643, 649-650 (1986),

where the Court held:

The third principle de-

rived from our prior cases [the

Arbitration Trilogy) is that,

in deciding whether the parties

have agreed to submit a partic-

ular grievance to arbitration,

-23-

a court is not to rule on the

potential merits of the under-

lying claims. Whether "“argu-

able" or not, indeed even if it

appears to the court to be

frivolous, the union's claim

that the employer has violated

the collective-bargaining

agreement is to be decided, not

by the court asked to order

arbitration, but as the parties

have agreed, by the arbitrator.

"The courts, therefore, have no

business weighing the merits of

the grievance, considering

whether there is equity ina

particular claim, or determin-

ing whether there is particular

language in the written instru-

ment which will support the

claim. The agreement is to

submit all grievances to arbi-

tration, not merely those which

the court will deem meritori-

ous.* American Mfg. Co., 363

U.S. at 568 (footnote omit-

ted).

Ironically, the Third Circuit Court

- of Appeals has had a number of opportuni-

ties to apply the unequivocal language of

this Court in the Steelworkers Arbitra-

tion Trilogy to deny claims that the

judiciary should meddle in the arbitra-

tion process when a party states that a

current arbitration is, or should be,

governed in whole or in part by a previ-

ous arbitration award.

The leading case in the Third Cir-

cuit specifying the respective role of

the judiciary and the arbitrator in such

circumstances is Local 103, IUE v. RCA

Corp., 516 F.2d 1336 (3rd Cir. 1975).

| In that case, the arbitration provi-

sion actually provided that, "{i]Jn no

event .. . shall the same question [or

issue] be the subject of arbitration more

than once." Id. at 1338. A dispute

arose in 1971 concerning a job classifi-

cation decision.’ The Union claimed that

the 1971 issue had been previously decid-

ed in a 1946 arbitration award. The

Union then suspended its participation in

the 1974 arbitration regarding the 1971

grievance and sought to enjoin RCA's

-25-

further arbitration efforts. The dis-

trict court "held that the question or

issue presented and resolved in 1946 was.

not identical to the question or issue

presented in 1971," Id. at 1339, and

thus dismissed the suit. The Third

Circuit held:

Although we affirm the judgment

of the district court, we do so

for a different reason: It is

the function of the arbitrator,

not the court, to decide wheth-

er the "same question or issue"

had been the subject of arbi-

tration within the meaning of

the collective bargaining

agreement.

74. @& i2save

By so holding, the Court expressly

disassociated itself from the “strict

identity" test utilized by the District

Court and arguably found in prior deci-

sions of that Court.

-26-

In an oft-quoted epilogue to the

Local 103, IVE case, the Court specifi-

cally answered all of the claims by the

respondents and the contention of the

District Court in this case that the FAL

pilots were attempting to "collaterally

attack" the Nicolau award and relitigate

the issues in that case in the _ Ross

arbitration.

The union evidences the fear

that prior decisions will be

relitigated ad infinitum pres-

aging a demise in finality and

opening the door to abuse. We

disagree. Open to the’ union,

before the arbitrator, is the

same contention it has. pres-

ented to the courts, i.e., that

the "same question or issue"

was previously "the subject of

arbitration." So viewed,

finality, consistent with the

provisions of the agreement,

will be preserved.

516 F.2d at 1341.

The situation here is even more

compelling than the Local 103, IUE case.

Here, unlike that case, the LPA contained

4

}

4

S

|

|

|

no provision that issues previously

settled in prior arbitrations should not

be the subject of arbitration more than

once. The LPA was totally devoid of any

language concerning prior arbitration

awards. To the contrary, the LPA specif-

ically applied to pilots of air carrier

subsidiaries of People Express, Inc. and

the District Court specifically found

that both PEX and FAL were such air

carriers. The scope and charter of the

LPA were broad. Absent agreement among

the parties, the issue of pilot seniority

integration was to be resolved in a "fair

and equitable" manner through arbitra-

tion. With the pilots of three carriers

involved in the LPA arbitration, it was

inevitable that one of the issues for the

arbitrator was the impact or effect, if

any, of the preceding Nicolau Award.

Nothing in the Nicolau Award or the LPA

-28-

purported expressly or by implication to

exclude from the arbitrator the issue of

the impact or effect of that Award.

There is, therefore, no evidence at all,

much less "forceful evidence" of an

intent to exclude the issue of the Nico-

lau Award from the Ross Arbitration.

Moreover, even if the "strict iden-

tity" of issues test were still in place,

the District Court's intrusion into the

arbitration process would still be unau-

thorized because the issues in the Nico-

lau Award (the integration of FAL and CAL

pilots ona single seniority list) were

admittedly different than the issues in

-29-

the Ross arbitration (the fair and equi-

table integration of the FAL, CAL and PEX

pilots) .3

The Third Circuit reiterated the

principles of the Local 103, IVE case,

supra, in Westinghouse Broadcasting v.

Local 804, 616 F.2d 97 (3rd Cir. 1980),

where the Court, after noting the rubric

that the issue of arbitrability is for

the Court, not the arbitrator, stated:

We did decide in Local 103 that

it is for the arbitrator, and

not the court, to decide wheth-

er the question or issue pres-~-

ented before an arbitrator in

1971 had previously been sub-

mitted before another arbitra-

tor in 1946.

Id. at 100.

3 On this much, the FAL pilots and the

District Court agree ("The question

or issue before Arbitrator Ross was

clearly not the same question or

issue which was the subject of the

Nicolau arbitration") (Appendix, Ppp.

49a-50a).

-30-

The next year, the Third Circuit

once again revisited this issue in United

Mine Workers of America v. Consolidation

Coal Co., 666 F.2d 806 (3rd Cir. 1981).

In that case, the union filed suit seek-

ing to avoid arbitration and to enforce a

prior "settlement agreement" between it

and the company regarding the contracting

out of repair and maintenance work. The

Court held that the issue of the status

of the prior settlement agreement was,

itself, a matter for the arbitrator to

rule upon, stating:

Federal courts are bound to

exercise the utmost restraint

to avoid intruding on the

bargained-for method of dispute

resolution and when enforcement

of an arbitration award or

settlement agreement is sought

under Section 301, the court

must be able to. say "with

positive assurance" that the

award or settlement was intend-

ed to cover the dispute. If

the court has any doubt, the

parties should be returned to

\iintadidna seh thie on itive A

their’ grievance procedure and

arbitration, for it is an

arbitrator, and not the court,

who is to decide whether the

same issue has already been

resolved in an earlier proceed-

ing.

Id. at 811 (footnotes and citations

omitted).

In other words, the heavy burden on

the respondents and the District Court

was to find "positive assurance" from the

Nicolau Award or the LPA that the Nicolau

Award was intended "to cover the dispute"

involved in the Ross arbitration. If the

Court had “any doubt" on this matter, the

issue of the effect of the prior Nicolau

Award on the subsequent Ross arbitration

should have been resolved by the arbitra-

tor, “for it is the arbitrator, and not

the court, who is to decide whether the

same issue has already been resolved in

an earlier proceeding."

The practical difficulty of conclud-

ing, as a matter of law, that a court has

"positive assurance" that a prior arbi-

tration award is binding upon a forthcon-

ing arbitration becomes an impossibility

when the Nicolau Award contains no refer-

ence to future arbitrations and the LPA

contains no reference to prior arbitra-

tions.

There is yet another line of cases

in the Third Circuit holding generally

that an arbitrator need not follow

previous arbitrations.4 In Metropoli-

tan Edison Co. v. NLRB, 663 F.2d 478 (3rd

4 Indeed, even Arbitrator Ross. noted

that “arbitration decisions general-

ly are reviewable by, and not bind-

ing on, other arbitrators."

Arbitrator Ross further found,

however, the District Court's order

in effect superceded this general

rule and required him to give bind-

ing effect to the Nicolau Award.

Cir.

-33-

1981), aff'd 460 U.S. 693 (1983),

this Court held:

The narrow issue before us is

whether we are bound by the

previous arbitrated interpreta-

tions. We hold that we are

not.

Normally an arbitrator

need not follow previous arbi-

trations construing the same

agreement. See New Orleans

Steamship Association Vv.

General Longshore Workers, 626

F.2d 455, 468 (5th Cir. 1980),

cert. granted sub nom. Jack-

sonville Bulk Terminals, Inc.

v. International Longshoremen's

Association, 450 U.S. 1029,

1013 & Ce. 1737, 68 L.Ed.2d

223 (1981); Riverboat Casino,

Inc. v. Local Joint Executive

Board, 578 F.2d 250, 251 (9th

Cir. 1978) (to require adher-

ence to previous arbitration

would reduce flexibility of the

arbitral process). It follows

that when this court is called

upon to construe a collective

bargaining agreement, it need

not follow a previous arbitral

interpretation. To bind this

court to a contractual inter-

pretation made ina _ previous

arbitral award would not be

consistent with what the par-

ties bargained for: arbitra-

tion as a dispute resolution

process for specific griev-

ances. See NLRB vy. Pincus

Brothers, Inc.-Maxwell, 620

F.2d 367, 374 (3rd Cir. 1980).

Id. at pp. 483-84.

Here, the general rule applies

because the arbitration agreement (the

LPA) “does not provide that one arbitra-

tion is to be bound by an earlier deci-

sion" (Ibid.).

The Third Circuit in Butler Armco

Independent Union v. Armco, Inc., 701

F.2d 253 (3rd Cir. 1983), brought togeth-

er the two strands of its Local 103, IUE

line of cases with the Metropolitan

Edison line of cases.

In that case, the union sought to

enjoin the Company's action in consoli-

dating seniority units based upon a prior

arbitration award allegedly prohibiting

such action and a provision in the griev-

ance/arbitration agreement prohibiting

fee Rebel Rot Coon GaP RA Pa ot Ke a te FS Fe

re-arbitrations of the same issue or

dispute. The Court held that:

Although not entirely free

from doubt, it appears that the

union relies on two theories.

First, it maintains that’ the

current dispute is not arbitra-

ble simply because the same

issue has been resolved ina

prior arbitration. This argu-

ment would appear to be fore-

closed, however, by our holding

in Metropolitan Edison v. NLRB,

663 F.2d 478 (3rd Cir. 1981),

cert. granted, 457 U.S. 1116,

102 S.Ct. 2926, 73 L.Ed.2d 1327

(1982), that, absent contractu-

al language to the contrary,

one arbitrator's interpretation

of a collective bargaining

agreement is not binding on a

subsequent arbitrator. Second,

the union urges that the rear-

bitration clause in the con-

tract renders the current

dispute not arbitrable.

Id. at p. 255.

The Court then held that the second

argument was foreclosed by the Local 103,

IUE case, noting that in that case the

arbitration agreement also contained "a

broad ban on re-arbitration" (Ibid.). As

-36-

noted above, the language of the arbitra-

tion agreement in this case contains no

language prohibiting re-arbitration of

prior arbitration awards. It is totally

Silent on this point.

The decisions of other circuit

courts of appeal have generally adopted

the same rule onthe effect of prior

arbitration awards on a subsequent arbi-

tration. For example, in Little Six

Corp. v. UMW, 701 F.2d 26, 29 (4th Cir.

1983), the Court held:

Not only do the Company's

authorities wilt under examina-

tion, but there is solid, well-

reasoned case law holding that

the preclusive effect of a

prior arbitral award is itself

a question for arbitration. In

addition to the Third Circuit

cases mentioned above, the

Fifth Circuit has stated that

"(wjhether [a prior] award can

be given an effect akin to res

judicata or state [sic] decisis

with regard to future disputes

-». neither the district court

nor this court should decide.

If the parties do not agree,

that issue itself is a proper

subject for arbitration." New

Orleans S.S. Ass'n v. General

Longshore Workers, 626 F.2d

455, 468 (5th Cir. 1980), aff'd

sub nom. Jacksonville Bulk

Terminals, Inc. Vv. Int'l.

Longshoremen's_ Ass'n., U.S.

__. 462 S.Ct. 2673, 73 L.Ed.2d

327 (1982). The First Circuit

also has endorsed this position

in a recent decision. See

Boston Shipping Ass'n v. Int'l.

Lonashoremen's Ass'n, 659 F.2d

1 (ist Cir. 1981). The dis-

trict court below in the pres-

ent case considered the

question and adopted the view

of the Third and Fifth (and now

First) Circuits. We agree.

In Westinghouse Elevators v. SIU de

Puerto Rico, 583 F.2d 1184 (lst Cir.

1978), the: First Circuit specifically

rejected an argument that a subsequent

arbitrator was bound by the decision of a

previous arbitrator. The rationale of

that court rested on a classic arbitra-

tion case? defining the difference

5 Federal Bearings Co., Inc., 22 L.A.

721, 725-727 (1954).

-38-

between arbitration awards and judicial

precedents:

Prior awards do not con-

stitute "judicial precedents"

in future cases, unless’ the

parties agree that they should.

The legal doctrine of "judicial

precedents" does not apply to

the arbitration process. It

prevails under the "common law"

judicial system. That legal

doctrine, in effect, cautions

the courts against declaring

wrongful that which custom and

usage has sanctioned and which

the weight of judicial authori-

ty has approved. Under that

doctrine, legal principles of

contract construction, which

have been distinctly enunci-

ated, have been given the force

of law. Court decisions and

judgments are thereby accorded

authoritative weight as "legal

precedents" in determining

Similar principles in future

cases.

Arbitrators' awards do not

have a corresponding authority

or force; they are not accorded

the weight of "judicial author-

ity* in determining future

controversies, even between the

same parties or over the same

issues. e e not u-

sive or binding upon an arbi-

trator in subsequent cases. In

arbitration, all questions of

BATT. SOPRA OOD Chm ~,

-39-

fact and law are deemed to be

referred to the arbitrator for

decision. Unless restricted by

the contract, or submission

agreement, or an applicable

state statute, the arbitrator

is not bound by the strict

rules of law or evidence. As .

long as the arbitrator keeps

within his jurisdiction, he can

decide the issues submitted to

him, notwithstanding any prior

awards between the parties,

unless the parties have agreed

otherwise.

583 F.2d at 1187 (emphasis added).

Accord, Connecticut Light & Power Co. v-

Local 420, IBEW, 718 F.2d 14, 20 (2d Cir.

1983) ("Principles of stare decisis and

res judicata do not have the same doc~

trinal force in arbitration proceedings

as they do in judicial proceedings") ;

Riverboat Casino, Inc. v. Joint Executive

Bd., 578 F.2d 250, 251 (9th Cir. 1978)

("Absent a provision in the contract to

the contrary, the arbitrator could rea-

sonably conclude that strict adherence to

stare decisis would impair the flexibili-

ty of the arbitral process contemplated

by the parties").

In a more recent case, the Seventh

Circuit Court of Appeals in Local 504 v.

Roadmaster Corp., 916 F.2d 1161, 1162

(7th Cir. 1990), ruled that a company's

claim that it would not arbitrate a claim

because of the "res judicata" and "pre-

clusion by prior judgment" doctrines was

a “piffle." As that Court stated:

Arbitrators frequently inter-

pret the scope and binding

effect of earlier arbitral

decisions.

The fact that the Nicolau Award was,

in accordance with the agreement preced-

ing it, to be "final and binding" on the

parties to that award does not provide

"the most forceful evidence" that it

should have been given preclusive effect

by the district court in the Ross arbi-

tration. This same issue was presented

to the Second Circuit in Transit Mix

Concrete Corp. v. Local 282, $09 F.2d 963

(2a Cir. 1987). There the Court stated:

(S]ince the arbitration clause

encompasses the present dis-

pute, it follows that the

present dispute is arbitrable.

Since the arbitration clause

makes arbitrable any dispute

"Concerning the interpretation

[or] application" of the CBA,

it follows that questions as to

the applicability of the final-

ity clause -- in the sense of

whether the Lippman award

adjudicated the issues raised

in the present dispute -- or as

to its effect -- in the sense

of the res judicata effect of

the Lippman award -- are as-

signed, at least in the first

instance, to the Panel or the

impartial arbitrator. Under

these circumstances, we find it

neither necessary nor appropri-

ate for us to decide the ex-

tent, if any, to which the

Lippman award resolved the

issues in the present dispute.

-42-

Id. at p. 969-970 (footnotes and cita-

tions omitted).

The Court cited the Butler Armco

case, supra, as a "persuasive" precedent

for its holding. ®

The decision of the District Court

on this issue was as curious as it was

indefensible. After noting the holdings

of this Court in the Local 103, IVE and

Westinghouse Broadcasting cases, the

District Court stated:

The above Third Circuit cases

relied upon by Frontier are

clearly distinguishable from

this case. The question or

6 See also Hotel Ass' f Washington

Vv. Hotel & Restaurant Employees

Union, F.2d (>.¢. Car.

4/28/92) ("The ‘final and binding'

Clause does not so unequivocally

import the principle of precedent

into arbitral decisionmaking that

Arbitrator Cass was obliged express-

ly to consider it lest his decision

fail to draw its essence from the

contract").

(oe Ph at

tin Sct in ss

-43-

issue before Arbitrator Ross

was clearly not the same ques~

tion or issue which was’ the

subject of the Nicolau arbitra-

tion. The issue before Arbi-

trator Nicolau was the

integration of the FAL pilot

seniority list with the Conti-

nental pilot list after the

merger. The issue before

Arbitrator Ross was the inte-

gration of the PEX pilots with

the list of Continental and FAL

pilots comprised [sic] by

Arbitrator Nicolau.

(Appendix, pp. 49a-50a) The answer to

this observation is that to the extent

the dispute or issues in one arbitration

differ from those in a prior arbitration,

there should be less judicial meddling in

terms of binding a subsequent arbitrator

by the terms of prior arbitration than is

the case where there is an alleged

"strict identity" of issues between the

prior arbitration and the subsequent

arbitration.

-44-

The real thrust of Judge Politan's

decision in this respect was his determi-

nation that he would not allow the FAL

pilots to engage ina "collateral attack"

on the Nicolau Award. (Appendix, p.

51a)

But, as is evident from the line of

Courts of Appeals cases previously cited,

every party -- whether labor or manage-

ment -- who believes it has_ been the

recipient of a favorable prior arbitra-

tion award will seek the federal court's

help on the basis of avoiding "relitiga-

tion," or "collateral attacks" on the

prior favorable arbitration ruling. And

the consistent answer of the Courts of

Appeal has been to tell the parties that

they may argue the issue of collateral

attack or relitigation to the arbitrator,

but is is not for the court to decide.

If a party could involve the federal

Rill LINE OMIT tt Ae Sd TOMAR NS A A tt

judiciary in determining the effect of a

prior arbitration award on a subsequent

arbitration by invoking the accusation of

"Collateral attack" or "relitigation,"

the federal courts, contrary to consis-

tent rulings of the Courts of Appeal,

would be in the business of regularly

determining the effects of prior arbitra-

tion awards on subsequent arbitration

proceedings. This is a burden the feder-

al judiciary should not have to bear.

The error of law by the District

Court had a clear and dramatic effect on

the outcome of the Ross Award. In the

post-hearing but pre-decision meetings of

the technical support committee, Arbitra-

tor Ross made the following observa-

tions:

FAL pilots should have _ been

treated better by Nicolau. If

I were comparing equities, I

would have to come down on the

side of the FAL captains. No

-~46-

comparison, the FAL pilots have

higher equities. ... Were it

not for the restraints on us, I

{Ross} would have treated the

FAL pilots differently.

In other words, Bob [Williams],

you look at what the FAL guys

had, their length of service,

their turnkey operation, they

had as far as I'm concerned --

if I would have been George

Nicolau .. . they [FAL]

captains would have been treat-

ed better.

If I would be free to apply the

fair and equitable standard to

-you guys [FAL], you bet you ass

you'd be up higher, but they

won't let me move you. The

Court won't let me move _ you

up.

If one were to seek a textbook

example of a clear cut case of judicial

interference with the bottom line result

of a labor arbitration proceeding, it

would be hard to imagine a stronger case

than the present one.

As the quotes of Arbitrator Ross

demonstrate, the District Court's re-

quirement that the FAL pilots be bound by

the prior Nicolau Award resulted in the

FAL pilots being deprived of the only

orum in which their seniority equities

could be compared on a fair and equitable

basis with the seniority equities of the

PEX pilots. Far from seeking a “second

bite at the apple" the District Court

effectively prevented the FAL pilots from

their first and only bite at the apple of

FAL/PEX pilot equity comparison which the

FAL pilots were unequivocally promised

under the LPA as pilots of "an air carri-

er subsidiary at People Express, Inc.”

Ee

To Protect The Integrity Of The

Arbitration Process And The Parties

To It, This Court Should Direct The

Federal Courts To Uphold Court Imposed

Bans On Ex Parte Communications

Between Arbitrators And Parties To

Arbitrations And Resolve A Conflict

Between The Third Circuit And The Ninth

Circuit Court Of Appeals

As noted in the statement of the

case, the District Court ordered a spe-

cific prohibition on contacts between the

arbitrator andthe parties. The ban by

its terms did not apply to such contacts

only when they were shown to prejudice a

party. Such contacts were banned uncon-

ditionally.

This blanket prohibition of communi-

cations goes well beyond the admonitions

la steidigeaits,

aig Am bate BoC Nb BF Na A ON = Eh NA Cee De

-49-

contained in 9 U.S.C. § 10(c) where the

Arbitration Act provides for the vacation

of an arbitration award when the “arbi-

trators were guilty of ... any misbe-

havior by which the rights of the party

have been prejudiced." Under even this

obviously less rigorous statutory stan-

dard, Courts of Appeal have vacated

arbitration awards where the arbitrators

have engaged in ex parte communications.

Totem Marine Tug & Barge _ v. North Am.

Towing, 607 F.2d 649, 653 (Sth Cir.

1979). See also, U.S. Lines v. Federal

Maritime Commission, 584 F.2d 519, 539

(D.C. Cir. 1978).

In some 9 U.S.C. § 10(c) cases in

which communications have been involved,

the courts have required the party urging

rejection of the award to show that the

communication prejudiced them. See,

e.g., Mutual Fire, Marine & Inland Ins.

Co. v. Norad Reinsurance Co. Ltd., 868

F.2d 52 (3d Cir. 1989).

While we will demonstrate below that

the communication prejudiced the FAL

pilots, it should be clear from the

outset that the unequivocal order against

contacts in Para. II.8(c) of the District

Court's order did not require a showing

of prejudice. If it did, the order

should have contained a second proviso

stating words to the effect "and provided

further that any party may communicate

directly with the arbitrator so long as

no other party is prejudiced by such

communication."

In this background, the District

Court found during oral argument on the

cross motions to confirm and reject that

"In my judgment, the arbitrator -- seems

to me had an ex parte conversation." Yet

the District Court ignored its own order

banning ex parte contacts by citing the

self serving letter of the arbitrator and

the affidavit of the PEX pilot represen-

tative that their meeting related only to

the continued participation of the PEX

Committee in the arbitration process, and

that:

There is absolutely no evidence

before this court to indicate

that the conversation between

Captain Mackenzie and Arbitra-

tor Ross related to the sub-

stance of what transpired at

the Technical Advice Committee

meeting.

Appendix, p. 32a.

The undisputed evidence, as shown in

the statement of the case, disclosed that

immediately after the meeting the Arbi-

trator announced to the parties that he

had reached a conclusion on two issues

vitally affecting the Frontier pilots and

both decisions were detrimental to the

interests of the Frontier pilots and

favored the interests of the People

Express pilots who engaged in the con-

tact. The District Court simply ignored

this compelling evidence.

Finally, the District Court erred in

stating that "this conversation was in

full and open view of the other parties'

representatives" (Appendix p. 33a). Only

lay persons attended the technical sup-

port committee hearings. The evidence

was that Captain Mackenzie and Mr. Ross

conducted the meeting in a room by them-

selves with the door closed with no other

parties invited. To suggest that other

lay persons observing this conduct should

barge into the room where this private

conversation was going on is ludicrous.

The view of the District Court and

the Third Circuit that there must be

direct evidence that the neutral and the

party discussed issues under litigation

———EeEeEeEEeE~ —

-53-

is in sharp conflict with a recent deci-

sion of the Ninth Circuit rendered after

the decision of the District Court, but

before the decision of the Third Cir-

cuit.

In Pacific & Artic Ry. & Nav. CoO. Vv.

United Transportation Union, 952 F.2d

1144 (9th Cir. 1991), the Court dealt

with the issue of an xX parte contact

between the arbitrator and a representa-

tive of one of the parties. The Ninth

Circuit first noted:

As one would expect, no direct

proof exists that Levin [party

representative] talked to

Sempliner {arbitrator] about

the merits of the case.

952 F.2d at 1148. Notwithstanding the

foregoing, the Court nevertheless held

that:

Even if Levin and Sempliner did

not discuss the merits of the

case, their ex parte contacts

afforded Levin an opportunity

sccm iii

-54-

to probe Sempliner's mood and

general attitude and then to

prejudice Sempliner.

952 F.2d at 1149.

There is an obvious conflict between

the ex parte standard espoused by the

Ninth Circuit (no need for direct evi-

dence of discussion of merits) and that

adopted’ by the Third Circuit (direct

evidence required that merits of litiga-

tion were discussed).

The preferable standard is that

adopted by the Ninth Circuit. A ban on

ex parte contacts should be just that.

If this Court were to adopt the Ninth

Circuit's standard, it would avoid the

parties to the ex parte contact seeking

to excuse their prohibited behaviour on

the basis of self-serving affidavits and

7 The parties briefed the Pacific &

Artic Ry. case to the Third Cir-

cuit.

-55-

letters disclaiming discussions of the

merits of the litigation. As the Ninth

Circuit correctly noted, there is seldom

direct proof of what was discussed in an

ex parte meeting. The whole purpose of a

ban on ex parte contacts is to avoid

impropriety and the appearance of impro-

priety.

Since the existence of ex parte

contacts is a continuing issue in the

field of arbitration, it would be ex-

tremely helpful to the process if this

Court were to adopt the Ninth Circuit's

standard on ex parte contacts in labor

arbitration.

Finally, if the federal judiciary

signals to parties to labor arbitration

that it will not enforce its own ban on

ex parte contacts, the "law" of arbitra-

tion will return to the law of the jungle

where anything goes, especially ex parte

communications, and the only "rule" will

be which party can out-ex parte the other

parties.

To protect the integrity of the

arbitration process and the parties who

agree to arbitration as the preferred

method of resolving labor disputes this

Court should adopt the standard of the

Ninth Circuit and enforce agreements and

orders against ex parte contacts.

Conclusion

Since this Court -declared over

thirty years ago that arbitration was the

favored method of resolving labor dis-

putes, and since strikes have largely

lost their efficacy,® arbitration has

increased as the alternative dispute

8 See, e.g., Washington Post, 7/5/92,

p. H1, article entitled, "Labor

Loses the Strike as a Weapon."

-57-

resolution process. Now that arbitration

has come of age and millions of workers

and their employers are bound by its

results, the time has come to settle two

recurring problem areas.

The many cases cited in this brief

amply demonstrate that the issue of the

"binding" effect of prior arbitration

awards on subsequent arbitrations has

been a recurring problem over the past

two decades and should be definitively

addressed by this Court in order to

terminate once and for all attempts to

involve the federal judiciary in the

merits of labor disputes by arguing that

subsequent arbitrators should be "bound"

by the results of prior arbitration

awards.

Equally important to the arbitration

process and to the millions of Americans

who are bound by its results is the

-58-

preservation of basic fairness in the

process by enforcement of court ordered

bans on ex parte contacts. Since the

Third and Ninth Circuits have different

standards for enforcing the ban on ex

parte contacts, this Court should resolve

the conflict by adopting the Ninth Cir-

cuit standard that the ban should be

enforced even if there is no direct proof

that the ex parte contact involved the

merits of the case. This will go a long

way toward restoring confidence in the

integrity of this increasingly used

method of resolving labor disputes.

-59°-

A petition for certiorari should

issue to review the judgment of the Third

Circuit.

Respectfully submitted,

John A. McGuinn

Counsel of Record

Schmeltzer, Aptaker &

Shepard

Suite 1000

2600 Virginia Avenue, NW

Washington, D.C. 20037

Attorney for the

Petitioner,

The Frontier Pilots

Litigation Steering

Committee, Inc.

APPENDIX

-la-

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

PEOPLE EXPRESS PILOT

MERGER COMMITTEE, : CIVIL ACTION

¢ NO. 87-1155

Plaintiff,

Vv. : HON. NICHOLAS

H. POLITAN

TEXAS AIR CORP., et al.,

Defendants.

ORDER COMPELLING ARBITRATION OF

THE INTEGRATION OF PILOT SENIORITY LISTS

OF CONTINENTAL AIRLINES,

PEOPLE EXPRESS AIRLINES

AND FRONTIER AIRLINES PURSUANT TO

THE PROVISIONS OF

THE LABOR PROTECTION AGREEMENT

Le Introduction

These procedures will govern

the pilot seniority integration process

for the pilot work forces of Continental

Airlines ("Continental"), Peoples Express

Airlines ("PEX") and Frontier Airlines

("FAL") .

-2a-

II. Seniority Integration Procedures

is Section of Committees. Within

30 days of the date set forth below, the

People Express Pilot Merger Committee

shall select a seniority integration

committee of five members and one alter-

nate. The Continental Pilots Merger

Committee shall similarly select a conm-

mittee of five members and one alternate.

The Frontier Pilots Litigation Steering

Committee shall also select a committee

of five members and one alternate. The

alternates shall participate fully in all

aspects of the process set forth below to

enable a smooth andtimely transition

should a member become unable to continue

serving.

The Frontier Pilots Litigation

Steering Committee's participation in

this arbitration shall be circumscribed

by the Final Award of Arbitrator George

-3a-

Nicolau, dated June 15, 1987. FAL may

not assert a position inconsistent with

that Arbitration Award but shall, for the

purposes of tnis arbitration, be deemed

bound by that award. The Award of Arbi-

trator Nicolau is currently under appeal.

In the event, at any time prior to the

Final Arbitrator's Award in this matter,

the decision of Arbitrator Nicolau shall

be reversed or modified, any party may

make application to this Court, on short

notice, to consider the impact of that

determination upon this arbitration

proceeding.

ai Exchange of Data. Within 60

days of the date set forth below, the

committees together with Continental

shall meet at a mutually agreeable place

and time for the purpose of exchanging

seniority data. No later than that date,

Continental shall provide each committee

-4a-

seniority lists of all pilots as of

September 15, 1986, March 12, 1987 and

June 1, 1989, which include date of birth

and date of hire (that is, the date used

by the Continental, FAL and PEX pilots

for monthly and system bidding purposes)

of former PEX, FAL and Continental pi-

lots, including seniority lists with date

of hire of pilots at each base, and base

staffing lists showing each pilot's

aircraft and status as of September 15,

1986, March 12, 1987, and June 1, 1989.

By that date, Continental will also .

supply each committee with the W-2 earn-

ings and common stock or other securities

received as compensation for services for

each pilot on any of the foregoing lists

for the calendar years 1984, 1985, 1986,

1987 and 1988. By that date, Continental

shall also supply each committee with the

furlough and strike and leave of absence

|

;

|

5

5 |

3

-5Sa-

dates for each pilot on any of the fore-

going lists, together with his/her ad-

justed longevity date. By that date,

Continental shall also furnish the com-

mittees with a list of each Continental

pilot's status under the rulings regard-

ing Continental of the U.S. Bankruptcy

Court for the Southern District of Texas,

including rulings on appeals therefrom,

including whether he/she is an Option 1,

Option 2 or Option 3 pilot, as well as

any copies of any rulings of the Bank-

ruptcy Court, and rulings on appeal

therefrom, pertaining to him/her for

seniority purposes. If any committee has

any questions about the accuracy or

completeness of the lists, Continental

will promptly investigate and resolve

them. The Committee and Continental

shall meet to resolve any questions

regarding pilot employment data within 90

-6a-

days of the date set forth below. Any

committee may file with the Court a

motion on short notice if there remains

disagreement regarding the adequacy of

the information provided. For purposes

of seniority list integration only, the

neutral may resolve any employment data

issues as to which all parties cannot

agree. Continental is not required to

produce any information not within its

possession, custody or control.

3. itia e s. Within 100

days of the date set forth below, the

committees shall attempt to reach agree-

ment upon a fair and equitable integra-

tion of the seniority lists of the pilot

groups. Barring agreement by majority

vote of each committee within 130 days of

the date set forth below, the parties

shall attempt to reach agreement on a

neutral third party who shall serve as a

-J7a-

binding arbitrator. If the parties fail

to reach agreement, any committee may

petition the national office of the

American Arbitration Association ("AAA")

to furnish a list of seven arbitrators

who are members of the National Academy

of Arbitrators experienced in airline

labor relations to the committees. The

committees shall select an arbitrator

from said list by alternate striking (an

equal number of strikes for each commit-

tee) within five (5) days of receipt from

the AAA.

4. Hearing before Neutral. Within

160 days from the date set forth below or

as soon as the neutral is available, the

neutral shall preside over a hearing

during which each pilot group and Conti-

nental may present evidence and argument

in support of its proffered method of

-8a-

integration. The hearing shall be con-

ducted as expeditiously as possible with

all due dispatch. There shall be no

limit on the number of expert or other

witnesses any party may call so long as

they do not unduly burden the record.

The parties shall have the opportunity to

submit briefs following the hearing. The

proceeding shall be transcribed by a

certified court reporter, who shall

supply the original to the neutral and a

copy to each committee and Continental.

The cost of the original transcript and

copies shall be paid by Continental. The

arbitration hearing will be held in

“Washington, D.C. or in another loca-

tion(s) mutually acceptable to the com-

mittees and Continental.

5. Factors to be Considered by

Neutral; Information for Conferences/

Hearings. The neutral shall consider any

Re

-9a-

factor relevant to a fair and equitable

integration of the seniority lists of the

People Express, Frontier and Continental

pilots. The parties are free to urge the

neutral to consider any factor, and put

in evidence any support, that they be-

lieve is relevant to this standard. Upon

request by any committee or the neutral,

Continental will provide such information

as is reasonably available to it, and is

necessary to the process. However,

except for the information identified in

Paragraph II.2 above, Continental shall

not be required to provide any informa-

tion which is not a matter of public

record; provided, however, that prior to

the commencement of the arbitration, the

neutral shall conduct a prehearing con-

ference to resolve any outstanding proce-

dural or evidentiary disputes, . including

any outstanding requests for information.

-10a-

At this conference or during the hearing,

the neutral may also rule on requests for

information deemed confidential by Conti-

nental and motions by any party to have

such information, if deemed confidential

by the neutral, to be received under an

appropriate protective order issued by

the neutral and, if admitted into evi-

dence, admitted under seal. Continental

shall not provide information to one

pilot group unless:it provides the same

information to all committees in the same

form. The information identified in

Paragraph 2 shall be treated confiden-

tially.

6. Decision by Neutral. Within 45

days of the conclusion of the hearing,

the neutral shall resole all open issues

previously unresolved by the committees

and Continental, and will simultaneously

issue a written opinion explaining the

-lia-

basis for his/her decision. The decision

of the neutral shall be final and binding

on the committees, their respective pilot

groups, and Texas Air Corp., Continental

Airlines, Inc., People Express, Inc.,

‘People Express Airlines, Inc., and Fron-

tier Air Lines, Inc.

FP Conditions on Integrated List.

The integrated pilot systems’ seniority

list to be preduced under these proce~

dures shall be subject to the following

condition: the integrated list shall not

alter or vary Continental's employment

policy.

8. Miscellaneous.

a. Fees and Expenses of Nev-

tral. The party or parties who are to

bear the fees and expenses of the neutral

shall be determined by the Court after

the arbitration.

-12a-

b. Release from duty and

expenses of Committee Members. Continen-

tal shall approve all releases from

flight and other duty that are required

by the respective committee members and

alternates and witnesses in order that

they may perform their duties hereunder.

Said releases shall be approved for all

meetings and arbitration hearings refer-

red to hereinabove, as well as prepara-

tion related thereto. Continental shall

pay all flight pay loss of the respective

committee members and alternates result-

ing from participation in the seniority

integration process up to a maximum of 85

hours of flight pay plus $250 per month

per diem. Continental will provide the

committee members and alternates with

fee-waived PS-5 passes for travel re-

quired in connection with the seniority

integration. ‘

-13a-

c. Communication with Neutral.

Neither Continental nor the committees

may communicate with the neutral, either

formally or informally, outside the

presence of the other parties, except in

writing, with copies to the other par-

ties, provided, however, that any party

electing not to be present for a meeting

or hearing date waives any right to be

present for such communications.

da. Attendance at meetings and

hearings and exchange of documents.

Continental may send representatives to

all meetings and arbitration sessions.

In addition, Continental will be timely

furnished with copies of ail documents

exchanged between the committees. In no

event shall any final solution be reached

which is not acceptable to each committee

(by majority vote), unless such solution

-

-14a-

; is imposed by the Neutral provided for

herein. }

e. Financial Assistance.

Continental shall not either directly or

indirectly aid financially one pilot

group unless it agrees and does provide

the identical level of financial assis-

tance to all pilot groups; the pilot

seniority integration committees’ shall

not either directly or indirectly receive

any financial assistance from sources

outside the company, including ALPA, and

shall report to the Court any such funds

received after April 24, 1989, provided,

however that each committee may receive

contributions from the pilots whom it is

representing.

III. Retention of Jurisdiction.

The Court retains jurisdiction over

this matter, and within: 10 days of the

-13a-

arbitrator's written decision, the par-

ties shall submit it to this Court, and

any party may apply to the Court at that

time for affirmance, rejection, modifica-

tion or such other action as it deems

appropriate. At the same time, the

parties shall submit to the Court the

bill of the neutral for the Court to

determine who shall bear the costs of the

arbitration.

It is so ordered, at Newark, New Jersey,

this 7th day of August, 1989.

Nicholas H. Politan

United States District Judge

16a

UNITED STATES DISTRICT COURT

District of New Jersey

NOT FOR PUBLICATION

November 26, 1991

LETTER OPINION AND ORDER

ORIGINAL ON FILE WITH CLERK OF THE COURT

Andrew T. Berry, Esq.

MC CARTER & ENGLISH

100 Mulberry Street

Four Gateway Center

Newark, NJ 07102

D.F. Moore Craig, Esq.

1129 Bloomfield Avenue

West Caldwell, NJ 07006

Jesse H. Strauss, Esq.

REITMAN, PARSONNET,

MAISEL & DUGGAN

744 Broad Street

Suite 1807

Newark, NJ 07102

Michael J. Madigan, Esq.

AKIN, GUMP, STRAUSS,

HAUER & FELD

1333 New Hampshire Avenue, N.W.

Suite 801

Washington, D.C. 20036

Dennis F. Gordon, Esq.

Frank Petramola, Jr., Esq.

GORDON & BARNETT

1133 21st Street, N.W.

Suite 450

Washington, D.C. 20036

17a

William H. Sudell, Jr., Esq.

MORRIS, NICHOLS, ARSHT

& TUNNELL

1201 N. Market Street

P O Box 1347

Wilmington, Delaware 19899

Jonathan D. Forstot, Esq.

Christopher Graham, Esq.

THACHER, PROFFITT & WOOD

Two World Trade Center

New York, NY 10048

John A. McGuinn, Esq.

SCHMELTZER, APTAKER & SHEPARD, P.C.

The Watergate

2600 Virginia Ave., Northwest

Suite 1000

Washington, DC 20037

Re: Peoples Express Merger

Committee, etc. v. Texas Air

Corporation, et al

Civil Action No. 87-1155

Dear Counsel:

This matter comes before the court

on plaintiff Peoples Express Pilot Merger

Committees ' ("PEX Pilots") motion to

affirm and enforce the August 13, 1991

arbitration award issued by Arbitrator

Jerome Ross. Defendant-Intervenor Fron-

tier Pilots Merger Committee ("Frontier")

~

18a

. has cross-moved to reject the arbitration

award. In response to the cross-motions

filed by the PEX Pilots and the Frontier

Pilots to affirm/reiject the arbitration

award, defendant Continental Airlines,

Inc. ("Continental") takes the position

that this court should affirm and enforce

the arbitration award. In addition, the

Continental Pilots Merger Committee has

filed an application for an order direct-

. ing Continental to bear all fees and

expenses which have been billed by Arbi-

trator Jerome H. Ross in connection with

the arbitration conductee pursuant to the

19a

August 7, 1989 order.1 I heard oral

argument on November 18, 1991 and re-

served decision. For the reasons out-

lined herein, the PEX Pilots' motion is

GRANTED and the arbitration award is

AFFIRMED.

In an Order dated August 7, 1989, I

compelled arbitration of the integration

of the Pilot Seniority Lists of People

Express Airlines, Continental Airlines,

and Frontier Airlines pursuant to the

provisions of the Labor Protection Agree-

ment (the "LPA"). The relevant provi-

sions of the LPA provide as follows:

[I}]n the event of a future

merger of airline operations

involving any air carrier

1 On October 2, 1991, the U.S. Bank-

ruptcy Court for the District of Delaware

issued an order lifting the automatic

stay provision of 11 U.S.C. § 362 for

purposes of permitting this court to act

upon applications filed pursuant to 3

of the August 7, 1989 Order, including

- applications regarding responsibility for

«the Arbitrator's fees and expenses.

CO

20a

subsidiary of People Express,

Inc., provision shall be made

for fair and equitable seniori-

ty integration procedures for

affected employees in each

craft or class, which shall

include as a final step, if

necessary in the absence of

agreement, a final and binding

decision by a Neutral Mediator

who shall be a member of the

National Academy of Arbitra-

tors.

Pursuant to my Order compelling

arbitration, hearings commenced before

Arbitrator Ross on May 7, 1990. Arbitra-

tor Ross conducted 72 days of hearings

and he reviewed extensive briefs and

reply briefs submitted by the parties.

The hearings were conclubed and the

record was closed with oral arguments on

April 29, 1991. On August 13, 1991,

Arbitrator Ross rendered a 135 pege

Opinion and Award integrating the Pilot

Seniority List of People Express Air-

lines, Continental Airlines, and Frontier

Airlines. ‘

21a

I retained jurisdiction over this

action pursuant to ¢ 3 of my Order com-

pelling arbitration as follows:

Be Retention of Jurisdiction

The court retains juris-

diction over this matter, _and

within ten (10) days of the

Arbitrator's written decision,

the parties shall submit it to

this court, and any party may

apply to the court at that time

for affirmance, rejection,

modification or such other

action as it deems appropriate.

At the same time, the party

shall submit to the court the

bill of the neutral for the

court to determine who shall

bear the costs of the arbitra-

tion.

Pursuant to this provision, the PEX Pilot

Merger Committee now moves to affirm and

-enforce Arbitrator Ross' Award.

The Frontier Pilots seek to reject

the arbitration award based on 5 grounds.

First, Frontier contends that Arbitrator

Ross' Award discloses a manifest disre-

gard of the Labor Protection Agreement

22a

and the Order of this court enforcing

that agreement. Specifically, Frontier

submits that the Award is not the product

of a fair and equitable seniority inte-

gration procedure which the LPA man-

dates.

Second, Frontier maintains that the

Award must be rejected because of an ex-

parte communication between the Arbitra-

tor and the Chairman of the PEX Pilot

Merger Committee which constituted a

Clear and direct violation of § 2.8(c) of

this court's Order compelling arbitra-

tion.

Third, Frontier argues that the

continuation of the hearing through the

technical support committee violated the

provisions of 4 2.4 of my order which

required a transcript of the proceedings

by a certified court reporter, and that

23a

such hearings denied the assistance of

counsel to the parties.

Fourth, counsel for Frontier con-

tends that Arbitrator Ross deprived the

FAL pilots of counsel of their choice

when he refused to adjourn certain hear-

ing dates over the objection of FAL's

counsel.

Fifth, Frontier submits that the

restriction placed by this court on the

FAL pilots' participation in the Ross

arbitration was contrary to the decisions

of the Supreme Court and the Third Cir-

cuit that District Courts should leave to

arbitrators the issue of the effect of a

prior arbitration award.

The standards governing the court's

review of a labor arbitration award are

well known and extremely narrow. A court

must enforce any arbitration award that

“draws its essence from the collective

24a

bargaining agreement". United Steelwork-

Car Corp., 363 U.S. 593, 597 (1960).

This standard reflects the policy in the

federal courts of elevating labor arbi-

trators to "an exalted status". Ludwig

fe) eS Vv. etcher, 405 F.2d

1123, 1126 (3d Cir. 1969).

Consequently, in reviewing an award,

the court must begin its analysis’ by

recognizing that the parties bargained

for the arbitrator's construction of the

agreement. See Enterprise Wheel, 363

U.S. at°599. A court may not, therefore,

overrule an arbitrator simply because it

disagrees with the arbitrator's construc-

tion of the contract, see id., or because

it believes its interpretation of . the

contract is better than that of the

arbitrator. See W.R. Grace & Co. v.

Local 759, International Union of the

25a

ite ubber Workers, 461 U.S. 757, 764

(1983). The Supreme Court has held that

as long as the arbitrator has arguably

construed or applied the contract, the

award must be enforced, regardless of the

fact that a court is convinced that the

arbitrator has committed a serious error.

See United Paperworkers International

Union v. Misco, 484 U.S. 29, 36 (1987).

The Third Circuit has elaborated

upon this standard of review finding

that, in order to upset an arbitrator's

award, there "must be absolutely no

support at all in the’ record justifying

the arbitrator's determinations for a

court to deny enforcement of an award."

News America Publications v. Newark

Typographical Union, 918 F.2d 21, 24 (3d

Cir. 1990) citing, N_F & M Corp. _v-

United Steelworkers of America, 524 F.2d

756, 760 (3d Cir. 1975)). Thus, only

26a

where there is a "'manifest disregard of

the agreement, totally unsupported by

principles of contract construction and

the law of the shop, may a reviewing

court disturb the award.'" Id. at 759

(quoting, Ludwig Honold Mfg. Co. Vv.

Fletcher, 405 F.2d 1123, 1128 (3d Cir.

1969)). In this regard, a court may not

review the merits of the arbitral deci-

sion. See Misco, 484 U.S. at 36. A

court does not review the award to ascer-

tain whether the arbitrator has applied

the correct principles of law. See

Enterprise Wheel, 363 U.S. at 598. An

arbitration award may not’ be overturned

for factual error, see Misco, 484 U.S. at

38, or because the court disagrees with

the arbitrator's assessment of the credi-

bility of witnesses, or the weight the

arbitrator has given to testimony. See N

F & M Corp., 524 F.2d 759. The test for

27a

reviewing an arbitration award is, there-

fore, "a singularly undemanding one."

ewa ographical, 918 F.2d at 24.

The court now turns’ to Frontier's

first argument in opposition to the

enforcement of the Arbitration Award,

namely, that the award reflects a mani-

fest disregard of the provisions of the

Labor Protection. Agreement. Pursuant to

the provisions of the Labor Protection

Agreement, Arbitrator Ross was bound to

apply a "fair and equitable" standard in

rendering the award which integrated the

Pilot Seniority Lists of Continental

Airlines, People Express Airlines, and

Frontier Airlines. Frontier contends

that Arbitrator Ross failed to balance

the equities of all three pilot groups by

his own admission when he stated:

The critical differences. be-

tween the arbitral charters of

the [Job Preservation Agree-

ment} and the LPA require my

EE

28a

analysis to focus primarily on

the relative equities of the:

[Continental Airlines] and PEX

pilots.

(Arbitration Opinion at p. 117).

Frontier submits that, instead of

weighing the comparative equities of all

three pilot groups on a fair and equita-

ble basis, Arbitrator Ross "tilted the

playing field" by stating that the "pri-

mary" comparison would be between the

Continental and PEX pilots. As_ such,

Frontier maintains that Arbitrator Ross

relegated the FAL pilots to a secondary

role in this arbitration because of the

Job Preservation Agreement and the Nico-

lau Award which I previously held would

be binding on the FAL Committee for

purposes of the Ross arbitration.

I find that Arbitrator Ross' award

meets the "Singularly undemanding" stan-

dard set forth by the Third Circuit Court

29a

of Appeals in News America. The arbitra-

tion award simply does not reflect a

"manifest disregard of the agreement,

totally unsupported by principles of

contract construction and the law of the

shop .. . ." Ludwig Honold Mfg. Co. v.

Fletcher, 405 F.2d 1123, 1128 (3d Cir.

1969). To the contrary, 4a thorough

review of Arbitrator Ross' opinion and

award reveals that there is much support

in the record justifying his determina-

tions. A review of the record below

discloses that Arbitrator Ross weighed a

myriad of considerations bearing on the

construction of a fair and equitable

merged seniority list, including but not

limited to, the economic viability of the

respective carriers, the non-operating

status of FAL and the limited employment

prospects for the FAL pilots resulting

therefrom, together with the protection

EE

30a

afforded the CAL pilots by virtue of

their promotional expectations for air-

craft on firm order or option to CAL as

of September 15, 1986. (See Ross Opinion

and Award at pp. 116-121.) The parties

to this action bargained for Arbitration

Ross' construction of what is "fair and

equitable" under the circumstances. I

cannot overrule the Ross Award simply

because FAL disagrees with Arbitrator

Ross' construction of the contract, or

because FAL believes its interpretation

of the contract is better than that of

the Arbitrator. See W.R. Grace & Co. v.

Local 759, International Union of the

United Rubber Workers, 461 U.S. 757, 764

(1983). See also United Steelworkers of

America v. Enterprise Wheel & Car Corp.,

363 U.S. 593, 597 (1960). Accordingly,

Arbitrator Ross' Award must be affirmed.

31a

~~

The court now addresses Frontier's

second argument, namely that the Arbitra-

tion Award must be rejected because of an

ex parte communication between the Arbi-

trator and the Chairman of the PEX Pilot

Merger Committee. Frontier essentially

asks this court to upset an Arbitration

Award which resulted from 72 days of

hearings based on a half hour conversa~

tion between Arbitrator Ross and Captain

Mac Kenzie, the PEX Committee Chairman.

The only sworn testimony that the court

has before it concerning what occurred

during this half hour conversation is the

affidavit of Captain Mac Kenzie and

Arbitrator Ross' letter, which both

attest to the fact that the conversation

related to the continued participation of

32a °

the People Express Committee in the

Subcommittee meetings. 2

There is absolutely no evidence

before this court to indicate that the

conversation between Captain Mac Kenzie

and Arbitrator Ross related to the sub-

stance of what transpired at the Techni-

cal Advice Committee meetings. It is

important to note that the arbitration

hearings were concluded and the record

was closed with oral arguments’ on April

29, 1991, while the conversation between

Arbitrator Ross and Captain Mac Kenzie

2 In a letter dated August 13, 1991,

Arbitrator Ross indicated that his dis-

cussion with Jim Mac Kenzie "was limited

to requesting that the People Express

Committee continue participation in the

SubCommittee meetings in the interest of

promoting insight into the construction

of the list, which in turn would lead to

harmony among the pilot groups." Arbi-

trator Ross further indicated that at no

time did he "discuss the People Express

Captain ratio in relation to the Frontier

Pilots."

33a

occurred on July 12, 1991. The conversa~

tion between Ross and Mac Kenzie took

place during a break in the Technical

Committee sessions, shortly after the

People Express representatives on the

Technical Committee distributed a letter

declining to participate further in the

Technical Committee meetings. Moreover,

this conversation was in full and open

view of the other parties' representa-

tives. After 72 days of full and fair

hearings conducted by Arbitrator Ross and

the submission of some 17,000 pages of

documents, it is baseless for Frontier to

suggest that the Arbitration Award should

be overturned because of this half hour

conversation between Captain Mac Kenzie

and Arbitrator Ross. The brief and

limited discussion between Captain Mac

‘Kenzie and Arbitrator Ross clearly did

not prejudice the Frontier Pilots so as

34a

to deprive them of "a fundamentally fair

hearing". See National Post Office

Mailhandlers v. U.S. Postal Service, 751

F.2d 834, 841 (6th Cir. 1985).

Frontier's third argument, that the

arbitration award should be vacated based

on the continuation of the hearings

through the Technical Support Committee,

must be rejected outright. Frontier

argues that the continuation of support

hearings violated the provisions of § 2.4

of this court's Order Compelling Arbitra-

tion. G 2.4 of my arbitration order

provides as follows:

The proceedings shall be tran-

scribed by a certified court

reporter, who shall supply the

original to the neutral and a

copy to each committee and

Continental.

An issue apparently arose on March

2, 1991 concerning how Arbitrator Ross

would handle the proceedings after he had

35a

studied the briefs and decided the mat-

ter. One of the parties suggested that,

after arriving at a tentative decision,

Arbitrator Ross should convene the par-

ties to announce his’ proposed decision

and to solicit the views of the parties

and their respective counsel concerning

his tentative award before it became

final. Counsel for the FAL pilots op-

posed this suggestion and, instead, urged

Arbitrator Ross to form a committee of

his choosing of the group of pilots "to

flesh out any computer runs [he] would

like to have done . . . after the award."

(See transcript of arbitration proceed-

ings at p. 16,689).

The idea of "a technical support

committee" arose from this debate.

Arbitrator Ross voiced his desire fora

committee of pilots ("other than coun-

sel") "to look at a list that [he] put

35a

together and to assist [him) in the

technical aspects of drafting that list

so that what finally comes out makes

clear what it is that [he] want[s] done."

Arbitrator Ross then emphasized that this

process would take place after he had

made his basic decision. (See transcript

of arbitration proceedings at pp. 16,704-

705). Counsel for the PEX pilots agreed

to participate in a technical support

committee but advised against "a tenta-

tive award program" with Arbitrator Ross

announcing a proposed decision and solic-

iting views from the parties as to that

decision. (See transcript of arbitration

proceedings at p. 16,706).

In an effort to explain his inten-

tions concerning the formation of a

technical support committee, Arbitrator

Ross clarified his position as follows:

37a

I [am not] proposing any tenta-

tive award. What I [am) pro-

posing [is] me meeting with

some technical people not for

the purpose of arguing anything

but simply for the purpose of

translating into words what it

is that I see as my decision

sone I am not talking about

giving anybody a chance to

change it (the decision] after

we get involved in a committee

action after that.

(See transcript of arbitration proceed-

ings at pp. 16,707-16, 718).

Arbitrator Ross further stated that

the "tentative award/pilot advisory

committee" concept was "such a signifi-

cant deviation from what was contemplated

by [this court's) order that the only way

that [he] would feel comfortable doing it

would be if [there was] unanimous agree-

ment that it made some sense." (See

transcript of arbitration proceedings at

“pp. 90-95). Frontier contends that,

despite the statements of Arbitrator

Ross, the "technical support committee"

sa

38a

turned into a "de facto pilot advisory

board" and the entire process was trans-

formed de facto into a tentative award

process. I disagree.

Arbitrator Ross' utilization of a

technical committee consisting of pilots

representing each of the four parties in

no way denied the Frontier pilots a

fundamentally fair hearing. I note at

the outset that Frontier did participate

in the technical support committee meet-

ings. In fact, all of the parties par-

ticipated in the technical committee's

post-hearing business, without objection,

until the PEX participants forwarded a

letter to Arbitrator Ross on July 12,

1991, announcing their withdrawal from

the process. It was not until after the

delivery of the PEX letter that the

Frontier pilots first voiced an objection

to the technical committee process. On

39a

August 12, 1991, Frontier complained

about the continuance of the technical

support committee meetings, as well as

the ex parte contact in a letter to

Arbitrator Ross. Nonetheless, Frontier

continued to participate in the technical

support committee meetings up through and

including the final stages.

As previously stated, Frontier

argued that the continuation of support

hearings violated the provisions of 7 2.4

of this court's Order Compelling Arbitra-

tion. However, Frontier did not come

before this court at such time to assert

that this action violated my previous

order. At oral argument, Mr. McGuinn,

counsel for Frontier, suggested that he

was reluctant to seek relief from this

court at that time because he thought his

efforts would prove unsuccessful. This

argument is without merit. Moreover,

40a

counsel for Frontier should refrain from

forecasting what this court would decide

as to any particular issue not yet before

it and should do what he or she is’ sup-

posed to do to protect his or her cli-

ent.

Furthermore, Arbitrator Ross' utili-

zation of the technical committee process

proved to be both essential and effi-

cient. For example, Arbitrator Ross used

the technical committee process to re-

solve the truly technical matters which

had arisen during the post-hearing pro-

ceedings, such as the question of how to

deal with the 29 pilots who appeared on

both the Continental and People Express

Pilot Seniority Lists, but who returned

to Continental prior to March 12, 1987,

PL when Continental imposed its merged list.

In the few technical sessions which

occurred during the July 13-15 and August

4la

7-9 periods, the technical -support com-

mittee assisted the Arbitrator in addres-

sing this and other matters and helped

devise the conditions and restrictions

which became a part of the award. As the

Frontier pilots themselves concede,

counsel representing all four parties met

with the Arbitrator on August 9, 1991 in

an effort to discuss the legal implica-

tions of the Frontier pilots' proposed

pay protection and longevity credit

conditions. (See Affidavit of John A.

McGuinn, counsel for Frontier, dated

August 21, 1991, at p. 3).

Frontier contends that Arbitrator

Ross arrived at the first meeting of the

"technical support committee" with a

tentative award that would have started

.the PEX captain ratio with the top New

York air captain, Charlie Bare, and would

have matched the top 162 PEX downgraded

42a

captains ina 1-for-1 ratio with the CAL

pilots just junior to the most junior FAL

captain. Frontier submits that, in the

end, Arbitrator Ross changed his final

award from his initial tentative award on

June 14, 1991 in significant ways at

different times during the technical

committee process. Frontier argues that,

instead of starting the first PEX captain

at the first New York air captain, Char-

lie Bare, Ross dropped the start of the

PEX captain ratio with CAL captains

several hundred numbers below Captain

Bare, and instead of ratioing the down-

graded 162 PEX pilots on a 1-for-1 basis

with the CAL pilots just below the junior

FAL captains, Ross “arbitrarily" selected

a point about 150 numbers’ junior to the

CAL pilot immediately junior to the most

junior FAL captain-to start his ratio of

43a

PEX downgraded captains and first offi-

cers with the CAL first officers. (See

Frontier's brief in support of its motion

to reject the arbitration award at p.

29).

It is significant to note that the

Arbitrator's modifications of his ini-

tially announced also adversely affected

the senior 295 People Express captains,

who dropped “several hundred numbers

below Captain Bare" (the number 1 New

York air pilot), but all 295 of these

People Express captains started out and

ended up senior to all Frontier pilots.

-Clearly, the Arbitrator's change of

position on this point during the techni-

cal committee phase had no impact whatso-

ever on any of the Frontier pilots. In

addition, the parties could have not

expected Arbitrator Ross to single-hand-

edly manage the actual construction of a

44a

merged seniority list containing more

than 4,000 pilots from four different

airlines. The technical support which

Arbitrator Ross sought from the parties

and their computers was both appropriate

and necessary under the circumstances.

The parties willingly agreed to provide

such support and Frontier's eleventh hour

objections are meritless. Accordingly,

the continuation of the hearing through

the technical support committee does not

suffice as a reason for me to set aside

Arbitrator Ross' award.

The court now turns’ to Frontier's

fourth argument, namely, that Arbitrator

Ross deprived the FAL pilots of counsel

of their choice when he refused to ad-

journ a portion of the hearings. On

September 21, 1990, counsel for the FAL

pilots requested this court to order

Arbitrator Ross to cancel certain hearing

45a

dates when counsel for the FAL pilots

could not be available. Specifically,

counsel for FAL requested this court to

postpone the arbitration hearings until

May 1, 1991. I refused to intervene in

an ongoing arbitration process and de-

clined to grant the interlocutory relief

requested at that time by an Order dated

October 4, 1990. Although I have already

ruled against the Frontier pilots on this

point, I must emphasize that Arbitrator

Ross permitted counsel for the Frontier

pilots to cross-examine any and all

witnesses he desired who had testified

during his absence. Moreover, there is

no merit in the Frontier pilot's argument

that adding hearing days after May l,

1991, as they requested, “would have

prejudiced no one". The parties consumed

46a

several months in briefing and arguing

the case after the hearings were con-

cluded. If the conclusion of the eviden-

tiary hearings was delayed until May,

then the issuance of the Award would have

been delayed for several months. This

result would run contrary to the proposi-

tion that arbitration proceedings provide

for a prompt and efficient resolution of

disputes. Accordingly, I will not over-

turn the Arbitration Award on the basis

of this argument.

I now turn to Frontier's fifth

argument, namely, that the restriction

placed by this court on the FAL pilots'

participation in the Ross Arbitration was

contrary to Supreme Court precedent and

Third Circuit decisions that District

Courts should leave to arbitrators the

issue of the effect of a prior arbitra-

tion. Over the objection of the FAL

. 47a

pilots, I entered an Order, dated August

7, 1989, compelling arbitration which

contained the following limitation on the

FAL pilots:

The Frontier Pilots Litigation

Steering Committee's participa-

tion in this arbitration shall

be circumscribed by the Final

Award of Arbitrator George

Nicolau, dated June 15, 1987.

FAL may not assert a position

inconsistent with that Arbitra-

tion Award but shall, for the

purposes of this arbitration,

be deemed bound by that award.

The Award of Arbitrator Nicolau

is currently under appeal. In

the event, at any time prior to

the Final Arbitrator's Award in

this matter, the decision of

Arbitrator Nicolau shall be

reversed or modified, any party

may make application to this

court, on short notice, to

consider the impact of that

determination upon this arbi-

tration proceeding.

At this point, I note that the Nicolau

Award which integrated the FAL pilots

with the Continental pilots was ultimate-

ly affirmed by the Colorado~* Supreme

Court.

48a

This argument for the rejection of

the Ross Award is essentially a repeti-

tion of the argument made before this

court by the FAL pilots on May 11, 1989.

Frontier relies on Local 103, IVE v. RCA

Corp., 516 F.2d 1336 (3d Cir. 1975) as

the leading case in support of its posi-

tion that this court improperly restrict-

ed the role of the FAL pilots in the Ross

arbitration proceedings. In Local 103, a

grievance challenging the company's right

to institute new job classifications was

premised upon a 1946 arbitration decision

which required the company to first

establish a job description. The union

sought to enjoin the arbitration and

specifically the company's right to

contest the underlying merits. The Third

Circuit addressed the issue of finality

in arbitration awards with the following

langvage:

49a

The union evidences the fear

that prior decisions will be

litigated ad infinitum pres-

aging a demise in finality and

opening the door to abuse. We

disagree. Open to the union,

before the arbitrator, is the

same contention it has pres-

ented to the courts, i.e., that

the ‘same question or issue’

was previously 'the subject of

arbitration'. So viewed,

finality, consistent with the

provisions of the agreement,

will be preserved.

516 F.2d at 1341.

Subsequently, in Westinghouse Broad-~-

casting Co., Inc. v. Local 804, 616 F.2d

97, 100, the Third Circuit stated, "we

did decide in Local 103 [v. RCA] that it

is for the arbitrator, and not the court,

to decide whether the question or issue

presented before an arbitrator in 1971

had previously been submitted before

another arbitrator in 1946." The above

‘Third Circuit cases relied upon by Fron-

tier are clearly distinguishable from

this case. The question or issue before

OO

50a

Arbitrator Ross was clearly not the same

question or issue which was’ the subject

of the Nicolau arbitration. The issue

before Arbitrator Nicolau was’ the inte-

gration of the FAL pilot seniority list

with the Continental pilot list after the

merger. The issue before Arbitrator Ross

was the integration of the PEX pilots

with the list of Continental and FAL

pilots comprised by Arbitrator Nicolau.

In my view, to the extent that

Arbitrator Nicolau integrated the FAL

pilots with the Continental pilots, the

FAL and the Continental pilots became one

body. Essentially, they had the’ same

interests to protect. They each had a

position ona pilot seniority list which

they had attained as a result of the

Nicolau Arbitration Award. I refused to

allow the FAL pilots to argue for a

change of their position on the seniority

5la

list vis-a-vis the Continental pilots in

the arbitration proceedings before Arbi-

trator Ross. If I permitted such con-

duct, then I would be encouraging a

collateral attack on the award issued by

Arbitrator Nicolau before the Colorado

Supreme Court could issue a final deter-

mination on that award.

However, I permitted the FAL pilots

to participate in the Ross arbitration in

an effort to allow them to protect what-

ever position they had attained as a

result of the Nicolau Award vis-a-vis the

People Express pilots who were to be

integrated by virtue of Arbitrator Ross!

Award. Moreover, my order dated August

7, 1989, provided that any party may make

application to this court, on short

notice, to consider the impact, if any,

of a reversal or modification of the

ooo

52a

Nicolau Award issued prior to the comple-

tion of the Ross arbitration proceedings.

Since the Colorado Supreme Court has

already affirmed the Nicolau Award, I

refuse to change my position and collat-

erally overrule the Nicolau Award.

Accordingly, I will not overturn the Ross

Award on the basis of this argument.

Counsel for FAL advanced two addi-

tional arguments for the rejection of the

Ross Arbitration Award at oral argument.

First, the FAL pilots suggested that

because they did not participate in the

interim fee arrangement, Arbitrator Ross

decided not to treat the FAL pilots

fairly and equitably and that he became

biased as to their position. This argu-

ment is clearly without merit. My Order

Compelling Arbitration, dated August 7,

1989, made no provision for payment of

the fees and expenses of the arbitrator

53a

on an interim basis. However, pursuant

to 4 3 of that Order, I provided that:

(Wjithin 10 days of the arbi-

trator's written decision, '

the parties shall submit to the

Court the bill of the neutral

for the Court to determine who

Shall bear the costs of the

arbitration.

Since I could impose the costs of arbi-

tration on any one party or on all par-

ties equally, I find it extremely

difficult to believe that Arbitrator Ross

would be partial or biased against FAL

because it did not contribute to his

interim fees. For FAL to suggest that

Arbitrator Ross would link their destiny

to the fact that they did not contribute

to his interim fee structure is ridicu-

lous and completely without merit.

Secondly, FAL seizes upon one con-

ment made by Arbitrator Ross during the

course of over 72 days of hearings and

Support Committee meetings in an effort

bi |

54a

to overturn the Opinion and Award.

Specifically, FAL contends that Arbitra-

tor Ross stated that "the FAL pilots

would have been better off if they had

stayed home". FAL apparently asks this

court to focus on one off-handed comment

made during the course of 72 days of

heated and vigorously contested arbitra-

tion hearings to conclude that Arbitrator

Ross was partial and biased in his find-

ings. I refuse to accept this conten-

tion. The record speaks for itself and

indicates that Arbitrator Ross rendered a

fair and impartial decision. Accord-

ingly, the Award must be AFFIRMED.

THE ARBITRATOR'S FEES AND EXPENSES

As previously stated, pursuant to §

3 of my Order Compelling Arbitration,

dated August 7, 1989, I reserved the

right to determine which parties would

55a

bear the costs of arbitration. Continen-

tal initially volunteered to bear all

costs of arbitration. At such time,

counsel for the PEX pilots indicated that

Such an arrangement would lead to the

appearance of impropriety. In an effort

to preserve the integrity of the arbitra-

tion process and to maintain the appear-

ance of impartiality, I declined to

impose all costs on Continental.

I note that the relevant provisions

of the Labor Protection Agreement con-

cerning mergers provides as follows:

In the event of a future merger

of airline operations involving

any air carrier Subsidiary of

People Express, Inc., provision

Shall be made for fair and

equitable seniority integration

procedures, for affected em-

ployees in each craft or class,

which shall include as a final

step, if necessary in the

absence of agreement, a final

and binding decision by a

Neutral Mediator who shall be a

member of the National Academy

of Arbitrators.

56a

Now that the arbitration proceedings have

been concluded and a fair and just Award

has been rendered, I find that the fees

for arbitration should be borne by Conti-

nental as part of the costs of the merg-

er.

Accordingly, Continental will be

responsible for Arbitrator Ross' fees and

expenses in connection with the arbitra-

tion as well as reimbursement of all

interim fees and costs which have been

expended to date by PEX or FAL.

APPLICATION FOR A STAY PENDING APPEAL

On November 25, 1991, FAL submitted

an application, on short notice, for a

stay pending appeal. If I were to grant

a stay pending appeal from my Order

Compelling Arbitration, it "would fly in

the face of the strong federal policy in

favor of arbitrating disputes in general

ee

57a

and labor disputes in particular." See,

e.g-, United Steelworkers v. Warrior &

Gulf Navigation Co., 363 U.S. 574, 582-83

(1960). "Arbitration is supposed to be

Swift." See Graphic Communications Union

Vv. Chicago Tribune Co., 779 F.2a ee

(7th Cir. 1985). These observations are

equally applicable here. Accordingly,

FAL'S application for a Stay pending

appeal is hereby DENIED.

SO ORDERED:

NICHOLAS H. POLITAN

U.S.D.J.

58a

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 91-5975

PEOPLE EXPRESS PILOT MERGER COMMITTEE

Vv.

TEXAS AIR CORP.; CONTINENTAL AIRLINES, INC.;

PEOPLE EXPRESS, INC.; PEOPLE EXPRESS

AIRLINES, INC. ;

and

FRANK T. SHANLEY; DAVID ROSS; H. F. MARONEY;

A. G. SINIBALDI; GARY ARMENTROUT;

BILL AUTREY; ANDY CASHETTA; H. A. COOPER;

STAN CHALLGREN; BRIAN CRAVEN; JOHN GAYLORD;

DON GENTRY; JOHN GIACCHI; DAVID HEEKEN;

CHARLIE HIGDON; CHARLIE HUFF,

DARRELL JOHNSTON; ALAN KING; NEIL MILLER;

JIM NORTHINGTON; STEVE OLSEN; LARRY GREEN;

JACK STICE; JIM SKELTON; JOHN CAMPBELL;

KEN R. QUICK; R. S. BROADWATER;

C. A. SCHEPACARTER; C. P. CONRADY;

JOHN F. PAINTER; TOM E. STEVENS, as

representatives of a class consisting of all

Continental pilots;

FRONTIER PILOTS LITIGATION STEERING COMMITTEE

(Intervenor-Defendant)

Neen ee

59a

NEIL A. MILLER

(Intervenor)

Frontier Pilots Litigation Steering

Committee,

Appellant

On Appeal from the United States District

Court for the District of New Jersey

(D.C. Civil No. 87-1155)

District Judge: Honorable Nicholas H. Politan

Argued February 10, 1992

BEFORE: GREENBERG and COWEN, Circuit Judges,

and GREEN, District Judgqe«

* Honorable Clifford Scott Green, United

States District Judge for the Eastern

District of Pennsylvania, sitting by

designation.

JUDGMENT ORDER

After consideration of all contentions

raised by the appellant, it is

ADJUDGED and ORDERED that the judgment of

the district court be and is hereby affirmed.

60a

Costs taxed against appellant.

BY THE COURT

Circuit Judge

ATTEST:

Sally Mrvos, Clerk

DATED: February 13, 1992 |

6la

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 91-5975

PEOPLE EXPRESS PILOT MERGER COMMITTEE

Vv.

TEXAS AIR CORP.; CONTINENTAL AIRLINES INC.

PEOPLE EXPRESS INC, ; PEOPLE EXPRESS AIRLINES,

INC.

and

FRANK T. SHANLEY; DAVID ROSS; H. F. MARONEY;

A. G.- SINIBALDI; - GARY ARMENTROUT;

BILL AUTREY; ANDY CASHETTA; H. A. COOPER;

STAN CHALLGREN; BRIAN CRAVEN; JOHN GAYLORD;

DON GENTRY; JOHN GIACCHI; DAVID HEEKEN;

CHARLIE HIGDON; CHARLIE HUFF;

DARRELL JOHNSTON; ALAN KING; NEIL MILLER;

JIM NORTHINGTON; STEVE OLSEN; LARRY GREEN;

JACK STICE; JIM SKELTON; JOHN CAMPBELL;

KEN R. QUICK; R. S. BROADWATER;

C.A. SCHEPACARTER; C. P. CONRADY;

JOHN F. PAINTER; TOM E. STEPHENS,

as representatives of a class consisting of

all Continental pilots;

FRONTIER PILOTS LITIGATION STEERING COMMITTEE

(Intervenor-Defendant)

62a

NEIL A. MILLER

(Intervenor)

Frontier Pilots Litigation Steering

Committee,’

Appellant

On Appeal from the United States District

Court for the District of New Jersey

(D.C. Civil No. 87-1155)

SUR PETITION FOR REHEARING

PRESENT: SLOVITER, Chief Judge, and BECKER,

STAPLETON, MANSMANN, GREENBERG, SCIRICA,

COWEN, NYGAARD, ALITO, and ROTH, Circuit

Judges, and GREEN, District Judge*

The petition for rehearing filed by the

appellant in the above captioned matter having

been submitted to the judges who participated

in the decision of this court and to all the

other available circuit judges of the court in

regular active service, and the court having

ordered the appellees to file an answer to the

petition and the court having considered the

63a

petition and the answer and no judge who

concurred in the decision having asked for

rehearing, and a majority of the circuit

judges of the circuit in regular active ser-

vice not having voted for rehearing by the

court in banc, the petition for rehearing is

denied.

BY THE COURT,

Circuit Judge

DATED: April 10, 1992

*Honorable Clifford Scott Green, United

States District Judge for the Eastern Dis-

trict of Pennsylvania, sitting by designa-

tion.