Spirit Airlines, Inc. v. Ass'n of Flight Attendants Cwa

SPIRIT AIRLINES, INC., Plaintiff, v. ASSOCIATION OF FLIGHT ATTENDANTS - CWA, AFL-CIO, Defendant.

Case No. 14-CV-10715

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

September 18, 2014

Honorable Patrick J. Duggan

OPINION AND ORDER DENYING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS

I. INTRODUCTION

This case is brought under the Railway Labor Act ("RLA"), 45 U.S.C. § 151 et seq. Plaintiff Spirit Airlines, Inc. ("Spirit") asks the Court to vacate an arbitration award issued pursuant to the mandatory arbitration provisions of the RLA and the collective bargaining agreement ("CBA") between Spirit and Defendant Association of Flight Attendants - CWA, AFL-CIO ("AFA"). AFA filed a counterclaim, urging the Court to confirm the award.

Now before the Court is AFA's motion for judgment on the pleadings. The matter is fully briefed and the Court heard oral argument on September 4, 2014. Inaddition, AFA filed a supplemental brief following oral argument. For the reasons that follow, the Court will deny AFA's motion for judgment on the pleadings.

II. BACKGROUND¹

Spirit is an airline providing passenger air transportation and a "carrier" within the meaning of the RLA. Am. Compl. ¶ 1 (Page ID 402). AFA is a labor organization representing the flight attendants employed by Spirit. Id. ¶ 2 (Page ID 402-403). Spirit and AFA are parties to a CBA that establishes rates of pay, rules, benefits, working conditions, and dispute resolution mechanisms. Id. ¶ 5 (Page ID 403).

Section 22 of the CBA establishes procedures for processing and resolving labor grievances between Spirit and AFA. Under § 22.F, the process culminates in a final and binding arbitration of unresolved grievances before the Spirit Airlines Flight Attendant System Board of Adjustment ("Board" or "System Board"). The System Board has authority to "adjust[] and decid[e] disputes which may arise out of the interpretation and/or application of the [CBA]." Am. Compl. Ex. 1 (Page ID 420). The Board is comprised of three members: a representative of AFA, a representative of Spirit, and a neutral arbitrator; the two partisan members "shall be full time Company employees" and the arbitrator is selected from a pre-approvedlist of five mutually-agreed-upon individuals. Id. (Page ID 421). Importantly for the present purposes, the CBA provides that "[d]ecisions of the Board . . . shall be by a majority vote and shall be final and binding on all parties." Id. (Page ID 422).

On January 28, 2011, AFA filed a grievance regarding domestic partner health care benefits. Am. Compl. ¶ 12 (Page ID 404). The matter proceeded to the System Board. Id. ¶ 14 (Page ID 404). AFA designated Carmen Linn, a Spirit flight attendant at the time, to serve as AFA's partisan representative on the System Board, and Spirit selected Costin Corneanu, a member of Spirit's management team, to serve as its partisan representative. Id. From the then-current list of five neutral arbitrators, the parties selected Susan Brown. Id. ¶ 15 (Page ID 404).

A hearing on the grievance was held on July 26, 2012, during which AFA's attorney announced that Linn would soon be retiring and that Ramona Rios would take her place as AFA's System Board representative. Am. Compl. Ex. 2 (Page ID 426). However, at the time of the hearing, Linn remained AFA's designated representative for the grievance at issue in this case.

Linn retired from Spirit effective September 1, 2012. Am. Compl. ¶ 21 (Page ID 405). At this time, the System Board had not issued a decision in connection with the present grievance. On September 26, 2012, Brown circulated a draft decision on the grievance, which was favorable to AFA, along with anemail message to Linn and Corneanu inquiring about the possibility of holding an executive session to discuss the draft opinion. Id. ¶ 23 (Page ID 406).² Apparently unaware of Linn's retirement, Corneanu and Brown continued to exchange emails, copying Linn, regarding dates for an executive session. Id. at Ex. 4 (Page ID 446-453). Eventually, on October 12, 2012, Corneanu emailed Brown advising that Linn had retired on September 1 and was thus, in Corneanu's view, ineligible to continue service on the System Board. Id. Brown responded suggesting a conference call on the issue of the composition of the System Board. Id. Prior to the conference call, AFA's attorney notified Brown and Corneanu that AFA was substituting Rios as AFA's designated representative on the System Board in place of Linn. Id.

On October 19, 2012, a conference call with Brown and the attorneys for Spirit and AFA took place on the record. The participants discussed the composition of the System Board in light of Linn's retirement. On the one hand, Spirit's attorney expressed the view that Linn was no longer a current Spirit employee and thus could no longer serve on the System Board pursuant to the CBA's requirement that the two partisan System Board members "be full time Company employees." At the same time, Spirit asserted that AFA cannotsubstitute Rios for Linn given that the arbitration proceedings had already commenced, as there is no provision of the CBA allowing mid-arbitration substitutions and the case law interpreting the RLA prohibits it. In light of Spirit's position that Linn cannot continue her service on the System Board and Rios cannot be substituted for Linn, Spirit's attorney presented three possible solutions: (1) allow the matter to be decided by the remaining two System Board members - Corneanu and Brown - and "hope to reach a majority decision, or a deadlock, resulting in the effective denial of the grievance"; (2) start anew with new System Board members, including a new arbitrator; or (3) withdraw the grievance. Am. Compl. Ex. 5 (Page ID 456-461).

On the other hand, AFA's attorney argued during the telephone conference that the CBA does not preclude Linn's continued service on the System Board. AFA's attorney pointed out that, although the CBA provides that the two partisan System Board members must be "be full time Company employees," the CBA does not specify at what point in time the member must be a full time employee. In other words, the CBA does not provide that the System Board member must continue to be a full time employee throughout the entire duration of the grievance proceedings; thus, AFA's position was that the CBA language could reasonably be interpreted to require that the Board member be a full time employee only when appointed to the Board or at the time of the hearing on the grievance, in which caseLinn's continued participation on the Board would not violate the CBA. AFA's attorney also disagreed with Spirit that Rios could not be substituted for Linn. AFA's attorney agreed with Spirit that the CBA is silent on the issue of substitution, but AFA's attorney maintained, contrary to Spirit's position, that the silence cuts in favor of allowing substitution, and that case law does not foreclose substitution in the present circumstances, because Rios was present during the July 26 hearing on the grievance. Id.

After listening to these arguments, Brown informed the parties of her belief that she lacks jurisdiction to decide matters concerning the composition of the Board (i.e., whether Linn's continued service, or her replacement by Rios, is proper) and that she cannot proceed with the proceedings until the parties resolve the Board composition issue. Id. (Page ID 459).

On December 26, 2012, AFA filed a lawsuit over which this Court presided, seeking an order recognizing either Linn or Rios as the AFA System Board representative for the purposes of completing the arbitration of the grievance or, alternatively, compelling Spirit to resubmit the grievance for a new hearing before a System Board chaired by Brown. On May 2, 2013, the Court granted Spirit's motion to dismiss the 2012 lawsuit, holding that only final arbitral awards are subject to judicial review and that Brown's decision was not yet final because "a majority vote is required to render a final decision" and, "[a]ccording to the CBA,Linn became ineligible to serve as a System Board member once she ceased being a full-time Spirit employee." Ass'n of Flight Attendants - CWA, AFL-CIO v. Spirit Airlines, Inc., No. 12-CV-15641, 2013 WL 1858754, at *5 (E.D. Mich. May 2, 2013) (the "2012 lawsuit"). AFA did not appeal the Court's ruling.

On August 14, 2013, more than three months after the Court dismissed the 2012 lawsuit, AFA filed a "motion" directed at Brown asking her to either find Linn eligible to serve on the System Board or allow Rios to serve in place of Linn for the purposes of completing the arbitration process. Am. Compl. Ex. 7 (Page ID 485-499). Spirit responded the next day, arguing that Brown does not have jurisdiction to decide the Board composition issue - a conclusion that Brown had already reached during the October 19, 2012 conference call. Id. at Ex. 8 (Page ID 501-506).

On September 24, 2012, Brown changed course, informing counsel for AFA and Spirit that she will issue a ruling on the Board composition issue. Brown backtracked from her prior position that she does not have jurisdiction to resolve the issue in light of this Court's May 12 ruling on Spirit's motion to dismiss in the 2012 lawsuit. In her letter to counsel, Brown wrote, in pertinent part:

When this issue of procedure arose during the course of the Board's deliberations, I indicated I thought that the composition of the Board was not properly before me and suggested that the parties address the matter in another forum, preferably by mutual agreement. The Company apparently inferred, incorrectly, that I meant by this suggestion that they should put the matter before another arbitrator.

In fact, I never considered that an option; the only alternatives I mentioned during our conference call were the preferred mutual agreement and court. The federal District Court has now opined that the matter indeed belongs to an arbitrator and noted that the Court

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