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Southwest Airlines Co. v. Transport Workers Union of America

United States District Court, N.D. Texas, Dallas Division

December 29, 2017

SOUTHWEST AIRLINES CO., Plaintiff,
v.
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, LOCAL 555, Defendant.

          MEMORANDUM OPINION AND ORDER

          A. JOE FISH SENIOR UNITED STATES DISTRICT JUDGE

         Before the court are two motions: (1) the motion of the plaintiff Southwest Airlines Company (“Southwest”) for summary judgment (docket entry 22), and (2) the motion of the defendant Transport Workers Union of America, AFL-CIO, Local 555 (“TWU Local 555”) for summary judgment (docket entry 25). For the reasons set forth below, the plaintiff's motion is granted in part and denied in part, and the defendant's motion is granted in part and denied in part.

         I. BACKGROUND

         Southwest brought this action against TWU Local 555 seeking judicial review of statutorily and contractually mandated arbitration proceedings. See Amended Complaint to Set Aside Arbitration Award (“Amended Complaint”) ¶¶ 12-15 (docket entry 4). In response to Southwest's suit, TWU Local 555 asserted a counterclaim for enforcement of the arbitration award, dismissal of Southwest's claims, and remand of the case to arbitration for a hearing on the merits. Defendant TWU Local 555's Original Answer to Amended Complaint to Set Aside Arbitration Award and Counterclaim to Enforce Arbitration Award (“Answer and Counterclaim”) at 12 (docket entry 11). In lieu of a trial, the parties have agreed to adjudication of the issues in this case by way of cross motions for summary judgment. See Defendant/ Counter-Claimant's Response to Plaintiff/Counter-Defendant's Motion for Summary Judgment (“TWU Local 555's Response”) at 1-2 (docket entry 32).

         A. The Parties

         Southwest is a corporation organized under the laws of the State of Texas, with its principal place of business located in Dallas, Texas. Amended Complaint ¶ 4. As one of the largest scheduled passenger airlines in the world and the largest carrier in the United States in terms of originating domestic passengers boarded, Southwest is a “common carrier” by air under the Railway Labor Act (“RLA”), 45 U.S.C. § 181.[1] Memorandum of Law in Support of Plaintiff Southwest Airlines Co.'s Motion for Summary Judgment (“Southwest's Brief”) at 3 (docket entry 23); Amended Complaint ¶ 4.

         TWU Local 555 is an unincorporated labor organization with principal offices in Dallas, Texas. Amended Complaint ¶ 5. Under the applicable provisions of the RLA, the labor organization is the exclusive collective bargaining representative for Southwest's ramp, operations, provisioning, and freight agents. Amended Complaint ¶ 5.

         Southwest and TWU Local 555 are parties to a collective bargaining agreement (“CBA”) that sets the rates of pay, rules, and working conditions for the approximately 13, 000 ramp, operations, provisioning, and freight agents Southwest employs. Amended Complaint ¶ 6. Over the years the parties have entered into a number of CBAs, but the question of when the latest CBA became binding and effective on the parties lies at the center of this dispute.

         B. Context for the Present Action

         Under the terms of the parties' CBA and pursuant to the RLA, grievances concerning the interpretation or application of the CBA are subject to arbitration.[2] See Southwest's Brief at 6; Amended Complaint ¶¶ 13-15. On March 28, 2016, TWU Local 555 filed a grievance in light of the parties' dispute over the interior cleaning of remaining overnight (“RON”) aircraft. Southwest's Brief at 6, 7. According to Southwest, however, “[f]rom approximately 1982 until 2012, Southwest contracted out RON cleaning work with the Union's full knowledge, without objection.” Id. at 6.

         Long before filing its 2016 grievance, in 2012, TWU Local 555 filed two similar grievances, claiming in each that Southwest's use of third-party vendors for RON cleaning violated the terms of the parties' CBA. Id. at 7. But before arbitrators reached a decision on either of the 2012 disputes, TWU Local 555 withdrew its grievances. Id.

         In November 2015, TWU Local 555 filed a third grievance, Grievance No. 5001/15, in light of the parties' RON cleaning dispute. Id.; Amended Complaint ¶ 16. This third grievance proceeded to arbitration before Elizabeth J. Neumeier (“Arbitrator Neumeier”). Southwest's Brief at 7. Arbitrator Neumeier presided over a hearing to address the grievance, but rather than litigating the merits, the parties limited their arguments to the issue of timeliness. Id. At the hearing before Arbitrator Neumeier, Southwest maintained that “the Union's grievance was untimely because the CBA requires that a grievance be filed within ten working days of when the filing party first has knowledge of an alleged contractual violation, ” and “[b]ased on the evidence the parties presented at the arbitration hearing, the Union knew or should have known for over thirty years that Southwest was contracting out RON cleaning” (emphasis in original). Id.

         On March 28, 2016, while the timeliness issue remained pending before Arbitrator Neumeier, TWU Local 555 filed a fourth grievance, Grievance No. 5000/16. Id.; Amended Complaint ¶ 16. In response to this development, Southwest argued that the fourth grievance was essentially identical to the grievance still pending before Arbitrator Neumeier, and -- like the previous filing -- the new grievance was time-barred because TWU Local 555 did not file it within the CBA's ten-day time limit. Southwest's Brief at 8. As to the timeliness issue, TWU Local 555 responded by arguing that its fourth grievance was timely because the parties entered into a new CBA, which was signed on March 16, 2016, and the latest grievance was filed within ten working days of that date. Id. at 8 n.2; see also Appendix to Plaintiff Southwest Airlines Co.'s Motion for Summary Judgment (“Southwest's Summary Judgment Appendix”) at 208 (docket entry 24-1) (“[T]he Union contends that the current CBA became effective and enforceable on March 16, 2016, the date which is shown on the Execution page of the current CBA.”).

         On July 6, 2016, TWU Local 555's fourth grievance proceeded to a hearing before Arbitrator Dr. Daniel F. Jennings (“Arbitrator Jennings”). Southwest's Brief at 11. The parties' CBA establishes a system for selecting and removing individuals from a panel of potential arbitrators, and under that system both Southwest and TWU Local 555 select an equal number of arbitrators to serve on the panel each time a new CBA takes effect. Id. at 10. Years earlier, under the terms of a prior CBA, TWU Local 555 selected Arbitrator Jennings as a member of the panel. Id. In May 2011, however, Southwest, citing its contractual right, removed Arbitrator Jennings from the panel. Id. at 11. After the parties' current CBA took effect, TWU Local 555 re-appointed Arbitrator Jennings. Id.

         At the July 6, 2016 hearing, the parties agreed that in light of the pending matter before Arbitrator Neumeier, the proceedings before Arbitrator Jennings should be postponed until a decision was rendered on the timeliness of TWU Local 555's third grievance. Id. Arbitrator Jennings acquiesced to the parties' request and agreed to postpone the proceedings until after Arbitrator Neumeier issued her opinion. Id. at 11-12. On August 20, 2016, Arbitrator Neumeier issued a decision on the timeliness of the third grievance, concluding that the filing was untimely because TWU Local 555 failed to initiate the grievance within ten working days of the date it first had knowledge of the alleged contractual violation. Id. at 12.

         Following the release of Arbitrator Neumeier's decision, on October 6, 2016, the parties reconvened before Arbitrator Jennings for the purpose of “determin[ing] the arbitrability of [TWU Local 555's fourth] grievance.” Id. at 13 (quoting an October 4, 2016 email from Arbitrator Jennings to Southwest's Kevin Minchey (Southwest's Summary Judgment Appendix at 170-71)). Subsequently, on December 16, 2016, Arbitrator Jennings issued a decision on the arbitrability of TWU Local 555's fourth grievance, concluding that it was timely filed and not barred by the doctrine of res judicata. Id. at 16. Specifically, on the timeliness issue, Arbitrator Jennings rejected Southwest's contention that the grievance was untimely because the parties' new CBA became effective on February 19, 2016 -- the date on which, according to Southwest, TWU Local 555 ratified the agreement. See id. at 24. Instead, Arbitrator Jennings accepted TWU Local 555's argument that it filed its fourth grievance in a timely manner because March 28, 2016 was within ten working days of March 16, 2016, the date on which the parties signed the latest CBA. Id. at 16; see also Southwest's Summary Judgment Appendix at 208-09.

         Shortly after Arbitrator Jennings released his initial decision, Southwest contacted him requesting that he clarify the scope of his award. See Southwest's Brief at 17. According to Southwest, in his initial opinion, Arbitrator Jennings purported to rule on the merits even though the parties had agreed, before the October 6, 2016 hearing, that in advance of a separate hearing on the merits, Arbitrator Jennings would first decide threshold issues on the grievance's arbitrability. Id. at 17-18; see also Southwest's Summary Judgment Appendix at 209 (“The present grievance (5001/16) is sustained.”). Although Arbitrator Jennings initially refused to clarify or modify his award, after additional prodding by Southwest, on December 29, 2016, he released a second, revised award. Southwest's Brief at 18.

         Dissatisfied with Arbitrator Jennings's revisions, Southwest filed this suit seeking to set aside the arbitration award. Amended Complaint at 1. TWU Local 555 asserted a counterclaim, requesting that the court uphold Arbitrator Jennings's decision, dismiss Southwest's claim, and remand the case to arbitration for a hearing on the merits. Answer and Counterclaim at 12. Although the parties argued a number of other threshold issues before Arbitrator Jennings -- in particular, the effect, if any, of res judicata on TWU Local 555's fourth grievance -- at this stage, it appears that the parties have narrowed their focus to a handful of issues. These remaining issues are examined below.

         C. The Parties' Contentions

         1. Southwest's Summary Judgment Motion

         In its motion for summary judgment, Southwest contends that the court should vacate Arbitrator Jennings's award for three primary reasons. First, Southwest maintains that Arbitrator Jennings exceeded his jurisdiction under the RLA and violated its due process rights by prematurely ruling on the merits of TWU Local 555's grievance when the parties explicitly limited his jurisdiction to a decision on the grievance's arbitrability. Southwest's Brief at 20. Second, Southwest contends that Arbitrator Jennings “also exceeded his jurisdiction when he held that the Union's grievance was timely filed under the CBA's ten-working-day time frame requirement.” Id. In Southwest's view, Arbitrator Jennings ignored the “clear and express terms” of the parties' CBA -- which provide that the agreement would become effective on the date of ratification, rather than the date of signing -- and, in doing so, he exceeded the scope of the jurisdiction afforded to him. Id. Third, according to Southwest, Arbitrator ...


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