Opinion ID: 448251
Heading Depth: 1
Heading Rank: 1

Heading: facts and proceedings to date

Text: 2 In 1958 Congress entrusted to the CAB the duty of regulating airline mergers as part of its more general responsibility of promoting the stability of the carrier industry. 49 U.S.C. Sec. 1378(b). Recognizing that airline employees are among those most likely to be harmed by mergers--and that their dissatisfaction poses potential dangers to the stability of the industry--the CAB has developed a set of rules called Labor Protective Provisions (LPP's) which it normally requires carriers to adopt as a condition to its approval of their mergers. The LPP's provide, among other things, compensation for carrier employees who are deprived of employment as a result of the merger, 2 and that either the employee or the carrier may request arbitration of disputes arising under the LPP's. 3 3 On October 24, 1979, the CAB approved the merger of Pan Am and National Airlines. As a condition to that merger, Pan Am agreed to abide by the standard LPP provisions enumerated above. Robert Wallace, one of National's managers, sought to take advantage of the LPP's after he found himself placed in a position at Pan Am which was substantially less attractive than the one he had held at National. While his request was pending, Wallace was dismissed from his job at Pan Am. He then amended his petition to include an allegation of retaliatory discharge. The Board directed arbitration, Pan Am-National Merger, C.A.B. Order 81-7-39 (July 7, 1981), and its order was affirmed by the Court of Appeals for the District of Columbia Circuit, Pan American World Airways Inc. v. C.A.B., 683 F.2d 554 (D.C.Cir.1982). 4 The arbitrator interpreted the Board's order compelling arbitration to mean that he was to decide three issues: (1) whether Wallace was discharged in retaliation for his decision to assert LPP benefits; (2) if not, whether he was otherwise entitled to LPP benefits, and (3) if he was entitled to LPP benefits, what the amount of his award should be. On July 2, 1982, the arbitrator concluded that Wallace was entitled to LPP benefits. The arbitrator resolved the first issue against Wallace because he found that the supervisor who made the ultimate decision to terminate Wallace did so because Wallace had earned the lowest performance ratings in his department, and that this was pursuant to the company's usual and customary practices and methodology. As to the second issue, the arbitrator determined that Wallace was entitled to benefits under section 4(a) of the LPP's because he was an employee who had been placed in a worse position as a result of the merger. On this ground, the arbitrator awarded Wallace a dismissal allowance pursuant to sections 5 and 7 of the LPP's. 5 On review, the CAB upheld the arbitrator on the retaliation issue, but overturned his award of benefits under section 4(a). First, it concluded that he had no authority to decide Wallace's rights under section 4(a) because only the retaliation issue had been submitted for arbitration. Second, it held that even if the arbitrator had been authorized to hear the section 4(a) claim, his conclusion was erroneous because Wallace was a manager at the time of the merger and therefore not an employee under the terms of the Pan Am-National LPP's. Third, the Board concluded that no matter what Wallace's eligibility status, the evidence in the record established that he had forfeited his right to LPP benefits by refusing three viable job offers that had been made to him. Last, the Board concluded that the arbitrator had improperly relied on extra-record information such as the Wall Street Journal in finding that the layoff occurred as a result of the merger, rather than because of unrelated economic conditions. Wallace appealed to this court under 49 U.S.C. Sec. 1486.