Fifth Circuit Rules that Unions and Employees May Contract to Exclude Certain Claims from Arbitration Under the RLA

The United States Court of Appeals for the Fifth Circuit held that a grievance concerning a pilot’s discharge is not subjected to the Railroad Labor Act’s (RLA) mandatory arbitration mechanism because the collective bargaining agreement (CBA) between the airline and its pilot’s union explicitly excluded the claim.

In CareFlite v. AFL-CIO, No. 08-10807 (5th Cir. Jul. 13, 2010) CareFlite is a medical transportation company that employed 18 helicopter pilots represented by the Professional Employees International Union, AFL-CIO (the “Union”). CareFlite and the Union entered into a CBA effective from April 6, 2006 until April 6, 2011. The CBA required all pilots to obtain certain pilot certification (the “ATP”) within a year of taking a course to be provided by CareFlite. It also stated that “termination of employment resulting from a pilot’s failure to obtain an ATP within the time requirements of this section is non-grievable and non-arbitrable.”

Craig Lee Hilton (Hilton) had worked as a pilot for CareFlite since December, 1998. Hilton also served as a union representative. On June 6, 2006 CareFlite discharged Hilton. The Union filed a grievance claiming CareFlite was retaliating against Hilton for his union activity. The arbitrator ordered Hilton reinstated. After CareFlite reinstated Hilton, the Union petitioned CareFlite a 10-month extension for Hilton to complete his ATP. CareFlite denied the request and the Union filed a grievance on May 15, 2007 (the “extension grievance”). On May 26, 2007, CareFlite discharged Hilton for not possessing the ATP certification. On June 1, 2007, the Union filed another grievance seeking reinstatement of Hilton and extension of his ATP deadline (the “discharge grievance”).

On June 4, 2007, CareFlite filed a motion in federal court seeking a declaratory judgment that both, the time extension and discharge grievances are not arbitrable under the RLA pursuant to the CBA clause. The district court ordered that both grievances be submitted to arbitration. CareFlite now appeals.

The Fifth Circuit stated that the U.S. Supreme Court “explained in Hawaiian Airlines, ‘Congress’ purpose in passing the RLA was to promote stability in labor-management relations by providing a comprehensive framework for resolving labor disputes.’ 512 U.S. at 252.” Then, the court distinguished the concepts of major and minor disputes. A major dispute involves “rates of pay, rules or working conditions.” On the other hand, minor disputes relate to “controversies over the meaning of an existing collective bargaining agreement in a particular fact situation.” Minor disputes “must be resolved only though the RLA mechanisms, including the carrier’s internal dispute-resolution processes.”

The court then noted that the two grievances filed by the Union are distinct disputes and proceeded to analyze them separately. The court held that because the CBA explicitly excluded the discharge grievance from arbitration, it did not grow out of the interpretation or application of the CBA, and, therefore, it is not subjected to the RLA. However, the court held that Hilton and the Union may seek redress through the RLA to resolve the extension grievance.

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