Court Opinion

ID: 3191400
Source: CourtListenerOpinion
Date Created: 2016-04-05 16:00:48.863642+00
Date Added: 2024-06-11T14:35:33.134035
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                            File Name: 16a0192n.06

                                       Case No. 15-1821

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

                                                                                FILED
                                                                           Apr 05, 2016
SPIRIT AIRLINES, INC.,                             )
                                                                      DEBORAH S. HUNT, Clerk
                                                   )
       Plaintiff-Appellant,                        )
                                                   )       ON APPEAL FROM THE UNITED
v.                                                 )       STATES DISTRICT COURT FOR
                                                   )       THE EASTERN DISTRICT OF
ASSOCIATION OF FLIGHT                              )       MICHIGAN
ATTENDANTS-CWA, AFL-CIO,                           )
                                                   )
       Defendant-Appellee.                         )
                                                   )
____________________________________/

Before: MERRITT, GIBBONS, and SUTTON, Circuit Judges

       MERRITT, Circuit Judge. This case arises under the Railway Labor Act (“the Act”)

from an arbitration dispute between Spirit Airlines (“Spirit”) and the Association of Flight

Attendants (“the Association”) representing Spirit’s employees. The arbitration arrangement

calls for a three-member arbitration board with an employee representative, a representative of

management, and a neutral arbitrator. The question presented here is a technical procedural

issue, not the merits of the dispute: Do the majority-vote provisions of the Act and the parties’

Agreement allow a neutral arbitrator to determine unilaterally that a former full-time Spirit

employee may continue to serve on the adjustment board and vote once she retires? Spirit says

“No,” the arbitration decision made by the retired employee and the neutral arbitrator must be set
Case No. 15-1821
Spirit Airlines, Inc. v. Ass’n of Flight Attendants

aside and an entirely new arbitration proceeding commenced. The district court rejected Spirit’s

argument, and we agree.1

                                                            I. Facts

        The Association and Spirit are parties to a collective bargaining agreement which, among

other things, governs employees’ grievance procedures. Pursuant to § 22 of the Agreement, the

grievance process culminates in a final and binding arbitration of unresolved grievances before

the Spirit Airlines Flight Attendant System Board of Adjustment, an adjustment board that is

created pursuant to the Act. 45 U.S.C. § 184. The provision of the Act relevant to this case

states that “[a] majority vote of all members . . . of the [a]djustment [b]oard eligible to vote shall

be competent to make an award with respect to any dispute submitted to it.” 45 U.S.C. § 153

First (n). The Agreement requires that: (1) the Board “shall consist of three (3) Board Members:

a[n Association] representative, a [Spirit] representative and [a neutral] arbitrator”; (2) all board

members, except the neutral arbitrator, “shall be full time [Spirit] employees”; and

(3) “[d]ecisions of the Board . . . shall be by a majority vote and shall be final and binding on all

parties.”

        On January 28, 2011, Spirit flight attendant Robert Shipley filed a grievance alleging that

distinctions imposed by Spirit between health insurance options offered to married flight

attendants and those offered to flight attendants with domestic partners violated the provisions of

the Agreement prohibiting discrimination based on marital status. Spirit maintains four health

insurance options for its employees: “two point-of-service plans (Plan A and Plan B), one plan of

the health maintenance organization type, and a fourth [plan] called the Diamond Health Fund

1
 The Railway Labor Act at 45 U.S.C. § 153 First (n) provides as follows: “A majority vote of all members of the
division of the Adjustment Board eligible to vote shall be competent to make an award with respect to any dispute
submitted to it.” The parties do not dispute that § 153 First (n) applies to this case, and we have no occasion to
question its applicability.

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Spirit Airlines, Inc. v. Ass’n of Flight Attendants

Plan which combines a high-deductible plan with an employer-funded Health Reimbursement

Account (HRA) that allows employees to use such funds for medical out-of-pocket costs such as

co-payments, etc.” R. 2-12, Page ID #: 240. Spirit pilots and flight attendants may enroll in any

of the four health insurance plans, and Spirit has made each of the health plans available to the

spouses and children of its pilots and flight attendants. But a Spirit employee who wishes to

obtain health insurance coverage for a domestic partner is required to select the higher-cost

Diamond Health Fund Plan for both the domestic partner and him or herself.

       Association representative and Spirit flight attendant Carmen Linn, Spirit representative

Costin Corneanu, and neutral arbitrator Susan R. Brown formed the Board selected to arbitrate

Shipley’s grievance. The grievance proceeded to arbitration before the Board on July 26, 2012,

and all three Board members were present for the hearing.

       On September 26, 2012, Brown circulated a “draft” opinion and award in favor of

employee Shipley and the Association.          Because Linn had retired a few days earlier on

September 1, 2012, Spirit objected to the “draft” award and claimed that Linn’s retirement made

her ineligible to continue serving on the Board because the parties’ Agreement required “[a]ll

Board members . . . [to] be full time [Spirit] employees.” Spirit maintained that because Linn’s

retirement a few days earlier made her ineligible to serve on the Board, Brown’s “draft” award in

favor of the Association could not be ratified by a majority vote of the Board as is required by

the Act and the parties’ Agreement. Brown initially concluded that she lacked authority to

resolve this dispute, and told Spirit and the Association that they should resolve the Board

composition issue either by mutual agreement or through the judicial process.

       On December 26, 2012, the Association filed suit in the United States District Court for

the Eastern District of Michigan in order to compel Spirit to recognize Linn as a valid member of

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the Board or to resubmit the grievance for a de novo hearing before an adjustment board chaired

by Brown.     The district court granted Spirit’s motion to dismiss, concluding that because

Brown’s “draft” award was not yet final and the parties’ dispute over the composition of the

Board constituted a “minor” dispute within the meaning of the Act, the parties had to resolve

their dispute through the mandatory procedures set forth in the Act. But the district court

emphasized that while Brown’s decision was not then final and binding, it might “become so. In

other words, re-arbitration may not necessarily be required.” There was no appeal, and the

dispute remained unresolved.

       On August 14, 2013, the Association filed a motion with Brown requesting that she

decide the parties’ Board composition dispute. Spirit responded that Brown had no jurisdiction

to decide the Board composition dispute, and reminded Brown of her earlier statement that she

lacked “authority” to decide the issue. In a September 24, 2013 letter, Brown announced that she

would issue a ruling regarding the parties’ dispute. Because the Board composition issue arose

during the Board’s deliberations, and because the district court both “opined that the matter

indeed belongs to an arbitrator” and did not prohibit Brown from resolving the issue, Brown

reasoned that she, as the arbitrator with jurisdiction over the domestic partner health benefits

grievance, had authority to decide this “issue of procedure.”

        On November 18, 2013, Brown ruled that Linn was not disqualified but was still a

member of the Board until the Board issued its final award. Brown concluded that because “the

composition of the Board was proper when initially constituted,” Linn’s status did not change

during the life of the case even though Linn, through her retirement, became ineligible under the

Agreement to serve on future boards. On January 10, 2014, the majority of the Board — Linn

and Brown — resolved the grievance in favor of the Association and issued a final and binding

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opinion and award. Corneanu, maintaining that Linn was ineligible to vote in support of the

Board’s award, dissented.

         Spirit brought this action in the United States District Court for the Eastern District of

Michigan, seeking a judgment vacating the Board’s final award in favor of the Association.2 On

June 17, 2015, the district court granted the Association’s motion for summary judgment and

enforced the Board’s final award.                 The court held that Brown’s unilateral ruling on the

procedural Board composition issue did not violate the majority-vote provision of the Act or the

parties’ Agreement. The court added that “[a]lternatively, even if the [Act] and/or [Agreement]

required that the board composition issue be decided by majority vote, the lack thereof is

harmless in light of Linn’s signature on the final award.” The court reasoned that the fact that

Linn joined Brown in issuing the final award served as an “implicit acknowledgement that [Linn]

deemed herself eligible to serve as a Board member.” Spirit now appeals to this Court for

reversal.

                                                         II. Discussion

         First, Spirit claims that Brown’s unilateral resolution of the Board composition dispute

violated the majority-vote provisions of the Agreement and the Act. See 45 U.S.C. § 153 First

(n) (“A majority vote of all members . . . of the [Board] eligible to vote shall be competent to

make an award.”); R. 1-2, Page I.D. # 21 (“[d]ecisions of the Board . . . shall be by a majority

vote and shall be final and binding on all parties”).

2
  Spirit originally filed this suit in the United States District Court for the Northern District of Texas, but the court
there granted the Association’s motion, pursuant to 28 U.S.C. § 1404(a), to transfer the case to the Eastern District
of Michigan.

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       Federal courts’ review of an adjustment board’s compliance with the Act is

limited to:

       “three specific grounds: (1) failure of the [Board] to comply with the requirements
       of the Railway Labor Act; (2) failure of the [Board] to conform, or confine, itself
       to matters within the scope of its jurisdiction; and (3) fraud or corruption.”

Union Pac. Ry. Co. v. Sheehan, 439 U.S. 89, 93 (1978) (citing 45 U.S.C. § 153 First (q)). We

must be “exceedingly deferential” to an arbitrator’s interpretation of a collective bargaining

agreement and normally will consider only these three questions:

       “Did the arbitrator act outside his authority by resolving a dispute not committed
       to arbitration? Did the arbitrator commit fraud, have a conflict of interest or
       otherwise act dishonestly in issuing the award? And in resolving any legal or
       factual disputes in the case, was the arbitrator arguably construing or applying the
       contract?”

Mich. Fam. Resources v. Serv. Emp., Loc. 517M, 475 F.3d 746, 753, 755 (6th Cir. 2007)

(internal quotation marks omitted) (citing Major League Baseball Players Ass’n v. Garvey,

532 U.S. 504, 510 (2001); United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38

(1987)). We review de novo the district court’s grant of summary judgment to the Association

under these deferential standards. City of Wyandotte v. Consolidated Rail Corp., 262 F.3d 581,

585 (6th Cir. 2001).

       After Brown resolved the Board composition dispute by continuing Linn on the Board, a

majority of the Board — Brown and Linn — approved of Brown’s unilateral resolution of the

issue by voting in favor of the final award sustaining the Association’s grievance. This approval

is sufficient to comply with the majority-vote provisions of both the Agreement and the Act. See

Edwards v. United Parcel Serv., Inc., 99 F. App’x 658, 660-61 (6th Cir. 2004) (affirming the

district court’s conclusion that although the neutral arbitrator’s award violated the majority-vote

provision of the parties’ collective bargaining agreement, the board corrected any violation by

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approving the award in a subsequent vote). As the district court correctly found, the majority’s

approval of the final award endorsed Brown’s prior preliminary decision because Linn could

have easily expressed her disagreement with the preliminary decision by issuing her own

separate final decision on the grievance or refusing to sit on the board or approve the final award.

That Linn joined Brown in issuing a final award sustaining the Association’s grievance is

sufficient to demonstrate Linn’s approval of Brown’s unilateral decision to reinstate Linn to the

Board.

         Moreover, our finding is consistent with the Act’s express purposes. 45 U.S.C. § 151a(4)

(“The purposes of the chapter are to . . . provide for the prompt and orderly settlement of all

disputes concerning rates of pay, rules, or working conditions.”); see also International Ass’n of

Machinists v. Central Airlines, 372 U.S. 682, 689-90 (1963) (stating that the Act reflects a

“steady congressional intent to move toward a reliable and effective system for the settlement of

grievances”). Unfortunately, there has been nothing “prompt” about the attempted resolution of

the underlying grievance in this case, which was filed more than five years ago. Simply put, a

decision by this Court, to the effect that the majority-vote provision of the Act requires the

parties to re-arbitrate the grievance in light of a dispute about a neutral arbitrator’s preliminary

decision, would ignore the “prompt and orderly” standard of the Act.

         Spirit seeks to fend off this conclusion by claiming that even if Brown’s unilateral

decision did not violate the majority-vote provisions of the Act or the Agreement, the Board’s

award is still invalid because Brown’s decision to continue Linn on the board after her retirement

violated the eligibility provision of the parties’ Agreement. Under Michigan Family Resources’

“exceedingly deferential” standard of review, Mich. Fam. Res., 475 F.3d at 755, we normally

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consider whether the arbitrator has “arguably constru[ed] or appl[ied] the contact.” Misco, Inc.,

484 U.S. at 38.

       While “the arbitrator may not ignore the plain language of the contract . . . a court should

not reject an award on the ground that the arbitrator misread the contract.” Id. In most cases,

courts will find that the arbitrator was applying the contract and enforce the arbitrator’s decision

so long as “the arbitrator appeared to be engaged in interpretation, and if there is doubt [courts]

will presume that the arbitrator was doing just that.” Mich. Fam. Res., 475 F.3d at 753 (citing

United Steelworkers of Am. v. Warrior & Gulf Navigation. Co., 363 U.S. 574, 582-83 (1960)).

Our Court, sitting en banc, has stated that “quotes from and analy[sis] [of] the pertinent

provisions of the agreement,” reliance on other indicators of meaning in the face of contractual

silence, and a lack of any indication that the arbitrator was trying to do anything other than reach

“a good-faith interpretation of the contract” are all “hallmarks” of an arbitrator’s valid

interpretation of an agreement. Mich. Fam. Res., 475 F.3d at 754.

       The parties’ Agreement requires that “[a]ll Board Members, except the arbitrator, [] be

full time [Spirit] employees.” Spirit claims that Brown violated this provision by allowing Linn

— a Spirit employee who had retired only after sitting on the Board during the arbitration

hearing — to remain a member of the Board. When gauged under Michigan Family Resources’

“exceedingly deferential” standard, we cannot say that Brown failed to “arguably constru[e] or

appl[y]” the eligibility provision of the parties’ Agreement.       Id. at 753, 755. In fact, the

provision is ambiguous as to whether an employee in Linn’s position is eligible to sit on the

Board because the provision does not indicate whether a Board member must be a full-time

employee when the Board issues a final award.          Moreover, Brown initially discussed and

considered this provision of the Agreement with the parties during a conference call, and

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determined in a subsequent letter that Linn was eligible to remain on the Board despite the fact

that she had retired before the Board issued a final award. While Brown did not explicitly

mention or interpret the Agreement in her two-page letter resolving Linn’s eligibility, the record

makes clear that Brown was aware of the Agreement’s eligibility provision. Furthermore,

neither Brown’s letter nor the record indicates that Brown was “doing anything other than trying

to reach a good-faith interpretation” of the Agreement. Mich. Fam. Res., 475 F.3d at 754.

       And while we do not reach the merits of the eligibility issue because the parties have

contracted for arbitration, not a court’s opinion, we briefly note that Brown’s resolution of the

eligibility issue seems reasonable for three reasons. First, if retirement disqualifies an employee

from continuing to serve, older more experienced employees would be deterred from

representing management or labor and many more arbitrations would need to be terminated and

started over again — in the face of the sensible, overriding policy of prompt resolution. Second,

it is normal and expected that the non-neutral representative will vote in favor of the interest she

represents.   Third, if retirement disqualifies an employee, it would open the door to

gamesmanship retirement which could extend arbitration indefinitely at the behest of whichever

side would benefit from the delay.

       Finally, Spirit briefly argues that the eighteen-month delay between the hearing and the

Board’s issuance of the final award caused the Board to lose jurisdiction over the domestic

partner benefits grievance because the parties’ Agreement requires that “[d]ecisions of the Board

shall be rendered within thirty (30) days after the close of the hearing.” To support its claim,

Spirit relies solely on Jones v. St. Louis-San Francisco Ry. Co., 728 F.2d 257, 265-66 (6th Cir.

1984), where we held that a board’s fourteen-month delay between the hearing and the final

award was clearly unreasonable when the parties’ contract unequivocally required the board to

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issue an award within fifteen days of the hearing. But Spirit’s heavy reliance on Jones is

misplaced. Jones involved a board’s delay in issuing an award despite a party’s numerous

objections to the delay and the fact that the delay prejudiced that same party. Id. at 266.

Conversely, the delay here occurred when Spirit itself objected to Brown’s issuance of a “draft”

award sustaining the Association’s grievance. Unlike the prejudiced party in Jones, Spirit is

primarily responsible for the delay in this case, and the Board’s delay in sustaining the

Association’s grievance did not harm Spirit. Id. Therefore, Spirit cannot successfully argue that

the delay has caused the Board to lose jurisdiction over the domestic partner health benefits

grievance.

       Accordingly, the judgment of the district court is AFFIRMED.

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