Opinion
No. 3-02-MC-022-R
May 29, 2002
FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Defendant Southwest Airlines Co. ("Southwest") has filed a motion to dismiss this miscellaneous action to reverse and vacate an arbitration award. For the reasons stated herein, the motion should be granted.
I.
On February 10, 2000, Plaintiff Michael Finelli ("Finelli") was terminated from his employment at Southwest for violating the company's sexual harassment policy and Flight Attendant Work and Conduct Rules. As a flight attendant, Finelli was covered by a Collective Bargaining Agreement ("CBA") between Southwest and the Transport Workers Union of America, Local 556. Finelli filed a grievance over his termination and the case proceeded to arbitration. On November 26, 2001, the arbitrator ruled that Finelli was discharged for "just cause" and denied his grievance. Finelli then filed suit in federal district court to reverse and vacate the arbitration award.
Finelli was accused of sexually harassing a female flight attendant, Lois Valenzuela, on a two-day trip in January 2000. The offensive conduct consisted of inappropriate remarks, gestures, and grabbing Valenzuela's breast "in a manner that was not accidental." (Plf. Orig. Pet., Exh. 3 at 3). Southwest's decision to terminate Finelli was based on this incident and his "overall performance," which included prior written warnings and suspensions for discourteous treatment of a customer and unprofessional behavior. (Id., Exh. 3 at 2, 5).
The case is before the Court on Southwest's motion to dismiss. According to Southwest, the grounds alleged by Finelli in his petition are insufficient as a matter of law to set aside an arbitration award under the Railway Labor Act, 45 U.S.C. § 153. The motion has been fully briefed by the parties and is ripe for determination.
II.
Although Southwest originally sought dismissal under Rule 12(b)(6), it now claims that subject matter jurisdiction is not proper. A party seeking to invoke the jurisdiction of a federal court must prove that jurisdiction is proper. See Boudreau v. United States, 53 F.3d 81, 82 (5th Cir. 1995), cert. denied, 116 S.Ct. 771 (1996); Lowe v. Ingalls Shipbuilding, A Division of Litton Systems, Inc., 723 F.2d 1173, 1177 (5th Cir. 1984). In this case, the burden falls on Finelli. The allegations of his petition must be taken as true and all inferences drawn in his favor. Saraw Partnership v. United States, 67 F.3d 567, 569 (5th Cir. 1995); Garcia v. United States, 776 F.2d 116, 117 (5th Cir. 1985). However, dismissal is warranted if those allegations together with any undisputed facts establish that the district court lacks jurisdiction. See Saraw, 67 F.3d at 569; Hobbs v. Hawkins, 968 F.2d 471, 475 (5th Cir. 1992).
Southwest raised this issue for the first time in its reply brief. However, a case may be dismissed at any time for lack of subject matter jurisdiction. See FED. R. Civ. P. 12(h)(3) ("Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.").
A.
Finelli alleges that federal subject matter jurisdiction is proper under the Railway Labor Act of 1926 ("RLA"), 45 U.S.C. § 151, et seq. The RLA, which governs disputes between airline carriers and its employees, was intended "to promote stability in labor-management relations by providing a comprehensive framework for resolving labor disputes." Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252, 114 S.Ct. 2239, 2243, 129 L.Ed.2d 203 (1994). The heart of the RLA is the duty imposed on carriers and their employees "to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes . . . in order to avoid any interruption to commerce or the operation of any carrier growing out of any dispute between the carrier and the employees thereof" 45 U.S.C. § 152; see also Brotherhood of Railroad Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 377-79, 89 S.Ct. 1109, 1115, 22 L.Ed.2d 344 (1969). To this end, the RLA establishes a mandatory arbitral mechanism for "the prompt and orderly settlement" of two classes of disputes. Norris, 114 S.Ct. at 2243-44. One class involves the formation of collective bargaining agreements or efforts to secure them. These are deemed "major" disputes. See Consolidated Rail Corp. v. Railway Labor Executives' Ass'n, 491 U.S. 299, 302, 109 S.Ct. 2477, 2480, 105 L.Ed.2d 250 (1989) (citation omitted). The second class of disputes "gro[w] out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions." 45 U.S.C. § 151a. These are known as "minor" disputes. Consolidated Rail, 109 S.Ct. at 2480 (citation omitted). Stated differently, "major disputes seek to create contractual rights, minor disputes to enforce them." Id.
Both parties agree that Finelli's wrongful discharge grievance was a "minor" dispute within the terms of the RLA. Such disputes must be resolved through binding arbitration. Andrews v. Louisville Nashville Railroad Co., 406 U.S. 320, 322, 92 S.Ct. 1562, 1564, 32 L.Ed.2d 95 (1972). The scope of judicial review of such decisions "is among the narrowest known to the law." Union Pacific Railroad Co. v. Sheehan, 439 U.S. 89, 91, 99 S.Ct. 399, 401, 58 L.Ed.2d 354 (1978). Under the RLA:
[A federal district] court shall have jurisdiction to affirm the order of the [arbitrator] or to set it aside, in whole or in part, or may remand the proceeding to the [arbitrator] for such further action as it may direct. On such review, the findings and order of the [arbitrator] shall be conclusive on the parties, except that the order of the [arbitrator] may be set aside, in whole or in part, or remanded to the [arbitrator], for failure of the [arbitrator] 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 [arbitrator's] jurisdiction, or for fraud or corruption by [the arbitrator].45 U.S.C. § 153 First (q). See also Sheehan, 99 S.Ct. at 402. Unless one of these grounds is shown, a court has no jurisdiction to review the arbitrator's factual or legal determinations. United Paperworkers International Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 37-38, 108 S.Ct. 364, 370, 98 L.Ed.2d 286 (1987).
B.
Finelli argues that this Court has jurisdiction to review and vacate the arbitration award because: (1) the conduct made the basis of his discharge occurred outside the workplace and was not covered by the CBA; (2) the arbitrator failed to comply with his statutory duties under the RLA; and (3) he was denied due process at the arbitration hearing. The Court will address each argument in turn.
1.
In his petition, Finelli alleges that the conduct made the basis of his discharge "occurred outside of work and hence outside of the scope of the conduct regulated by [Southwest's] collective bargaining agreement." (Plf. Orig. Pet. at 5, ¶ 6). Southwest acknowledges that Finelli was off-duty when he allegedly grabbed his co-worker's breast. Nevertheless, the arbitrator found that his termination was justified under the CBA:
Article 5 of the CBA defines the duty period for a flight attendant as "the period of time commencing from check-in to block arrival at an RON (required over night rest), and from check-in to block plus 30 minutes in domicile." (Plf. Orig. Pet., Exh. 2 at 4). "Domicile" is the home base of a flight attendant. "Block time" is when an aircraft leaves the gate. (Id.). Article 8.2(A) of the CBA further provides that "an on duty period shall commence at the time a flight attendant is required to report for duty" and "shall terminate 30 minutes after block arrival of a flight at a home domicile and at block arrival of a flight at an outstation." (Id.).
[T]he grievant's behavior cannot be excused or overlooked because it occurred off the clock and away from Company property. In general, the employer has no right to control employees when they are not on the clock and on the property. However, an exception to the general rule holds when there is a nexus, a relationship, between the errant conduct and the employer's business. "An employer can impose discipline for off-duty conduct by establishing the conduct's relevance or notoriety. Off-duty conduct is relevant when the conduct relates to and harms the employer's business." (Footnote and citation omitted).
For the sake of their customers, flight attendant crews must be able to work together harmoniously and in a manner allowing each member of the crew to concentrate on customer comfort and safety and not their own personal safety. Finelli's sexual harassment of Valenzuela created a situation where Valenzuela could not work comfortably with him, as evidenced by her decision to leave the trip in Phoenix. Furthermore, in a situation where Flight Attendants not only work closely together while on duty, but often eat meals together when off duty, in part as a safety precaution when away from home, the Company has an obligation to ensure as best it can that Flight Attendants are not subjected to improper behavior by fellow employees. Thus nexus clearly exists in this case.
(Id., Exh. 3 at 11-12).
The arbitrator's role is to interpret the collective bargaining agreement. See Misco, 108 S.Ct. at 371; Brotherhood of Railroad Trainmen v. Central of Georgia Railway Co., 415 F.2d 403, 412 (5th Cir. 1969), cert. denied, 90 S.Ct. 564 (1970). His decision must be grounded in contract and "cannot simply reflect the arbitrator's own notions of industrial justice." Misco, 108 S.Ct. at 371. An arbitrator exceeds his jurisdiction if his decision is not, "in some logical way, derived from the wording or purpose of the contract." Brotherhood of Railroad Trainmen, 415 F.2d at 412. However, the arbitrator is not confined to the express terms of the collective bargaining agreement in resolving a dispute. A collective bargaining agreement includes implied as well as express terms and incorporates the practices, customs, and usages of the industry. Consolidated Rail, 109 S.Ct. at 2485. As such, "[t]he collective bargaining agreement is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate. . . . It calls into being a new common law — the common law of a particular industry or of a particular plant." United Steel Workers of America v. Warrior and Gulf Navigation Co., 363 U.S. 574, 578-79, 80 S.Ct. 1347, 1351, 4 L.Ed.2d 1409 (1960).
Here, the arbitrator acted within his jurisdiction in interpreting the CBA to implicitly allow Southwest to consider off-duty conduct as a basis for disciplinary action. This decision was not unfounded. To the contrary, other labor arbitrators have upheld the right of management to terminate workers for conduct outside the workplace. See, e.g. Allied Supermarkets, Inc., 41 L.A. 713, 714 (Mittenthal, 1963); Inland Container Corp., 28 L.A. 312, 314 (Ferguson, 1957); see also ELKOURI ELKOURI, HOW ARBITRATION WORKS at 896-99. Although not binding on the federal courts, such decisions are reliable indicators of the state of the common law of industrial relations. Local Union No. 2286 of the International Brotherhood of Electrical Workers, AFL-CIO v. Gulf States Utilities Co., 749 F. Supp. 777. 780 (E.D. Tex. 1990). The Court therefore lacks jurisdiction to review the arbitrator's decision on this ground.
2.
Finelli further alleges that the arbitrator failed to comply with his statutory duties under the RLA. Specifically, Finelli complains that the arbitrator: (1) did not file his decision with the district court; (2) failed to produce copies of all hearing exhibits; and (3) refused to allow inspection of the envelope containing Southwest's closing brief, which was not mailed on time. (Plf. Orig. Pet. at 5-6, ¶ 7).
Finelli's first argument is predicated on the language of 45 U.S.C. § 157 Third (f). This statute provides, in relevant part:
The board of arbitration shall furnish a certified copy of its award to the respective parties to the controversy, and shall transmit the original, together with the papers and proceedings and a transcript of the evidence taken at the hearings, certified under the hands of at least a majority of the arbitrators, to the clerk of the district court for the United States for the district wherein the controversy arose or the arbitration is entered into, to be filed in said clerk's office as hereinafter provided.45 U.S.C. § 157 Third (f). However, this provision of the RLA is applicable only to "major" disputes. See CSX Transportation, Inc. v. United Transportation Union, 879 F.2d 990, 996-97 (2d Cir. 1989), cert. denied, 110 S.Ct. 720 (1990) (noting that arbitration under section 157 is not mandatory). "Minor" disputes such as this one must be submitted to binding arbitration before either the National Railroad Adjustment Board or other boards of adjustment. 45 U.S.C. § 153 First (i) Second; CSX Transportation, 879 F.2d at 997. See also Hill v. Norfolk and Western Railway Co., 814 F.2d 1192, 1199 (7th Cir. 1987) (recognizing difference between ad hoc arbitration boards created by section 157 and national or regional adjustment boards under section 153). In such cases, the arbitrator's decision and hearing record are not filed with the district court until the aggrieved party initiates an action for judicial review and the clerk transmits a copy of the petition to the adjustment board. See 45 U.S.C. § 153 First (q). Because Finelli attached copies of all relevant documents to his federal court petition, there was no need to obtain the same documents from the arbitrator.
Finelli further contends that the arbitrator violated his statutory duties by failing to produce copies of all hearing exhibits and refusing to allow inspection of the envelope containing Southwest's closing brief. The Court initially notes that Finelli does not identify the exhibits that were not produced to his attorney. Nor does he explain how this action is subject to judicial review. Instead, Finelli focuses on the arbitrator's refusal to allow inspection of a mailing envelope so he could confirm that Southwest's closing brief was untimely. However, even if this allegation is taken as true, the acceptance of a late-filed brief does not divest the arbitrator of jurisdiction to hear a dispute under the RLA. Cf. University of California, Berkeley, 93 L.A. 450, 453-54 (Wilcox, 1989) (noting that "most arbitrators accept late briefs") (footnote omitted); Sheller Manufacturing Corp., 40 L.A. 890, 891 (Davey, 1963) (briefs are never regarded as more than an "aid" in helping the arbitrator reach ultimate decision). None of these arguments provide a basis for judicial review of the arbitrator's decision.
To the extent that Finelli suggests that the arbitrator in this case was biased by refusing to cooperate with a reasonable request for information, such a claim is subject to review only if the bias rose to the level of fraud or corruption. "Fraud properly embraces a situation in which the supposedly neutral arbitrator exhibits a complete unwillingness to respond, and indifference, to any evidence or argument in support of one of the parties' positions." Pacific Arctic Railway and Navigation Co. v. United Transportation Union, 952 F.2d 1144, 1148 (9th Cir. 1991). Finelli's allegations do not even approach this exacting standard.
3.
Finally, Finelli argues that he was denied due process because the company representative who investigated the charges against him, Ernie Santellanes, did not testify at the arbitration hearing.The RLA does not specifically authorize the review of arbitration decisions based on alleged due process violations. See 45 U.S.C. § 153 First (q). Nevertheless, some federal courts have held that a due process challenge may constitute an independent ground for judicial review of an arbitration award. See Shafii v. PLC British Airways, 22 F.3d 59, 62 (2d Cir. 1994) (citing cases). According to Southwest, this issue was put to rest by the Supreme Court in Sheehan, which reaffirmed that:
Judicial review of Adjustment Board orders is limited to three specific categories: (1) failure of the Adjustment Board to comply with the requirements of the Railway Labor Act; (2) failure of the Adjustment Board to conform, or confine, itself to matters within the scope of its jurisdiction; and (3) fraud or corruption. (Citation omitted). Only upon one or more of these bases may a court set aside an order of the Adjustment Board . . .
Sheehan, 99 S.Ct. at 402 (emphasis added). Despite this language, the Fifth Circuit and other courts apparently continue to allow judicial review of arbitration decisions on due process grounds. See Hayes v. Western Weighing and Inspection Bureau, 838 F.2d 1434, 1436 (5th Cir. 1988) (noting that later decisions interpreting Sheehan "have cabined the reach of the due process challenge"). See also Shafii, 22 F.3d at 62-64; Edelman v. Western Airlines, 892 F.2d 839, 846 (9th Cir. 1989); Steffens v. Brotherhood of Railway, Airline Steamship Clerks, Freight Handlers, Express and Station Employees, 797 F.2d 442, 448-49 n. 5 (7th Cir. 1986); Armstrong Lodge No. 762 v. Union Pacific Railroad, 783 F.2d 131, 135 (8th Cir. 1986). But compare Jones v. Seaboard Systems Railroad, 783 F.2d 639, 642 n. 2 (6th Cir. 1986) (Sheehan precludes judicial review of due process challenge); Henry v. Delta Air Lines, 759 F.2d 870, 873 (11th Cir. 1985) (same); United Steelworkers of America Local 1913 v. Union Railroad Co., 648 F.2d 905, 911 (3d Cir. 1981) (same).
Fortunately, the Court need not traverse this judicial quagmire in order to resolve the pending motion. Assuming arguendo that a due process challenge is still a viable ground for judicial review of an arbitration decision under the RLA, Finelli cannot sustain such a claim. Finelli predicates his due process argument on the fact that he did not have an opportunity to confront Ernie Santellanes, the Southwest representative who investigated the sexual harassment charge that ultimately led to his termination. However, Finelli was afforded a full and fair opportunity to question and cross-examine both of his accusers, Lois Valenzuela and Jose Arizola, at the arbitration hearing. His attorney was provided with Santellanes' interview notes, which could have been used to point out any discrepancies or inconsistencies between the witnesses' testimony and their original statements. (See Plf. Pet., Exh. 3 at 10). This was more than sufficient to satisfy the requirements of due process. Consequently, the Court lacks jurisdiction to review the arbitration decision on this ground.
RECOMMENDATION
Defendant's motion to dismiss should be granted. This case should be dismissed for lack of subject matter jurisdiction.