Petition for Writ of Certiorari — Konop v. Hawaiian Airlines, Inc. (No. 09-649)
Supreme Court brief2009
Ask Donna
What actually matters in this document.
Text
No. 09-649 DEC 2- 2009
_ORBAGEHGRAHE GLERIC
Wittam IX. Suter, Clerk
an The
Supreme Court of the United States
ROBERT C. KONOP,
Petitioner,
HAWAIIAN AIRLINES, INC.,
Respondent.
On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Ninth Circuit
PETITION FOR WRIT OF CERTIORARI
ROBERT C. KONOP
8601 Falmouth #406
Playa del Rey, CA 90293
(310) 305-2837
Petitioner
With a Dissent, the Court of Appeals reversed a
U.S. District Court Order to Vacate an arbitration
award which had wrongly upheld Hawaiian Airlines’
termination of Boeing 767 Captain Robert Konop.
Captain Konop was fired for claimed “disloyalty”
when he led employee opposition to the ratification of
a concessionary labor contract. Based on the record,
the District Court found that the arbitrator exceeded
his defined jurisdiction when he considered and relied
on “matters” which had not first been handled as
contractually mandated. The plain language of the
labor agreement (“CBA”) required both a “precise”
pre-termination “Statement of Charges” and a pre-
discharge company hearing on those charges.
Questions Presented for Review
1. Regardless of the arbitrator’s professional
censure for misconduct, in behalf of Hawaiian
Airlines, did the Court of Appeals create a
conflict between the circuits, and with the
law, when it reversed the district court’s Order
to Vacate the arbitration award as was issued
contrary to the plain language limits for
jurisdiction specified in the labor contract?
2. Has the Court of Appeals misconstrued, or
misapplied, the Supreme Court’s directions in
Machinists v. Central Airlines, 372 U.S. 682
(1963), so as to mistakenly undermine the
important public policies respecting airline
arbitrations under the Railway Labor Act?
ee
LIST OF PARTIES
The caption of the case in this Court contains the
names of all of the parties.
- iil -
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED FOR REVIEW ........... l
SO Te POE sividiehicivine ti onmeanaiaiaen 1]
TEE CARPET 8 BED tititttitrrrcconianiceaumnamn lll
TAREE OF AU Ere seee BBG os cesersecsssvesessveassnrssstiasevenns vi
OPINIONS AND JUDGMENT BELOW .......000000.. 001
STATEMENT OF JURISDICTION ..............0..000.... ]
STATUTORY PROVISIONS INVOLVED ............. 1
STATEMENT OF THE CASE ....00000.o. eects 2
UII oociccaucsscssustuantannsscocssssincenmenmenansmnieaue 3
IEE i osccsssccinisecctinceatrasticouaindanuenesaannid 5
The District Court Proceedings .....................066008 10
Proceeding in the Court of Appeals .................... 11
REASONS FOR GRANTING THE PETITION ...... 13
L The Review of Jurisdictional Breaches by
Arbitrators is Within the Proper Purview
OF CE CR. | Secnccccccintiewdenaenaan 13
I. Title Il of the RLA Specifically Excepts
Air Carriers from the Exceedingly Narrow
Scope of Judicial Review Set Forth in RLA
Title I, Where Airline Arbitrations are not
Provided the Review and Appeal Mechan-
isms of the National Railway Adjustment
-iv-
TABLE OF CONTENTS
IL Review Will Provide Needed Clarification
of the Limited Role of the Courts in Rail-
way Labor Act Arbitration Cases, and of
the Necessity for Arbitrators to Adhere
to the Plain Language Limits of their
pS SPR iain, SR eareaiye enptt ena a eo ROY 31
III vis cieduia sanadcvunuuneineile checedondsteabaaeeaaiine 36
APPENDIX
Memorandum Decision of the U.S. Court
of Appeals for the Ninth Circuit, reversing
the District Court’s Order to Vacate (June
30, 2009) ...... OM ane naan App. la
Dissent to the Memorandum Decision of the
U.S. Court of Appeals for the Ninth Circuit,
supporting the District Court’s Order to
VECUES CFUIG BD, BOG) nvsccccccicsessccsesseserseccenes App. 5a
Order to Vacate from the U.S. District Court
for the Central District of California
ne Eo caceacsenvauainaswindiune App. 8a
Arbitration Award from the Hawaiian System
Board of Adjustment (Undated) ............. App. 40a
-V-
TABLE OF CONTENTS
Page
APPENDIX (cont.)
Order of the U.S. Court of Appeals for the
Ninth Circuit denying the Petition for
Rehearing or for Rehearing En Banc
CIIINIION Eh, FD ences rcseccecvsecscconsconeses App. 46a
MOUWAY LADOF ACE OF 1626 ..cccccoccsccsccsecccesevesss App. 48a
rs Ae I a dsccudnsexinestusvanvacssiecenanes . App. 48a
Be ee PUN prickossavvccuvsanecisessasecvensooon App. 48a
I i ac csasnacbssdncecausacoanngs App. 49a
ee is devadl coecnineeuserccusaxavdsaeavenata App. 5la
I I asap epeanaieneinih App. 5la
Hawaiian Airlines 2005 Pilots Agreement
[Excerpts] Sections 16 and 17 ................. App. 53a
Grievance Submission Letter from the Air
Line Pilots Association to the Hawaiian
System Board (April 26, 2005) ............... App. 57a
Censure Decision from the National Academy
of Arbitrators (April 5, 2009) .................. App. 6la
Arbitral Discretion - The Tests of Just Cause
[Excerpt] Proceedings of the National
Academy of Arbitrators, Arbitration 1989,
ee IN, SD si vicivecaincsnsesccisanereccsvadaiainn App.
66a
o Was
TABLE OF AUTHORITIES
CASES
American Postal Workers Union v. U.S.
Postal Service,
789 F.2d 1 (D.C. Cir. 1986)
A.T.&T. Technologies, Inc. v. Communications
Workers of America,
475 U.S. 643 (1986)
Barnett v. Pennsylvania-Reading Seashore
Lines, 245 F.2d 579. (3rd Cir. 1957)
Bates v. Baltimore & Ohio Railroad Co..,
9 F.3d 29 (7th Cir. 1993)
Beacon Journal Publishing Co v. Akron Newspaper
Guild, 114 F.3d 596 (6th Cir. 1997)
Boise Cascade v. Paper Allied-Industrial,
Chemical and Energy Workers,
309 F.3d 1075 (8th Cir. 2002)
Bower v. Eastern Airlines, Inc.,
214 F.2d 623 (3rd Cir. 1954)
Brotherhood of Railroad Trainmen v.
Templeton, 181 F.2d 527 (8th Cir. 1950)
Champion International Corp. v. United
Paperworkers International Union,
168 F.3d 725 (4th Cir.1999)
- Vl -
TABLE OF AUTHORITIES - Cont.
Chernak v. Southwest Airlines,
778 F.2a 578 (10th Cir. 1986) .......................000.. 26
Clinchfield Coal Co. v. Dist. 28, United Mine
Workers, 720 F.2d 1365 (4th Cir.1983) ............ 19
Coca-Cola Bottling Co. of St. Louis v. Teamsters
Local Union No. 688, 959 F.2d 1438
ee eeeidaneddicauusial 19
Cole v. Burns International Security Services,
105 F.3d 1465 (D.C. Cir. 1997) cocccccccccessscseeseeeees 35
CSX Transportation., Inc. v. United
Transportation Union,
Be ae Pe CN OOD cvkecasishedsccesscscnncsexecsesers 18
D'Elia v. New York, New Haven & Hartford
Railroad, Co. 230 F.Supp. 912 (D. Conn.1964),
affd 338 F.2d 701 (2nd Cir. 1964) ................... 25
Edwards v. Capital Airlines, Inc.,
176 F.2d 755 (D.C. Cir. 1949),
cert denied; 338 U.S. 885 (1949) .....0 25
Edwards v. St. Louis-San Francisco Railroad,
SEL Fee DOS CIEE Cie. TGS) ccceccccccvssccccccscescssces 24
Ellerd v. Southern Pacific Railroad Co.,
BOY Fe GEL CFE Ce, FBT) ccccscccccvcesscasscvecsceses 25
- Vill -
TABLE OF AUTHORITIES - Cont.
Page
George A. Hormel & Co. v. United Food &
Commercial Workers, Local 9,
879 F.26 347 (Gti Cir. 1968) ......cccccscccccccccvcceses oe
Gilmer v. Interstate/Johnson Lane Corp.,
a a ceasecbeseverenaancss 34
Giordano v. Modern Air Transport, et al,
504 F.2d 882 (5th Cir. 1974) oo... eee eee 27
Hall v. Eastern Airlines,
511 F.2e GSS (Gt Cir. 1978) .....cccccccccsocccccsecccess 29
Hart v. Overseas National Airways, Inc.,
541 F.2d 386 (3rd Cir. 1976) ..........0......2.. . 26, 27
Hornsby v. Dobard,
291 F.2G 483 (GE Cir, 1961) ....ccrcccccccceccscscccceess 25
Hunt v. Northwest Airlines,
600 F.2d 176 (8th Cir. 1979) ..............ccecceee. 24, 29
International Association of Machinists v.
Central Airlines, 372 U.S. 682 (1963) ........ passim
International Woodworkers v. Weyerhaeuser Co.,
Fe He RUPEE denccas nnnncnscescoccvecscccesoccee 13
Konop v. Hawaiian Airlines, Inc.,
302 F.3d 868 (9th Cir. 2002), cert. denied;
re Rn, Ok EN IEEE | cvs cccsencnsbasdevscencdsvusdsenbecvesonse —
- ix -
TABLE OF AUTHORITIES - Cont.
Page
Local 1199, Hospital & Health Care Employees
Union, etc. v. Brooks Drug Co.,
956 F.2d 22 (2nd Cir, 1992) coccceccccccecsescseceeseresven 18
Loveless v. Eastern Air Lines, Inc.,
GB F264 TATE Ce eee E casccvccecs ccs ccsccccceees 18
Mitsubishi Motors, Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U.S. 614 (1985) .. 34
Morin v. Consolidated Rail Corp.,
810 F.2G TAO Cie Wee ED caccccesesccccscccces: oe 25
Norfolk and Western Railway Co. v. Trans-
portation Communications International
Union, 17 F.3d 696 (4th Cir. 1994) ................... 17
Norfolk Shipbuilding v. International
Brotherhood of Boilermakers,
671 F.2d 797 (4th Cir. 1982) ooocccccccccccccceeeseeee B2
Northwest Airlines, Inc. v. Air Line Pilots
Association International,
530 F.2d 1048 (D.C. Cir. 1976) ............... 28
Pokuta v. Trans World Airlines,
191 F.3d 834 (7th Cir. 1999) ..occcccccccccesceeeeeee 25, 29
Rosen v. Eastern Airlines, 400 F.2d 462 (5th Cir.
1968), cert. denied; 394 U.S. 959 (1969) .......... 29
Singer v. Flying Tiger Line,
652 F.2d 1349 (9th Cir 1981) 21, 26, 29
TABLE OF AUTHORITIES - Cont.
United Paperworkers v. Misco,
484 U.S. 29 (1987) ................. . 24,
United Steelworkers of America t
Enterprise Wheel & Car Corp..,
363 U.S. 593 (1960)
United Steelworkers v. American
Manufacturing Co., 363 U.S. 564 (1960)
United Steelworkers v. Warrior & Gulf
Navigation Co., 363 U.S. 574 (1960)
Wells v. Southern Airways,
517 F.2d 132 (5th Cir. 1975)
W.R. Grace v. United Rubber Workers,
461 U.S. 757 (1983)
STATUTES
Federal Arbitration Act
9 U.S.C. §§ 1 et seq.
Judiciary and Judicial Procedure
28 U.S.C. § 1254(1)
28 U.S.C. § 1331
28 U.S.C. § 1337
Page
31. 34. 36
passim
35
Ls
- X] -
Railway Labor Act
45 U.S.C. § 151 et seq. —
ih Roe 2) | eee Lessesees PCSSLM
45 U.S.C. § 153(p) cccecececcccssseeeseenre: .. 2, 20, 21, 23
15 U.S.C. § 153(q) =
45 U.S.C. § 181 ...... | sesseeses Sly 2a, 20, GU, 31
Rules
Supreme Court Rule 13(1)
OTHER AUTHORITIES
Enterprise Wire Co.,
46 LA 359, Daugherty (1966) 15
How Arbitration Works, Elikouri and Elikouri.
6th edition, BNA Books,
WU RIED, TDCi, BID ccccocccsccccesvessonece sonseooces 23
Judicial Review of Labor Arbitration Awards;
A Second Look at Enterprise Wheel.
75 Mich. L. Rev. 1137 (1977) ..............cecceeeeees 35
Just Cause: The Seven Tests, Third Edition.
Koven and Smith, BNA Books, 2006 .. on
Moore’s Seafood Products, Inc.,
50 LA 83, Daugherty (1968) | sok 15
Proceedings of the National Academy
of Arbitrators - Arbitration 1989,
BNA Books, 1990 App. 66a
~
OPINIONS AND JUDGMENT BELOW
The U.S. District Court’s Order to Vacate is
unpublished, and it is provided here in the Appendix
(“App.”) at pp. 8a-39a. The Memorandum Decision of
the Court of Appeals, reversing the District Court’s
Order, and including the Dissent of Judge Callahan, is
also unpublished and reprinted here at App. pp. la-
7a. The Award of the Hawaiian System Board, the
basis for this case, is provided at App. pp. 40a-45a.
STATEMENT OF JURISDICTION
The District Court had jurisdiction to hear and act
on Captain Robert Konop’s Petition to Vacate under
the terms of 28 U.S.C. §§ 1331 and 1337. The Court
of Appeals issued its Memorandum Decision, with the
Dissent, on June 30, 2009 (App. pages la-7a). The
Court of Appeals denied Captain Konop’s timely
Petition for Rehearing on September 11, 2009 (App. at
pages 46a-47a). Thus, this Petition has been timely
filed in line with Supreme Court Rule 13(1), and the
Court has jurisdiction under 28 U.S.C. § 1254(1).
STATUTORY PROVISIONS INVOLVED
Subject to specified limitations, Title /] of the
Railway Labor Act (“RLA”) (45 U.S.C. §§ 151 et seq.),
confers upon the National Railway Adjustment Board
(“NRAB”) the power to hear and to decide labor
disputes which arise with respect to the application
or interpretation of labor agreements in the Railroad
Industry. The provisions of RLA Title I, however,
also provide an “analogous” framework for other
= =
arbitrations, and specifies a process for court review
of arbitration cases in the airline industry, as take
place under the requirements of RLA Title Hl. See:
International Association of Machinists v. Central
Airlines, 372 U.S. 682 (1968).
The relevant provisions of Title Jand Title I of the
Railway Labor Act (45 U.S.C. §§ 151 et seq.) are
reprinted in the Appendix (App. pages 48a-52a).
Included therein, as apply here for review, is 45
U.S.C. §§ 153); 153(p); 153(q); 181, and; 184.
STATEMENT OF THE CASE
During oral argument before the Court of Appeals,
Judge Consuelo Callahan chastised Hawaiian
Airlines, and its legal counsel, for their “appalling
behavior.” This condemnation apparently arose with
respect to Hawaiian’s efforts to interfere in the
arbitration review processes, as was wrongly accom-
plished through the attorneys’ solicitation of ethical
breaches from Arbitrator James Scearce. However,
the record before the Appeals Court panel also
included undisputed evidence of Hawaiian’s longer
history of anti-labor misconduct, and its criminal
violations of electronic privacy laws, all undertaken
in the airlines’ wrongful pursuit of collective
bargaining advantages over its employees. Sce:
Konop v. Hawaiian Atrlines, Inc., 302 F.3d 868 (9th
Cir. 2002), cert. denied; 537 U.S. 1193 (2003).
Regardless of the reasons for Judge Callahan’s
concern, Hawaiian’s counsel simply called Arbitrator
> 2
James Scearce’s formal Censure, by the National
Academy of Arbitrators (“NAA”) (App. pp. 61la-65a),
“a tempest in a teacup.” This remark was given after
Hawaiian attorney Mark Perry attempted to orally
downplay Mr. Scearce’s misconduct, portraying the
arbitrator’s professional censure as the least possible
sanction which might have been imposed. (See also:
Page 5 of Hawaiian’s 4/28/2009 Response to Captain
Konop’s Request for Judicial Notice).
In the NAA’s evaluation of the arbitrator’s mis-
conduct, however, Arbitrator Scearce was formally
disciplined for his "serious and_ inexcusable"
violations of the NAA’s Code of Professional
Responsibility. Mr. Scearce was also denounced by
the NAA for his “inexcusable violation of funda-
mental fairness,” and for his “insensitivity to the
requirements of ordinary due process.” (App. pp. 63a-
65a). All of this, however, is merely the immediate
backdrop against which this Petition arises. These
are not the issues brought for review.
Introduction
When the district court issued its Order to Vacate
the arbitration award, which had wrongly sustained
the employment termination of widebody jet Captain
Robert Konop, the court relied on the plain language
jurisdictional limitations provided within the
Hawaiian Airlines 2005 Pilots Agreement (App. pages
53a-56a). That collective bargaining agreement
(“CBA”) required that, prior to any action for
discipline or discharge, Hawaiian Airlines was to
oe
provide the accused pilot with a statement of the
“precise charge or charges” which he would face. App.
page 53a. In fact, in the record before the district
court, Hawalan Airlines had provided Captain
Konop with a Statement of Charges (“SOC”) (App.
pages 14a-17a). The CBA, however, also required a
company hearing and a written decision on the
“precise charge or charges,” before action on
employment discharge could be attempted. App. 53a.
Unfortunately, at the arbitration hearing with
respect to Captain Konop’s termination, where Konop
could disprove the company’s original allegations,
Hawaiian instead focused on entirely new charges.
Those new charges had not been subject to a prior
Statement of Charges, had not been provided the
required company hearing, and had not been included
as a part of the required company written decision in
the matter. Under such circumstances the Hawaiian
Airlines 2005 Pilots Agreement (“CBA”) prohibited the
Hawauan System Board of Adjustment from under-
taking any review or consideration of those new
“matters.” Thus, as both the Dissent and the district
court noted, the arbitrator exceeded his authority
when he considered and relied on new allegations,
which had only first arisen at the arbitration hearing.
The plain language of the CBA provided:
“No matter shall be considered by the
Board that has not first been handled in
accordance with the _ provisions of
Section 16 (Grievances) and a decision
thereon by the Company.”
=
App. p. 56a; CBA Section 17(D)(2)
Both the district court, and the Dissent, correctly
concluded that no interpretation of the collective
bargaining agreement was necessary in order to
conclude, from its plain language, that the arbitrator
exceeded the scope of his contractually limited
authority. The arbitrator improperly sustained
Captain Konop’s termination on the basis of entirely
new charges, which had neither been’ provided in
writing prior to Captain Konop’s termination, nor
been a part of the prior company investigative hearing,
which was also a jurisdictional prerequisite (App. pp
53a & 56a). This petition, thus, arises where the
Court of Appeals erroneously further limited its
review beyond those already extremely limited
circumstances provided by statute, and contrary to
the standards applied by most other circuits.
In fact, the CBA contained a default remedy in the
event Hawaiian failed to timely provide its charges,
failed to conduct the required investigative hearing,
or failed to timely provide a written decision with
respect to allegations which were ultimately pursued.
That jurisdictional default required, as now applies
here, that the “grievant’s position shall be sustained,
and the relief requested shall be granted.” App. page
54a. In this case, the “relief requested” was Captain
Konop’s reinstatement. App. p. 59a.
Background
Immediately after Hawaiian Airlines’ pilots voted
to reject the ratification of a concessionary labor
» 6.
contract, in March of 2005, the airline fired Captain
Robert Konop. Captain Konop was a 20 year veteran
Boeing 767 pilot for Hawaiian, with an unblemished
safety and disciplinary record. It was undisputed,
however, that Captain Konop was also a vocal leader
in opposition to pilot contract concessions, and that
Hawaiian blamed him for a pilot vote, just a few days
earlier, to reject a new concessionary labor contract.
At the time of Captain Konop’s job termination,
Hawaiian was demanding a new round of concessions
from its pilots in anticipation of an ownership
change. This was taking place just as the airline was
experiencing the most profitable period in its 80 year
history. In fact, the airlines’ huge operating profits
had come in spite of a bankruptcy filing, and it was a
period during which the airline had accumulated
more cash from those profitable operations than at
any other time, When he was discharged, Hawaiian
charged that Captain Konop had been “disloyal,” that
he had “failed to work with management,” and the
airline further asserted that Hawaian’s pilots had
voted to reject the ratification of concessions based on
Captain Konop’s claimed “misrepresentations.”
Concurrently, in a related Motion for Contempt in
the bankruptcy court in Honolulu, the airline separ-
ately accused Captain Konop of ‘interference with
negotiations’ and of ‘tnterference with the contract
ratification process.’ Hawaiian there alleged that
pilots voted to reject ratification on the basis of
“Konop rhetoric.” Hawaiian also asserted that
Captain Konop was guilty of “misrepresentation”
-7-
where he had stated his belief that an employee-
sponsored, alternative bankruptcy recrganization
plan was a viable option for Hawaiian. This plan
was brought as an alternative to a bankruptcy
trustee’s proposal, which otherwise resulted in an
over $40 million windfall to Hawaiian’s former
Chairman of the Board, while effectively absolving
that former chairman, and his business partner, of
liability for a stock buyback scam which improperly
netted the pair approximately $18 million more.’
Where the bankruptcy trustee’s Plan ultimately
prevailed, and when Hawaiian eventually gained the
concessions that they sought from its pilots, after
Captain Konop’s discharge, that court appointee then
applied for an $8 million “success fee,” and a total 2
year compensation package of approximately $10
million for his relatively minimal time at Hawaiian.*
}
Hawaiian’s Board Chairman and CEO later entered
into a ‘disgorgement’ agreement with the U.S. S.E.C.
requiring the return of nearly $2.5 million to minority
shareholders. They admitted that key company stock
information had been intentionally misstated. S.E.C.
File No. 3-11676, Order 59870, dated May 6, 2009.
Through its bankruptcy, Hawaiian was able to avoid
scrutiny of the fact that its former CEO had converted
nearly $25 million of Hawaiian’s federal 9/11 impact
grant money to a fund which was wrongly used to buy
back Hawaiian’s stock from the CEO and his partner.
Hawaiian also avoided nearly $100 million in
interest and penalties for the airlines’ failure to pay
federal fuel excise taxes, public money which was
fraudulently used to bolster Hawaiian’s balance
sheet for the purposes of justifying the company stock
buyback swindle, this just before the bankruptcy.
=~ 2
The matter of Captain Konop’s termination was
then “grieved,” and taken to the Hawaiian System
Board of Adjustment. There, the case was heard by a
three member panel, as chaired by arbitrator James
Scearce. During four days of hearings before the
System Board, and in spite of objections by the Air
Line Pilots’ Association, the arbitrator allowed
Hawaiian to raise new charges, without any prior
notice, without a prior company hearing, and without
the required company written decision with respect to
those new charges. Hawaiian, in fact, provided scant
evidence to support its original charges, other than
with respect to assertions the Captain Konop had
made objections to proposed expenditures, which
required bankruptcy court approval, objections that
the bankruptcy court had overruled.* Hawaiian also
provided evidence that Captain Konop’s concerted
opposition had influenced the pilot vote to reject the
ratification of the proposed new contract.
These objections first arose to oppose Hawatian’s
claimed justification for seeking court approval to
suspend payments into the pilots’ retirement fund.
During the 18 months over which Captain Konop had
filed his objections, Hawaiian never provided any
warning or indication that it might consider such
objections a violation of company “House Rules,” as
was later claimed at the arbitration. Objections were
also filed for proposed extraordinary expenditures,
which had been requested regardless of the airlines’
failure to fund the pilots retirement plan. These
proposals included plans for a new Honolulu airport
terminal, for which the initial planning ‘consultations’
alone were estimated to cost several million dollars.
However, no new terminal was never built.
_
After the case was submitted, the arbitrator held
Captain Konop culpable for the previously uncharged
allegation of having made “false or unproven” state-
ments, rather than the company’s prior “precise
charges,” or the conclusions made in line with the
airlines’ contractually required written decision.’
That company written decision asserted Captain
Konop to be guilty of “intentional misstatements and
acts of dishonesty.” The arbitrator also referenced
his consideration and reliance on what he termed “a
serious error,” by Captain Konop, with regard to a
claimed shortfall in “due diligence” concerning the
employee alternative plan of reorganization for
Hawaiian.
At the same time, where Hawaiian had “precisely”
asserted that Captain Konop was guilty of false
representations, made with respect to a posting on
the employee website which Konop owned, the arbi-
trator instead concluded Captain Konop to be liable
for any mistaken information appearing on the
website. It was undisputed before the System Board
that Captain Konop had not made a posting which
Hawaiian had cited in its Statement of Charges. In
this regard, the arbitrator failed to reference or to
At that hearing, Hawauan simply referenced the first
bankruptcy objection Captain Konop filed, opposing
Hawaiian’s effort to avoid a $500,000 retirement fund
payment. For 18 months, Hawaiian failed to provide
any warning or notice that it considered this earlier
objection a violation of any company “rule.” The issue
only first arose five (5) days after pilots voted to reject
the ratification of a new concessionary labor contract.
» es
apply the plain language provisions of the Hawaiian
Pilots Agreement, the airlines’ written charges, or the
well established industrial Common Law _ with
respect to “Just Cause” for employment termination.
(App. 66a-76a; The Test of Just Cause).
The District Court Proceedings
After the Hawaiian System Board of Adjustment
issued its undated arbitration award, on or about
April 7, 2006, on July 14, 2006 Captain Konop filed a
Petition for Review and to Vacate that award in the
U.S. District Court for the Central District of
California (Case No. 06-04426-CBM) (18 USC §
1337). An extensive Excerpts of Record, of the
underlying arbitration proceeding, was also filed and
served at that time. Thereafter, on August 21, 2006,
Hawaiian Airlines filed its Opposition to the Petition.
Concurrently, Captain Konop filed a Motion for
Summary Judgment, again opposed by Hawaiian.
The Petition to Vacate was thereafter taken under
submission on the record, without oral argument.
On January 4, 2008, the U.S. District Court
issued its Order to Vacate the arbitration award, as
had wrongly sustained Captain Konop’s discharge.
Based upon the plain language of the applicable labor
contract, the district court concluded that the
arbitrator exceeded the scope of his authority where
his decision was predicated on new allegations which
had “not first been handled in accordance with the
provisions of the Section 16’ of the CBA.” The district
court's Order to Vacate was correctly predicated on the
ee
plain language requirement that there first be a
company hearing and written decision on any “charge
or charges,” rather than allowing them to be raised
for the first time at the later arbitration hearing.
Hawaiian appealed that court Order.
Proceedings In The Court of Appeals
On June 30, 2009, with a Dissent from Judge
Consuelo Callahan, the U.S. Court of Appeals for the
Ninth Circuit issued a Memorandum which granted
Hawaiian Airlines’ appeal of the district court’s Order
to Vacate. Jurisdiction was under 18 USC §§ 1337. In
the 2-1 majority decision, the Appeals Court opined
that, in order to determine whether the arbitrator
had violated the scope of his jurisdiction, the district
court was required to “interpret” the Collective
Bargaining Agreement, concerning what the CBA
required that Captain Konop was to be timely
provided with regard to the written statement of “the
precise charge or charges” he faced. There was no
dispute that, before being brought into a prerequisite
company investigative hearing, and prior to a
required company written decision in the case, a
written company Statement of Charges (“SOC”) was
to be provided, and that certain time limits had been
specified for each of these procedural steps.
The full appeals court panel, however, agreed to
deny Captain Konop’s cross-appeal of the fact that
the district court’s Order to Vacate had mistakenly
been too narrow. Therein, Captain Konop noted that
the arbitration award should also have been vacated
12.
where it was issued in “manifest disregard of the
law,” and where it showed that the arbitrator had
wrongly “dispensed his own brand of industrial
justice.” Captain Konop further noted that the issue
of “fraud and corruption” in the case, as would also
justify vacatur, had only first become evident after
the district court issued its Order to Vacate.
In contrast to the majority view, Judge Callahan’s
Dissent concluded that the arbitrator had exceeded
his jurisdiction when he considered and relied on
“matters” which had not first been provided in the
SOC, nor been subjected to the required company
hearing and written decision. In fact, the company
written decision had also been “precise,” but did not
include “matters” upon which the district court
concluded that the arbitrator had considered and
relied. The Dissent, however, did not detail how this
particular shortfall also adversely impacted the
contract’s plain language requirement for a company
hearing on the charges, or the mandate that there
also be a written company decision on their “precise”
charges. In fact, neither the majority opinion, nor the
Dissent, discussed the fact that Hawaiian had
provided a precise Statement of Charges, and a
written decision, which were effectively abandoned at
the arbitration hearing.
Ina 2-1 vote, on September 11, 2009, the Appeals
Court panel denied Captain Konop’s Petition for
Panel Rehearing. Further, no judge of the court
requested a vote concerning the concurrent Petition for
a Rehearing En Banc.
-13-
REASONS FOR GRANTING THE PETITION
The Appeals Court majority created a conflict in
how the various circuits now view the issue of arbitral
jurisdiction. Though rare, the lack jurisdiction has
been the most common basis for courts to vacate
arbitration awards. At the same time, there is still
no circumstance in which an arbitrator is allowed to
simply “dispense his own brand of industrial justice.”
Thus, in this case, it was not necessary for the
district court to consider the arbitrator’s ethical
violations to conclude that the arbitrator had
breached the limits of his authority. This violation
took place when the arbitrator’s actions were contrary
to the plain language limits of the contract (App. pp
53a & 56a), lacked justification in industrial common
law (App. pp. 66a-76a), and when the arbitrator did
not undertake any query into the intent of the parties
with regard to the allowable due process limits of
“Just Cause” for a pilot's job termination.
L. The Review of Jurisdictional Breaches by
Arbitrators is Within the Proper Purview
of the Courts:
In reversing the district court’s Order to Vacate,
the appeals court majority ignored the requirement
that an arbitrator must operate within the plain
language limits of his jurisdiction. In taking its
action the appeals majority, first, mistakenly
assumed an ambiguity in the CBA’s requirement for
a “precise statement of the charge or charges” against
Captain Konop. Second, the panel majority wrongly
Rte
surmised that the word “precise” might be viewed
differently in the context of the labor agreement than
in the real world, rather than to apply it as Hawaiian
itself had done, providing Captain Konop with a
“precise” pre-discharge statement of charges, then a
written company decision on those’ charges.
(Hawaiian, however, later effectively abandoned
those charges at the arbitration hearing.) Third, the
appeals majority created a conflict with the law, and
with the other circuits, when the arbitration award
did not comply with the clear limits of the
arbitrator's jurisdiction, and did not draw “its
essence from the collective bargaining agreement.”
“|A]n arbitrator is confined to interpretation
and application of the collective bargaining
agreement; he does not sit to dispense his
own brand of industrial justice. He may
of course look for guidance from many
sources, yet his award is legitimate only
so long as it draws its essence from the
collective bargaining agreement.”
United Steelworkers of America v. Enterprise Wheel &
Car Corp, 363 U.S. 593, 597 (1960) (emphasis added)
The only issue submitted for the arbitrator's
review was whether or not Hawailian’s stated charges
demonstrated “Just Cause” to terminate Captain
Robert Konop on the basis of his lawful conduct off
the job and away from the workplace. The grievance
was brought to the Hawaiian System Board based
on: 1) Hawalian’s precise Statement of Charges
» De
against Captain Konop; 2) in light of the completion
of the required company hearing on those charges,
and; 3) in opposition to the written decision on the
precise charges which Hawaiian described and enum-
erated, as contractually required, shortly after the
completion of the company hearing. App. p. 57a-59a.
Over multiple objections, however, at the hearing
before Arbitrator James Scearce and the Hawaiian
System Board, the arbitrator allowed Hawaiian to
raise entirely new allegations against Captain
Konop. The contract prohibited any such expansion of
charges under several plain language provisions. The
long established requirements of labor common law
also unequivocally mandated the reversal of any
company discharge under the circumstances present
in thiscase. App pp. 66a-76a.’
In fact. as the district court noted, and as the
Hawatian did not object to, supplement, or disagree
with this case submission to the System Board
‘he “Seven Tests,” developed by arbitrator Carrol
KR. Daugherty, is the most common reference in the
industrial cormmon law for termination “just cause.”
It has been adopted by the National Academy of
Arvitrators, the American Arbitration Association,
and the American Bar Association. App. pp. 68a
76a (See: Enterprise Wire Co., 46 LA 359, Daugherty
(1966); Moore's Seafood Products, Inc., 50 LA 83,
Daugherty (1968)). A “no” answer to any one of the
seven provided questions signifies that “just cause”
for a termination did not exist. In this case, all of
the seven questions had a “NO” answer. See Also
Just Cause The Seven Tests, Koven and Smith,
Third Edition, BNA Books, 2006
~16-
Dissent agreed, in reaching the decision to sustain
Hawaiian’s termination, the arbitrator considered
and relied on matters which had not been a part of
Hawaiian’s SOC, and had not been subject to a
company hearing. Thus, those new charges were also
NOT a part of Hawaiian’s required written decision
in the matter, and the arbitrator ignored the limits of
his authority. In fact, under these circumstances, the
jurisdictional default in the CBA required that
Captain Konop’s “position shall be sustained, and
the relief requested shall be granted.” App. p. 54a.
Hawalian’s written decision had precisely ruled
that Captain Konop was guilty of “numerous falsifi-
cations and acts of dishonesty.” (Excerpts of Record,
Tab 27)' The arbitrator, however, simply ignored
these assertions, and this justification for termina-
tion, when the charges could not be proven by
Hawaiian at the hearing. As the district court noted,
the arbitrator then considered and_ relied on
“matters” which were not properly before the System
Board, where they were not in either the SOC or in
Hawalian’s own written decision, and they had not
been submitted for review. App. p. 55a. The district
court noted that the CBA was unambiguous:
“No matter shall be considered by the
Board that has not first been handled in
accordance with the provisions of
These materials were supplied to the Court of
Appeals as a part of the required Excerpts of Record,
as had been in the record presented to the district
court as part of the original Petition to Vacate.
«27.
Section 16 (Grievances) and a decision
thereon by the Company.”
App. p. 56a; CBA Section 17(D)(2)
The appeals panel majority, instead, mistakenly
focused on the fact that the arbitrator had failed to
act on the basis of the “precise charge or charges”
which were before him. The majority reversed the
district court reasoning that use of the word “precise”
was imprecise, while that word might also be
interpreted’ as requiring something different than the
actual “precise” written statement of charges which
Hawaiian had originally provided, as was the
airlines’ apparent understanding of the CBA and the
“intent of the parties.” However, the arbitration
award never mentioned the “precision” of the charges,
any lack thereof, or even hinted that any definition
played a factor in the arbitrator’s considerations.
“(Wjhere an arbitrator fails to discuss a probative
contract term, and at the same time offers no clear
basis for how he construed the contract to reach his
decision without such consideration, there arises a
strong possibility that the award was not based on
the contract." George A. Hormel & Co. v. United Food
& Commercial Workers, Local 9, 879 F.2d 347, 351
(8th Cir.1989). “[A court] may reverse an arbitral
decision as in excess of a board's jurisdiction only
where the arbitration board's order ‘does not draw its
essence from the collective bargaining agreement,' "
Norfolk and Western Katlway Co. v. Transportation
Communications International Union, 17 F.3d 696,
~ 18.
701 (4th Cir. 1994), quoting; W.R. Grace v. United
Rubber Workers, 461 U.S. 757, 764 (1988).
It was only the panel majority, however, who
somehow discerned ambiguity in the contractual use
of the word “precise.” There was no inquiry, briefing,
or evidence offered in this regard at the arbitration or
on appeal. In such circumstances, by contrast, the
Eighth Circuit requires that, where there is an
“ambiguous provision,” the arbitrator’s failure to
seek “the parties’ guidance as to its intent” requires
vacatur where an award under such circumstances
would constitute the arbitrator having “dispensed his
own brand of industrial justice, and his award cannot
be said to draw its essence from the collective
bargaining agreement.” IJnternational Woodworkers v.
Weyerhaeuser, Co., 7 F.3d 133, 136-137 (&th Cir.
1993). “Determining the intent of the parties is the
essential inquiry.” CSX Transportation, Inc. v. United
Transportation Union, 29 F.3d 931, 936 (4th Cir.
1994), quoting; Local 1199, Hospital & Health Care
Employees Union, etc. v. Brooks Drug Co., 956 F.2d 22,
25 (2nd Cir.1992), and; Loveless v. Eastern Air Lines,
Inc., 681 F.2d 1272, 1279 (11th Cir. 1982).
If an interpretation of the word “precise” had been
necessary, as the panel majority discerned, that lack
of review also constituted a violation of the arbitra-
tors authority as defined by the Fourth Circuit.
"Where, as here, the arbitrator fails to discuss
critical contract terminology, which terminology
might reasonably require an opposite result, the
award cannot be considered to draw its essence from
« Ste
the contract." Clinchfield Coal Co. v. Dist. 28, United
Mine Workers, 720 F.2d 1365, 1369 (4th Cir.1983).
Although an arbitrator’s award is due great
deference, that respect is not without its limits.
“[Fjederal courts have repeatedly vacated arbitral
awards that failed to discuss probative terms.” Boise
Cascade, Corp. v. Paper Allied-Industrial, Chemical
and Energy Workers, 309 F.3d 1075, n. 9 (8th Cir.
2002), referencing; Champion International Corp. v.
United Paperworkers International Union, 168 F.3d
725, 731 (4th Cir.1999) (An arbitrator's failure to
address certain contractual provisions was "evidence
of a basic abdication of [his] duty to apply the
contract that governs the grievance"). In fact, the
Ninth Circuit’s majority here has effectively rejected
the Dissent, and the differing view of the Eighth
Circuit. In this regard, conflict now arises where the
applicable corollary holds that “[t]he arbitrator did
not have the authority to alter the agreement by
interpreting unambiguous language in a way contrary
to its plain meaning.” Coca-Cola Bottling Co. of St.
Louis v. Teamsters Local Union No. 688, 959 F.2d
1438, 1442 (8th Cir.1992).
If, indeed, a question of the violation arbitral
jurisdiction turns on a deferral to an arbitrator's
“interpretation” of the word “precise,” which defini-
tion the Dissent found to be unequivocal when read in
conjunction with the plain language restrictions of the
CBA (App. pp. 6a-7a), the Ninth Circuit would now
necessarily defer all review of arbitral jurisdiction
issues back to the arbitrator himself. This does not
- 20 -
jibe with the requirements of the law, or any mean-
ingful application. In fact, this new deference not only
defeats the intent and purposes of the law, regardless
of how narrow the scope of court review is allowed,
but it is contrary to the views of virtually all of the
other circuits, and contrary to the prior directions of
the Court. It is for this reason that the Court should
exercise its supervisory discretion in this case, to
resolve this growing split between the circuits, and to
clarify the Court’s intentions with regard to any
necessary limits for judicia] review of jurisdictional
violations by arbitrators.
IT. Title II of the RLA Specifically Excepts
Air Carriers from the Exceedingly Narrow
Scope of Judicial Review Set Forth in RLA
Title I (45 U.S.C. §§ 153(p) and (q)), Where
Airline Arbitrations Are Not Provided the
Review and Appeal Mechanisms of the
National Railway Adjustment Board.
Both the district court and the Court of Appeals
rejected review of this arbitration case beyond the
issue of jurisdiction. The courts paid no attention to
the arbitrator’s “serious and inexcusable” breach of
professional ethics, his “inexcusable violation of
fundamental fairness,” or Arbitrator Scearce’s
complete “insensitivity to the requirements of
ordinary due process.” App. 65a. Although judicial
review of arbitration cases is exceptionally narrow,
the award in this case should also have been vacated
where Hawaiian, and the arbitration panel, failed in
o Bi a.
the most basic requirements of ordinary due process.
While other circuits recognize a slightly broader
scope of judicial review for airline arbitrations, and
that a breach of due process or basic fairness also
exceeds an arbitration panel’s jurisdiction, judges in
the Ninth Circuit are strictly constrained by circuit
case law, in airline arbitration cases, to review only
on the basis of those specific factors set forth within
45 U.S.C. § 153(p) and (q). Singer v. Flying Tiger
Line, 652 F.2d 1349, 1355-6 (9th Cir 1981)
(Concluding that the standard for judicial review for
arbitration decisions, as applicable to the National
Railroad Adjustment Board, are also applicable to
airlines). App. 12a. This rigid limitation, however,
neither reflects RLA Title Il’s specific airline excep-
tion, nor is it consistent with several of the other
circuits. There is, however, a reason for this conflict.
First, where airline arbitration cases arise under
RLA Title IJ (45 U.S.C. § 181 et seq.), the law
provides a specific exception to the applicability of
the review standards set forth in RLA Title I:
“All of the provisions of subchapter I of this
chapter except section 153 of this title are
extended to and shall cover every common
carrier by air engaged in interstate or foreign
commerce, and every carrier by air transport-
ing mail for or under contract with the United
States Government, and every air pilot or
other person who performs any work as an
employee or subordinate official of such
- 22-
carrier or carriers * * *.”
45 U.S.C. § 181 (emphasis added). App. p. 51a.
When examined in context, this exception has a
clear and specific foundation. Cases arising under
the purview of the National Railroad Adjustment
Board have at least three, and in some cases more,
layers of available-review and appeal! before they can
be brought to the courts. There is no similar review
hierarchy for airlines, or for any other industry.
In this regard, the National Railroad Adjustment
Board is a permanent adjudicative body with a
permanent staff. Beyond the system, group, or
regional Boards of Adjustment which airlines might
form, railroads have the benefit of non-judicial
appeal and review through the four permanent
Divisions of the NRAB, and even to the full NRAB
itself. The issues of “fundamental fairness” and
“basic due process” are, thus, already subject to
significant scrutiny. At the same time, with all these
layers of available review, ethical breaches would be
much less likely.
A railroad employee grievance, in contrast to that
of an airline employee, has a well established path
for review through a number of appeal layers.
Depending on a particular agreement, railroads and
employees may first proceed to a System or Group
Board of Adjustment (as for this case), then to the
Regional Board of Adjustment, and/or to one of the
permanent Divisions of the National Railroad
Adjustment Board, then even to the full National
o 22 eo
Railroad Adjustment Board. As a practical point,
“[tlhe NRAB is essentially an appellate tribunal.”
How Arbitration Works, Elikouri and Elikoun, 6th
edition, p. 165, note 105, BNA Books, Washington
D.C., 2003. There is no comparable mechanism
available to the airline industry.
Thus, where a particular grievance under 45 USC
§ 153 already has the benefit of a substantial review
and appeal mechanism, beyond the designation of a
single review panel, or arbitrator, there is little
justification for further court review of railroad cases
beyond those exceptionally limited circumstances
defined for the courts under RLA Title 1(45 U.S.C. §
153(p) and(q)). In contrast, under the law, airlines
are actually treated as is any other party to an
arbitration. Court review is narrow, but slightly
greater than that which is defined for railroads under
RLA Title I. However, in this case, even under that
most limited scope of review, the district court was
compelled to vacate the award of the Hawaliian
System Board. Arbitrator Scearce exceeded the scope
of his plain language authority, going outside the
explicit limits of the labor agreement. Nonetheless, a
slightly broader scope of review would have provided
even more reasons for vacatur. See: App. p. 38a.
Oddly, the reasons underlying the application of
the most limited scope of review under RLA § 153, to
airlines, first arose from the Fighth Circuit, rather
than from this Court’s seminal decision § in
International Association of Machinists v. North
Central Airlines, 372 U.S. 682 (1963). In referencing
o 24.
the Court’s determination of the intent that “airline
system board awards would ‘have legal effect, not
merely that of private advice,” in Hunt v. Northwest
Airlines, Inc., 600 F.2d 176, 178 (8th Cir. 1979), the
Eighth Circuit’s panel took a leap of logic. Under the
Eighth Circuit’s assumptions, not only would airline
arbitration awards be subject to court review, as the
Court found was the Congressional intent in
Machinists, supra, but court review for airlines would
also be limited to the exceptionally narrow reasons
set out in 45 U.S.C. § 153 for railroads, rather than
the standard set for arbitration cases in general.
United Paperworkers v. Misco, supra at 38. This was
contrary to the specific statutory exception, and it
was without meaningful explanation by the Eighth
Circuit beyond referencing Machinists, supra.
Thereafter, the Ninth Circuit, and other of the
circuits, adopted the Eighth Circuit’s conclusion,
without examination of the apparent leap of logic
contained there, and without examining the statutory
exception or the practical reasons for such exception.
In fact, while the Ninth Circuit has strictly applied
the most limited scope of review for airlines, which
the Eighth Circuit first adopted in Hunt v. Northwest,
supra, the Eighth Circuit, in fact, had actually taken
a slightly more relaxed view.
In Hunt, the Eighth Circuit instead recognized the
existence of a less stringent standard of review for
airlines, noting the propriety of vacatur “where there
has been a denial of due process ‘By some conduct of
the * * * Board,” citing , Edwards v. St. Louis-San
- 25.
Francisco Railroad, 361 F.2d 946, 953 (7th Cir. 1966)
(A Board’s denial of due process provides the courts
with authority for the review of an arbitration award,
citing; D'Elia v. New York, New Haven & Hartford R.
Co., 230 F.Supp. 912 (D. Conn.1964), aff'd 338 F.2d
701 (2nd Cir. 1964); Hornsby v. Dobard, 291 F.2d 483
(5th Cir. 1961); Ellerd v. Southern Pacific Railroad
Co., 241 F.2d 541 (7th Cir. 1957); Barnett ov.
Pennsylvania-Reading Seashore Lines, 245 F.2d 579.
(3rd Cir. 1957); Brotherhood of Railroad Trainmen v.
Templeton, 181 F.2d 527 (8th Cur. 1950), and;
Edwards v. Capital Airlines, Inc., 176 F.2d 755 (D.C.
Cir. 1949), cert. denied; 338 U.S. 885 (1949)).
By the same token, the Seventh Circuit has also
recognized that its review of airline arbitration cases
is not strictly limited under the terms 45 U.S.C. §
153(q). In Pokuta v. Trans World Airlines, 191 F.3d
834, 839 (7th Cir. 1999), the court noted that, while
the review of airline arbitration cases is extremely
limited, that court undertakes a slightly broader
review, including when an arbitration board denies
“due process,” as is the situation in the present case.
“(Wje have recognized a fourth category of
objections that supply jurisdiction over the
award -- an allegation that a party was
denied due process. E.g., Bates v. Baltimore &
Ohio R.R. Co., 9 F.3d 29, 31 (7th Cir. 1993);
‘Morin v. Consolidated Rail Corp., 810 F.2d
720, 722 (7th Cir. 1987) (per curiam).”
Id
° 26 -
The Tenth Circuit, however, has taken a position
similar to that of the Ninth Circuit in Singer v. Flying
Tiger Line, supra. The 10th Circuit notes that
“statutory restrictions on judicial review of these
decisions are to be strictly enforced.” Chernak v.
Southwest Airlines, 778 F.2d 578, 580 (10th Cir.
1985). In fact, the Tenth Circuit even seems to have
gone one step further, as the Ninth Circuit majority
did in the present case, leaving the interpretation’ of
jurisdiction solely to the arbitrator, regardless of the
plain language. However, the Tenth Circuit failed to
reconcile its view in this regard with the prior
direction of the Court, which would require that
federal courts review the issue of jurisdiction, just as
even the strictest standard of review under RLA Title
I directs. In fact, the Tenth Circuit did not acknow-
ledge that the question of arbitral jurisdiction and
arbitrability is one which is left to the courts.
A.T.&T. Technologies, Inc. v. Communications Workers
of America, 475 U.S. 643, 656 (1986).
The Third Circuit has also questioned the strict
applicability of 45 U.S.C. § 153 to airlines. Without
deciding the issue of the applicable ‘Standard of
Review,’ in Hart v. Overseas National Airways, Inc.,
the court noted that “there is a serious question as to
whether the entire § 153 applies to the airline
industry.” (541 F.2d 386, 392 n.15 (3rd Cir. 1976)).
In fact, under the terms of 45 U.S.C. § 181 it
specifically DOES NOT apply. The Third Circuit then
went on to note that in Machinists v. Central Airlines
(supra), the Court had indicated “that the arbitration
provisions of § 153 were nevertheless to be utilized by
analogy in airline disputes.” /d (emphasis added).
Machinists, however, only discussed the propriety
of court review of arbitration awards, where the issue
there had been a district court’s dismissal of an
airline arbitration review case for “lack of juris-
diction.” Thus, where RLA Title lJ did not specifically
provide for court review in airline arbitration cases,
in Machinists the Court noted that such review was
necessary just as it was for railroad cases, whether
that necessity arose under the ALA itself, or under
some more gencral authority of the federal courts (i.e.
28 U.S.C. § 1337).
In fact, the Third Circuit has long held that in its
review of airline arbitration awards, the court would
consider “questions of jurisdiction or of the essential
fairness of the administrative proceeding” before an
airline System Board. Bower v. Eastern Airlines, Inc.,
214 F.2d 623, 626 (3rd Cir. 1954). The Third Circuit
later restated this as a requirement for “a full and
fair hearing” requiring the arbitration panel to have
“exercised its honest judgment in reaching its
conclusions and decisions on the full record.” Hart v
Overseas National Airways, supra at 392-393.
With regard to airline arbitrations, even the Fifth
Circuit has stated its similar view, that a System
Board’s denial of due process has long been a proper
basis to vacate an arbitration award. Giordano uv.
Modern Air Transport, et al, 504 F.2d 882, 883 (5th
Cir. 1974) (A court can reverse a System Board
- 28.
“where there is a denial of due process”). In fact, the
Fifth Circuit has also noted its view that “[a] federal
court does have power to set aside |ja System] Board’s
determination where there is a fundamental absence
of due process.” Wells v. Southern Airways, 517 F.2d
132, 133, (5th Cir. 1975). The D.C. Circuit has taken
this a step further, however, defining even a “mistake
of fact” by a System Board as potentially rendering
an arbitration award as reviewable by the courts.
Northwest Airlines, Inc. v. Air Line Pilots Association
International, 530 F.2d 1048, 1050 (D.C. Cir. 1976)
(The courts have “both the power and duty to refuse
to enforce [an] award” predicated on a dispositive
“mistake of fact.”). The D.C. Circuit’s view in this
regard, however, is more of an aberration, but still in
conflict with this case, and with the other circuits.
Naturally, where Congress established the semi-
public review and appeal hierarchy as a function of
the NRAB, for the railroad industry, there is no
meaningful need for the slightly broader court review
as might be available to other arbitration cases, in
general, or to arbitration cases which might also
arise under the Federal Arbitration Act (9 U.S.C. §§ 1
et seq.). In fact, in view of this lack of NRAB
oversight and review for airlines, Congress quite
properly excepted airlines from the most extreme
standard of court review which RLA_ Title I
established for NRAB originated cases.
Of course, where arbitration review arises in the
context of an issue of procedural or substantive due
process, it is impossible to conclude such violations as
29
having been allowable within the intent of any
agreement. ‘Thus, arbitration awards which are
issued in violation of due process. standards,
especially as defined by contract or common law, have
also been an issue of varying review standards by the
different circuits. Most circuits have decisions which
reference due process requirements 1n some form.
As example, in Pokuta v. Trans World Airlines,
supra at 839, the Seventh Circuit was clear that the
denial of due process properly fell into its review
authority. In fact, it was the deniai of due process
which the Eighth Circuit also noted as an exception
for its own very strict standard of review in Hunt uv.
Northwest Airlines, supra at 179. The Fifth Circuit
has also espoused a similar view of due process as a
requirement, where a violation would subject an
arbitration decision to review and vacatur. See: Hall
v. Kastern Airlines, 511 F.2d 663 (5th Cir. 1975), and:
Rosen v. HKastern Airlines, 400 F.2d 462 (5th Cir
1968), cert. demed; 394 U.S. 959 (1969)
In Captain Konop’s case, to a certain extent, the
issues of jurisdiction and due process intersected at
several junctures. Although, during the oral argu-
ment before the Ninth Circuit’s panel, Judge
Callahan noted the due process issues which had
arisen in relation to some of the misconduct of the
Hawaiian System Board, she was constrained by
circuit precedent in Singer v. Flying Tiger (supra), to
limit her reasoning, in support of the district court's
Order to Vacate, to the narrow issue of jurisdiction
alone. Judge Callahan noted that the System Board
- $0.
lacked authority to act on “matters” which had not
first been handled in accordance with the grievance
procedures of the labor agreement. See: App. p. 38a
As several of the circuits have recognized, whether
or not airlines are subject to the extremely limited
standard of review set for railroads, the issue of
jurisdiction, even under the strictest standard of
review, encompasses a question of due process. More
important is the fact that, contrary to the Ninth
Circuit majority's opinion, “review is not toothless
when an arbitrator’s award disregards the collective
bargaining agreement and its terms.” Beacon
Journal Publishing Co v. Akron Newspaper Guild, 114
F.3d 596, 599 (6th Cir. 1997).
Thus, it has now become important for the Court
to clarify its intent, as discussed in Machinists’ v.
Central Airlines (supra), with respect to the
“analogous” handling of airline disputes, as RLA Title
I specifies for railroads. Given the existence and
function of the NRAB, as a appeal and review body, it
is difficult to reconcile applying the most restrictive
standard of review, under RLA Title [, to airlines
which are subject to a specific statutory exception
from such application under RLA Title Lf (45 USC §
181). The reasons for the different railroad standard
is otherwise quite clear. However, an arbitrator is
not allowed to simply “dispense his own brand of
industrial justice” under any circumstance. United
Steelworkers of America v. Enterprise Wheel & Car
Corp., supra 597. Given the growing conflicts, the
Court’s guidance on this issue has become necessary.
.
Review Will Provide Needed Clarification
of the Limited Role of the Courts in
Railway Labor Act Arbitration Cases, and
of the Necessity for Arbitrators to Adhere
to the Plain Language Limits of Their
Authority
In Machinists v. Central Airlines (supra), the Court
definitively settled that the judiciary primarily plays
a supervisory role in the review and enforcement of
airline arbitration awards under Title IJ of the RLA
(45 U.S.C. §§ 181 et seq.). However, there has been
conflict and confusion among the circuits concerning
both the nature of that limited review, and of the
necessity for arbitration panels to act within the
defined limits of their contractual authority. Misco,
supra at 38. Some courts, now including the Ninth
Circuit, entirely defer to the arbitrator, even to the
extent of declining review of plain language juris-
dictional violations, as occurred in this case.
The Ninth Circuit majority essentially held that
even the review of the plain language limits of a
arbitrator’s authority should be left solely to the
arbitrator. App. pp. 2a-3a. That was Hawaiian
Airlines’ central position in its appeal. Thus,
Hawanian’s self-serving viewpoint has now been
adopted by the panel majority, where there was
supposedly no_ specific contractual definition
providing the explicit intent of the phrase “precise
charge or charges,” as was incorporated by the labor
contract in terms of the due process notice which was
to be provided to Captain Robert Konop.
- 32 -
The Dissent, however, found no ambiguity in the
precision required of any charges, nor did the district
court. Hawaiian was not free to simply abandon the
precise charges it had provided for something more
likely to gain the arbitrator’s sympathy. However,
the panel majority not only disregarded what the
NAA termed the arbitrator’s “insensitivity to the
requirements for ordinary due process,” and an
“inexcusable violation of fundamental fairness” (App.
p. 58a), but they also ignored contrary case law. For
example, if there had indeed been any contract
ambiguity, the Eighth Circuit holds that, given the
arbitrator’s failure to seek input from the parties as
to their “intent,” or their “past practices,” any
resultant decision “cannot be said to draw its essence
from the collective bargaining agreement” and, thus,
was given outside the scope of the arbitrator’s
authority. Boise Cascade, supra at 1080. At the
same time, “[i]n construing the collective bargaining
agreement, however, the arbitrator must take into
account any existing common law * * * for it is an
integral part of the contract.” Norfolk Shipbuilding v.
International Brotherhood of Boilermakers, 671 F.2d
797, 800 (4th Cir. 1982). App. 66a-76a.
It was undisputed that Hawaiian provided
Captain Konop with a pre-termination Statement of
Charges, including the “precise charges” which had
been subject to the required pre discharge company
hearing and written decision. However, the arbi-
trator did not act on those charges, instead relying on
new charges, raised for the first time at the
- F
arbitration hearing. Moreover, it was not necessary
to interpret’ any contract provision, concerning the
definition of “precise charge,” when the arbitrator
considered and relied on charges which were not even
arguably incorporated into the broader rules
originally cited by Hawaiian as a part of its
Statement of Charges. However, it is also wholly
irrelevant that all this was simply a pretext for the
purposes of eliminating Captain Konop as a leader in
the opposition to ratification of a concessionary labor
contract by Hawalian’s pilots.
As an example of how far afield the arbitrator
traveled in Hawaiian’s behalf, there was nothing in
Hawaiian’s charges which faulted Captain Konop for
a shortfall in “due diligence,” which the arbitrator
concluded in relation to the plan of reorganization
which Captain Konop and most of Hawauian’s other
pilots supported. App. 14a-17a. At the same time,
Hawaiian had never previously alleged that the
initial financing proposed for the employee alterna-
ive plan had been through a financial institution
with “mob ties,” as the arbitrator referenced in his
award and in his discussion of “due diligence.” App.
43a. Beyond that, where Hawaiian had accused
Captain Konop of intentional misstatements, there
was nothing in Hawaian’s charges which asserted
that he might also be held culpable for all internet
posts on the hawalianpilots.com website, regardless
of the lack of dispute that a single, cited erroneous
posting had not been made by Captain Konop, as
Hawaiian had originally alleged. App. 44a.
-34-
It was the panel Dissent, and the district court,
which followed the law most faithfully. Nothing in
the Court’s admonitions in Enterprise Wheel & Car
(supra) conflicts in any way with the review standard
established for arbitration cases which arise under
the Railway Labor Act, whether it be for railroads
under RLA Title J or for airlines under RLA Title II.
In all cases, an arbitrator is not free to “dispense his
own brand of industrial justice.” Further, “[t]he
arbitrator [wa]s not free to ignore the plain language
of the contract.” Misco, supra 38. Thus, the district
court’s Order to Vacate was properly given in line with
even the most restrictive possible standard of review.
In Gilmer vv. Interstate/Johnson, the Court
recognized that arbitration is not designed to be a
perfect system of justice. Gilmer v. Interstate/Johnson
Lane Corp.,500 U.S. 20, 31 (1991) (“[A] party ‘trades
the procedures and opportunity for review of the
courtroom for the simplicity, informality, and
expedition of arbitration” quoting; Mitsubishi Motors,
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614,
628 (1985)). However, the fundamental expectation
in every arbitration agreement is that the arbitrator
will act ethically, within the bounds of his defined
authority, and that the ultimate award “draws its
essence from the collective bargaining agreement.”
Enterprise Wheel & Car, supra 597. None of that
occurred in this case.
No intent has ever been stated, either in the
Congressional Record, or in the decisions of the
Court, that airline employees were somehow expected
. 35-
to bear any particularly different or more onerous
burden with respect to arbitration. An arbitrator’s
violation of the plain language limits of his
jurisdiction, his “inexcusable violation of funda-
mental fairness,” his total “insensitivity to the
requirements of ordinary due process,” and his
“serious and inexcusable” ethical breaches, do not fall
within the contemplations of any arbitration
agreement. App. 63a-65a. Thus, the appeals panel
majority erroneously reversed the district court, both
under the most restrictive standard set in RLA Title
I, and even more so under the slightly broader scope
of review which most of the other circuits have
defined in reference to the Steelworkers trilogy. °
The views of the appeals panel majority, in
adopting Hawaiian’s appeal premise, would have far
reaching adverse consequences, and not just in terms
of a lack of fairness which the Dissent noted. App. 7a.
* Theodore J. St. Antoine, Professor Emeritus and
former dean of the Michigan School of Law, was a
member of the NAA Tribunal which Censured the
arbitrator. App. 65a. Professor St. Antoine is an
expert on the Steelworkers Trilogy, and is regularly
cited by the courts concerning the role of arbitrators.
i.e. American Postal Workers Union v. U.S. Postal
Service, 789 F.2d 1, 6-7 (D.C. Cir. 1986); Cole uv.
Burns International Security Services, 105 F.3d
1465 (D.C. Cir. 1997); Judicial Review of Labor
Arbitration Awards, 75 Mich. L.Rev. 1137 (1977).
* Enterprise Wheel & Car Corp., 363 U.S. 593 (1960);
United Steelworkers v. American Manufacturing Co.
363 U.S. 564 (1960); United Steelworkers v. Warrior
& Gulf Navigation Co., 363 U.S. 574 (1960).
- 36-
As was the case with arbitrator Scearce, and as was
implied by the National Academy of Arbitrators’ in
its Censure, the panel majority would do little beyond
encouraging a more cavalier and haphazard attitude
with respect to arbitral decision making. This is a
situation which would only detract from the Railway
Labor Act’s clear and fundamental purposes. It would
also upset the goal of relative consistency and
simplicity in the process of judicial review.
CONCLUSION
Thus, this Petition for a Writ of Certiorari should
be granted to resolve the growing conflict between the
circuits. It should also be granted for those reasons
cited in the Dissent of Appeals Court Judge Callahan
(App. 5a-7a), as was given in support of the district
court’s Order to Vacate (App. 8a-39a). An arbitrator
“is not free to ignore the plain language of a contract.”
Enterprise Wheel & Car, supra at 597. By the same
token, an arbitrator is not free to “dispense his own
brand of industrial justice.” United Paperworkers v.
Misco, supra at 38.
Respectfully submitted,
DATED: December 1, 2009
Robert C. Konop
8601 Falmouth #406
Playa del Rey, California 90293
(310) 305-2837
Petitioner
- App. la -
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROBERT C. KONOP, ! No. 08-55248
Petitioner - Appellee, | D.C. No. ev-06-4426-
| CBM
Vv. |
| Central District of
HAWALIAN AIRLINES, INC.,! California, Los
Respondent - Appellant. | Angeles
_|
MEMORANDUM
ROBERT C. KONOP, 1 No. 08-55248
Petitioner - Appellant, | D.C. No. cv-06-4426-
| CBM
Vv. |
| Central District of
HAWAIIAN AIRLINES, INC.,! California, Los
Respondent - Appellee. | Angeles
|
Appeal from the United States District Court
for the Central District of California
Consuelo B. Marshall, District Judge, Presiding
Argued and Submitted April 17, 2009
‘This disposition is not appropriate for publication
and is not precedent except as provided by 9th Cir.
R. 36-3.
- App. 2a -
Pasadena, California
Before: SILVERMAN and CALLAHAN, Circuit
Judges, and QUIST,” District Judge.
Appellant/Cross-Appellee Hawaiian Airlines,
Inc. ("Hawaiian") appeals the district court's order
vacating an award by the Hawaiian Airlines System
Board of Adjustment (the "Board") affirming
Hawaiian's discharge of Appellee/Cross-Appellant
Robert C. Konop ("Konop"). Konop cross-appeals the
district court's denial of his alternative grounds for
vacating the award. We have jurisdiction pursuant to
28 U.S.C. § 1291, and we reverse that portion of the
district court's order vacating the Board's award,
affirm in all other respects, and remand for entry of
judgment confirming the Board's award.
The district court correctly recognized that the
required notice of "the precise charge or charges" to
the employee limits the Board's authority to decide
disputes. The district court erred, however, by
equating "charges" with "facts" or "evidence." The
CBA leaves open what constitutes or suffices as a
charge. It does not define a charge, nor does it specify
what information, or degree of factual detail, if any, is
required. Cf Fed. Express Corp. v. Holowecki, 128 8.
Ct. 1147, 1154 (2008) ("Even with the aid of
The Honorable Gordon J. Quist, United States District
Judge for the Western District of Michigan, sitting
by designation.
- App. 3a -
regulations the meaning of charge {as used in the
ADEA] remains unclear .... "). While the charge must
be "precise," this might be merely the difference
between a general allegation that the employee's
conduct violated the House Rules and an allegation
that the employee violated a particular House Rule.
In light of this ambiguity and lack of specific guidance
from the CBA, the sufficiency and scope of the
charges were properly left to the Board's
interpretation. Desert Palace, Inc. v. Local Joint
Executive Bd. of Las Vegas, 679 F.2d 789, 792 (9th
Cir. 1982). Because the Board's consideration of facts
not specifically alleged in the Statement of Charges
did not conflict with any express provision of the
CBA, the district court should not have substituted
its judgment for the Board's. W.R. Grace & Co. v.
Local Union 759, Int'l union of United Rubber, Cork,
Linoleum & Plastic Workers of Am., 461 U.S. 757,
765, 103 C. St. 2177, 2183 (1983) ("Because the
authority of arbitrators is a subject of collective
bargaining, just as is any other contractual provision,
the scope of the arbitrator's authority is itself a
question of contract interpretation that the parties
have delegated to the arbitrator."). While an
arbitrator may not ignore the plain language of the
contract in favor of “his own notions of industrial
justice," United Paperworkers Int'l Union v. Misco,
484 U.S. 29, 38,108 S. Ct. 364, 371 (1987), so long as
the arbitrator is even arguably construing the
contract, the reviewing court's view of the correctness
of the arbitrator's decision - whether factually or
legally flawed or even "silly" - is irrelevant. Major
- App. 4a -
League Baseball Players Ass'n v. Garvey, 532 U.S. 504,
509,121 S. Ct. 1724, 1728 (2001) ("[I]fan ‘arbitrator
is even arguably construing or applying the contract
and acting within the scope of his authority,’ the fact
that 'a court is convinced he committed serious error
does not suffice to overturn his decision. "’) (quoting L.
Assoc ‘d Coal Corp. v. Mine Workers, 531 U.S.
57,62,121 S. Ct. 462, 466 (2000)).
Il.
In Konop's cross-appeal, we affirm the issues
presented below for the reasons cited by the district
court. We decline to consider Konop's claim of fraud
and corruption as he failed to raise it before the
district court. See FSLIC v. Butler, 904 F .2d 505, 509
(9th Cir. 1990) ("As a general rule, an appellate court
will not consider arguments which were not first
raised before the district court, absent a showing of
exceptional circumstances."),
Each party shall bear its own costs.
AFFIRMED IN PART, REVERSED IN PART and
REMANDED.
FILED
June 30, 2009
Molly C. Dwyer, Clerk
U.S. Court of Appeals
- App. 5a -
Konop v. Hawaiian Airlines, Inc.,
Nos. 08-55248 & 08-55314
June 24, 2009
FILED
June 30, 2009
Molly C. Dwyer, Clerk
U.S. Court of Appeals
CALLAHAN, Circuit Judge, concurring and
dissenting:
I would affirm the district court's order in its
entirety. A decision by the Hawaiian Airlines System
Board of Adjustment (the "Board") is entitled to
considerable deference, see Rossi v. Trans World
Airlines, Inc., 507 F.2d 404, 405 (9th Cir. 1974),
including any plausible interpretation of the
underlying collective bargaining agreement ("CBA").
See Sprewell v. Golden State Warriors, 266 F.3d
979,986 (9th Cir. 2001). However, an award may be
unenforceable when the arbitrator "strays from
interpretation and application of the agreement and
effectively ‘dispense[s] his own brand of industrial
rr ‘
justice." Major League Baseball Players Ass 'n v.
Garvey, 532 U.S. 504, 509 (2001) (quoting United
Steelworkers of America v. Enterprise Wheel & Car
Corp., 363 U.S. 593, 597 (1960)). Moreover, an
arbitrator is bound to abide by the plain language of
a collective bargaining agreement that limits his
authority. United Puperworkers Int'l Union v. Misco,
Inc.. 484 U.S. 29, 38 (1987); Hawaii Teamsters and
- App. 6a -
Allied Workers Union, Local 996 v. United Parcel
Service, 241 F.3d 1177, 1181 (9th Cir. 2001) (holding
that an award does not draw its essence from the
CBA when the arbitrator ignores the plain language
of the agreement).
In this matter, the CBA grants the Board
authority to interpret the CBA. ("The Board shall
have jurisdiction over disputes ... growing ... out of
interpretation or application of any of the terms of
the [CBA]."). However, the CBA explicitly states
that "[b Jefore a pilot is ... discharged, such pilot shall
be notified in writing ... of the precise charge or
charges against him or her." On appeal, the Board
may not consider a "matter" that has not yet been
handled in accordance with the previous disciplinary
procedure, i.e. a statement of charges and hearing.
Here the Board interpreted "matter" broadly
to allow it to consider charges that had not been
included in the Statement of Charges ("SOC") filed
against Konop. A review of the applicable portions of
the CBA indicates that the Board's interpretation of
"matter" to mean anything besides specific instances
of misconduct charged in the SOC is contrary to the
clear purpose and intent of the parties as set forth in
the CBA. Thus, the Board's interpretation failed to
"draw its essence" from the CBA. When read in
conjunction with Section 16, which requires that the
precise charge or charges be set forth in the SOC, the
only "plausible" reading of the CBA requires that the
Board rely only on factual instances of misconduct set
App. 7a
forth in the SOC. Konop was entitled to rely on the
SOC to determine what actions he had to defend.
The scheme set forth in the CBA is disrupted
when Hawaiian Aijurlines ("HAL") is allowed to
advance new charges before the Board because this
deprives an employee of fair standards of notice and
renders him unprepared to defend new allegations
not set forth in the SOC.’ Indeed, Konop's attorney
made this objection at the hearing. Moreover, the
materials before this court suggest that neither HAL
nor at least one of the three arbitrators were
concerned with fairness. I would affirm the district
court's determination that the Board exceeded its
jurisdiction when it based its decision on charges
that had not been set forth in the SOC,
This is particularly true in this case because the
charges against Konop arosc out of his participation
in HAL's bankruptcy proceedings, not from his
performance of his duties as a pilot. Furthermore,
Konop's right to participate in HAL's bankruptcy
proceedings had been established in prior htigation
between the parties. Konop v. Hawaiian Airlines,
Inc., 302 F .3d 868, 883 (9th Cir. 2003). Although
the case was cited to the Board, it is not mentioned
in the Board's award
After the district court issued its decision in this
case one of HAL's attorneys sent an ex parte letter
to the arbitrators asking them to “clarify” their
award to avoid the impact of the district court's
opinion. One of the arbitrators responded with
such a clarification. The district court subsequently
found that this attempted clarification was outside
the Board's jurisdiction
- App. 8a -
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
JS-6
FILED
Clerk, U.S. District Court
JAN 4, 2008
Central District of California
ROBERT C. KONOP, | No. 06-4426-CBM
Petitioner, |
| Order re Petition for
v. | Review and to
| Vacate an Award of
| the Hawaiian Airlines
| System Board of
_| Adjustment
HAWAIIAN AIRLINES, INC.
Respondent.
The matter before the Court, the Honorable
Consuelo B. Marshall, United States District Judge
presiding, 1s Petitioner Robert C. Konop's Petition for
Review and to Vacate an Award of the Hawaiian
Airlines System Board of Adjustment ("Petition" or
"Pet."). The Court has jurisdiction pursuant to 28
U.S.C. § 1331 and 45 U.S.C. §§ 151 et seq.
PROCEDURAL AND FACTUAL BACKGROUND
Pro Se Petitioner Robert C. Konop ("Konop" or
"Petitioner") was employed as a pilot by Defendant
- App. 9a -
Hawanan Ail$rlines, Inc. ("HAL") for approximately
twenty (20) years until his termination on Apru 20,
2005. Petitioner's employment was terminated while
HAL was attempting to emerge from bankruptcy
protection. HAL's stated reasons for the termination
related exclusively to Petitioner's participation in the
bankruptcy proceedings.
HAL pilots are represented by the Air Line
Pilots Association ("ALPA"), and the terms and
conditions of Petitioner's employment during his
tenure with the Airline were at all times governed by
a collective bargaining agreement ("CBA") between
HAL and the ALPA. Konop appealed his termination
witn the Hawaiian Airlines System Board of
Adjustment ("the Board"). Pursuant to the CBA, the
grievance was first submitted to a four member
System Board of Adjustment, consisting of two
members selected by the ALPA and two members
selected by HAL. When the four member Board
deadlocked, the grievance was submitted to a three
member arbitration Board consisting of a union-
preferred member, a management-preferred member,
and a neutral outside arbitrator. On or about April 7,
2006, the three member Board affirmed Konop's
termination by a 2-1 vote; the dissenting panel
member was the union-preferred arbitrator. Pet.,-r
116; System Board of Adjustment Award re
Grievance No. HAL-19-05DS ("Award") (attached as
Exh. A to the Petition).
On October 11, 2005, Petitioner brought an
action under the Railway Labor Act ("RLA") ‘alleging
- App. 10a -
the termination violated his rights as enumerated in
that statute. This Court dismissed the complaint
without prejudice for failure to state a claim and for
lack of subject matter jurisdiction. See Civil No. 05-
7298, Order dated June 27, 2006 at 2. The Court
explained that the proper method for attacking the
termination was through a petition to vacate the
arbitration award. Id. On July 14,2006, Konop filed
the instant Petition alleging various grounds for
vacating the Board's Award.
STANDARD OF LAW
The scope of judicial review of adjustment
board awards under the RLA is among the narrowest
known to the law. English v. Burlington Northern R.R.
Co., 18 F.3d 741,743 (9th Cir. 1994). The RLA limits
review of adjustment board decisions to three specific
grounds: (1) failure of the board to comply with the
RLA; (2) failure of the board to conform, or confine
itself to matters within its jurisdiction; and (3) fraud
or corruption. ld.; 45 U.S.C. § 153 First (q); see also
Union Pac. R.R. Co. v. Sheehan, 439 U.S. 89,93
(1978). The findings and order of the adjustment
board are conclusive on the parties and may be set
aside only for the three reasons specified in Section
153 First (q). 45 U.S.C. § 153 First (q); Sheehan, 439
U.S. at 93. A legal exception to the lhmited scope of
judicial review exists where an arbitration award is
unenforceable as contrary to public policy. Hastern
Assoc. Coal Corp. v. United Mine Workers of America,
Dist., 531 U.S. 57,62 (2000).
- App. lla -
DISCUSSION
Petitioner does not challenge the System
Board's Award on the grounds of fraud or corruption.
Rather, Petitioner argues that the Award should be
vacated because it (1) exceeded the scope the Board's
jurisdiction; (2) failed to comply with the RLA; (3)
violated public policy; and (4) that the Board award
was issued in disregard of the law.
A. Whether the Board Exceeded the Scope of Its
Jurisdiction
Petitioner alleges that the Board failed to
conform, or confine itself to matters within its
jurisdiction by (1) proceeding on allegations raised
for the first time at the System Board hearing; (2)
upholding the termination based on of Petitioner's
participation in HAL's bankruptcy proceedings; and
(3) applying HAL "House Rules" that were never
ratified by the ALPA or by Petitioner. Pet. at 18-23,
Reply Brief in Support of Petition ("Reply") at 3-5.
1. The Board Failed to Confine Itself to Matters
Within Its -Turisdiction When It Considered
and Relied on Matters that Were Not Included
in HAL's Statement of Charges
Courts will not review the merits of an
arbitration award so long as the award is based
properly on the applicable collective bargaining
agreement and the subject matter is within the
board's jurisdiction. Rossi v. Trans World Airlines,
- App. 12a -
Inc., 507 F.2d 404, 405 (9th Cir. 1974); Singer v.
Flying Tiger Line Inc., 652 F.2d 1349, 1356 (9th Cir.
1981) (overruled on other grounds). An arbitration
award must be confirmed if it "draw[s] its essence
from collective bargaining agreement." Hawaii
Teamsters and Allied Workers Uxion, Local 996 v.
United Parcel Serv., 241 F.3d 1177, 1181 (9th Cir.
2001); United Steelworkers of America v. Enterprise
Wheel & Car Corp., 363 U.S. 593, 597, (1960).
However, the "strong admonitions" that steer courts
away from the merits and circumscribe judicial
review "do not mean that an arbitrator may ignore
the plain language of the contract." Hawait
Teamsters, 241 F.3d at 1181 (citations omitted).
"{[A]n arbitrator has no authority to ignore the plain
language of a collective bargaining agreement that
limits the scope of his authority." Jd.
(a) The Plain Language of the CBA Limits
the Board's Authority
The CBA between HAL and the ALPA
provides that, "[bJefore a pilot is disciplined or
discharged, such pilot shall be notified in writing ... of
the precise charge or charges against him or her." See
HAL 2000 Pilots Agreement § 16.B.1 (attached as
Ex. B to Excerpt of Record in Support of Petition). "A
hearing shall be held by the Vice President-Flight
Operations ... within ten (10) calendar days after
receipt of the letter of charge to determine what
action, if any, should be taken on the charge or
charges." Id. "If the pilot is dissatisfied with any
- App. 18a -
discipline or discharge action of the Company and
desires to appeal, s/he shall, through the Association
. make a written appeal to the Hawaiian Airlines
Pilots' System Board of Adjustment ...." Id. §
16.B.2.
The CBA provides that the Board has
jurisdiction "over disputes between any employee
covered by the Pilots' Agreement and the Company
growing out of grievances or out of interpretation or
application of any of the terms of the Pilots'
Agreement. Jd. § 17.C.1. The jurisdiction of the Board
covers "any dispute properly submitted to it by the
President of the Association or by the Company,
when such dispute has not been previously settled in
accordance with the terms provided for in Section 16
(Grievances)." Id. However, "[n]o matter shall be
considered by the Board that has not first been
handled in accordance with the provisions of Section
16 (Grievances) and a decision thereon by the
Company." Id. § 17.D.2.
(b) The Board Both Considered and Relied
On Matters That Were Not First Handled
in Accordance With The Grievance
Procedures Set Forth in the CBA
Pursuant to Section 16.B of the CBA, on March
31, 2005, HAL proffered a "Statement of Charges"
("SOC") and removed Petitioner from service with
pay pending the outcome of a hearing to "determine
what action, if any, should be taken" on the charges.
SOC at 1,3 (attached as Ex. C to Excerpt of Record in
- App. 14a -
Support of Petition). The Statement of Charges,
which referred exclusively to Petitioner's partici-
pation in HAL's bankruptcy proceedings as the basis
for the company's disciplinary action, are set forth
below in their entirety:
I. FACTS
Your involvement in the Hawaiian Airlines
Bankruptcy Case No. 03-00817-RJF (Chapter
11) ceased on March 11, 2005 with your
withdrawal of all of your motions filed in
such case, the dismissal with prejudice of
your Plan of Reorganization ("POR") by the
Bankruptcy Court and a harsh judicial
admonishment directed toward you for lying
about the court's actions on your public
website.
A. The facts surrounding the dismissal] of
your POR included numerous
falsifications and acts of dishonesty by
you including, but not limited to, the
following:
- Your filing with the court in September
2004 stating that you had a commitment of
$100 million dollars to back up your POR;
followed by your admission during your
deposition on March 4, 2005 that you did
not have such financial commitments at
the time of that filing;
- App. 15a -
Your filing with the court in September
2004 stating that your commitment was
from "financial institutions and accredited
investors" when in fact you admitted in
deposition that: (i) you had no under-
standing of whether either Paul Boghosian
or The Barron Group is a financial
institution or an accredited investor; and
(ii) your belief that Dr. Spencer was an
“accredited investor" was based upon Dr.
Spencer's affidavits, the first of which was
not filed until January 2005, or several
months after your September 2004 filing;
Your admission in March 2005 that you in
fact had no agreement in effect to deliver
the funds underlying your POR; and that
you had never met, corresponded by letter
or email, or talked on the phone to a Dr.
Spencer, the man who you presented to
the court as the source of $300 million in
funds to support your plan through his
E&M Trust;
Your admission that you visited Dr.
Spencer's E&M Trust address and
observed it to be some sort of "mission" or
“community services" building that was
located in a bad neighborhood, but you
continued on with your representations to
the court despite what should have caused
you to have serious reservations about the
- App. 16a -
legitimacy of the E&M Trust;
The filing, on behalf of your POR, of (i) a
redacted print-out of a Euroclear
computer screen, which purported to
show approximately $500 million available
in an ABN-Amro Bank of NV account held
in the name of E&M Trust and (ii) a letter
cosigned by two purported ABN-Amro
bank officials confirming that the cash
was in the account, both of which later
proved to be false documents containing
phony names for bank officials and an
invalid account number;
Your censure by the bankruptcy court for
representing that the court had approved
your Disclosure Statement when in fact, as
you admitted during your deposition, just
the opposite was true.
. You were disloyal to the Company through:
Your attempts to derail the bankruptcy
case by objecting to nearly every
substantive motion filed by the Trustee,
which in nearly every single case, your
objections were overruled by the court
and your motions denied;
Your filing of a sham POR that has
disrupted and caused additional,
unnecessary expense to the Company in
- App. 17a -
the processing of its bankruptcy case.
Il. RULES VIOLATED
Your above cited actions violated Flight Oper-
ations Manual Section 2-1-6, House Rules:
he
House Rule 14: Falsification or
Dishonesty of Any Kind;
House Rule 14: Making False
Statements About Other Employees;
House Rule 16: Failure or Refusal to
Work With Management;
House Rule 19: Improper conduct at
any time or any place which adversely
affects the employees relationship with
his fellow workers and/or superwisors;
House Rule 19: Improper conduct at
any time or any place which is detri-
mental to Hawaiian Airlines reputation
and/or goodwill among its customers
and/or the community as determined
by the Company;
House Rule 20: Conduct or communica-
tion that disparages the Company or its
reputation, its employees, and/or the
quality of its service or product;
House Rule 20: Disloyalty to the
Company
- App. 18a -
SOC at 1-3.
At the conclusion of the three member Board
arbitration, the System Board of Adjustment issued
an Award concluding that HAL demonstrated just
cause for the termination of Konop's employment. A
review of the 49-page Award reveals that the Board
considered and/or relied on several matters that
were not included as "precise charges" in the 3-page
Statement of Charges. For example, in the
"Background" section, the Award references a March
2003 "incident" in which Petitioner Konop visited
HAL's System Operations Control Center, and sent
a letter advising the Company's Vice President of
Operations of his opinions of the Control Center's
effectiveness. Award at 4-5. By letter dated April 9,
2003, the Vice President of Operations responded to
Petitioner "that his presence in the SOC was
unsolicited and without authorization, that his
interaction with personnel at the Center was
unwelcome and considered a disruption of work
progress." Id. This incident is not included in HAL's
Statement of Charges against Konop.
The Award also details several motions and
applications filed by Konop with the bankruptcy
court. See e.g., Award at pp. 8-9 (discussing Konop's
motion for "Air Safety Conservator"); Award at 10-
11 (detailing Konop's motion for "Preliminary
Injunction Barring Extraordinary Expenditures by
Trustee Gotbaum"); Award at 22-23 (describing
Konop's TRO "Prohibiting Extraordinary Expendi
tures by the Trustee"). While the Statement of
- App. 19a -
Charges generally references Konop's "object[ions] to
nearly every substantive motion filed by the
Trustee," and details some of Konop's POR-related
filings, the SOC does not mention any of the
affirmative motions and applications filed by Konop
and discussed in the Award. See Statement of
Charges, passim.
At the outset, the Award indicates that where
appropriate, and "for the sake of continuity, the
Board may include references to related events, that
do not necessarily bear on the issue." Award at 3.
Thus, it is unclear whether uncharged information
that was only cited in the Background section of the
Award supported the Board's decision to uphold the
termination. However, the Board's factual findings,
contained in the "Discussion and Findings" section of
the Award, likewise include facts that were not
alleged in the Statement of Charges.
The Discussion and Findings provide that,
during the bankruptcy proceedings, Konop “derided
members of management, criticized Company
procedures, accused officials of causing’ the
bankruptcy through improper decision making,
challenged the integrity of certain individuals - all
without offering proof of such charges." Award at 46.
The Board concluded that "the company has
demonstrated that the Grievant repeatedly made
false or unproven statements about other employees
.. " Award at 48.
The Board also found that Konop "disparaged
- App. 20a -
Company officials to other employees’ and
potentially the general public via his website" and
that he "brought adverse attention to the Company
by the notoriety associated with attempting to
involve the company with disreputable persons."
Award at 48-49. Although these factual findings
may support the Board's conclusion that Konop
violated certain "House Rules," the factual
allegations themselves are not found in the
Statement of Charges.
The System Board of Adjustment lacks
jurisdiction over matters that have “not first been
handled in accordance with the provisions of Section
16" of the CBA, and Section 16 requires that "[b
jefore a pilot is disciplined or discharged, such pilot
shall be notified in writing ... of the precise charge or
charges against him or her." Because the Board
considered and relied on allegations and facts that
are not set forth as precise charges against
Petitioner in HAL's Statement of Charges, the Court
finds that the Board failed to confine itself to
matters within its jurisdiction in issuing its Award.
2. The Board Did Not Exceed Its Jurisdiction By
Applying HAL's "House Rules"
Petitioner alleges that the Board also
exceeded its authority by imposing and applying
HAL's "House Rules," which had been expressly
rejected during the collective bargaining process, not
only by his union representative, but also specifically
- App. 2la -
and individually by him. Pet. at 21-23. According to
Petitioner, the Rules are not, therefore, part of the
collective bargaining agreement.
While an arbitrator has "no authority to ignore
the plain language of a collective bargaining
agreement that limits the scope of his authority," if
the CBA is not explicit, the arbitrator may look for
guidance from other sources, including "house rules,"
or the "common law of the shop." Rossi, 507 F.2d at
405; Hawaii Teamsters, 241 F.3d at 1178, 1181-84
(upholding termination for violation of “house rules").
The law of the shop is “equally a part of the collective
bargaining agreement although not expressed in it."
Hawaii Teamsters, 241 F.3d at 1181. This approach
is necessary because CBAs cannot expressly regulate
every conceivable employment matter. As_ the
Supreme Court has stated:
Collective bargaining agreements regulate or
restrict the exercise of management
functions; they do not oust management from
the performance of them. Management hires
and fires, pays and promotes, supervises and
plans. All these are part of its function, and
absent a collective bargaining agreement, it
may be exercised freely except as limited by
public law and by the _ willingness of
employees to work under the particular,
unilaterally imposed conditions.
United Steelworkers of Am. v. Warrior and Gulf
Navigation Co., 863 U.S. 574, 583 (1960).
- App. 22a -
Here, the Board explicitly stated that it
applied HAL's "House Rules" in its analysis of
Konop's termination. See Award at 3 (indicating that
Board limited "its attention to ... the question as to
whether actions by the Grievant that are set out in
the record are properly deemed to be violations of the
several House Rules cited by the Company .... ").
Although the House Rules are not mentioned in the
2000 Pilots Agreement, there is no evidence that the
House Rules conflict with any express provision of the
Pilots Agreement. Further, the Board found that
HAL was permitted under the CBA to "promulgate
and enforce reasonable rules and_ regulations
concerning the performance of its employces,"
provided such rules did not conflict with a negotiated
term of the agreement. Award at 45-46.
In upholding Konop's termination, the Board
interpreted the CBA to allow disciplinary action for
violation of HAL's House Rules. See English, 18 F.3d
at 746 (finding Board "implicitly interpreted" the
CBA to permit termination for employee's conduct).
"Unfamiliar with 'the practices of the industry and
the shop,' courts are not competent to second-guess
an arbitrator's judgment." Stead Motors of Walnut
Creek v. Automotive Machinists Lodge No. 1173,
Intern. Ass'n of Machinists, 886 F.2d 1200, 1207 (9th
Cir. 1989). More importantly, even if this Court
disagreed with the arbitrator's findings, the Court is
"barred from disregarding the arbitrator's factual
determinations" respecting the terms of the parties'
CBA. Id. The Court therefore finds that the Board did
- App. 23a -
not exceed its jurisdiction when it upheld Petitioner's
termination based his violation of HAL’s "House
Rules."
3. The Board Upheld Petitioner's Termination.
Based on the Manner of Petitioner's
Bankruptcy Participation and Not Because of
the Participation Itself
Petitioner asserts that the Board exceeded its
jurisdiction because all of the charges in the
Statement of Charges’ reference Petitioner's
participation in HAL's bankruptcy. Specifically,
Petitioner asserts that the Board (i) lacks
jurisdiction to interpret or enforce the Bankruptcy
Code, and (2) exceeded its jurisdiction by sustaining
“"Konop's employment termination for lawful off-the-
job activities, conducted away from the workplace."
Pet. at 19-20. Petitioner is incorrect on both points.
The Board did not endeavor to interpret or
enforce the Bankruptcy Code when it upheld
Petitioner's termination. It merely considered
Petitioner's conduct during’ the bankruptcy
proceedings, and whether that conduct violated
HAL's House Rules. The Board did not deny that
Petitioner had "standing" to participate in the
Bankruptcy (Award at 47), but found that the
manner of his participation violated the House Rules
and justified his termination. Award at 45-49. This
Court will not consider the merits of the Board's
factual findings. Eastern, 531 U.S. at 62 citing
- App. 24a -
United Steelworkers of Am. v. Enterprise Wheel & Car
Corp., 363 U.S. 593, 596 (1960) (holding the proper
judicial approach to a labor arbitration award is to
refuse to review the merits).
Nor did the Board exceed the scope of its
jurisdiction when it affirmed the discharge based on
Konop's off-the-job activities. See English, 18 F.3d at
745-46. A system board "exceeds its jurisdiction if it
issues a decision without foundation in reason or
fact." ld. at 746. "The basis of the Board's award
must be rationally inferable from the letter or
purpose of the collective bargaining agreement." Id.
Again, however, the "interpretation of the collective
bargaining agreement is for the Board to decide and
not the courts." ld.
In English, a_ railroad employee was
terminated for an off-duty incident in which he
assaulted another employee on private property. Id.
at 743, 746. The arbitration board upheld the
termination, ruling it was justified because the
assault was "related to his employment" in that it
was provoked by on-the-job events, and because it
"adversely affected the railroad.” Id. On appeal, the
Ninth Circuit found that the "Board implicitly
interpreted the [CBA] to allow disciplinary action for
conduct such as English’'s, even though the conduct
occurred while off-duty and not on Burlington's
property." Id. The Ninth Circuit concluded that this
decision was not wholly without foundation in reason
or fact and therefore did not exceed the Board's
jurisdiction. Id.
- App. 25a -
The Board here interpreted the CBA to permit
termination for violation of HAL "House Rules." The
Board also found that Petitioner's conduct adversely
affected HAL by inter alia disparaging Company
officials to other employees and potentially the
general public via his website, bringing adverse
attention to the company, and by delaying or
interfering with the efforts of the Trustee to bring the
Company out of bankruptcy, including making false
claims before the bankruptcy court. Award at 48-49.
The Board concluded that the "fact that such
activities were not related to his status as a pilot
does not detract from the gravity of the violations of
the House Rules." Award at 49. Like the decision in
English, the Board's decision here is "not wholly
without foundation in reason or fact and thus, the
Board's decision does not exceed its jurisdiction"
merely because it rests on Petitioner's off- the-job
conduct. English, 18 F.3d at 746.
B. Whether the Board Failed to Comply with the
RLA
Petitioner claims the Board Award violated
the RLA because he was terminated for his concerted
labor activities in contravention of 45 U.S.C. § 151
(a). Pet. at 23-24. One of the purposes of the RLA is
to "forbid any limitation upon freedom of association
among employees or any denial, as a condition of
employment or otherwise, of the right of employees to
join a labor organization." 45 U.S.C. § 151(a). The
- App. 26a -
RLA also provides for "the complete independence of
carriers and of employees in the matter of self-
organization to carry out the purposes" of the RLA.
Id.
Petitioner alleges that he was engaged in a
number of concerted activities that were protected
under the RLA, including (1) opposing ratification of
concessionary labor contracts; (2) seeking a change in
union representation; (3) seeking changes in elected
union officers; (4) aiding other pilots in filing
grievances; and (5) supporting an alternative plan of
reorganization ("POR") for HAL in bankruptcy court
that would leave HAL employces "unimpaired by
Hawailian's reorganization." Pet. at 24.
Petitioner claims that he worked in concert
with other employees to encourage HAL employees to
reject newly proposed concessionary labor contracts
by (I) establishing an internet website to facilitate
employee communication regarding labor contract
proposals; (2) distributing materials on file with the
bankruptcy court relating to HAL's financial
condition; (3) distributing materials related to the
legal rights of employees in light of HAL's
bankruptcy; (4) distributing materials relating to the
trustee's POR; (5) proposing an alternative POR; (6)
conducting business research and planning regarding
HAL's post reorganization operations; and (7)
authoring a proposed business plan that would leave
employee labor contracts intact. Petitioner argues
that the System Board's decision violates the RLA
because it is based on tnese purported concerted
- App. 27a -
labor activities.
However, only two of these activities - the POR
submission and website maintenance - were
expressly referenced in the Board's "Discussion and
Findings" upholding Petitioner's termination. With
respect to Petitioner's proposed alternative PORs,
the Board upheld Petitioner's termination, not
because he submitted alternative PORs, but because
the company "demonstrated" that Petitioner
"falsified and made _ representations concerning
crucial aspects of the POR with which he was
associated before the Bankruptcy Court." Award at
48. The Board also found that the PORs did not meet
with "appropriate standards" for submissions to the
Court, including that such submissions be "factual,
truthful and free of deception." Award at 47.
Regarding the website, the Board found
Petitioner's termination was justified, not because he
maintained the website, but because the website
made false claims regarding the status of the
alternative POR in the bankruptcy court. Id. Although
Petitioner disclaimed responsibility for preparing the
false statement, the Board found he was "reasonably
held responsible" for the content of his website. Id.
The Board concluded that these activities violated
HAL's House Rules. This Court may not consider the
substantive merit of these findings on review.
Finally, the jurisdiction of the System
Adjustment Board over "minor" disputes is limited
- App. 28a -
to disputes growing out of interpretation of the CBA.’
Fennessy v. Southwest Airlines, Co., 91 F.3d 1359,
1361-62 (9th Cir. 1996); Norris, 512 U.S. at 252-66
(1994) ("the category of minor disputes contemplated
by § 15la are those that are grounded in the
collective-bargaining agreement"). RLA statutory
claims are outside the jurisdiction of the Board. See
Fennessy, 91 F.3d at 1364 (holding the "Board of
Adjustment has no jurisdiction over the statutory
claim" under section 152); see also Norris, 512 U.S. at
254 ("[Bloth the traditional role of the arbitrator and
admonitions of the courts require the Board to refrain
from attempting to construe any of the provisions of
the [RLA]" (quoting Northwest Airlines/Airline Pilots
Assn., Int'l Sys. Bd. Of Adjustment, Decision of June
28, 1972, p.13)). Petitioner's claim, that he was
discharged for engaging in protected labor activities,
"rests not upon a collective bargaining contract, but
upon a charge that [HAL] violated the statute;" such
charge is "within the jurisdiction of the district court
rather than an adjustment board." /d. quoting
Roscello v. Southwest Airlines Co., 726 F2d 217, 220,
n.2 (5th Cir. 1984). Indeed, Petitioner has separately
filed a Complaint with this Court alleging he was
wrongfully terminated for his concerted labor
activities in violation of the RLA.
The System Board also has jurisdiction over
"major" disputes relating to the "formation of
collective bargaining agreements or efforts to
secure them." Hawaiian Airlines, Inc. v. Norris,
512 U.S. 246, 252-53 (1994).
- App. 29a
C. Whether the Board Award Violates Public
Policy
Because the parties bargain for the System
Board's construction of the CBA, courts view
arbitration awards as interpreting the contractual
agreement between the parties. HKdstern, 531 U.S. at
61-62. As with any contract, courts will not enforce an
award that contravenes public policy. Stead Motors,
886 F.2d at 1210 n.9. However, the scope of judicial
review of arbitration awards under the public policy
exception is "extremely narrow." United Transp.
Union v. Union Pac. R.R. Co., 116 F.3d 430, 433 (9th
Cir. 1997); Stead Motors, 886 F.2d at 1212.
While a court should be reluctant to do so, it
may vacate an award for violating a public
policy that is explicit, well-defined, and
dominant as ascertained by reference to the
laws and legal precedents and not from general
considerations of proposed public interest. The
court must focus on the award itself, not the
behavior or conduct of the party in question ....
In other words, to vacate an award on public
policy grounds, the court must find that the
policy is one that specifically militates against
the relief ordered by the arbitrator.
S. Cal. Gas Co. v. Util. Workers Union of Amer., Local
132, AFL-CIO, 265 F.3d 787, 794-95 (9th Cir. 2001)
(emphasis supplied) (citations omitted). The relevant
inquiry is whether the "specific terms contained in
the [Award] violate public policy," by creating an
- App. 30a -
"explicit conflict with other ‘laws and _ legal
precedents’ .... United Paperworkers Int'l Union,
AFL-CIO v. Misco, Inc., 484 U.S. 29,43 (1987); see also
Eastern, 531 U.S. at 62-63.
Petitioner alleges that the arbitration Award
should be vacated as contrary to explicit public
policies articulated in (1) the California Labor Code,
(2) the Railway Labor Act, and (3) the federal
Bankruptcy Code.
1. The California Labor Code Does Not Support.
Vacating the Award
Petitioner argues that his termination
violates explicit public policy because California
Labor Code Sections 98.6(a) and 96(k) prohibit
employers from discharging employees as a result of
lawful off-the-job conduct. Pet. § 114. Cal. Labor
Code § 98.6 proscribes termination for employee
conduct specified in delineated Labor Code
provisions, “including the conduct described in
subdivision (k) of Section 96." See Cal. Labor Code §
98.6(a). Section 96, subdivision (k), provides, in
pertinent part:
"The Labor Con:missioner...shall, upon the
filing of a claim therefor by an employee...
take assignments of ... [§] (k) Claims for loss
of wages as the result of demotion, suspen-
sion, or discharge from employment for
lawful conduct occurring during non-working
hours away from the employer's premises."
- App. 3la -
Cal. Labor Code § 96(k). However, Section 96(k) does
not set forth independent public policy that provides
employees with substantive rights or protections.
Barbee v. Household Auto. Fin. Corp., 113 Cal. App.
4th 525, 533 (2003). Section 96(k) merely establishes
a procedure by which the Labor Commissioner may
assert, on behalf of employees, "recognized
constitutional rights." Id. (emphasis supplied).
Petitioner alleges that he was terminated for
participating in HAL’s bankruptcy proceedings and
for concerted labor activities undertaken during
nonworking hours and away from his employer's
premises. Pet. 44] 115, 120. However, as set forth
above, Petitioner's termination was not upheld
because he was engaged in lawful activities outside of
work, but because of the manner in which he engaged
in those activities. Further, Petitioner neither alleges
nor argues that his termination violated "recognized
constitutional rights" as required to assert a
violation of Cal. Labor Code §§ 98.6(a) and 96(k).
2. The Award Does Not Violate Pubic Policy of
the RLA
Petitioner alleges that the public policy of the
RLA, which prohibits an employer from interfering
with the organization of its employees, supports this
Court's exercise of its narrow. discretion § in
overturning the Board Award. Pet. 94 111, 120. The
Court is constrained in this review to determine
whether the "specific terms'
contained in the Award
- App. 32a -
violate public policy. See Misco, 484 U.S. at 43;
Eastern, 531 U.S. at 62-63. As discussed above, to
the extent the Award relies on actions that
Petitioner describes as concerted labor activities, it
does so based on its findings that Petitioner's
misrepresentations and falsifications violated HAL's
House Rules and justified his termination. The
Award does not create an "explicit conflict" with the
RLA because its findings and conclusions do not
support Petitioner's claim that the termination was
upheld because of his concerted labor activity. See id.
In conducting this review, the Court does not
consider the conduct of the parties in question. See S.
Cal. Gas Co., 265 F.3d at 794-95. ("The court must
focus on the award itself, not the behavior or conduct
of the party in question."). Focusing, as it must, on
the terms of the Award, the Court concludes that the
Award does not create an explicit conflict with the
RLA.
3. The Bankruptcy Code Does Not Support
Vacating the Award
Petitioner looks to the Bankruptcy Code as a
third source of public policy, and argues that, as a
creditor of HAL, he had a right to “appear and be
heard" by the bankruptcy court, and a right to
propose a reorganization plan. Pet. §/"| 112-123 citing
11 U.S.C. § 1109(b); 11 U.S.C. § 1121(c). Petitioner is
correct that the Bankruptcy Code authorizes such
participation. 11 U.S.C. § 1109(b) provides: "A party
App. 33a
in interest, including ... a creditor ... may raise and
may appear and be heard on any issue in a case
under this chapter." 11 U.S.C. § 1109(b) (emphasis
supplied). 11 U.S.C. § 1121(c) provides: "Any party in
interest, including ...acreditor may file a plan if
and only if -- (1) a trustee has been appointed undei
this chapter..." 11 U.S.C. § 1121(c) (emphasis
supplied). However, even assuming this statutory
authority permitting Petitioner's bankruptcy
participation also constitutes an "explicit, well
defined, and dominant" policy that "specifically
militates" against terminating him for’ such
participation, the Board's Award did not uphold
Petitioner's termination because he participated in
HAL's bankruptcy pursuant to these statutes
HAL argues that the Board upheld Konop's
termination because of his dishonest conduct before
the bankruptcy court. The Award confirms that the
Board relied, at least in part, on its factual findings
concerning Petitioner's false representations to the
court
While the Association pointed out that the
Grievant had standing with the Court, as
evidenced by acceptance oj his Motions and
Objections, the Grievant also had an obligatlon
to meet appropriate standards for such
presentations. It is reasonable to conclude that
uch submissions would be factual, truthful
and free of deception The PORs presented bs
the Grievant on behalf of himself, as well a
with others, did not meet that standard: thi
- App. 34a -
was particularly true insofar as the important
aspect of available funding was concerned.
While the Grievant made repeated
representations to the Court of the availability
of such funding, in point of fact none ever
existed, or if it did, no proof was presented to
substantiate such clarms. Moreover, the source
of such alleged funds was determined to be
suspect as to its legitimacy. It was his
obligation to do due diligence to ensure the
validity of his clainis before the Court. When
questioned about that aspect of the PORs, the
Grievant attempted to avoid responsibility by
belatedly contending that he lacked the
necessary qualifications or experience to do so.
Whether he intentionally made false claims
before the Court or failed to ensure the
integrity of such claims out of a lack of
competency he committed a serious error for
which he was personally responsible. The fact
that the Court did not charge him with fraud
does not detract from the wiolation of
applicable House Rules that occurred.
Award at 47-48. The Court agrees that public policy
does not support making false statements or
misrepresentations in court, and that a party
appearing before the court has an obligation to
exercise due diligence to ensure the validity of claims
made to the court
The Award also indicates. however, that the
Board did not rely exclusively on Petitioner's
dishonest participation in the bankruptcy
- App. 35a -
proceedings as a basis for termination. In response
to the ALPA' s contention that the charges brought
against Grievant only related to his involvement with
several versions of PORs filed with the Court, the
Board pointed to HAL's Statement of Charges, which
include a charge of disloyalty for Konop's “attempts
to derail the bankruptcy case by objecting to nearly
every substantive motion filed by the Trustee .
Award at 46. The Board then made factual findings
in support of the disloyalty charge:
In point of fact, the Grievant involved himself
in the bankruptcy right from its outset: he
derided members of management, criticized
Company procedures, accused officials of
causing the bankruptcy through improper
decision making, challenged the integrity of
certain individuals -- all without offering proof
of such charges .... His repeated challenges to
the Trustee's actions by his presentations to
the Court were rejected by the Court.
Award at 46-47. The Board concluded that "the
Company has demonstrated that the (Grievant
repeatedly made false or unproven statements about
other employees, falsified and made representations
concerning crucial aspects of the POR with which he
was associated before the Bankruptcy Court, [and]
delayed or interfered with the cfforts of the Trustee
A)
to bring the Company out of bankruptcy
The relevant INqULry is not whether
Petitioner's participation in the bankruptcy could
- App. 36a -
support just cause for upholding his termination;
rather, it is whether the Board's interpretation of the
collective bargaining agreement which resulted in
upholding the termination violated public policy.
Eastern, 531 U.S. at 62-63. Having reviewed the A
ward, the Court concludes that the Board found that
Petitioner's participation in HAL's bankruptcy was
dishonest and served to delay and interfere with the
Trustee's efforts to bring HAL out of bankruptcy in
violation of HAL's House Rules. The Court finds that
there is no public policy, explicit or otherwise, that
supports dishonest participation in court
proceedings, or actions that serve to delay or interfere
with court proceedings. Accordingly, the Court finds
that the Board Award upholding Petitioner's
termination does not implicate any public policy
stated in the Bankruptcy Code.
D. Courts May Not Reverse Arbitration Awards
on the Ground of Legal Error
Petitioner argues that the Award, which found
that Konop "made false or unproven statements
about other employees [and] disparaged Company
officials to other employees and potentially the
general public via his website," was issued in
manifest disregard of the law. Reply at 9. Petitioner
claims that the Board was supplied the full text of
the Ninth Circuit's opinion in Konop v. Hawaiian
Airlines, Inc., 302 F.3d 868 (9th Cir. 2002), and that
the ALPA post-hearing brief provided an explanation
of the case and its implications. Reply at 10. In
- App. 37a -
Konop, the Ninth Circuit held, inter alia, that
Konop's website publication constituted protected
union organizing activity under the RLA, and that the
RLA protects "even false and defamatory statements
unless such statements are made with actual malice
- 1.e. knowledge of falsity or with reckless disregard
for the truth." Konop, 302 F.3d at 882-83.
Petitioner claims that the Court may vacate
the Award where "(1) the arbitrators knew of a
governing legal principle yet refused to apply it or
ignored it altogether, and (2) the law ignored by the
arbitrators was well defined, explicit, and clearly
applicable to the case." Reply at 10-11. However,
none of the cases cited by Petitioner in support of this
argument involved arbitration awards under the
RLA, and the standard and scope of available review
in those cases differed from scope of review available
here.”
Petitioner's effort to characterize the issue
Appalachian Reg. Healthcare, Inc. v. United
Steelworkers of Amer. , 245 F.3d 601 (6th Cir.
2001) (employment arbitration award, but not
under the RLA); Halligan v. Piper Jaffray, Inc.,
148 F .3d 197, 202 (2d Cir. 1998) (NASD
arbitration board entered award pursuant to
employment arbitration agreement); DiRussa v.
Dean Witter Reynolds Inc., 121 F.3d 818 (2d Cir.
1997) (same); Merrill Lynch, Pierce, Fenner &
Smith v. Jaros, 70 F.3d 418 (6th Cir. 1995)
(arbitration award entered pursuant to securities
account arbitration clause); Wilko v. Swan, 346
U.S. 427 (1953) (same).
- App. 38a -
presented as one of law "does not alter the
availability or scope of judicial review: The
dispositive question is whether the party's objections
to the Adjustment Board's decision fall within any of
the three limited categories of review provided for in
the Railway Labor Act." Sheehan, 439 U.S. at 93. As
stated above, the RLA limits review of adjustment
board decisions to three specific grounds: (1) failure of
the board to comply with the RLA; (2) failure of the
board to conform, or confine itself to matters within
its jurisdiction; and (3) fraud or corruption. Further,
Section 153 First (q) of the RLA "unequivocally
states that the ‘findings and order of the [Adjustment
Board] shall be conclusive on the parties' and may be
set aside only for the three reasons specified therein."
Id. quoting 45 U.S.C. § 153. Courts "do not sit to hear
claims of .. legal error by an arbitrator as an
appellate court does in reviewing decisions of lower
courts." Hawaii Teamsters, 241 F.3d at 1180.
The Board, in issuing its Award, considered
the ALPA's argument that Petitioner's disparaging
statements were protected speech (see Award at 43),
but nonetheless found that HAL had just cause to
terminate him for violating HAL's House Rules. See
Award at 43, 46-49. Even if the Board's decision
reflects an error of law, this Court may not reverse
the Award on the ground of "legal error" without
exceeding the proper scope of its review. Hawaii
Teamsters, 241 F.3d at 1180; Sheehan, 439 U.S. at
92-93; see also Phoenix Newspapers, Inc. v. Phoenix
Mailers Union Local 752, Int'l Brotherhood of
- App. 39a -
Teamsters, 989 F.2d 1077, 1080 (9th Cir. 1993)
(holding that "a reviewing court is bound-under all
except the most limited circumstances-to defer to the
decision of the arbitrator, even if that decision finds
the facts and states the law erroneously") (citations
omitted).
CONCLUSION
Pursuant to 45 U.S.C. § 1538 First (q), the
Court GRANTS the Petition for Review. The Court
VACATES the award of the Hawaian Airlines
System Board of Adjustment on the grounds that the
Board exceeded the scope of its jurisdiction when it
considered and relied on factual allegations against
Petitioner that were not set forth as precise charges
in HAL's Statement of Charges.
IT IS SO ORDERED.
DATE: January 4, 2008
s/ Consuclo B. Marshall
CONSUELO B. MARSHALL
United States District Judge
- App. 40a -
In the Matter of Arbitration
Between
: Grievance No.
Hawaiian Airlines, Inc. : HAL-19-05DS
“Comnany” :
and : Robert C. Konop
Air Line Pilots Association
“Association”
Before: System Board of
Adjustment
This case involves a dispute over the discharge of the
Grievant, Robert C. Konop, on the charge of violating
"House Rules" 1 4, 16, 19 and 20 as found in the
Flight Operations Manual, Section 2-1-6. The hearing
was held October 25-27, 2005 at the offices of Marr,
Hipp, Jones and Wang, Attorneys at Law, in
Honolulu, Hawaii and was continued on December
10, 2005 at the offices of the Air Line Pilots
Association in San Bruno, California. Both parties
were afforded a full opportunity to present, examine
and cross-examine witnesses and to submit exhibits.
The proceedings were’ recorded by public
stenographers. Copies of the transcripts were
received in due course. Both parties closed argument
by briefs, which were received March 14, 2006.
KEK
- App. 41a -
[Pages 2-45 Not Included Here]
THE ISSUE
Did the company have just cause to terminate
the employment of the Grievant, Robert Konop;
if not, what shall the remedy be?
DISCUSSION AND FINDINGS
It is important at the outset to establish that the
Company has a right to promulgate and enforce
reasonable rules and regulations concerning the
performance of its employees; it also has an
obligation to apply them uniformly and consistently.
Such right is not diminished or altered by the
presence of a collective bargaining relationship for an
employee group, unless the it can be demonstrated
that such rule(s) is in confiict with a negotiated term
of the Agreement or thet a company otherwise agrees
to make any such change(s). This right is intact even
if the bargaining representative has not participated
in the drafting of such rules and regulations. The
effectiveness of such rules is not diminished by the
refusal of an employee to sign a commitment to abide
by then [sic], although such refusal might better be
dealt with at that point in time. Conversely, it is the
right of a bargaining representative to challenge any
such rule if it is deemed to conflict with a negotiated
provision of the collective bargaining agreement.
The Association contends that the Charges
brought against the Grievant relate only to his
- App. 42a -
activities involving several versions of the PORS,
which he either personally executed or was a
participant with others as a "principal proponent."
The statement of Charges dated March 31, 2005
indicate otherwise: As part of Section 13 of such
document includes the Charge of disloyalty for
"Your attempts .to derail the bankruptcy case
by objecting to nearly every substantive
motion filed by the Trustee, which in nearly
every single case, your objections were
overruled by the court and your motions
denied; ... “
(Jt Ex 2)
In point of fact, the Grievant involved involved
himself in the bankruptcy right from its outset: he
derided members of management, criticized
Company procedures, accused officials of causing the
bankruptcy through improper decision making,
challenged the integrity of certain individuals - - all
without offering proof of such charges. The full scope
of such activities on the Grievant's part is set out in
some detail in this document. His repeated
challenges to the Trustee’s actions by his presen-
tations to the Court were rejected by the Court.
While the Association pointed out that the
Grievant had standing with the Court, as evidenced
by acceptance of his Motions and Objections, the
Grievant also had an obligation to meet appropriate
standards for such presentations. It is reasonable to
conclude that such submissions would be factual,
- App. 43a -
truthful and free of deception. The PORs presented
by the Grievant on behalf of himself, as well as with
others, did not meet that standard; this was
particularly true insofar as the important aspect of
available funding was concerned. While the Grievant
made repeated representations to the Court of the
availability of such funding, in point of fact none ever
existed or, if it did, no proof was presented to
substantiate such claims. Moreover, the source of
such alleged funds was determined to be suspect as
to its legitimacy. It was his obligation to do due
diligence to ensure the validity of his claims before
the Court. When. questioned about that aspect of the
PORs, the Grievant attempted to avoid responsibility
by belatedly contending that he lacked the necessary
qualifications or experience to do so. Whether he
intentionally made false claims before the Court or
failed to ensure the integrity of such claims out of a
lack of competency, he committed a serious error for
which he vas personally responsible. ‘The fact that
the Court did not charge him with fraud does not
detract from the violation. of applicable House Rules
that occurred.
Finally, the Grievant attempted to excuse himself
from any responsibility for the statement on his
website which alleged that the Bankruptcy Judge had
accepted the financial exhibits presented by the
HIP/HARC/Konop group as_ proof of financial
capability. He contended he did not prepare such
statement, and that his website was available to a
number of other people who could have done so. Even
- App. 44a -
if the Grievant did not prepare such statement, he is
reasonably held responsible for the contents of such
website, which apparently was made available to
Company employees, if not others. In this specific
incident, it is apparent that the intent was to
influence other employees by use of false claims
concerning the financial status of the HIP/HARC
/Konop POR.
While the Association presented a well-reasoned
and insightful defense, the Company has demon-
strated that the Grievant repeatedly made false or
unproven statements about other employees,
falsified and made representations concerning crucial
aspects of the POR with which he was associated
before the Bankruptcy court, delayed or interfered in
the efforts of the Trustee to bring the Company out of
bankruptcy, disparaged Company officials to other
employees and potentially the general public via his
website and brought adverse attention to the
Company by the notoriety associated with attempt-
ing to involve the Company with disreputable
persons. The fact that such activities were not related
to his status as a pilot does not detract from the
gravity of the violations of the House Rules. The
Award is drawn according.
AWARD
The Company has demonstrated just cause
for the termination of employment of the
Gnievant, Robert Konop; grievance is denied.
App. 45a
System Board Members
ct
s/ James S. Scearce
James S. Scearce
Chairman/Neutral Member
s/Barbara Falvey s/Steve Malin
Barbara Falvey Steve Malin
Company Member Association Member
“s/Concur” “s/ Dissent”
- App. 46a -
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FILED
September 11, 2009
Molly ©. Dwyer, Clerk
U.S. Court of Appeals
ROBERT C. KONOP, | No. 08-55248
Petitioner - Appellee, | D.C. No. ev-06-4426
| CBM
Vv. |
| Central District of
HAWAILAN AIRLINES, INC.,! California, Los
Respondent - Appellant. | Angeles
-_ 7 |
ORDER
ROBERT C. KONOP, | No. 08-55248
Petitioner - Appellant, | D.C. No. cev-06-4426-
| CBM
Vv.
| Central District of
HAWAILLAN AIRLINES, INC.,! California, Los
Respondent - Appellee. | Angeles
|
Before: SILVERMAN and CALLAHAN, Circuit
Judges, and QUIST, District Judge
The Honorable Gordon J. Quist, Senior United
States District Judge for the Western District of
Michigan, sitting by designation
App. 47a
Judges Silverman and Quist have voted to
deny Petitioner-Appellee's petition for rehearing and
Judge Callahan has voted to grant the petition for
rehearing. Judges Silverman and Callahan have
voted to reject the petition for rehearing en banc and
Judge Quist so recommends
The full court has been advised of the petition
for rehearing en banc and no active judge has
requested a vote on whether to rehear the matter en
banc Fed. R. App. P. 35
The petition for rehearing and the petition for
rehearing en banc are DENIED
- App. 48a -
RAILWAY LABOR ACT (Excerpts)
45 U.S.C.§ 153. National Railroad Adjustment
Board
There is established a Board, to be known as the
“National Railroad Adjustment Board”, the
members of which shall be selected within thirty
days after June 21, 1934, and it is provided —
*k“**
(i) The disputes between an employee or group of
employees and a carrier or carriers growing out of
grievances or out of the interpretation or application
of agreements concerning rates of pay, rules, or
working conditions, including cases pending and
unadjusted on June 21, 1934, shall be handled in the
usual manner up to and including the chief operating
officer of the carrier designated to handle such
disputes; but, failing to reach an adjustment in this
manner, the disputes may be referred by petition of
the parties or by either party to the appropriate
division of the Adjustment Board with a full
statement of the facts and all supporting data
bearing upon the disputes.
kKk*
(p) Ifa carrier does not comply with an order of a
division of the Adjustment Board within the time
limit in such order, the petitioner, or any person for
whose benefit such order was made, may file in the
- App. 49a -
District Court of the United States for the district in
which he resides or in which is located the principal
operating office of the carrier, or through which the
carrier operates, a petition setting forth briefly the
causes for which he claims relief, and the order of the
division of the Adjustment Board in the premises.
Such suit in the District Court of the United States
shall proceed in all respects as other civil suits,
except that on the trial of such suit the findings and
order of the division of the Adjustment Board shall
be conclusive on the parties, and except that the
petitioner shall not be liable for costs in the district
court nor for costs at any subsequent stage of the
proceedings, unless they accrue upon his appeal, and
such costs shall be paid out of the appropriation for
the expenses of the courts of the United States. If the
petitioner shall finally prevail he shall be allowed a
reasonable attorney's fee, to be taxed and collected as
a part of the costs of the suit. The district courts are
empowered, under the rules of the court governing
actions at law, to make such order and enter such
judgment, by writ of mandamus or otherwise, as may
be appropriate to enforce or set aside the order of the
division of the Adjustment Board: Provided, however,
that such order may not be set aside except for failure
of the division to comply with the requirements of
this chapter, for failure of the order to conform, or
confine itself, to matters within the scope of the
division's jurisdiction, or for fraud or corruption by a
member of the division making the order.
(q) lf any employee or group of employees, or any
- App. 50a -
carrier, is aggrieved by the failure of any division of
the Adjustment Board to make an award in a dispute
referred to it, or is aggrieved by any of the terms of an
award or by the failure of the division to include
certain terms in such award, then such employee or
group of employees or carrier may file in any United
States district court in which a petition under
paragraph (p) could be filed, a petition for review of
the division’s order. A copy of the petition shall be
forthwith transmitted by the clerk of the court to the
Adjustment Board. The Adjustment Board shall file
in the court the record of the proceedings on which it
based its action. The court shall have jurisdiction to
affirm the order of the division, or to set it aside, in
whole or in part, or it may remand the proceedings to
the division for such further action as it may direct.
On such review, the findings and order of the division
shall be conclusive on the parties, except that the
order of the division may be set aside, in whole or in
part, or remanded to the division, for failure of the
division to comply with the requirements of this
chapter, for failure of the order to conform, or confine
itself, to matters within the scope of the division’s
jurisdiction, or for fraud or corruption by a member of
the division making the order. The judgment of the
court shall be subject to review as provided in
sections 1291 and 1254 of title 28.
% RSE
- App. 5la-
45 U.S.C.§ 181. Application of subchapter I to
carriers by air
All of the provisions of subchapter I of this chapter
except section 153 of this title are extended to and
shall cover every common carrier by air engaged in
interstate or foreign commerce, and every carrier by
air transporting mail for or under contract with the
United States Government, and every air pilot or
other person who performs any work as an employee
or subordinate official of such carrier or carriers,
subject to its or their continuing authority to
supervise and direct the manner of rendition of his
service.
ve ve ¥
45 U.S.C. § 184. System, group, or regional
boards of adjustment
The disputes between an employee or group of
employees and a carrier or carriers by air growing out
of grievances, or out of the interpretation or
application of agreements concerning rates of pay,
rules, or working conditions, including cases pending
and unadjusted on April 10, 1936 before the National
Labor Relations Board, shall be handled in the usual
manner up to and including the chief operating officer
of the carrier designated to handle such disputes; but,
failing to reach an adjustment in this manner, the
disputes may be referred by petition of the parties or
by either party to an appropriate adjustment board,
as hereinafter provided, with a full statement of the
- App. 52a -
facts and supporting data bearing upon the disputes.
It shall be the duty of every carrier and of its
employees, acting through their representatives,
selected in accordance with the provisions of this
subchapter, to establish a board of adjustment of
jurisdiction not exceeding the jurisdiction which may
be lawfully exercised by system, group, or regional
boards of adjustment, under the authority of section
153 of this title.
Such boards of adjustment may be established by
agreement between employees and carriers either on
any individual carrier, or system, or group of carriers
by air and any class or classes of its or their
employees; or pending the establishment of a
permanent National Board of Adjustment as
hereinafter provided. Nothing in this chapter shall
prevent said carriers by air, or any class or classes of
their employees, both acting through their
representatives selected in accordance’ with
provisions of this subchapter, from mutually agreeing
to the establishment of a National Board of
Adjustment of temporary duration and of similarly
limited jurisdiction.
i
- App. 58a -
Hawaiian Airlines 2005 Pilots Agreement
[Excerpts]
Section 16
GRIEVANCES
KE*
DISCIPLINE AND DISCHARGE
Before a pilot is disciplined or discharged, such
pilot shall be notified in writing by certified mail,
return receipt requested, of the precise charge
or charges against him or her. S/he shall be
given the necessary time, not to exceed seven (7)
calendar days from date of receipt, in which to
secure the presence of witnesses and shall have
the right to be represented by a Company
employee of his or her choice or his or her duly
accredited representative(s). A hearing shall be
held by the Vice President-Flight Operations,
or his or her designee, within ten (10) calendar
days after receipt of the letter of charge to
determine what action, if any, should be
taken on the charge or charges.
a. Within ten (10) calendar days after the
close of the hearing, a decision shall be
announced in writing and, if requested by
the pilot, a copy shall be furnished to the
Contract Administration Department of
the Association, MEC Grievance
Chairman and the MEC Chairman.
zk«z&*
D.
1.
- App. 54a -
Hawaiian Airlines 2005 Pilots Agreement
GENERAL
The time limits set forth in Paragraphs A & B
of this Section may be extended by mutual
agreement of the Company and the grievant or
the Association.
If any decision of the Company under the
provisions of this Sectior is not appealed by
the grievant(s) within the time _ limits
prescribed herein for such appeal or any
extension mutually agreed upon, the decision of
the Company shall be final and binding. If any
hearing or decision required of the
Company under the provisions of this
Section is not provided within the time
limits herein, or any extension mutually
agreed upon, the grievant(s) position shall
_ be sustained, and the relief requested shall
be granted.
All notification in writing’ shall be
accomplished by certified mail, return receipt
requested, addressed to the last known
address of the party to whom the notice is
being given. All time limits specified in this
Section shall be determined by the date on the
return receipt.
A.
- App. 55a -
Hawaiian Airlines 2005 Pilots Agreement
[Excerpts]
Section 17
ESTABLISHMENT OF SYSTEM BOARD OF
ADJUSTMENT.
. In compliance with Section 204, Title Il of the
Railway Labor Act, as amended, there is hereby
established a System Board of Adjustment,
which shall be known as the "Hawaiian Airlines
Pilots System Board of Adjustment" hereinafter
referred to as the "Board". The Board's purpose
shall be to adjust and decide disputes that may
arise under the terms of the Pilots’ Agreement
when such disputes have been properly
submitted to the Board.
*k*¥*
JURISDICTION OF THE BOARD
The Board shall have jurisdiction over disputes
between any employee covered by the Pilots’
Agreement and the Company growing out of
grievances or out of interpretation or application
of any of the terms of the Pilots’ Agreement. The
jurisdiction of the Board shall not extend to
proposed changes in hours of employment, rates
of compensation, or working conditions covered
by existing agreements between the parties
hereto, or as subsequently executed.
2.
D.
ie
- App. 56a -
Hawaiian Airlines 2005 Pilots Agreement
The Board shall consider any dispute
properly submitted to it by the President
of the Association or by the Company, when
such dispute has not been previously settled in
accordance with the terms provided for in
Section 16 (Grievances).
kk
PROCEEDINGS BEFORE THE BOARD
All disputes properly submitted to the Board
for consideration shall be addressed to the
Members of the Board, including all papers
and exhibits in connection therewith. Each
case submitted shall show:
a. Question or questions at issue;
b. Statement of facts;
c. Position of employee or employees; and
d. Position of the Company.
When possible, joint submissions should be
made but if the parties are unable to agree
upon a joint submission, then either party may
submit the dispute and its position to the
Board. No matter shall be considered by
the Board that has not first been handled
in accordance with the provisions of
Section 16 (Grievances) and a decision
thereon by the Company.
kkk
- App. 57a -
San Francisco Contract Administration
Air Line Pilots Association, International
1150 Bayhil Drive, Suite 2200 San Bruno,
California 94066-3004
Phone 650-872-7028 FAX 650-872-7086
April 26, 2005
Certified Mail - Return Receipt
Receipt # 7002 2410 0004 7397 3737
Mr. Robert Glasgow
Company System Board Member
Hawaiian Airlines, Inc.
PO Box 30008
Honolulu International Airport
Honolulu, HI 96820-0008
Captain Steven Malin
ALPA System Board Member
2333 Kapiolani Blvd, Suite # 2909
Honolulu, HI 96826
Captain Bill Seavy
Company System Board Member HAWAIIAN
AIRLINES, INC.
3375 Koapaka St Ste G350
Honolulu, HI 96819-1804
Captain Ray Moudy
ALPA System Board Member
92-328 Kiowao Place
Kapolei, Hawaii 96707
Re: HAL-19-05DS, Robert Konop (Discharge)
- App. 58a -
Dear Gentlemen:
In the Agreement between Hawaiian Airlines, Inc.,
and the airline pilots in its service, as represented by
the Air Line Pilots Association, International,
relating to the establishment and maintenance of a
System Board of Adjustment, which Agreement was
effective January 1, 2001, there appears the following
paragraph:
The Board shall consider any dispute properly
submitted to it by the President of the
Association or by the Company, when such
dispute has not been previously settled in
accordance with the terms provided for in
Section 16 (Grievance).
Herewith is submitted for consideration and decision
by the above-described Board, the individual grie-
vance filed by Robert Konop.
1. Question at Issue:
a. Whether the Company had just cause to
terminate the employment of Captain
Robert Konop, as set forth in its letter of
April 20, 2005.
b. If not, what shall be the remedy?
2. Statement of Facts:
The Company issued pilot Robert Konop a
“Statement of Charges" on March 31, 2005. A
hearing on the Company's charges was held
on April 12, 2005. The Company issued its
- App. 59a -
written letter of termination on April 20,
2005. (Exhibit 1). The disposition of this
matter is unsatisfactory and it is herewith
submitted to this board for final hearing and
determination.
3. Position of the Association:
It is the position of the Association that the
Company is in violation of the Agreement as
herein alleged.
4. Position of the Company:
It is presumed that the position of the
Company is as set forth in its decision
attached hereto (Exhibit 1). If such is not the
position of the Company, it is requested to
submit its position to the Board in writing
upon receipt of a copy of this Letter of
Submission.
WHEREFORE, the grievant requests the Board to
decide:
a. That the Company be ordered to reinstate
Captain Robert Konop to his previous position
and capacity and make him whole by awarding
him full back pay and benefits for the entire
duration of said termination;
b. That the Company be ordered to remove the
“Statement of Charges" and all references
from the pilot's personnel record; and
c. That the Association have such other, further
or different relief as has been requested in the
- App. 60a -
grievance or as this Board may be deem just
and proper.
It is respectfully requested that the Board hear this
grievance at its next regular or special session.
Sincerely,
s/Duace E. Woerth rc
Duane E. Woerth
President
Air Line Pilots Association International
CC: Robert Konop
HAL MEC Chairman
HAL MEC Grievance Chairman
ALPA SFO/CA
- App. 61a -
National Academy of Arbitrators
Tribunal Appeals Committee
In re Appeal by:
ROBERT C. KONOP
Complainant
against
JAMES F. SCEARCE
Charged Member
Background Facts, Analysis and Decision
On September 1, 2008, Robert C. Konop
submitted a complaint to the Committee on
Professional Responsibility and Grievances (CPRG),
alleging that James F. Scearce, a member of the
Academy, had violated the Code of Professional]
Responsibility for Arbitrators of Labor Management
Disputes (Code). At the request of Shyam Das, Chair
of the CPRG, Robert Landau, a member of the CPRG,
conducted a preliminary investigation of the charges
set forth in the complaint. After following the
procedures outlined in Article IV, Section 2 (d) of the
Bylaws, Chair Das prepared a report, setting forth a
summary of the relevant facts and holding that there
was cause to proceed on the charges alleging violation
of Sections 6-0-1 and 6-D-2 of the Code. Chair Das
- App. 62a -
appointed Dennis R. Nolan, to serve as Hearing
Officer (H.O.) to proceed as provided in Article IV,
Section 2 (e) of the Bylaws.
Background Facts
In the proceeding before H.O. Nolan, the
parties did not disagree with any of the facts, as set
forth in the summary prepared by Chair Das. Those
facts are as follows:
"Mr. Scearce served as the neutral member of a
three-member arbitration panel (System
Board of Adjustment) in a grievance arising
from the termination of Mr. Konop, an airline
pilot, by Hawaiian Airlines (Hawaiian) in
April 2005. Mr. Konop was represented by the
Air Line Pilots Association (ALPA).
kk *
Mr. Konop prepared an appeal of the decision
of H.O. Nolan to the Tribunal Appeals Committee
(Committee), dated March 9, 2009, pursuant to the
provisions of Article IV, Section 2 (f) of the Bylaws.
The Chair of the Committee received a copy of the
appeal on March 12, 2009. The other two members of
the Committee received their copies shortly
thereafter.
Based on our reading of the record and appeal,
which set forth Mr. Konop's arguments in some
- App. 63a -
detail, the members of the Committee were of the
view that the appeal in this case could be decided on
the basis of written arguments. The Chair of the
Committee advised Mr. Konop and Mr. Scearce of
that fact, and set forth a suggested schedule and
procedure for filing written arguments. Both parties
accepted the Committee's proposal.
kk *
Analysis and Decision
In his appeal, Mr. Konop argues that H.O.
Nolan failed to take into account the "egregious
nature" of Mr. Scearce's ethical breaches, and the
"corruption of the arbitration process" that resulted.
It is Mr. Konop's view that H.O. Nolan erred when he
concluded that Mr. Scearce's conduct called for a
penalty that involved correction rather’ than
condemnation or punishment and issued a remedy
consisting of "formal advice."
In arguing that Mr. Scearce's conduct was
egregious, Mr. Konop cites a number of matters
having to do with his dissatisfaction with the
arbitration proceeding that were not included in the
"cause" finding made by Chair Das. We do not wish to
minimize the significance of the violations that
occurred in this case. We agree with H.O. Nolan that
Mr. Scearce's violations were "serious and
inexcusable." However, they need to be viewed for
what they were, and in light of the "conflicting
- App. 64a -
factors" referred to by H.O. Nolan.
As he put it in his latest submission, Mr.
Scearce apparently viewed the request for
clarification as "a System Board matter." He wrongly
concluded that he was being asked to clarify the
intent of the award so the company could share it
with the court, and that the other party to the
proceeding before the System Board (ALPA)
apparently agreed or at least did not object to that
request, as evidenced by the lack of response. Those
conclusions demonstrated a woeful lack of knowledge
of the provisions of the Code and appreciation of the
due process reasons for their inclusion in the Code.
Further, they do nothing to excuse his decision to sign
the proposed clarification and send it to counse} for
the company alone. His failure to obtain the views of
both parties and the other two System Board
members before acting was an inexcusable violation
of fundamental fairness.
On the other hand, there is no showing that
Mr. Scearce's erroneous conclusions and careless
conduct amounted to "corruption of the arbitration
process." More to the point, they did not amount to
intentional misconduct of the type that would justify
suspension or expulsion of an arbitrator with no
record of any prior code violations.
We do differ with one of the conclusions of H.O.
Nolan - his conclusion that censure was not
appropriate in this case. The violations in this case
- App. 65a -
were, aS H.G. Nolan himself found, "serious and
inexcusable." They not only demonstrated a lack of
awareness of the requirements of the Code, but
insensitivity to the requirements of ordinary due
process. We believe that his conduct calls for a "wake
up call," forcefully reminding him of his need to be
aware of the provisions of the Code and the reasons
underlying their inclusion in the Code.
For these reasons, we hold that the
appropriate discipline for Mr. Scearce's conduct is to
censure him for his’ serious and_ inexcusable
violations of Sections 6-0-1 and 6-0-2 of the Code.
s/ George R. Fleischli 3/31/09
George R. Fleischh, Chair Date
s/ Theodore J. St. Antoine 4/2/09
Theodore J. St. Antoine Date
s/ Walter J. Gershenfeld 4/5/09
Walter J. Gershenfeld Date
- App. 66a -
Proceedings of the National Academy of Arbitrators;
Arbitration 1989; BNA Books, 1990. [Footnotes
Omitted]
Chapter 3
Arbitral Discretion
The Tests of Just Cause
I.
John E. Dunsford
ke *
The Seven Tests
Perhaps the most widely known attempt to
reduce just cause to precise criteria is the checklist of
seven tests devised by the late Carroll R. Daugherty,
a member of this Academy and a professor of labor
economics and labor relations at Northwestern
University. The tests were first published by him in
the early 1960s as an appendage to an arbitration
opinion, and were given their final formulation in
another case in 1972.
kk *
Inasmuch as the company investigation serves
the purpose of giving an employee his or her day in
court, what is the function of the arbitrator in the
- App. 67a -
Daugherty world view? He is quite specific in his
answer to that question, in his comments introducing
the Seven Tests in their final formulation:
It should be understood that, under the
statement of issue as to whether an
employer had just cause for discipline ...
it is the employer and not the
disciplined employee who is "on trial"
before the arbitrator. The arbitrator's
hearing is an appeals _ proceeding
designed to learn .. . whether the
employer, as sort of trial court, had
conducted, before making his decision, a
full and fair inquiry into the employee's
alleged "crime"; whether from the
inquiry said trial court had obtained
substantial evidence of the employee's
guilt .... In short, an arbitrator "tries"
the employer to discover whether the
latter's own "trial" and treatment of the
employee was proper. The arbitrator
rarely has the means for conducting, at a
time long after the alleged offense was
committed, a brand new trial of the
employee.
kkk
It comes as a Surprise, then, to learn that the
Department of Education and Training of the
American Arbitration Association (AAA) includes the
Seven Tests in its Discipline Workshop Manual for
- App. 68a -
the education of new advocates and arbitrators.
While it is true that a full statement of Daugherty's
philosophy of arbitration is not included in the AAA
Manual, the tests as reported there still convey the
following propositions:
1. If there is a "no" answer to any of the seven
questions, normally there is no cause for
discipline.
2. Arbitrators are entitled to substitute their
judgment for management's only if there is an
abuse of managerial discretion.
3. A full and fair investigation must normally be
made before a disciplinary decision is made,
since the subsequent use of the grievance
procedure will not suffice to give the employee
his “day in court."
4. At the investigation the "judge" for the
company must obtain substantial evidence
that the employee is guilty.
kke*
The Questions
1. Did the company give to the employee forewarning
or foreknowledge of the possible or probable
disciplinary consequences of the employee's
conduct?
Note 1: Said forewarning or foreknowledge may
properly have been given’ orally’ by
management or in writing through the medium
2.
- App. 69a -
of typed sheets or booklets of shop rules and of
penalties for violation thereof.
Note 2: There must have been actual oral or
written communication of the rules and
penalties to the employee.
Note 3: A finding of lack of such communication
does not in all cases require a "no" answer to
Question No. 1. This is because certain
offenses such as insubordination, coming to
work intoxicated, drinking intoxicating
beverages on the job, or theft of the property of
the company or of fellow employees are so
serious that any employee in the industrial
society may properly be expected to know
already that such conduct is offensive and
heavily punishable.
Note 4: Absent any contractual prohibition or
restriction, the company has the _ right
unilaterally to promulgate reasonable rules
and give reasonable orders; and same need not
have been negotiated with the union.
Was the company's rule or managerial [sic]
reasonably related to (a) the orderly, efficient, and
safe operation of the company's business and (b)
the performance that the company might properly
expect of the employee?
Note 1: Because considerable thought and
judgment have usually been given to the
development and promulgation of written
- App. 70a -
company rules, the rules must almost always
be held reasonable in terms of the employer's
business needs and usually in terms of the
employee's performance capacities. But
managerial orders often given on the spur of
the moment, may be another matter. They may
be reasonable in terms of the company's
business needs, at least in the short run, but
unreasonable in terms of the employee's
capacity to obey. Example: A foreman orders
an employee to operate a high-speed band saw
known to be unsafe and dangerous.
Note 2: If an employee believes that a company
rule or order is unreasonable, he must
nevertheless obey same (in which case he may
file a grievance thereover) unless he sincerely
feels that to obey the rule or order would
seriously and immediately jeopardize his
personal safety and/or integrity. Given a firm
finding to the latter effect, the employee may
properly be said to have had justification for
his disobedience.
3. Did the company, before administering discipline
to an employee, make an effort to discover
whether the employee did in fact violate or
disobey a rule or order of management?
Note 1: This Question (and No. 4) constitutes the
employee's "day in court" principle. An
employee has the right to know. with
- App. 71a -
reasonable precision the offense with which he
is being charged and to defend his behavior.
Note 2: The company's investigation must
normally be made before its disciplinary
decision is made. If the company fails to do so,
its failure may not normally be excused on the
ground that the employee will get his day in
court through the grievance precedure after the
exaction of discipline. By that time there has
usually been too much hardening of positions.
In a very real sense the company is obligated to
conduct itself like a trial court.
Note 3: There may of course be circumstances
under which management must _ react
immediately to the employee's behavior. In
such cases the normally proper action is to
suspend the employee pending investigation,
with the understanding that (a) the final
disciplinary decision will be made after the
investigation and (b) if the employee is found
innocent after the investigation, he will be
restored to his job with full pay for time lost.
4. Was the company's investigation conducted fairly
and objectively?
Note 1: At said investigation the management
official may be both "prosecutor" and "judge,'
but he may not also be a witness against the
employee.
Note 2: It is essential for some higher, detached
- App. 72a.-
management official to assume and
conscientiously perform the judicial role, giving
the commonly accepted meaning to that term
in his attitude and conduct.
Note 3: In some disputes between an employee
and a management person there are not
witnesses to an incident other than the two
immediate participants. In such cases it is
particularly important that the management
"judge" question the management participant
rigorously and thoroughly just as an actual
third party would.
Note 4: The company's investigation should
include an inquiry into possible justification
for the employee's alleged rule violation.
Note 5: At his hearing the management "judge"
should actively search out witnesses and
evidence, not just passively take what
participants or "volunteer" witnesses tell him.
5. At the investigation did the company "judge"
obtain substantial and compelling evidence or
proof that the employee was guilty as charged?
Note 1: It is not required that the evidence be fully
conclusive or “beyond all reasonable doubt."
But the evidence must be truly weighty and
substantial and not flimsy or superficial.
Note 2: When the testimony of opposing witnesses
at the arbitration appeals hearing is
irreconcilably in conflict, an arbitrator seldom
- App. 73a -
has any means for resolving the contradictions.
His task is then to determine whether the
management "judge" originally had reasonable
grounds for believing the evidence presented to
him by his own people instead of that given by
the accused employee and his witnesses. Such
grounds may include a decision as to which
side had the weightier reasons for falsification.
6. Has the company applied its rules, orders, and
penalties evenhandedly and without discrimi-
nation to all employees?
Note 1: A "no" answer to this question requires a
finding of discrimination and warrants nega-
tion or modification of the discipline imposed.
Note 2: If the company has been lax in enforcing
its rules and orders and decides henceforth to
apply them rigorously, the company may avoid
a finding of discrimination by telling all
employees beforehand of its intent to enforce
hereafter all rules as written.
Note 3: For an arbitral finding of discrimination
against a particular grievant to be justified, he
and other employees found guilty of the same
offense must have been in_ reasonably
comparable circumstances.
Note 4: The comparability standard considers
three main items— the degree of seriousness
in the offense, the nature of the employees'
employment records, and the kind of offense,
- App. 74a -
(a) Many industrial offenses, e.g., in-plant
drinking and insubordination, are found in
varying degree. Thus, taking a single nip of gin
from some other employee's bottle inside the
plant is not so serious an offense as bringing
in the bottle and repeatedly tippling from it in
the locker room. Again, making a small, snide
remark to and against a foreman is consider-
ably less offensive than cussing him out with
foul language, followed by a fist in the face, (b)
Even if two or more employees have been found
guilty of identical degrees of a particular
offense, the employer may properly impose
different degrees of discipline on them, pro-
vided their records have been significantly
different. The man having a poor record in
terms of previous discipline for a given offense
may rightly, i.e., without true discrimination,
be given a considerably heavier punishment
than the man whose record has been relatively
unblemished in respect to the same kind of
violation, (c) The words “same kind of vio-
lation,” just above, have importance. It is
difficult to find discrimination between two
employees found guilty of totally different
sorts (not degrees) of offenses. For example,
poor work performance or failure to call in
absences have little comparability with
insubordination or
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.