1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-10-1998

Independent Assoc of Continental Pilots v. Cont

Airlines

Precedential or Non-Precedential:

Docket 97-7282

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Recommended Citation

"Independent Assoc of Continental Pilots v. Cont Airlines" (1998). 1998 Decisions. Paper 226.

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Filed September 10, 1998 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 97-7282 

INDEPENDENT ASSOCIATION OF CONTINENTAL PILOTS 

v. 

CONTINENTAL AIRLINES, a Delaware Corporation 

 Independent Association 

 of Continental Pilots ("IACP"), 

 Appellant 

On Appeal from the United States District Court 

for the District of Delaware 

D.C. Civil No. 96-cv-00389 

Argued: January 22, 1998 

Before: BECKER, Chief Judge, STAPLETON, Circuit Judge 

and POLLAK, District Judge* 

(Filed: September 10, 1998) 

Roland P. Wilder, Jr. (argued) 

Christy Concannon 

Baptiste & Wilder, P.C. 

1150 Connecticut Avenue, N.W. 

Suite 500 

Washington, DC 20036 

 Attorneys for Appellant 

_________________________________________________________________ 

* Honorable Louis H. Pollak, United States District Judge for the Eastern 

District of Pennsylvania, sitting by designation. 
 Jon A. Geier (argued) 

 Margaret H. Spurlin 

 Paul, Hastings, Janofsky & 

 Walker LLP 

 1299 Pennsylvania Avenue, N.W. 

 10th Floor 

 Washington, DC 20004-2400 

 Josy W. Ingersoll 

 Laura D. Jones 

 Robert S. Brady 

 Young, Conaway, Stargatt & Taylor 

 Rodney Square North, 11th Floor 

 P.O. Box 391 

 Wilmington, DE 19899 

 Margaret Coullard Phillips 

 Continental Airlines, Inc. 

 Post Office Box 4607 

 Houston, Texas 77210-4607 

 Attorneys for Appellees 

OPINION OF THE COURT 

POLLAK, District Judge. 

This appeal concerns the allocation of authority between 

judicial and arbitral tribunals under the Railway Labor Act, 

45 U.S.C. S 151 et seq. The International Association of 

Continental Pilots (IACP) brought this action against 

Continental Airlines, Inc. ("Continental") in the District 

Court for the District of Delaware, seeking a declaration 

and order directing that (1) Continental was required to 

arbitrate the merits of an issue assertedly raised in an 

employee's grievance, and (2) the grievance should be 

submitted to the arbitral tribunal on a class-wide basis. 

Continental counterclaimed, seeking an order directing that 

the arbitral tribunal determine the issues the IACP sought 

determination of by the district court. Thereafter 

Continental moved for judgment on the pleadings. That 

motion was granted and the case was dismissed. The IACP 

 2 
has appealed the district court's order granting judgment 

on the pleadings. For the reasons set forth below, we affirm. 

I. 

We rehearse the facts as set forth in IACP's complaint 

and brief on appeal. In 1992, after Continental filed its 

second petition for protection under Chapter 11 of the 

bankruptcy code, the airline froze, and then sought to 

reduce, the pay of its pilots. In response to the airline's 

announcement of its intent to reduce pilots' pay, a group of 

pilots undertook negotiations with the airline's 

management; these talks resulted in a written agreement, 

the "Cost Reduction Memorandum" ("CRM"). Paragraph 6(A) 

of the CRM made provision for the phased restoration, 

according to an agreed-upon formula, of any reduction in 

pilot pay: 

 The wage reductions (i.e. fuel bonus, line divisor, 

 training, per diem, and crew meals) . . . will be restored 

 progressively by Continental, in accordance with the 

 formula set forth in Attachment A, with full restoration 

 projected by July 1, 1993. As part of the restoration, 

 the program of quarterly fuel bonus payments to pilots 

 shall end, and in lieu thereof pilots rates of pay 

 progressively restored shall be . . . the April 1, 1992 

 rates of pay. 

Paragraph 6(B) of the CRM (the so-called "me-too" 

provision) provided that, until the pilots' pay was restored 

according to paragraph 6(A), if the airline granted a raise to 

any employee group other than the pilots, the pilots would 

receive a comparable wage increase: 

 Should Continental grant a wage or salary increase to 

 any employee group, including management and

 executive employees, prior to restoration of pilot wage 

 reductions, then the company shall at the same time 

 restore pilot wages on a comparable basis. 

In late 1993, after the airline and the pilots' group entered 

into this agreement, the IACP was certified as the 

bargaining unit for the pilots. The CRM continued to be 

operative until Continental and the IACP executed their 

first collective bargaining agreement. 

 3 
After the IACP was certified as the pilots' bargaining 

representative, the airline and the union entered into an 

agreement entitled the "Interim Grievance Procedure" 

("IGP") pending the completion of the parties'first collective 

bargaining agreement. In accordance with S 204 of the 

Railway Labor Act, 45 U.S.C. S 184, the IGP established a 

system board of adjustment ("System Board") for the

arbitration of grievances.1 The grievance procedure

contemplated by the IGP consisted of two preliminary 

stages--denominated as "Step I" and "Step II" hearings-- 

followed by appeal to the system board of adjustment of 

any grievance not resolved in the first two stages.

On September 9, 1994--after implementation of the IGP 

but before the effective date of the first collective bargaining 

agreement--pilot Jackson Martin filed a grievance stating: 

 The Cost Reduction Memorandum establishes that fuel 

 bonus will be restored, it establishes a protocol for the 

 use of a higher hourly rate in lieu of quarterly fuel 

 bonus payments and it defines Continental's total 

 liability toward restoration of pilot wage reductions to 

 April 1, 1992 pay rates plus the value of the fuel bonus 

 program. Continental Airlines should honor the 

 Agreement it reached with its pilots under the Cost 

 Reduction Memorandum and fully restore pilot wage 

 reductions; to not do so would substantially alter the 

 letter and intent of the current Pilot Employment 

 Policy. 

Martin pursued his grievance, unsuccessfully, through the 

first two steps of the grievance procedure. On January 4, 

1995, Martin filed a notice of appeal to the System Board. 

On February 8, 1995, the IACP refiled Martin's appeal, 

stating "herewith is submitted the grievancefiled on behalf 

of Jackson Martin and all other similarly situated 

_________________________________________________________________ 

1. Section 204 of the Railway Labor Act is among the amendments to the 

statute that extended its coverage to the airline industry. This provision 

declares that "it shall be the duty of every carrier and of its employees, 

acting through their representatives . . . to establish a board of 

adjustment." 45 U.S.C. S 184. A "board of adjustment" so established is 

an arbitral tribunal to which the parties may refer any grievances that 

are not otherwise resolved. Id. 

 4 
Continental Airlines pilots." The IACP's appeal formulated 

the question at issue as "whether the Company is in

violation of the Cost Reduction Memorandum . . . and all 

related provisions for failure to properly enact pilot pay 

restoration rate effective July 1, 1994." 

Prior to the arbitration hearing, Continental took the 

position that (1) the IACP could not bring the appeal on 

behalf of similarly situated pilots, and (2) the System Board 

could not entertain the merits of any claim under 

paragraph 6(B) of the CRM (the "me too" provision) because 

Martin had not invoked this provision at the earlier stages 

of the grievance proceeding. When the arbitration hearing 

commenced, the IACP announced that it refused to proceed 

unless Continental agreed that any determination made by 

the arbitrator with respect to Martin's waiver of the "me 

too" provision or the IACP's right to raise claims for 

similarly situated pilots would be reviewable de novo by a 

federal court. When Continental refused to make this 

concession, the IACP voiced its intent to go to court to 

secure a judicial determination of the two issues. The 

arbitrator thereupon ended the hearing. 

The IACP brought suit in the district court, seeking an 

order (1) declaring that Continental was required to 

arbitrate the issue of whether the airline violated paragraph 

6(B) of the CRM, and (2) compelling Continental to accept 

the System Board's authority to resolve the paragraph 6(B) 

issue on a class-wide basis. Continental counterclaimed, 

seeking an order remanding for arbitration by the System 

Board the issues IACP sought to have the district court 

determine. Continental then moved for judgment on the 

pleadings, urging that the IACP's complaint sought judicial 

determination of issues that properly should be addressed 

by the System Board as part of its overall arbitration of the 

Martin grievance as recast by the IACP--the issues the 

IACP requested judicial determination of being whether the 

System Board should entertain the merits of a claim under 

paragraph 6(B) and whether any relief awarded pursuant to 

paragraph 6(B) should inure to all similarly situated pilots. 

In opposition to Continental's motion for judgment on the 

pleadings, the IACP urged that these were issues of

"substantive arbitrability" for the court to decide in advance 

 5 
of arbitration. The district court granted Continental's 

motion for judgment on the pleadings, stating in its order 

that "[t]he case is dismissed." IACP then brought this 

appeal. Our review of the district court's decision is 

plenary. Jablonski v. Pan American World Airways Inc., 863 

F.2d 289, 290 (3d Cir. 1988). 

II. 

In order to bring the questions posed in this appeal into 

sharper focus, it may be useful to review the statutory 

setting within which these questions arise. The Railway 

Labor Act ("RLA") was enacted in 1926 to provide "a

comprehensive framework for the resolution of labor

disputes in the railroad industry." Atchison Topeka & Santa 

Fe Ry. Co. v. Buell, 480 U.S. 557, 562-63 (1987). Among 

the "[g]eneral purposes" of the legislation, as set forth in the 

1934 amendments to the statute, are "[t]o avoid any

interruption to commerce or to the operation of any carrier 

engaged therein" and "to provide for the prompt and orderly 

settlement of all disputes growing out of grievances or out 

of the interpretation or application of agreements covering 

rates of pay, rules or working conditions." Act of June 21, 

1934, ch. 691 S 2, 48 Stat. 1185, 1186-87 (codified at 45 

U.S.C. S 151a). To these ends, the legislation, as amended 

in 1934, required the establishment of an arbitral tribunal, 

denominated "the National Railroad Adjustment Board," for 

the resolution of such disputes, and authorized carriers 

and their employees to create "system, group, or regional 

boards" for the resolution of such controversies, provided 

that any party dissatisfied with the decision of a 

subordinate tribunal might still present the grievance to the 

National Board.2 RLA S 3, 45 U.S.C. S 153. 

_________________________________________________________________ 

2. The RLA was the product of the joint efforts of labor and industry 

representatives, who drafted the legislation in an effort to correct the 

weaknesses of the Transportation Act of 1920, 41 Stat. 456, a statute 

which provided for the establishment of adjustment boards to hear 

disputes, but did not require the establishment of such boards nor 

render their awards judicially enforceable. See International Association 

of Machinists v. Street, 367 U.S. 740, 758 (1961); Katherine Van Wezel 

Stone, Labor Relations on the Airlines: The Railway Labor Act in the Era 

 6 
In 1936, the RLA was amended to cover the infant airline 

industry. Act of April 10, 1936, ch. 166, 49 Stat. 1189 

(codified at 45 U.S.C. S 181). As amended, all provisions of 

the RLA, save S 3, 45 U.S.C. S 153--the provision creating 

the National Railroad Adjustment Board--apply to airlines 

and their employees. 45 U.S.C. S 181. In so amending the 

statute, Congress deferred the issue of whether to establish 

a national adjustment board for the airline industry, and 

empowered the National Mediation Board ("NMB") to 

determine when the creation of such a board would be 

appropriate. 45 U.S.C. S 185. The NMB has not yet made 

such a determination. 

As amended, the RLA directs air carriers and their 

unions to establish arbitral tribunals--"system, group, or 

regional boards"--for the resolution of "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." 45 U.S.C. S 184. The statute requires 

that such a dispute "be handled in the usual manner up to 

and including the chief operating officer of the carrier 

designated to handle such disputes; but, in the event of 

failure to reach an adjustment in this manner, the dispute 

may be referred by petition of the parties or by either party 

to an appropriate adjustment board." Id. Consequently, 

until a national adjustment board is created for the airline 

industry, a decision rendered by a "system, group or 

regional board" is the terminal stop in the pre-judicial 

grievance process. Id. Once the appropriate adjustment 

_________________________________________________________________ 

of Deregulation, 42 Stan. L. Rev. 1485, 1498 (1990). The 1926 legislation 

made it the "duty of all carriers, their officers, agents, and employees . 

. . 

to settle all disputes," and mandated the establishment of system boards 

for the resolution of disputes. Railway Labor Act, ch. 347 SS 2-3, 44 

Stat. 

577, 577-78 (1926). But when the requirements of the 1926 legislation 

proved to be easily evaded, further labor and management dissatisfaction 

with the process led to amendments in 1934, strengthening the disputeresolution provisions of the statute. Act of June 21, 1934, ch. 691 S 2, 

48 Stat. 1186. The history leading up to the 1934 amendments is 

recounted in Elgin, Joliet & Eastern Railway Co. v. Burley, 325 U.S. 711, 

725-26 (1945). 

 7 
board enters an award, its decision is enforceable in the 

federal courts, see International Ass'n of Machinists v. 

Central Airlines, 372 U.S. 682, 685 (1963), and is subject to 

narrow judicial review. Bower v. Eastern Airlines, 214 F.2d 

623, 625 (3d Cir. 1954). 

As the foregoing summary makes plain, the RLA's 

dispute-resolution machinery is central to the statutory 

scheme. As set forth in the statute, and elaborated by 

Supreme Court precedent, the RLA regime governs three 

different types of disputes: "representation disputes" 

(disputes concerning the selection of collective-bargaining 

representatives), "major disputes," and "minor disputes." 

Depending upon the type of dispute involved, the RLA 

regime imposes different procedural requirements on the 

parties and prescribes different dispute-resolution fora.3 

This appeal concerns "major disputes" and "minor 

disputes." 

Under the RLA, questions about whether a dispute is

subject to arbitration are usually answered with reference 

to the distinction between "major" and "minor" disputes: 

"minor disputes" are resolved through arbitration (by the 

system boards in the case of the airline industry or by the 

National Railroad Adjustment Board in the railroad 

_________________________________________________________________ 

3. "Representation disputes" are committed to the exclusive jurisdiction 

of the National Mediation Board. 45 U.S.C. S 152 Ninth; Switchmen's 

Union v. National Mediation Board, 320 U.S. 297, 302 (1943). Major and 

minor disputes involve, respectively, efforts to secure and to implement 

contractual rights; these distinctions will be discussed more fully in the 

text. Further, it should be noted that certain of the rights and 

correlative 

obligations created by the RLA--particularly the provisions ensuring the 

free choice of bargaining representatives found in Section 2 of the 

statute, 45 U.S.C. S 152--are also enforceable in federal court. Because 

the RLA (unlike the National Labor Relations Act) has not established an 

administrative body for the enforcement of statutory rights, certain of 

the 

rights created by the statute are enforceable in the courts. See, e.g., 

Virginian Ry. v. System Fed'n No. 40, 300 U.S. 515, 544 (1937)(duty to 

negotiate judicially enforceable); Texas & New Orleans Railroad v. 

Railway & Steamship Clerks, 281 U.S. 548, 567 (1930)(right to free 

choice of bargaining representative judicially enforceable). Although a 

leading treatise on the RLA--The Railway Labor Act (Douglas Leslie, ed. 

1994)--refers, for analytic purposes, to disputes raising such issues as 

"statutory disputes," this label has not caught on in the courts. 

 8 
industry) while "major disputes" are subject to a lengthy 

process of bargaining and mediation. 

The Supreme Court set forth the major/minor framework 

in Elgin, Joliet & Eastern Railway Co. v. Burley, 325 U.S. 

711 (1945).4 This classification scheme determines what 

kind of dispute resolution mechanisms may be brought to 

bear on the controversy and also determines the extent to 

which the federal courts may become involved. Association 

of Flight Attendants, AFL-CIO v. USAir, Inc., 960 F.2d 345, 

348 (3d Cir. 1992). 

The "major dispute" category, as the Supreme Court 

explained in Burley, "relates to disputes over the formation 

of collective agreements or efforts to secure them. They 

arise where there is no such agreement or where it is 

sought to change the terms of one, and therefore the issue 

is not whether an existing agreement controls the 

controversy." 325 U.S. at 723. If the parties are involved in 

a major dispute, they must bargain over the issue; while 

bargaining, the parties are required to maintain the status 

quo and exhaust the lengthy mediation procedures set forth 

in S 6 of the statute, 45 U.S.C. S 156, before they may 

resort to self-help. Compliance with these requirements is 

enforceable in the federal courts. Detroit & Toledo Shore 

Line Railroad v. United Transportation Union, 396 U.S. 142, 

149 (1969). If, upon the conclusion of the mediation 

procedures, the parties are at an impasse, they may then 

employ economic weapons (e.g., strikes or lockouts). See 

Burley, 325 U.S. at 725, Consolidated Rail Corp. v. Railway 

Labor Executives' Ass'n, 491 U.S. 299, 303 (1989). 

While the major dispute category concerns efforts to 

establish or change the terms of a collective bargaining 

agreement, the minor dispute category, in the Burley 

Court's formulation, 

_________________________________________________________________ 

4. The terms "major" and "minor" are not found within the RLA. The 

Supreme Court first used the major/minor typology in the Burley 

decision. In doing so, the Court adopted the nomenclature that had 

developed within the railroad industry. See 325 U.S. at 723-28. As the 

Court later clarified in Consolidated Rail Corp. v. Railway Labor 

Executives' Ass'n, 491 U.S. 299, 305 (1989), the designations "major" 

and "minor" are not to be understood as reflecting the relative 

importance of particular labor controversies. 

 9 
 contemplates the existence of a collective bargaining 

 agreement already concluded or, at any rate, a 

 situation in which no effort is made to bring about a 

 formal change in terms or to create a new one. The 

 dispute relates either to the meaning or proper 

 application of a particular provision with reference to a 

 specific situation or to an omitted case. . . . . [T]he 

 claim is to rights accrued, not merely to have new ones 

 created for the future. 

325 U.S. at 723. Minor disputes are subject to mandatory 

arbitration by the relevant board of adjustment, and may 

not be the subject matter of strikes and lockouts. 

Jurisdiction to entertain the merits of a minor dispute rests 

exclusively with the arbitral forum: "Congress considered it 

essential to keep these so-called `minor' disputes within the 

Adjustment Board and out of the courts." Union-Pacific 

Railroad Co. v. Sheehan, 439 U.S. 89, 94 (1978)(per

curiam). 

Although the Burley Court established the general 

contours of the distinction between major and minor

disputes, it did not articulate a standard for differentiating 

the two. In Consolidated Rail Corp. v. Railway Labor 

Executives' Association, 491 U.S. 299 (1989) ("Conrail"), the 

Court undertook to advance the analysis. "[T]he line drawn 

in Burley," said the Conrail Court, "looks to whether a claim 

has been made that the terms of an existing agreement 

either establish or refute the presence of a right to take the 

disputed action. The distinguishing feature of [a minor 

dispute] is that the dispute may be conclusively resolved by 

interpreting the existing agreement." Id. at 305. Accordingly 

the Court adopted a standard that sought to synthesize the 

various verbal formulations adopted by the several courts of 

appeals that had addressed the issue: "Where an employer 

asserts a contractual right to take the contested action, the 

ensuing dispute is minor if the action is arguably justified 

by the terms of the parties' collective-bargaining agreement. 

Where, in contrast, the employer's claims are frivolous or 

obviously insubstantial, the dispute is major." Id. at 307. 

III. 

In the case at bar, the district court determined that the 

"underlying issues in this case"--Continental's alleged 

 10 
violations of paragraphs 6(A) and 6(B) of the CRM--

"constitute minor disputes under the RLA." Slip opinion at 

6. The district court then stated that "although the RLA 

requires that minor disputes be settled in arbitration rather 

than by strikes or by the federal courts, it does not prohibit 

the parties to a collective bargaining agreement from setting 

procedural limits to the system boards' jurisdiction. 

Whether the parties have complied with the procedural 

requirements of the collective bargaining agreement such 

that the arbitrator may address the merits of a dispute is 

a matter for the arbitrator to decide." Slip opinion at 8-9 

(citation omitted). The district court went on to conclude 

that the issues presented in the IACP's complaint "are 

minor disputes" which "must, therefore be decided through 

arbitration." Slip opinion at 9. 

There is no doubt that, as a general matter, a dispute 

over whether Continental violated paragraphs 6(A) and 6(B) 

of the CRM is a minor, rather than major, dispute. And, 

more particularly, there is no doubt that the issues posed 

by the grievance relating to pilot wages filed by Jackson 

Martin against Continental are issues of the sort that are 

subject to arbitration by the board of adjustment. This 

appeal focuses on the question whether the IACP's 

recasting of the Martin grievance into one of broader scope 

has introduced additional and antecedent issues that 

should be resolved judicially as a predicate to arbitration or 

whether those additional issues are themselves subject to 

arbitration. Characterizing these issues as matters of 

"substantive arbitrability," the IACP contends that they 

must be resolved by the district court rather than by the 

board of adjustment.5 In pressing this contention on 

appeal, the IACP argues that the issues that it asked the 

district court to resolve prior to arbitration--namely, 

whether the alleged violation of paragraph 6(B) of the CRM 

is properly before the arbitrator, and whether the 6(B) 

question must be addressed on a class-wide basis--are 

_________________________________________________________________ 

5. On page 15 of its brief, the IACP attributes to the district court the 

statement that "the doctrine of substantive arbitrability has no 

application under the RLA." This language, however, appears neither on 

the page to which the IACP's brief refers nor anywhere else in the 

opinion. 

 11 
questions of "substantive arbitrability" for the court to 

decide. 

The term "substantive arbitrability" derives from National 

Labor Relations Act jurisprudence but has been utilized in 

other contexts. It is used to describe the question whether 

the parties' dispute involves a subject matter that is within 

the ambit of a contractual arbitration agreement. See John 

Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557-58 

(1964); United Steelworkers of America v. Warrior & Gulf 

Navigation Co., 363 U.S. 574, 582-83 (1960). The Supreme 

Court used the term "substantive arbitrability" for the first 

time in John Wiley, a case arising under the NLRA, to 

differentiate "substantive" issues--whether the parties have 

agreed to arbitrate the subject matter of the dispute--from 

"procedural" issues--"whether grievance procedures or 

some part of them apply to a particular dispute, whether 

such procedures have been followed or excused, or whether 

the unexcused failure to follow them avoids the duty to 

arbitrate." 376 U.S. at 557-58. The question of"substantive 

arbitrability"--that is, "whether a collective bargainingagreement creates a duty for the parties to arbitrate the 

particular grievance"--is, as the Supreme Court instructs, 

"undeniably an issue for judicial determination." AT & T 

Technologies, Inc. v. Communications Workers, 475 U.S. 

643, 649 (1986). Issues of "procedural arbitrability," on the 

other hand, are for the arbitrator to decide. John Wiley, 376 

U.S. at 558. 

Responding to the IACP's contention that its complaint 

implicates issues of "substantive arbitrability" for the court 

to decide, Continental makes two arguments: Thefirst 

argument is that, as the district court ruled, the IACP's 

complaint presents a minor dispute solely within the 

jurisdiction of the board of adjustment. The second

argument is that the IACP's complaint raises questions not 

of "substantive arbitrability" but of "procedural 

arbitrability"--questions which are for the arbitrator to 

decide. 

A. Does Continental's Complaint Present a "Minor 

Dispute"? 

In urging the correctness of the district court's 

determination that the IACP's complaint presents a minor 

 12 
dispute, Continental contends that the defenses that it 

advanced to the Martin grievance and to the IACP's 

proposed recasting of the grievance are defenses which, to 

use the terminology of Conrail--"[a] dispute is minor if the 

action is arguably justified by the terms of the parties' 

collective-bargaining agreement"--are "arguably justified" 

by, respectively, the Cost Reduction Memorandum ("CRM") 

and the Interim Grievance Procedure ("IGP"). Thus, in 

Continental's view, we need look no further than the 

definition of a minor dispute to resolve this case.

Although the Court's Conrail discussion of minor 

disputes is pertinent, we are called upon to answer a 

somewhat different question from that posed by the 

distinction between major and minor disputes. The function 

that a court performs when determining whether a dispute 

is major or minor is not the function that a court performs 

when deciding whether an issue is one of "substantive 

arbitrability" or "procedural arbitrability." As the Supreme 

Court has pointed out, the "arguably justified" standard 

announced in Conrail "was employed only for policing the 

line between major and minor disputes." Hawaiian Airlines, 

Inc. v. Norris, 512 U.S. 246, 265 (1994). That line

determines which statutory route must be followed as 

between (1) bargaining, followed by compulsory mediation 

procedures under the auspices of the National Mediation 

Board, which procedures are judicially enforceable, and (2) 

binding arbitration, subject to limited judicial review. Thus, 

the major/minor question allocates the respective authority 

of the National Mediation Board on the one hand, and the 

arbitral boards of adjustment on the other, and also 

delineates the judiciary's role in each respective statutory 

path.6 See Burley, 325 U.S. at 722. 

This appeal presents a related, but nonetheless different, 

question. It presents the question whether, in the 

adjudication of a dispute concededly to be decided by an 

_________________________________________________________________ 

6. The definition of a minor dispute also comes into play when 

determining whether a state-law claim raised by a worker covered by a 

collective bargaining agreement governed by the RLA is preempted. See 

Hawaiian Airlines, 512 U.S. at 265. But the preemption inquiry has no 

bearing on the case at bar. 

 13 
arbitral tribunal (under the RLA, a board of adjustment), it 

is the arbitral tribunal or the court which determines the 

scope of the arbitration. To be more specific, a decision that 

the controversy about the adequacy of Continental's pilots' 

wages is a "minor" dispute sets the stage for a further 

question: Granted that Jackson Martin's grievance is 

arbitrable, are the additional issues posed by Continental's 

objections to the IACP's recasting of the Martin grievance 

matters to be decided by the district court or by the System 

Board? 

Hence this appeal concerns not whether this case goes to 

arbitration (as opposed to another statutory route), but 

instead concerns what issues the arbitral tribunal should 

decide and on whose behalf those issues are to be decided: 

the IACP's complaint asks the court to determine (1) 

whether the arbitral tribunal must, in entertaining Martin's 

grievance, decide whether or not Continental violated 

paragraph 6(B) of the CRM (the "me-too" provision), and (2) 

whether the arbitral tribunal must decide that issue on a 

class-wide basis. It is the IACP's contention that these 

questions fall under the rubric of "substantive arbitrability" 

and thus must be decided by the court. Because this

contention is not definitively answered one way or another 

via the major/minor distinction, we now turn to the

question whether the IACP's complaint involves issues of 

"substantive" or "procedural" arbitrability. 

B. Does the IACP's Complaint Raise Issues of 

"Substantive" or "Procedural" Arbitrability? 

In support of its argument that its complaint raises 

questions of "substantive arbitrability," the IACP relies 

heavily on our discussion in PaineWebber v. Hartmann, 921 

F.2d 507, 512-13 (3d Cir. 1990), and PaineWebber, Inc. v. 

Hofmann, 984 F.2d 1372, 1378 (3d Cir. 1993), two cases 

arising not under the RLA or the NLRA, but under the 

securities laws and the Federal Arbitration Act. In

Hartmann and Hofmann, securities brokerage houses sued 

to enjoin the arbitration of customers' claims of fraud and 

mismanagement. Both cases concerned contractual 

language found in the arbitration provisions of the New 

York Stock Exchange rules and the National Association of 

Stock Dealers Code of Arbitration Procedure, to wit: "No 

 14 
dispute, claim, or controversy shall be eligible for 

submission to arbitration . . . where six (6) years have 

elapsed from the occurrence or event giving rise to the act 

or dispute, claim or controversy." 921 F.2d at 509. Relying 

on the specific language, absent in the case at bar, relating 

to disputes "eligible for submission to arbitration," we held 

in Hartmann (and reiterated in Hofmann) that the 

application of the quoted provision was a question of 

"substantive arbitrability" for the court. 921 F.2d at 513; 

984 F.2d at 1379. In Hartmann, however, we specifically 

noted the narrowness of our holding, stating that 

"[l]anguage less distinct than `eligible for submission to 

arbitration' might well be insufficient to overcome the 

strong jurisprudential pull toward arbitration." 921 F.2d at 

514. 

The IACP urges that the agreement in this case--and in 

particular the exhaustion requirement of the IGP--presents 

a "substantive bar" to arbitration such that our rulings in 

Hartmann and Hofmann apply. The IACP places principal 

reliance on language in the "Jurisdiction" portion of Section 

III of the IGP. The language relied on provides: "The System 

Board shall have authority to hear only matters which are 

within the scope of this Agreement and which have been 

handled through the prior steps of this grievance 

procedure." This is not, however, the only part of the 

agreement which sets forth exhaustion principles. In 

Section IV of the IGP, under the heading "General 

Provisions," the agreement states in relevant part:

 Unless the Company and the grievant or the IACP 

 mutually agree otherwise, a grievant is precluded from 

 raising in subsequent steps issues not raised in his 

 original grievance. Further, the Step II Hearing Officer 

 and System Board of Adjustment are precluded from 

 considering issues not raised in the grievant's original 

 grievance unless the Company and the grievant or the 

 IACP mutually agree otherwise. Such issues may only 

 be submitted as new grievances subject to all time 

 limits, jurisdictional restrictions, and any other 

 pertinent provisions of this Agreement. 

We do not find the language of Sections III and IV of the 

IGP to be as "distinct" as the language at issue in the 

 15 
Hartmann and Hofmann cases. The mere fact that the 

exhaustion provisions are framed in obligatory terms does 

not necessarily render the provisions a "substantive bar" 

requiring judicial, rather than arbitral, interpretation. In 

Belke v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 

1023 (11th Cir. 1982), a case we referred to in Hartmann, 

the arbitration portion of the agreement between the 

investor and the broker read, in pertinent part, "Arbitration 

must be commenced within one year after the cause of 

action accrued." Id. at 1026 n.4. The Eleventh Circuit 

concluded that compliance with this provision was an issue 

for the arbitrator to decide. Id. at 1028. Noting that the 

provision at issue in Belke presented a "stark contrast" with 

the NYSE and NASD's "eligib[ility] for submission to 

arbitration" formulation, we observed in Hartmann that the 

Belke court "quite reasonably" held that"its application 

should be decided by the arbitrator." 921 F.2d at 513-14. 

Even if the exhaustion provisions of the IGP could 

properly be read as approximating the distinctness of the 

Hartmann/Hofmann "eligible for submission to arbitration" 

provision, we would be slow to conclude that interpretation 

and application of the exhaustion provisions were matters 

for the district court rather than matters for the System 

Board. We think the case for judicial circumspection in 

defining the boundaries of the arbitral process is less 

compelling in the Hartmann/Hofmann setting, where the 

disputes to be addressed arise out of the relationship 

between a brokerage house and an individual customer, 

than in settings governed by a collective bargaining 

agreement which covers scores or hundreds or thousands 

or even tens of thousands of employees. In the collective 

bargaining setting, the primacy of the arbitral role is crucial 

to the stability of the work place. The Supreme Court made 

this plain almost forty years ago in United Steelworkers of 

America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578 

(1960): 

 Thus, the run of arbitration cases, illustrated by Wilko 

 v. Swan, 346 U.S. 427 [a securities case], becomes 

 irrelevant to our problem. There the choice is between 

 the adjudication of cases or controversies in courts 

 with established procedures or even special statutory 

 16 
 safeguards on the one hand and the settlement of them 

 in the more informal arbitration tribunal on the other. 

 In the commercial case, arbitration is the substitute for 

 litigation. Here arbitration is the substitute for 

 industrial strife. . . . For arbitration of labor disputes 

 under collective bargaining agreements is part and 

 parcel of the collective bargaining process itself. 

Id. at 578. 

A recent illustration of the centrality of arbitration in the 

collective bargaining context is our decision in Association 

of Flight Attendants v. USAir, 960 F.2d 345 (3d Cir. 1992). 

In Association of Flight Attendants, an RLA case, we were 

called upon to decide whether the district court erred in 

ruling that a particular item of evidence--the grievant's 

expunged criminal records--must be admitted in the 

arbitral proceeding. While finding that this issue could not 

correctly be characterized as presenting either a major or a 

minor dispute, we determined that the issue was one of 

procedure for the arbitrator to decide. Id. at 348-49.7 

In so holding, we found guidance in John Wiley, which 

held that under the National Labor Relations Act, "[o]nce it 

is determined . . . that the parties have agreed to submit 

the subject matter of the dispute to arbitration, `procedural 

questions' which grow out of the dispute and bear on its 

final disposition should be left to the arbitrator." Id. at 557. 

Following the logic of John Wiley, we concluded in 

Association of Flight Attendants that the general subject 

matter of the dispute--i.e., the termination of the grievant-- 

was subject to arbitration and that the evidentiary question 

was one for the arbitrator to decide.8 960 F.2d 349-350. 

_________________________________________________________________ 

7. It bears noting that we decided Association of Flight Attendants after 

Hartmann. 

8. The "procedural arbitrability" doctrine of John Wiley, long a mainstay 

of NLRA jurisprudence, has been held applicable to RLA cases by other 

courts of appeals as well. In Brotherhood [of] Railway Carmen v. Atchison, 

Topeka & Santa Fe Railway Co., 956 F.2d 156 (7th Cir. 1992), the court 

came to a conclusion similar to the one we reached in Association of 

Flight Attendants, albeit in a case arising in a different procedural 

posture. In that case, the union sued on the basis of an arbitral award 

entered in favor of a discharged employee by an RLA board of 

 17 
In the case at bar, the IACP, in its first count for relief, 

asked the district court to rule that the arbitrator must 

determine the merits of the issue of whether Continental 

violated paragraph 6(B)--an issue which Continental

contended, in advance of arbitration, was not previously 

raised in the grievance procedure. Thus the IACP requested 

a judicial determination of whether or not any applicable 

exhaustion requirement was met (and, if not, whether there 

was ground for excusing exhaustion). In doing so, IACP 

raised, in the RLA context, an argument which, in the 

NLRA context, the Supreme Court in John Wiley had 

occasion to reject. In John Wiley, the employer resisted 

arbitration of an employee's grievance on a number of 

grounds, one of which concerns us here: the employer's 

argument that the court should find arbitration precluded 

because the employee failed to exhaust the preliminary 

steps of the grievance procedure. 376 U.S. at 556 & n.11. 

Rejecting the employer's argument that it was for the court 

to decide the exhaustion issue (as well as the issue whether 

the grievance was timely instituted) the Court stated: 

 Doubt whether grievance procedures or some part of 

 them apply to a particular dispute, whether such 

_________________________________________________________________ 

adjustment. On appeal, the issue was whether the district court erred in 

ruling, in the first instance, that the employer "had waived its right to 

oppose the full award" because it failed to introduce the evidence that 

supported its opposition during arbitration. Id. at 158. The court held 

that the interpretation of the contractual provision relating to the 

manner in which grievances were to be presented to the arbitrators-- 

"each written submission shall be limited to the material submitted by 

the parties to the dispute [in the earlier stages of the grievance 

proceeding]"--was a procedural question for the arbitrators to decide. Id. 

at 158, 159. In doing so, the court pointed out that it is "customary for 

collective bargaining agreements to require the exhaustion of the 

preliminary stages of the grievance procedure before resorting to 

arbitration . . . for why establish remedies if the parties are free to 

bypass them?" Id. at 158. And in Larsen v. American Airlines, Inc., 313 

F.2d 599 (2d Cir. 1963), the court noted "[W]here a labor agreement 

provides for arbitration or other internal resolution of disputes, this 

court has held that questions of `procedural arbitrability' are for the 

arbitrator" (citing Livingston v. John Wiley & Sons, Inc., 313 F.2d 52 (2d 

Cir. 1963), subsequently affirmed as John Wiley & Sons, Inc. v. 

Livingston, 376 U.S. 543 (1964)). 

 18 
 procedures have been followed or excused, or whether 

 the unexcused failure to follow them avoids the duty to 

 arbitrate cannot ordinarily be answered without 

 consideration of the merits of the dispute which is 

 presented for arbitration. . . . . It would be a curious 

 rule which required that intertwined issues of 

 "substance" and "procedure" growing out of a single 

 dispute and raising the same questions on the same 

 facts had to be carved up between two different 

 forums, one deciding after the other. Neither logic nor 

 considerations of policy compel such a result. 

376 U.S. at 557. We find this reasoning and result fully 

applicable to the case at bar. 

The second issue raised in IACP's complaint, whether the 

arbitrator must entertain the Martin grievance on behalf of 

all pilots, is likewise an issue for the arbitrator to decide. 

This issue is not only "procedural" in nature, but also 

requires considerable investigation into the meaning of the 

parties' agreements. The IACP in effect requests that the 

court certify the grievance as a class action before the 

arbitrator proceeds to hear the case, a proposed partyjoinder ruling that would be "procedural" as that term is 

normally understood. Furthermore, resolving this issue 

would involve an analysis of the interplay between the 

CRM's wage-restoration provision--paragraph 6(A)--and the 

"me too" provision--paragraph 6(B)--on the one hand, and 

the IGP's provisions governing the conduct of grievance 

proceedings on the other. If we were to assume that an 

arbitrator would find any applicable exhaustion 

requirement satisfied, then the arbitrator might also find 

within the language of the parties' agreements, as 

elucidated by the law of the shop, a basis for considering 

paragraph 6(B) claims to mandate or permit class-wide 

relief (that is to say, perhaps the "me too" clause is better 

understood as an "us too" clause). But such a 

determination requires a much more searching 

interpretation of the contract than the courts are permitted 

under the RLA. In this case, as in John Wiley, this

procedural issue cannot "be answered without 

consideration of the merits of the dispute which is

presented for arbitration." 376 U.S. at 557. 

 19 
The IACP seeks not a determination of the subject matter 

covered by the agreement to arbitrate, but a judicial 

determination of the parameters and scope of the award 

that the system board may permissibly enter, that is, (1) 

whether the "me-too" clause was properly invoked (and if 

not, whether the union can interpolate this claim at the 

arbitral stage), and (2) whether the arbitrator has authority 

to grant relief on a class-wide basis. In the latter regard, it 

bears noting that Section III.B of the IGP contains the 

following general grant of remedial authority (also under the 

subheading "Jurisdiction"): 

 The System Board shall have the authority to issue 

 rulings and make awards necessary to compensate a 

 pilot for actual damages suffered as a result of any 

 policy violations it finds to have occurred. The System 

 Board's jurisdiction to award damages is strictly 

 limited to actual, compensatory damages, and does not 

 include jurisdiction or authority to award damages in 

 the nature of a penalty, i.e., punitive damages. The 

 Board shall have the authority, however, to order a 

 party to comply with any provision(s) of the [agreement] 

 or policies as necessary to remedy or correct violations, 

 or to require specific enforcement of a provision of the 

 [agreement] or policies. 

The interpretation of such remedial provisions is a task for 

which arbitrators conversant with industry practice are 

likely to be better suited than judges. Cf. Carey v. General 

Elec. Co., 315 F.2d 499, 508 (2d Cir. 1963)("We cannot 

divine now, nor do we deem it proper to predict, the precise 

form in which the arbitrator will frame his decree."), cert. 

denied, 377 U.S. 908 (1964). 

When a court is called on to determine whether aspects 

of a dispute arising out of a collective bargaining agreement 

are to be determined by an arbitrator or by the court, 

judicial restraint is an institutional imperative. Excessive 

judicial intrusion can undermine arbitral expertise and 

authority.9 Further, lengthy court proceedings can seriously 

_________________________________________________________________ 

9. "It is particularly underscored that the arbitral process in collective 

bargaining presupposes that the parties wanted the informed judgment 

of an arbitrator, precisely for the reason that judges cannot provide it." 

Concurring Opinion of Brennan, J., joined by Frankfurter and Harlan, 

JJ., in United Steelworkers of America v. American Manufacturing 

Company, 363 U.S. 564, 570 (1960). 

 20 
undermine the capacity for prompt adjudication which is 

the hallmark of arbitration. As the Court cautioned in John 

Wiley, 

 the opportunities for deliberate delay and the 

 possibility of well-intentioned but no less serious delay 

 created by separation of the "procedural" and 

 "substantive" elements of a dispute are clear. . . . [S]uch 

 delay may entirely eliminate the prospect of a speedy 

 arbitrated settlement of the dispute, to the

 disadvantage of the parties (who, in addition, will have 

 to bear increased costs) and contrary to the aims of 

 national labor policy. 

376 U.S. at 558.10 

Accordingly, both of the matters raised by the IACP's 

complaint are questions of procedure for the arbitral 

tribunal to decide. 

Conclusion 

For the foregoing reasons, the judgment of the district 

court is affirmed.11 

_________________________________________________________________ 

10. As pointed out in Part II of this opinion, supra note 1, the RLA's 

provisions for arbitration by boards of adjustment were drafted in 

response to the Transportation Act's ineffectual dispute-resolution 

machinery; but even those procedures established by the original statute 

proved less than satisfactory. Before the RLA's mechanisms for resolving 

grievance and contract-application disputes were strengthened by the 

1934 amendments to the statute, "parties were free at all times to go to 

court to settle [grievances]" and the intended dispute-resolution process 

broke down. Burley, 325 U.S. at 725-26. Consequently, the 1934 

amendments created a compulsory arbitration system"to remove the 

settlement of grievances from this stagnating process and bring them 

within a general and inclusive plan of decision." Id. at 728. Hence it is 

unsurprising that the 1934 amendments were enacted under the title: 

"An Act to amend the Railway Labor Act approved May 20, 1926, and to 

provide for the prompt disposition of disputes between carriers and their 

employees." Act of June 21, 1934, ch. 691, 44 Stat. 577. 

11. Continental concluded its brief on appeal with the recital that "the 

judgment [the judgment of the district court which granted Continental's 

 21 
A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

_________________________________________________________________ 

motion for judgment on the pleadings and recited that "[t]he case is 

dismissed"] should be affirmed." Continental has not asked this court to 

address the counterclaim it filed prior to moving for judgment on the 

pleadings. Whether that counterclaim has any continuing viability, or (as 

pointed out in the district court's memorandum opinion but not in the 

district court's order) vanished with the district court's grant of 

judgment 

on the pleadings and consequent dismissal of the case, is not a question 

that is before this court. If this matter reaches the System Board of 

Adjustment, we presume that the threshold issues before the Board will 

be those identified in Continental's counterclaim, e.g., whether, under 

the Interim Grievance Procedure, (1) the IACP may bring a grievance on 

behalf of "similarly situated" pilots other than the individual pilot who 

filed the grievance; (2) a grievant is precluded from raising before the 

System Board an issue not raised in the original grievance; and (3) 

Jackson Martin raised Paragraph 6(B) of the Cost Reduction 

Memorandum in his original grievance filed on September 9, 1994. 

 22