Unpublished Disposition, 896 F.2d 555 (9th Cir. 1985)

MEMORANDUM^* 

* Appellant, the International Association of Machinists and Aerospace Workers ("Union"), and the appellee, Alaska Airlines ("Alaska"), submitted a dispute arising from a labor strike to Alaska Airlines' System Board of Adjustment ("Board") for arbitration, as provided under the Railway Labor Act, 45 U.S.C. § 184 (1982). Among other things, the Board found that Alaska's policy for recalling strikers to work violated the parties' agreements. On review, the district court granted Alaska's motion to vacate the award with respect to this issue. The Union now appeals the district court's order. We reverse and reinstate the Board's decision.

II

This case arose out of appellants' strike against Alaska Airlines from March 4, 1985, to June 3, 1985. During this period, Alaska hired "permanent replacements" for the strikers and filled other positions with non-striking employees.

On June 3, 1985, the parties entered into a new collective bargaining agreement and a back to work agreement. In early 1986, Alaska began recalling strikers to work. On October 30, 1985, the Union filed suit against Alaska in federal district court, challenging the recall procedure. The Union claimed Alaska's plan for reinstating strikers violated the parties' agreements, and sought a preliminary injunction barring Alaska from instituting the plan until after arbitration by the Board to determine the plan's validity.

The court refused to grant injunctive relief, finding that the Union failed to show irreparable harm. It found that the Board had jurisdiction to award full compensatory damages, and ordered an expedited hearing by the Board. In a related order clarifying its earlier order, the court ordered that all issues relating to the recall of strikers be presented to the Board.

The Board found that the back to work agreement, as interpreted by Alaska, conflicted with the parties' agreements and the Railway Labor Act ("RLA"). It held that the strikers were to be considered employees until they found other work, and were entitled to bid on vacant positions on the same basis as non-striking employees. It also ordered Alaska to place all striking employees who were eligible to bid on vacant positions into those positions, and to pay the loss of earnings which the employees had suffered.

Alaska then filed a motion in the district court to vacate the portion of the Board's order addressing the recall issue. The district court found that the Board had exceeded its authority by looking beyond the terms of the back to work agreement to the parties' intents and to the RLA. The Union appeals this order.

III

We review the district court's order vacating the Board's decision de novo, keeping in mind the limited scope of federal courts' review of arbitration decisions. See Stead Motors of Walnut Creek v. Automotive Machinists Lodge No. 1173, 886 F.2d 1200, 1204-1205, 1207-1209 (9th Cir. 1989) (en banc); see also Hughes Aircraft Co. v. Elec. & Space Technicians, Local 1553, 822 F.2d 823, 826 (9th Cir. 1987).

* Federal district courts have limited jurisdiction under the RLA to review board decisions. 45 U.S.C. § 153, First(q) (1982); Union Pacific R.R. Co. v. Sheehan, 439 U.S. 89, 93, 99 S. Ct. 399, 58 L. Ed. 2d 354 (1978) (per curiam).

The district court based its opinion on the "failure of the order to conform, or confine itself, to matters within the scope of the division's jurisdiction." 45 U.S.C. § 153, First(q). The court stated the issue as whether the Board "exceeded the scope of its authority," and found that the Board "failed to confine itself to interpretation and application of the parties' agreement." E.R., Order at 4-5. Thus, the district court did not exceed its statutory jurisdiction in reviewing the Board's order.

B

The district court's standard of review of arbitration decisions is "among the narrowest known to law." Atchison, Topeka, and Santa Fe Ry. Co. v. Buell, 480 U.S. 557, 563, 107 S. Ct. 1410, 94 L. Ed. 2d 563 (1987) (quoting Union Pacific, 439 U.S. at 91); United Food and Commercial Workers Union, Local 1119 v. United Markets, Inc., 784 F.2d 1413, 1415 (9th Cir. 1986) (citing, inter alia, United Steelworkers of Am. v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960)); see also Edward Hines Lumber Co. of Oregon v. Lumber and Sawmill Workers Local No. 2588, 764 F.2d 631, 634 (9th Cir. 1985), cert. denied, 475 U.S. 1131 (1986); George Day Constr. Co. v. United Bhd. of Carpenters and Joiners of Am., Local 354, 722 F.2d 1471, 1477 (9th Cir. 1984); Federated Employers of Nevada, Inc. v. Teamsters Local No. 631, 600 F.2d 1263, 1265 (9th Cir. 1979).

The district court was not permitted to "reexamine the merits of the underlying grievances, ... [or] overrule an arbitrator because [it] disagree [d] with the arbitrator's interpretation of the contract." Edward Hines, 764 F.2d at 634 (citing Broadway Cab Co-op, Inc. v. Teamsters & Chauffeurs Local 281, 710 F.2d 1379, 1382 (9th Cir. 1983)).

Appellant claims that the district court did not defer to the arbitrator's interpretation of the contract. This argument is intertwined with the district court's finding that the Board did not rely, as it was required to do, on contractual interpretation in reaching its decision. To evaluate appellant's claim, it is necessary to analyze the basis for the Board's order, keeping in mind the degree of deference required of the district court.

V

The district court found that the Board's order exceeded the scope of its authority in three ways: (1) the Board relied on the fact that the agreement violated the RLA, (2) the Board went beyond interpreting and applying the "clear language" of the parties' agreement and looked to the parties' intent, and (3) the Board looked to case precedent to interpret unambiguous language.

However, as long as the Board's decision " [drew] its essence from the collective bargaining agreement," the district court was required to defer to the arbitrator's decision. United Steelworkers of Am. v. Enterprise Wheel and Car Corp., 363 U.S. 593, 597, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960).

* An arbitration award does not "draw its essence" from the parties' agreement if it is "based on external legal sources, wholly without regard to the terms of the parties' contract." American Postal Workers Union v. United States Postal Serv., 789 F.2d 1, 8 (D.C. Cir. 1986) (relying on Enterprise Wheel, 363 U.S. 593 and W.R. Grace & Co. v. Local Union 759, Int'l Union of United Rubber Workers, 461 U.S. 757, 103 S. Ct. 2177, 76 L. Ed. 2d 298 (1983)). "If an arbitral decision is based 'solely upon the arbitrator's view of the requirements of enacted legislation,' rather than on an interpretation of the collective-bargaining agreement, the arbitrator has 'exceeded the scope of the submission,' and the award will not be enforced." Alexander v. Gardner-Denver Co., 415 U.S. 36, 53, 94 S. Ct. 1011, 39 L. Ed. 2d 147 (1974) (quoting Enterprise Wheel, 363 U.S. at 597-98).

Although an award may not be based "solely upon the arbitrator's view of the requirements of enacted legislation," the arbitrator "may of course look for guidance from many sources." Enterprise Wheel, 363 U.S. at 597. See, e.g., Edward Hines Lumber Co. of Oregon v. Lumber and Sawmill Workers Local No. 2588, 764 F.2d 631, 635 (9th Cir. 1985) (upholding an award when "the arbitor thoroughly considered all relevant evidence presented to him" and "carefully analyzed the common law of the industry, looked at past arbitration decisions, and took into account economic considerations.").

The Board did not, as appellee argues, base its decision "solely" on the RLA. While the order stated the Board's erroneous opinion that "it has the right to rule upon violations of the RLA", it also clearly stated that "a decision on this issue does not necessarily have to rely on that basis." E.R., Exhibit A, at 39.

Given the Board's direct statement in its order that it was not relying solely on Alaska's violations of the RLA, the most reasonable reading of the order is that it is based on alternative grounds, each of which independently supports the Board's conclusion. At the very least, the Board's decision was ambiguous as to the extent of its reliance on the RLA. Assuming this ambiguity, the order should be reinstated. See Enterprise Wheel, 363 U.S. at 597-98; accord Rossi v. Trans World Airlines, Inc., 507 F.2d 404, 405 (9th Cir. 1974). Even if one conceivable construction of the Board's order is that it relied primarily on the RLA, the award should still be affirmed. See Stead Motors of Walnut Creek v. Automotive Machinists Lodge No. 1173, 886 F.2d 1200, 1208-09 (9th Cir. 1989).

Furthermore, a finding that the Board was unable to consider the contract's violation of the RLA would deprive appellants of any forum in which to bring their RLA claims in connection with the collective bargaining agreement. In a case related to the same strike which involved the same contract, the same issue, but a different group of employees, the Union argued that its suit was based on violations of the RLA, and was therefore within the court's, and not the Board's, jurisdiction. International Ass'n of Machinists and Aerospace Workers v. Alaska Airlines, Inc., 813 F.2d 1038, 1040 (9th Cir.), cert. denied, 484 U.S. 926 (1987). This court characterized the issue as a "minor dispute." Id. See Elgin, Joliet, & Eastern Ry. v. Burley, 325 U.S. 711, 722-28, 65 S. Ct. 1282, 89 L. Ed. 1886 (1945) (Board's jurisdiction turns on whether dispute is "major" or "minor"). The court found that the dispute revolved around the collective bargaining agreement, and distinguished cases relied upon by the Union by stating that in those cases, "judicial involvement was the only means of enforcing the RLA." Alaska Airlines, 813 F.2d at 1040. It found that the district court properly dismissed the action, and the claim should have been brought before the Board. Because this court previously found that the RLA claims were closely connected to the collective bargaining agreement, which the Board had the undisputed authority to interpret, we now recognize the Board's authority to look to the RLA in making its decision. If the Board did rely exclusively on the RLA, it was entitled to do so.

B

An award that is contrary to the clear and unambiguous language of the parties' agreement clearly does not "draw its essence" from the parties' agreement. United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38, 108 S. Ct. 364, 98 L. Ed. 2d 286 (1987); United Food & Commercial Workers Union, Local 1119 v. United Markets, Inc., 784 F.2d 1413, 1415-16 (9th Cir. 1986). However, if the award is based on a "plausible interpretation" of the contract, the court may not reverse merely because it believes that interpretation is error. See W.R. Grace & Co. v. Local 759, Int'l Union of United Rubber Workers, 461 U.S. 757, 764, 103 S. Ct. 2177, 76 L. Ed. 2d 298 (1983); Francesco's B., Inc. v. Hotel and Restaurant Employees and Bartenders Union, Local 28, 659 F.2d 1383, 1388-89 (9th Cir. 1981). As we have stated, the reviewing court, in order to reverse, must find that the Board's decision is "actually and indisputably without foundation in reason or fact." Singer v. Flying Tiger Line Inc., 652 F.2d 1349, 1356 (9th Cir. 1981) (quoting S.Rep. No. 1201, 89th Cong., 2d Sess., reprinted in 1966 U.S.Code & Admin.News 2285, 2287).

The Board was ordered to resolve "all issues related to the recall of strikers covered by the Mechanics Union contract with Alaska Airlines following the 1985 strike." E.R., Exhibit 40, at 5 (emphasis in original). The recall was actually governed by two contracts: the new collective bargaining agreement and the back to work agreement, both adopted at the end of the strike. To determine the full recall policy, the Board was required to look to both contracts. See E.R., Exhibit 19, at 10.

The back to work agreement provides that strikers will be recalled after Alaska complies with the provisions in the new collective bargaining agreement dealing with vacancies. Article 10 of the collective bargaining agreement states that a vacancy may be filled by a new hire or by an upgrade from a lower classification if "no qualified employees bid." See E.R., Exhibit 19, at 10. Alaska contends that the term "qualified employees" does not include strikers; the Union contends that it does.

The Board was thus required to construe both agreements together. Appellee argues that the unambiguous language of the back to work agreement did not require interpretation. However, two contracts were at issue, and the Board, in ruling on the recall issue, was required to construe their interaction.

The district court recognized the ambiguity of the recall policy in its original order, stating that neither the collective bargaining agreement nor the back to work agreement defined "qualified employee." E.R., Exhibit 19, at 10-11. It was the Board's duty to interpret this provision. See id. at 12. In doing so, it did not err in looking to the parties' intent and relevant case law to interpret the language of the agreements. It found that Alaska's interpretation of the collective bargaining agreement, combined with the clear language of p 1.a. of the back to work agreement, "violated the basic agreement between the parties." E.R., Exhibit A at 40. It found that the policy expressed in this interpretation of the agreement demonstrated "union animus" and was thus inconsistent with the RLA. It thus ordered the parties to adopt the Union's interpretation of the collective bargaining agreement, under which "qualified employees" included strikers.

Furthermore, the Board did not exceed its authority in going behind the "superficially clear and unambiguous terms" and construing the contract language in light of the intent of the parties. See Loveless v. Eastern Air Lines, Inc., 681 F.2d 1272, 1278 (11th Cir. 1982).

VI

The Board's award was based on the parties' collective bargaining and back to work agreements, and the Board did not exceed its jurisdiction in looking to the RLA, the parties' intent, or case precedent in interpreting the contracts. Given the degree of deference to be accorded the Board's contract interpretation, the award should not have been vacated.

REVERSED.