Sture v. Sigfred v. Pan American World Airways, Inc.

TUTTLE, Circuit Judge.

This appeal presents questions regarding the reviewability of the award of an air carrier board of adjustment, established pursuant to Section 204 of the Railway Labor Act as amended, 45 U.S.C.A. § 184, and the interpretation of a collective bargaining agreement entered into between the Air Line Pilots Association International and Pan American World Airways, Inc. In 1950, appellant Sigfred, a pilot with more than twenty years’ service with Pan American, suffered an ear injury which caused him occasional dizziness while in flight and resulted in the company grounding him for varying periods of time during that year. Medical examination later disclosed that he was unfit for further flight duty and on March 29, 1951, the company advised him that since there were no other available jobs for which he was qualified, he would be discharged from its service effective April 1, 1951. Under Section 25 of the collective bargaining agreement between the Air Line Pilots Association International and Pan American, the company paid Sigfred his full salary while he remained in its employ, but since his discharge it has refused to make any further payments. Sigfred claims here that, in accordance with Section 25,¹ he is entitled to his full salary for as long as his disability continues, for the balance of his life if it lasts that long.

On April 27, 1951, Sigfred brought suit against Pan American in a Florida court for a decree declaring his rights under the collective bargaining agreement. The company removed the case to federal district court, which dismissed the complaint without prejudice, holding that jurisdiction should be declined until the plaintiff should exhaust his administrative remedies under the Railway Labor Act or elect to pursue “his statutory or Common Law remedy for breach of contract for wrongful discharge.” Sigfred then filed a claim for workmen’s compensation with the Florida Industrial Commission, and obtained an award to the effect that his disablement was a result of an occupational injury.

This having been established, he reasserted his claim with the company that it pay him his full salary. The company denied liability beyond workmen’s compensation, and an appeal was taken to the Pilots’ System Board of Adjustment, which disallowed the claim. Sigfred then brought the present action in district court, challenging the board’s construction of the collective bargaining agreement and seeking damages in the amount of his salary from April 1, 1951 until the filing of the complaint. The district court dismissed the complaint on the ground that the board’s interpretation of the contract was correct, and Sigfred brings this appeal.

The company argues that the judgment must be affirmed because the plaintiff elected to pursue the administrative route through to an award by the system board, which is made “final and binding,” by the collective bargaining agreement; and because in any event both the board and the court properly interpreted the agreement as not allowing recovery. Sigfred contends that his election to pursue his remedy to the Pilots’ System Board of Adjustment was not voluntary, but pursuant to Florida law; that Florida law governs the re-viewability of the board’s award; that under the Florida rule of reviewability of arbitration awards all pure questions of law may be reexamined by the reviewing court, and that a consideration of the board’s interpretation of the agreement will reveal it to be patently erroneous.

Without expressing any opinion on the first of these propositions, a matter not entirely free from doubt under Florida law,^{2 3} we may proceed to an examination of the second, viz., that Florida law governs the reviewability of the board’s award. The establishment of boards of this type is authorized under the 1936 amendments to the Railway Labor Act, extending many of the provisions of that Act to air carriers in interstate and foreign commerce. 45 U.S.C.A. § 181. The Act as originally passed stated among its general purposes the avoidance of any interruption to commerce and the providing for the prompt and orderly settlement of labor disputes, including those arising out of the interpretation or application of collective bargaining agreements. 45 U.S. C.A. § 151a. Pursuant to these aims, Congress provided that disputes concerning the interpretation of collective bargaining agreements in rail transportation are to be “handled in the usual manner up to and including the chief operating officer of the carrier”, but that if no adjustment is reached at this level, they can then be referred by petition of either party to a division of the National Railroad Adjustment Board, whose decision, except insofar as it contains a money award, is final and binding. 45 U.S.C.A. § 153, First (i, m). It also provided, however, that any carrier, system, or group of carriers and their employees may establish system, group or regional boards for the deciding of disputes of the same character, with the express provision in the statute that if either party to such an arrangement becomes dissatisfied therewith, it may elect upon ninety days’ notice to come under the jurisdiction of the national Adjustment Board. 45 U.S.C.A. § 153 “Second.”

The 1936 amendments, in extending many provisions of the Act to air carriers, did not provide for the immediate establishment of a National Air Transport Adjustment Board. 45 U.S.C.A. § 185. Instead, Congress provided that such a board should be set up when “it shall be necessary”, “in the judgment of the National Mediation Board.” 45 U.S.C.A. § 185. It expressly applied to air carriers that section declaring it to be the duty of carriers and employees “to exert every reasonable effort to make and maintain” collective bargaining agreements. 45 U.S.C.A. § 181. It also made it the duty of every carrier and its employees to establish a board of adjustment with jurisdiction not exceeding that of the system, group and regional boards created in rail transportation under the original Act. 45 U.S.C.A. § 184. Finally, Congress required that disputes be handled in the usual manner up to and including the chief operating officer of the carrier designated to handle such disputes, with the added proviso that failing adjustment in this manner, the dispute may then be referred by petition of either party “to an appropriate adjustment board.” 45 U.S.C.A. § 184.

The question in this case is whether Florida law or federal law governs the reviewability of an award made by such a board in interpreting a collective bargaining agreement negotiated under the duty to bargain imposed on air carriers and their employees by the Act. Florida law makes unenforceable any agreement to arbitrate future disputes ³ and thus would strike down the provision in the agreement that awards of the Pilots’ System Board of Adjustment shall be final and binding. Appellant urges that it likewise allows the review of any pure question of law. However tenuous the distinction between. so-called “unmixed” questions of law and those requiring the deciding of a factual issue also, the appellant contends that we have such a pure question of law before us here in the problem of interpreting the collective bargaining agreement.

Without passing on the issue of whether such a rule exists in Florida, it becomes plain upon a moment’s reflection that such a system of review would completely sweep aside Congress’s efforts to provide for a prompt and orderly settlement of labor disputes by system boards of adjustment. Moreover, such a result would obtain solely as a matter of compliance with Florida’s contrary policy of allowing disputants a court review of their disputes, regardless of their agreements to arbitrate those questions with finality. It would rest the effectiveness of the statutory plan upon the variegated characteristics of state law, and eventually lead to the anomaly of a National Air Transport Adjustment Board whose decisions, except in awarding money, must be final,⁴ existing alongside coordinate system boards in Florida whose decisions cannot be final. Although the parties could achieve what they have here sought, a final decision by a board versed in the problems of the industry, by electing to come under the national board,⁵ they would lose thereby whatever advantages there are in operating under a board established by a single carrier and its employees.

We see no reason to force such an election. Congress having required the negotiation of collective bargaining agreements, and the establishment of boards of adjustment to interpret them, we deem it a reasonable corollary thereto that it intended that the scope of review in appeals from these boards should be determined by federal courts, applying federal law. In the light of the declared aims of the Act, we also find it to be the intent of Congress to allow the parties to make the awards of such boards final and binding. Therefore, giving normal effect to these words, we refuse to review a challenged ruling of law, there being no question raised regarding the jurisdiction of the board or the regularity of its proceeding. James Richardson & Sons v. W. E. Hedger Transportation Corp., 2 Cir., 98 F.2d 55.

However, it was urged upon the district court that the system board’s construction of the agreement is arbitrary and capricious. If we regard this as an assertion that the board’s arbitrariness rose to the level of a denial of due process, it is not amiss to add that we regard the board’s interpretation of the agreement not only entirely reasonable, but we believe it to be the correct interpretation. The language in question reads as follows:

“The Company will provide or compensate the pilot for the cost of complete medical care for occupational sickness or injury. In the event of non-occupational injury or illness occurring while on assignment at a point other than the pilot’s base station, or outside the Continental United States, the Company agrees to reimburse the pilot for such additional expenses occasioned by the pilot’s location at the time of such injury or illness. During such period the pilot’s salary will be continued and the pilot agrees that all workmen’s compensation benefits due under applicable laws shall be paid by the pilot to the Company.”

The arguments of counsel debate whether the third sentence of the section refers to the second sentence or to the first sentence as well. The company argues that the words, “During such period,” at the beginning of the third sentence, by their natural sense refer to the period mentioned in the immediately preceding sentence. It is significant that it is only the second sentence that makes a reference to time (“while on assignment at a point * * * ” etc.). Sigfred urges that such an interpretation is patently erroneous because a pilot would then draw full salary during periods of non-occupational injury, but only workmen’s compensation during periods of occupational injury. Therefore, he reasons, sentence 3 must refer also to sentence 1, granting full salary during the period of any occupational injury.

We perceive in this agreement, as construed by the arbitration board, a clearly understandable and helpful policy of the company. It provides that when a pilot is away from home, and it is of peculiar value when he is in a foreign country, he is protected in his salary if mishap befalls him, whether or not such mishap is occupational. Instead of providing for the cost of complete medical care, as is provided for in the case of occupational sickness or injury, this provision takes care of such “additional expenses” beyond what he would be put to if he were at his home base, thus excluding reimbursement for medical treatment if such medical treatment is not more expensive on account of the pilot’s being away from home. It then provides the further assurance, partially, no doubt, because of the failure to provide complete medical care, that during such period his salary will be continued.

. The construction of this paragraph in the manner contended for by the appellant would amount to providing a guaranteed full salary payment for life in the event of any permanent occupational disability that disqualified the pilot from passing a rigid physical examination. Of course, such a provision could be included in a collective bargaining agreement. But if it were it is not too much to assume that it would be in such terms and with such clarity that there could be no doubt about its meaning. We think it also appropriate to remark that in those exceptions to the normal subjects covered by collective bargaining agreements in which provision is made for benefits after employment ceases, the provisions relating to such pensions are usually carefully spelled out in the agreement, as they should be.

Without, therefore, making a choice between the alternative constructions, since we find that the complaint failed to set out a cause of action for review of the action of the board, we nevertheless express the conviction that the arbitrators could not easily have yielded to a construction that would require the company to pay a pension of the full $13,440 annual salary to all pilots who no longer meet rigid flight medical requirements for as long as their disability exists. Certainly we cannot strike down as arbitrary an award which refused to make such an interpretation.

It is finally argued that not every employer-employee dispute falls within the exclusive jurisdiction of the system board. Thus, it was held in Moore v. Illinois Cent. R. Co., 312 U.S. 630, 61 S.Ct. 754, 85 L.Ed. 1089, that a suit under state law for wrongful discharge could be brought by a former employee, despite the fact that he might also have a right to reinstatement and back pay under the collective bargaining agreement. However, in Slocum v. Delaware, L. & W. R. Co., 339 U.S. 239, 70 S.Ct. 577, 94 L.Ed. 795, the Supreme Court held that a state court has no power to declare rights under a collective bargaining agreement negotiated under the Act, since the statutory procedure in such cases is exclusive. The appellant here does not claim that he was wrongfully discharged (in fact, he concedes that he was not), and does not assert a cause of action arising out of any rights except those created by the collective bargaining agreement. The interpretation of such an agreement was held by the Slocum case to be within the exclusive jurisdiction of the statutory board there involved. The construction of this agreement was therefore correctly referred to the Pilots’ System Board of Adjustment, and since, as noted above, its award presents no reviewable question of law, the district court’s dismissal of appellant’s complaint was correct.

The judgment is

Affirmed.

1 . This provides:

“Sickness or Injury

“Section 25.

“(a) The Company will provide or compensate the pilot for the cost of complete medical care for occupational sickness or injury. In the event of noil-occupational injury or illness occurring while on assignment at a point other than the pilot’s base station, or outside the Continental United States, the Company agrees to reimburse the pilot for such additional expenses occasioned by the pilot’s location at the time of such injury or illness. During such period the pilot’s salary will be continued and the pilot agrees that all workmen’s compensation benefits due under applicable laws shall be paid by the pilot to the Company.

“(b) Pilots may be granted full salary during periods of sickness or injury while at their base station. When such salary is granted the pilot agrees that all workmen’s compensation benefits due under applicable law to the pilot shall be paid to the Company.”

2 . See Mountain v. National Airlines, Inc., Fla., 75 So.2d 574.

3 . Glens Falls Ins. Co. v. Gulf Breeze Cottages, Fla., 38 So.2d 828.

4 . 45 U.S.C.A. § 185.

5 . Ibid.