Horizon Air Industries Inc v. Airline Professionals Association, Teamsters Local 1224

Filing 30

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT -Granting in part and denying in part 16 Motion for Summary Judgment; granting in part and denying in part 17 Motion for Summary Judgment, by Judge Ricardo S Martinez. (See Order for Details)(MD)

1

2

3

4
5

6
7

UNITED STATES DISTRICT COURT

8

FOR THE WESTERN DISTRICT OF WASHINGTON

9
10

HORIZON AIR INDUSTRIES, INC.
Petitioner,

11
12

NO. 2:13-cv-681 RSM
v.

13

AIRLINE PROFESSIONALS ASSOC.,

14

TEAMSTERS LOCAL 1224,

15

ORDER ON CROSS MOTIONS FOR
SUMMARY JUDGMENT

Respondent.

16
17
18

This matter comes before the Court on Cross Motions for Summary Judgment by
Respondent-Counterclaimant Airline Professional Association, Teamsters Local 1224 (the

19

“Union”) and Petitioner Horizon Air Industries, Inc. (“Horizon”). Dkt. ## 16, 17. Horizon

20

moves the Court to vacate, and the Union moves the Court to uphold, an arbitration award

21

that allows for the reinstatement of First Officer Brian Milam following a positive drug test.

22

Neither party has requested oral argument, and the Court finds it unnecessary. Having

23

reviewed the briefs of both parties and the remainder of the record and for the reasons stated
herein, the Court denies both motions in part and remands the case to the System Board of

24

Adjustment for further proceedings.

25
26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 1 

1
2
3

Factual and Procedural Background
The facts of this case as determined by Horizon Air Pilot’s System Board of
Adjustment (the “Board) are binding in this Court’s review of the underlying arbitration
award and have been stipulated to by the parties. Horizon is a regional passenger carrier, with

4

its corporate headquarters in Seatac, Washington, operating daily flights throughout the

5

Western United States. As a “common carrier by air” within the meaning of the Railway

6

Labor Act, 45 U.S.C. §§ 151, 181, Horizon is regulated by the Federal Aviation

7

Administration (“FAA”) and the Department of Transportation (“DOT”). Dkt. # 1, ¶ 1. The

8

Union represents pilots of Horizon, including First Officer Brian Milam (“Milam”). Horizon
and the Union are parties to a Collective Bargaining Agreement (“CBA”), which provides a

9
10
11
12
13

process for employees like Milam, represented by the Union, to submit grievances for
arbitration by a three-member Board. See Dkt. # 18, Ex. 6.
Both the FAA and the DOT require that employees operating in a safety-sensitive
position, including Horizon’s pilots, be tested for drugs and alcohol. Dkt. # 1, Ex. 2, p. 2
(hereinafter, “Award”). Horizon complies with these drug-testing requirements through its
Integrated Drug and Alcohol Program (“IDAP”), which is incorporated into the CBA. The

14
15
16
17
18
19

IDAP states, inter alia, that:
the use, sale, transfer, possession, or presence in one’s system of any
controlled substance (except medically prescribed drugs) by any safety
sensitive employee while on company premises, engaged in company business,
operating company equipment, or while under the authority of Horizon Air is
strictly prohibited. Disciplinary action will be taken as necessary up to and
including termination.
Id.; Dkt. # 18, Ex. 4, p. 4 (hereinafter, “IDAP”). The IDAP further provides that after an
employee has had a positive drug test result, that employee will be offered a last chance

20

agreement (“LCA”) if such an agreement is “consistent with SAP recommendations and a

21

review of company records supports retention of the employee as being in the best interest of

22

Horizon Air. If the SAP does not recommend retention and/or company records do not

23
24
25

support retention, the employee will be terminated.” IDAP at pp. 14-15 (emphasis in original).
First Officer Milam was hired by Horizon in January 2004, where he worked through
his termination in November 2011. On November 4, 2011, Milam was scheduled to fly a
roundtrip from Seattle, Washington to Redmond, Oregon, followed by a roundtrip from

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 2 

1

Seattle, Washington to Spokane, Washington. Award at p. 3. Upon completing his first

2

roundtrip, Milam was notified that he was to be subject to a random drug test, to which he

3

submitted. After providing his specimen, Milam completed the Seattle to Spokane roundtrip.
Milam was present in the cockpit during all four flight legs, though the pilot did the flying.

4

Upon returning to Seattle, Milam called in sick for the remaining days of his schedule through

5

November 7th, and then again through November 13th, and additionally scheduled an

6

appointment with a mental health provider. Id. at pp. 3-4. Milam subsequently acknowledged

7

that he had been using marijuana periodically during the preceding six months in order to

8

“cope” with various issues, including chronic back pain, chronic sinusitis, and difficulties
associated with his wife’s thyroid disorder, high-risk pregnancies, and post-partum

9

depression. Id. at p. 3. Milam testified that he never used the drug while on duty but would

10

use marijuana the night before serving on an afternoon flight. Milam testified to using

11

marijuana around 7 p.m. on November 3, 2011 and acknowledges calling in sick “because of

12

the drug test.” Id. at p. 4 (emphasis in original).

13

On November 14, 2011, a confirmation test on Milam’s specimen confirmed that he
had tested positive for marijuana. Id. Horizon provided to Milam a letter on November 17,

14

2011, advising him that, as a result of his positive drug test, he was in violation of Federal

15

regulations and would be unable to perform any DOT/FAA safety sensitive duties for any

16

employer until he completed a Substance Abuse Professional (SAP) evaluation. The letter

17

included a list of three SAPs. Id.

18
19

On November 21, 2011, Horizon summoned Milam to a meeting, at which he was
offered the opportunity to test a split sample of the specimen to confirm the original drug test
finding. After Milam declined, he was handed a letter, signed by Seattle Assistant Chief Pilot

20

Gordon Smith, terminating Milam’s employment. Id. Prior to Milam’s termination, Mr. Smith

21

had reviewed two of Milam’s “action log entries,” or electronic files stored on a system

22

known as “POSSUM” that document an aspect of an employee’s performance. Id. at p. 5.

23
24
25

Both entries pertained to “excessive sick leave” taken by Milam during the 12 months
preceding each entry. Id. No disciplinary action was taken with respect to the first entry, and
no meeting had taken place with respect to the second at the point that Milam was terminated
for his positive drug test. The Board found that Mr. Smith had not reviewed any additional

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 3 

1

information prior to terminating Milam, and had therefore not reviewed Milam’s personnel

2

file, training file, or letters of recommendation written by Mr. Smith himself on Milam’s

3

behalf. Id. at p. 6.
After his termination, Milam contacted David Perlman, one of the Substance Abuse

4

Professionals listed in Milam’s termination letter. Upon meeting with Milam on November

5

29, 2014, Mr. Perlman diagnosed him as suffering from cannabis abuse and referred him to

6

treatment, including a one-time marijuana awareness class and a three to six month course of

7

individual counseling. Subsequent to Milam’s satisfactory completion of the treatment plan,

8

Mr. Perlman conducted a follow-up evaluation and issued a “Follow-up Evaluation/Notice of
Compliance” report to Horizon. In his report, Mr. Perlman stated that Milam was “rated at a

9

low risk of continued use, does not present an imminent risk or liability at the workplace and

10

may return to work at this time, subject to MRO review and FAA suspension requirements.”

11

Id. at p. 7.

12
13

Following Milam’s termination, the Union submitted a grievance on his behalf. Id. at
p. 2. The grievance was heard by the Board on September 11, 2012, pursuant to the CBA and
the Railway Labor Act, 45 U.S.C. § 151-188 (“RLA”), consisting of one neutral arbitrator,

14

one union board member, and one Horizon board member. The parties stipulated to the

15

following issue to be determined by the Board: “Was there cause for Horizon Air to discharge

16

the Grievant on November 21, 2011, and if not, what shall be the remedy?” Id. at p. 2.

17
18
19

After conducting a hearing, through which both parties had an opportunity to submit
documentary evidence and to examine and cross-examine witnesses, the Board issued its
Opinion and Order (hereinafter, “Award”) resolving the grievance on February 11, 2013, from
which the Horizon representative dissented. The Board majority found that, regardless of

20

whether he was actually impaired at any time during the flights on November 4, 2011,

21

Milam’s positive drug test alone constituted a violation of the IDAP and a basis for

22

termination. Id. at p. 9. Nonetheless, the Board determined that Horizon had failed to comply

23
24
25

with the IDAP insofar as it also required Horizon to determine Milam’s eligibility for a last
chance agreement prior to terminating him. In reviewing Milam’s eligibility, the Board found
first that a return to employment had been consistent with the recommendation of the SAP,
Mr. Perlman. Id. at p. 10. It subsequently found that the Board had violated the terms of the

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 4 

1

IDAP by terminating Milam upon selectively reviewing only his two POSSUM entries rather

2

than reviewing all of his relevant company records. Id. at p. 11. Accordingly, the Board

3

concluded that Horizon was without cause to terminate Milam’s employment because of its
failure to comply with the IDAP. As to the appropriate remedy, the Board ordered Horizon to

4

reinstate Milam with an LCA and full benefits and seniority, but without back pay. Id. at p.

5

15. The Board further subjected Milam’s reinstatement to his satisfaction of particular

6

conditions precedent, including his obtainment of a current medical certification on file with

7

the FAA and further necessary certifications, and his provision to Horizon of an updated

8

Follow-up Evaluation and Notice of Compliance from a SAP.
Horizon’s petition to this Court followed. Dkt. # 1. As the parties have not yet reached

9
10

agreement on an appropriate last chance agreement, Milam remains suspended from duty. See
Dkt. # 29.

11
12
13

Motions to Strike
As an initial matter, the Court considers motions to strike presented by both parties.
The Union moves the Court to strike “any and all facts in the pleadings of the Company

14

inconsistent with and/or in addition to the findings of the Board.” Dkt. # 25, p. 3. The Court

15

agrees with the Union that its review must, and is herein, confined to the findings of the fact

16

of the Board. “A party who has litigated an issue before the Adjustment Board on the merits

17

may not relitigate that issue in an independent judicial proceeding.” Lewy v. Southern Pacific

18
19

Transp. Co., 799 F.2d 1281, 1289 (9th Cir. 1986). However, as Respondent has not specified
the facts and exhibits to which its motion to strike pertains, the Court declines to grant it.
Horizon moves the Court to strike arguments presented by the Union for the first time

20

through its Reply brief (Dkt. # 25, pp. 11-13), pertaining to attorneys’ fees and costs. Dkt. #

21

28. As a general rule, a “movant may not raise new facts or arguments in his reply brief.”

22

Quinstreet, Inc v. Ferguson, 2008 WL 5102378, at *4 (W.D. Wash. 2008). See also Eberle v.

23
24
25

City of Anaheim, 901 F.2d 814, 818 (9th Cir. 1990) (“It is well established in this circuit that
[t]he general rule is that appellants cannot raise a new issue for the first time in their reply
briefs.”) (citations and internal quotations omitted). The Court agrees with Horizon that a
litigant may not raise issues for the first time upon reply, as doing so deprives the opposing

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 5 

1

party of an opportunity to respond. The Court accordingly grants Petitioner’s motion to strike

2

and disregards the Union’s arguments for attorneys’ fees presented through its reply brief.

3
Standard of Review
4

A grant of summary judgment is proper where “the movant shows that there is no

5

genuine dispute as to any material fact and the movant is entitled to judgment as a matter of

6

law.” Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In

7

ruling on a motion for summary judgment, the court does “not weigh the evidence or

8

determine the truth of the matter but only determine[s] whether there is a genuine issue for
trial.” Crane v. Conoco, 41 F.3d 547, 549 (internal citations omitted). Where the court

9

reviews an arbitration award, it is confined to the evidence submitted to, and the factual

10

findings of, the arbitration board. See United Paperworkers Intern. Union, AFL-CIO v. Misco,

11

Inc., 484 U.S. 29, 37 (1987). The Court may not reject an arbitrator’s factual findings simply

12

because it disagrees with them. Id.

13

It is well-settled that judicial review of system board of adjustment awards is “among
the narrowest known to the law.” Edelman v. Western Airlines, Inc., 892 F.2d 839, 842 (9th

14

Cir. 1989); Union Pacific R. Co. v. Sheehan, 439 U.S. 89, 91-92 (1978). Congress enacted the

15

RLA in order to promote stability in the railroad industry and provide for the efficient

16

resolution of labor-management disputes that arise out of railroad collective bargaining

17

agreements. Lewy, 799 F.2d at 1289. The RLA thus reflects Congress’ intent to settle labor

18
19

disputes via grievance procedures and arbitration, and to insulate arbitral decisions from
judicial review. Misco, 484 U.S. at 36-37; 45 U.S.C. § 153, First (m) (providing that the
decisions of a system board of adjustment are “final and binding upon both parties to the

20

dispute.”). The authority of the court to review an award under the RLA is statutorily limited

21

to three specified grounds: (1) failure of the Adjustment Board to comply with the RLA; (2)

22

failure of the Board to conform, or confine, itself to matters within the scope of its

23
24
25

jurisdiction; and (3) fraud or corruption. Edelman, 892 F.2d at 842, quoting Sheehan, 439
U.S. at 92-93; 45 U.S.C. § 153, First (q). Pursuant to 45 U.S.C. § 184, this limited standard of
judicial review of arbitration awards, developed for the context of the railroad industry,
applies equally to the airline industry. See Singer v. Flying Tiger Line. Inc., 652 F.2d 1349,

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 6 

1

1355 (9th Cir. 1981).

2
Analysis

3

On motion for summary judgment, Horizon contends that the Award should be
4

subjected to judicial review, and should be vacated, on two grounds. First, Horizon contends

5

that the Award should be set aside because it is contrary to public policy, which Horizon

6

asserts is a statutorily independent basis for judicial review of an arbitration award. Second,

7

Horizon contends that the Award should be vacated because the Board exceeded the scope of

8

its jurisdiction in requiring the reinstatement of Milam with a last chance agreement. The
Court addresses each of these arguments in turn.

9
10

1) Public Policy Review

11

As an initial matter, the parties dispute whether an arbitration award may be set aside

12

if it is determined to violate public policy. In the context of the National Labor Relations Act

13

(“NLRA”), the Ninth Circuit has recognized that it “is the now-settled rule that a court need
not, in fact cannot, enforce an award which violates public policy.” Stead Motors of Walnut

14

Creek v. Automotive Machinists Lodge No. 1173, 889 F.2s 1200, 1210 (9th Cir. 1989). The

15

rationale underlying public policy review of an arbitrator’s award under a collective

16

bargaining agreement stems from the “general doctrine, rooted in the common law, that a

17

court may refuse to enforce contracts that violate law or public policy.” Misco, 484 U.S. at 42;

18
19

see also, Stead, 88 F.2d at 1209 n. 9 (characterizing the public policy review “exception” as
“nothing more than a specific application of the general rule that a court cannot enforce any
contract that contravenes public policy”). Stated differently, the public policy doctrine

20

recognizes that “courts should not lend their authority to agreements that harm the public.”

21

Union Pacific R. Co. v. United Transp. Union, 3 F.3d 255, 260 (8th Cir. 1993).

22
23
24
25

The Union contends that public policy review is not available under the RLA, which,
unlike the NLRA, explicitly constrained judicial review to three enumerated grounds. See
Sheehan, 439 U.S. at 93 (“Judicial review of Adjustment Board orders is limited to three
specific grounds… .”). While the Ninth Circuit has found that due process challenges raise an
independent jurisdictional basis under the RLA, see Edelman, 892 F.2d at 846, it has not yet

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 7 

1

determined whether a public policy challenge provides an additional ground beyond those

2

enumerated in 45 U.S.C. § 153. See United Transp. Union v. Union Pacific R. Co., 116 F.3d

3

430, 433 (9th Cir. 1997); c.f., Union Pacific R. Co., 3 F.3d at 260 (holding that “a court may
refuse to enforce the parties’ agreement where a public policy would be violated by enforcing

4

the agreement, whether expressed in the form of a private contract or an arbitration award

5

under either the [NLRA] or the [RLA]”). While the Court agrees with Horizon that reason and

6

precedent support judicial authority to vacate an arbitration award that violates public policy,

7

it need not reach the question in this case, as Horizon has failed to show that Milam’s

8

reinstatement, subject to the conditions precedent provided by the Award, would violate an
explicit, well-defined, and dominant public policy.

9

Where judicial review of arbitration awards under the public policy exception is

10

established, “the scope of such review is ‘extremely limited.’” United Transp. Union, 116

11

F.3d at 433, citing American Postal Workers Union v. United States Postal Service, 789 F.2d

12

1, 8, (D.C. Cir. 1986). To vacate an award on public policy grounds, the court must first

13

locate a public policy that is “explicit,” “well defined,” and “dominant,” and that is
“ascertained by reference to the laws and legal precedents and not from general considerations

14

of supposed public interests.” Eastern Associated Coal Corp. v. United Mine Workers of

15

America, 531 U.S. 57, 62 (2000) (internal citations and quotations omitted). Second, the court

16

must determine whether the arbitration award itself, rather than underlying acts or conduct of

17

the employee, violates the identified public policy. Id. (“[T]he question to be answered is not

18
19
20
21
22
23
24
25

whether [the employee’s] drug use itself violates public policy, but whether the agreement to
reinstate him does so.”); see also, Stead Motors, 886 F.2d at 1212 (“If a court relies on public
policy to vacate an arbitral award reinstating an employee, it must be a policy that bars
reinstatement.”) (emphasis in original).
Horizon provides ample support for a “clear and dominant public policy against the
operation of any aircraft while under the influence of prohibited Schedule I drugs, such as
marijuana.” Dkt. # 17, p. 14. Horizon cites to a complex of regulations enacted pursuant to the
Omnibus Transportation Employee Testing Act of 1991, through which Congress and the
FAA require that airlines test employees operating in safety-sensitive positions for the
presence of controlled substances in their systems and which authorize penalties, up to and

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 8 

1

including termination. Dkt. # 17, p. 14. See, e.g., 49 U.S.C. § 45102(a) (directing the FAA to

2

promulgate regulations providing for the screening of airline employees for the use of a

3

control substance); 49 U.S.C. § 45102(c) (authorizing “suspension or revocation of any
certificate…or the disqualification or dismissal of the individual” who has tested positive for

4

presence of a controlled substance); 14 C.F.R. § 120.33 (barring any individual from

5

performing a safety-sensitive function for an FAA-regulated airline while “that individual has

6

a prohibited drug… in his or her system”).

7
8

However, what is at issue is not whether Milam’s use of marijuana contravenes public
policy, but whether the Board’s Award does so. Eastern Associated Coal Corp., 531 U.S. 57,
is instructive on this distinction. In Eastern Associated Coal Corp., an employer sought the

9

revocation of an arbitration award reinstating an employee truck driver who had twice tested

10

positive for marijuana, subject to return-to-duty conditions. While the Court recognized the

11

strong public policies against drug use by transportation workers and in favor of public

12

testing, it upheld the award as no specific provision barred reinstatement. See id. at 67 (“We

13

hesitate to infer a public policy in this area that goes beyond the careful and detailed scheme
Congress and the Secretary have created.”). In doing so, the Court noted the “remedial aims”

14

of the Omnibus Transportation Employee Testing Act, which provides that “rehabilitation is a

15

critical component of any testing program,” and that “rehabilitation should be made available

16

to individuals, as appropriate.” Id. at 64 (internal citations omitted). As in Eastern, the instant

17

Award punishes Milam for the severe risks that he has posed to public safety by denying him

18
19
20
21
22
23
24
25

backpay and subjecting him to further treatment and testing prior to reinstatement, consistent
with the rehabilitative aims of the Omnibus Testing Act and the IDAP. And, as in Eastern, the
Court declines to find that, absent a specific and clear statutory provision, the Testing Act
categorically bars a rehabilitated Milam from returning to duty.
In search of a specific positive law barring reinstatement, Horizon cites to 14 C.F.R. §
120.111(e)(2), which provides that “[a]n employee who has engaged in prohibited drug use
during the performance of a safety-sensitive function…is permanently precluded from
performing that safety-sensitive function for an employer.” Horizon contends that Milam’s
positive drug test is sufficient to establish that he “engaged in prohibited drug use” within the
meaning of this provision and that he should thus be permanently barred from employment.

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 9 

1

The Court disagrees. The Board’s order reinstating Milam contained no findings of fact

2

pertaining to Milam’s use of marijuana during a safety-sensitive function and explicitly

3

avoided considerations as to whether “Milam was impaired” during the flights in question, as
the Court determined that the single positive drug test alone could provide a basis for

4

termination. See Award at p. 9. The Court is not permitted to substitute its own factual

5

findings for those of the Board. To the extent that Horizon argues that “use” is synonymous

6

with “presence in one’s system,” Horizon’s argument is also unavailing. The FAA’s language

7

clearly distinguishes between various predicate factual findings that trigger differing

8

regulatory violations, including “use,” presence “in one’s system” and “positive drug test.”
Compare 14 C.F.R. § 120.111(e)(2) with 14 C.F.R. § 120.33 (barring individual from

9

performing a safety-sensitive function with the presence of a controlled substance “in one’s

10

system”) and 14 C.F.R. § 120.111(e)(1) (permanently precluding employee who has “verified

11

positive drug test results on two drug tests”). In fact, the IDAP itself incorporates the language

12

of 14 C.F.R. § 120.111(e)(1), prefaced with the explanation that it pertains to “[o]n duty use

13

of a prohibited drug” as distinguished from a “verified positive test,” and the Board did not
find this provision to be potentially triggered by Milam’s conduct. See IDAP at p. 16; Award.

14

The Court does agree with Horizon that the reinstatement of a pilot who has so

15

egregiously compromised public safety offends common sense considerations of the public

16

interest. As the Board itself articulated, Milam’s actions “violated a trust that exists between

17

Horizon and its customers, who depend upon Horizon pilots to ensure their safety as they are

18
19
20

transported from place to place.” Award at p. 9. Nonetheless, where a policy barring Milam’s
reinstatement is not explicit in positive law or case law binding on this Court, the Court may
not substitute its own general views of public welfare or infer a public policy that goes
beyond the complex regulatory schemes governing the matter.
Furthermore, the Award itself is conditioned on certification by the FAA, the agency

21
22
23
24
25
26

charged with enforcing the regulations in question, that Milam is fit and qualified to fly.
Should the FAA find that Milam is incapable of regaining the public’s trust and hence his
medical certification,1 or that the FAA’s regulations otherwise prevent him from engaging in

1

The Court takes judicial notice that Milam’s medical certificate has been revoked by the FAA, as the revocation is
publicly available information from the FAA Airman Details Report website, https://amsrvs.registry.faa.gov/airmen
inquiry, and pursuant to a request by Horizon for public document submitted to the FAA Aviation Data Systems 

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 10 

1

safety-sensitive functions, the Award provides that Milam shall never again enter the cockpit.

2

The responsibility for recertifying Milam as fit for duty ultimately and properly rests in the

3

hands of the controlling regulatory agency, to which, as a matter of institutional competency,
the Court gives deference. See Northwest Airline, Inc. v. Air Line Pilots Ass’n Intern., 808

4

F.2d 76, 83 (D.C.Cir. 1987) (“Obviously, it would be patently absurd for us, under the guise

5

of ‘public policy,’ to reverse an arbitration award that is expressly limited by deference to the

6

ultimate judgment of the agency that is charged with the enforcement of the public policy here

7

at issue. … It would be the height of judicial chutzpah for us to second-guess the present

8
9
10

judgment of the FAA recertifying [the pilot] for flight duty.”).

2) Scope of the Board’s Jurisdiction
Horizon further argues that the Board exceeded its jurisdiction by disregarding

11

requirements of the CBA and its incorporated policies and thereby dispensing its own brand

12

of industrial justice. The jurisdiction of the Board, and its limits, arise out of the CBA. See

13

Continental Airlines, Inc. v. Air Line Pilots Ass’n, Intern., 555 F.3d 399, 405 (5th Cir. 2009).
The RLA judicial review provisions permit the district court to review an adjustment board’s

14

decision to determine whether the board failed to conform or confine itself to matters within

15

its jurisdiction. Sheehan, 439 U.S. at 93; 45 U.S.C. § 153, First (q). An adjustment board

16

“exceeds its jurisdiction if it issues a decision without foundation in reason or fact.” English v.

17

Burlington Northern R. Co., 18 F.3d 741, 746 (9th Cir. 1994)(citing International Ass’n of

18
19
20
21
22
23
24
25

Machinists, 626 F.2d at 717). “The basis of the Board’s award must be ‘rationally
inferable…from the letter or purpose of the collective bargaining agreement.” Id. It also must
not be contrary to an unambiguous provision of the governing CBA. Continental Airlines, 555
F.3d at 405.
The Court’s authority to review the Board’s award under this exception is narrow, as
the “interpretation of the collective bargaining agreement is for the Board to decide and not
the courts.” English, 18 F.3d at 746, citing Gunther v. San Diego & Ariz. E. Ry. Co., 382 U.S.

Branch. Dkt. # 17, p. 16 n. 1. See Reyes v. Fircrest School, 2012 WL 5878243 at *1 n. 1 (taking judicial notice of
information available on a government website); U.S. v. Ritchie, 342 F.3d 903, 908-09 (9th Cir. 2003) (explaining that
courts may take judicial notice of documents that are “generally known” or “capable of accurate and ready
determination by resort to sources whose accuracy cannot be reasonably questioned”) (internal citations omitted).   

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 11 

1

257, 261-62 (1965). The Court may not reject an award because it believes that the adjustment

2

board misread the CBA. See Misco, 484 U.S. at 38; Continental Airlines, 555 F.3d at 405.

3

Rather, it must uphold an award even if it disagrees with the merits of the Board’s decision so
long as the decision “draw[s] its essence from the agreement” and does not “simply reflect the

4

arbitrators’ own notions of industrial justice.” Misco, 484 U.S. at 38. “[A]s long as the

5

arbitrator is even arguably construing or applying the contract and acting within the scope of

6

his authority, that the court is convinced he committed serious error does not suffice to

7

overturn his decision.” Id.; see also, Major League Baseball Players Ass’n v. Garvey, 532

8

U.S. 504, 509 (2001). That the arbitrator possesses extraordinary discretion to “bring his
informed judgment to bear in order to reach a fair solution of a problem” is “especially true

9
10

when it comes to formulating remedies.” United Steelworkers of America v. Enterprise Wheel
& Car Corp., 363 U.S. 593, 596 (1960).

11

Horizon advances two principal grounds on which it believes that the Board exceeded

12

the scope of its jurisdiction. First, Horizon argues that the Board departed from construing the

13

terms of the CBA by ignoring Horizon’s Personnel Policy, entitled “Illegal Drug Use and
Alcohol Misuse” (“Policy No. 35”), which Horizon contends required Milam’s discharge. See

14

Dkt. # 17, pp. 23-24. Second, Horizon contends that the Board ignored the IDAP itself,

15

principally by inserting the requirement that Horizon perform an “exhaustive review” of all

16

company records prior to terminating Milam. See id. at pp. 24-26. In accordance with the

17

exceedingly narrow scope of its review, the Court defers to the Board with respect to its

18

construction of the CBA and its factual findings but finds that remand for further proceedings
is necessary.2

19
20

a) Policy No. 35

21

Horizon contends that Policy No. 35 requires Milam’s termination, and that the Board

22

exceeded its jurisdiction by failing to consider the consequences of Policy No. 35 in rendering

23
24
25

its decision. Policy No. 35 states, “Except in cases where rehabilitation assistance is offered to
benefit the Company as described below, any employee who is detected by the Company: (1)

2
As the Court finds it appropriate and necessary to remand for further factual investigation, it does not reach Horizon’s
further argument that the Board dispensed its own brand of industrial justice by considering the personal circumstances
of Milam’s drug use as a mitigating factor. 

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 12 

1

to be an illegal drug user; or (2) to have misused alcohol, will be discharged.” Further, “[a]n

2

employee found to have misused alcohol or used illegal drugs by means of testing under this

3

policy will not be offered [rehabilitation] assistance…unless the Company believes that (1)
retention of an employee will benefit the Company, and (2) rehabilitation is likely to be

4
5

successful for the long term.” Dkt. # 18, Ex. 5, p. 2.
The Court does not agree that the Board strayed from interpretation of the CBA in

6

considering the IDAP as the document governing the consequences for Milam of his positive

7

drug test. Both parties agree that the Board admitted Policy No. 35, as well as the IDAP, into

8

evidence during arbitration. See Dkt. # 17, p. 23; Dkt. # 23, p. 17. After reviewing the
evidence and hearing oral argument, the Board determined, as it made clear in its order, that

9

the “IDAP is the relevant document controlling Milam’s fate.” Award at p. 11. According to

10

the Board, “[t]he parties do not dispute” this determination. The Board further explained that

11

“Horizon complies with the FAA/DOT drug-testing requirements through its Integrated Drug

12

and Alcohol Program.” Id. at p. 4. As the Court is bound to accept the Board’s construction of

13

the CBA, it is not for the Court to question the Board’s decision as to the controlling policy.
The Court also disagrees that Policy No. 35 requires a different result than that

14

reached by the Board. Though again it is not for the Court to review the Board’s

15

determinations of fact and interpretations of contract, the Court nonetheless notes that the sole

16

relevant difference between Policy No. 35 and the IDAP is the addition of the specific

17

requirement in the IDAP that the infringing employee “will be offered a last chance

18
19

agreement if consistent with SAP recommendations and a review of company records
supports retention.” IDAP at pp. 14-15. Horizon does not refute that the IDAP is a governing
component of the CBA. Rather, Horizon would have the Board ignore the specific

20

requirements of the IDAP and instead enforce the more general terms of Policy No. 35. As

21

Horizon itself points out, the Board’s award would have required vacatur had the Court done

22

so. See Dkt. # 17, p. 23 (“It is well settled that ignoring the terms of the CBA or imposing

23
24
25

new ones that, as here, contradict bargained-for terms of the CBA requires vacatur.”).

b) Integrated Drug and Alcohol Policy
Horizon provides several arguments in support of its claim that the Board exceeded its

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 13 

1

jurisdiction by ignoring unambiguous language of the IDAP. As discussed supra and detailed

2

below, the IDAP’s LCA provision requires that two prongs must be satisfied before an

3

employee who tests positive for drugs can be offered a last chance agreement: (1) an LCA
must be “consistent with SAP recommendations” and (2) “a review of company records” must

4

“support[] retention of the employee as being in the best interest of Horizon Air.” IDAP at pp.

5

14-15. First, Horizon contends that the SAP, Mr. Perlman, did not recommended Milam’s

6

reinstatement, and that a last chance agreement should therefore have been unavailable. See

7

Dkt. # 17, p. 25. This argument is easily dispensed with. The Board clearly construed the

8

relevant language of the IDAP, and found that “Horizon does not accurately set forth its own
test” in taking the position that the “SAP must recommend retention with a last chance

9

agreement.” Award at p. 11. The Board interpreted the IDAP to mean instead that “the

10

offering of a last chance [agreement] must only be consistent with the SAP

11

recommendations,” and proceeded to make the factual determination that such offering was

12

consistent with Mr. Perlman’s recommendations for Milam. Id. (emphasis added). As the

13

Court is not authorized to review either the Board’s interpretation of this CBA provision or
the Board’s factual findings as to Mr. Perlman’s recommendations, the Court is therefore

14
15

bound to let stand the Board’s determination on this first prong.
Horizon further contends that the Board exceeded its jurisdiction by writing a new

16

term into the second prong of the IDAP’s LCA provision in requiring Horizon to review “all

17

relevant records” before it could terminate Milam. See Dkt. # 25, p. 30. The Board’s decision

18
19

turned on its finding that Horizon had failed to comply with the LCA provision because it had
selectively reviewed company records related to Milam’s performance. As an initial matter,
Horizon argues that the Board should never have reached this question because it was

20

required to uphold Milam’s discharge upon finding that “[Milam’s] positive drug test alone is

21

a violation of the IDAP and constitutes a basis for termination.” See Dkt. # 17, p. 26, quoting

22

Award at p. 9. To this extent, the Court disagrees. The Board, in interpreting the IDAP and its

23
24
25

imperative language, determined that the IDAP “mandates that before terminating an
employee for a positive drug test, company records are to be reviewed.” See IDAP at pp. 1516 (providing that an employee who fails a random drug test “will be offered a last chance
agreement if” the two prongs are satisfied) (emphasis added). This case is thus distinguishable

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 14 

1

from those in which an arbitrator finds just cause for discharge and then proceeds to

2

improperly craft a modified penalty. For instance, in Northern States Power, the Eighth

3

Circuit overturned an arbitrator’s award reinstating an employee because the arbitrator had
implicitly determined that just cause existed to discharge the employee. Northern States

4

Power Co., Minnesota v. International Broth. Of Elec. Workers, Local 160, 711 F.3d 900, 903

5

(8th Cir. 2013) (determining that “the language of the arbitrator’s decision – specifically that

6

NSP had ‘demonstrated justification’ for its decision to terminate Snow – is sufficient to show

7

that the arbitrator found the termination was supported by ‘just cause[,]” pursuant to which

8

“the arbitrator had no authority to…fashion a remedy different than the termination.”). By
contrast, the Board here found that just cause for termination was predicated on Milam’s

9

ineligibility for an LCA. The Court therefore disagrees that the Board found that just cause

10

existed for Milam’s termination based on his positive drug test alone, and the Board was

11

therefore operating within its jurisdiction in determining whether the IDAP provision at issue

12

had been complied with.

13

Horizon further contends that the Board exceeded its jurisdiction by adding the word
“all” to the IDAP and thereby altering the bargained-for agreement between the parties. The

14

Court disagrees. In examining the IDAP’s mandates, the Board determined that “[w]hile the

15

language of the IDAP does not state ‘all records,’ common sense dictates that certainly all

16

relevant records must be reviewed in order to make a reasonable and good faith determination

17

with respect to the employee’s career.” Award at p. 11. The Board acted within its discretion

18
19
20
21
22
23
24
25

in construing the undefined term “records” to encompass “all relevant records” pertaining to
the employee’s performance. Where “the arbitrator’s decision concerns construction of the
contract, the courts have no business overruling him because their interpretation of the
contract is different from his.” Enterprise Wheel, 363 U.S. at 599.
The Court is similarly barred from reviewing the Board’s factual determination that
Horizon had failed to comply with this IDAP requirement. Having construed the IDAP
language in such a way, the Board found that Mr. Smith had effectively “cherry pick[ed]” two
POSSUM records containing notes of Milam’s absences and ignored relevant training records
and personnel files, a review of which could have led to a different result. Here, the Court is
guided by the Supreme Court’s admonition that an arbitrators’ “improvident, even silly,

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 15 

1

factfinding does not provide a basis for a reviewing court to refuse to enforce an award.”

2

Misco, 484 U.S. at 39 (internal quotation omitted). The Court agrees with Horizon that

3

several records of Milam’s exceedingly poor attendance may have constituted all of the
records that were necessary for Horizon to make an informed decision regarding his

4

reinstatement. Nonetheless, the Court does not sit in the position of a fact-finder in this case

5

and cannot review the Board’s decision that additional company records were relevant to

6

Horizon’s determination.

7
8

In one respect alone does the Court find that the Board exceeded its jurisdiction, and
that is in prematurely ordering Milam to be reinstated with an LCA contrary to the express
terms of the IDAP. While an arbitrator enjoys broad discretion in fashioning remedies, this

9

discretion is not unbounded: “the arbitrator is not free to fashion a separate remedy apart from

10

the one provided by the parties’ agreement.” Poland Spring Corp. v. United Food and

11

Commercial Workers Int’l Union, AFL-CIO-CLC, Local 1445, 314 F.3d 29, 34 (1st Cir.

12

2002); see also Enterprise Wheel, 363 U.S. at 597 (“[T]he paramount point to be

13

remembered in labor arbitration is that the power and authority of an arbitrator is totally
derived from the collective bargaining agreement… .”). By the Board’s own interpretation,

14

the IDAP conditions the offering of an LCA to an employee who fails a random drug test on

15

the satisfaction of two conditions, including that a review of relevant company records

16

support retention as being in Horizon’s best interest. “An employee will not be offered

17

reemployment unless both conditions are met.” Award at p. 11 (emphasis in original). Having

18
19

found that Horizon had failed to properly review Milam’s records and that no determination
had therefore been made on this second prong, the Board exceeded its jurisdiction in
proceeding to order Milam’s reinstatement with an LCA. According to the Board’s

20

interpretation of the IDAP, Milam could be neither terminated for just cause nor reinstated

21

with an LCA absent such a determination. In other words, only a good faith review of all of

22

Milam’s relevant employment records could free him from this limbo. The Board elided its

23
24
25

duty to ensure that such a review was carried out: “The Board makes no determination as to
whether had the Company reviewed the entire file, it would have arrived at exactly the same
conclusion.” Award at p. 13. Reinstating Milam with an LCA without a review of his relevant
company records was therefore contrary to an express provision of the CBA and cannot stand.

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 16 

1

Continental Airlines, 555 F.3d at 405.
Where the reviewing court determines that a board of adjustment has exceeded its

2
3

authority, the court is empowered to vacate or modify the board’s ruling, or to remand to the
board for further proceedings. 45 U.S.C. § 153, First (q); Continental Airlines, Inc., 555 F.3d

4

at 407. “Even in the very rare instances when an arbitrator’s procedural aberrations rise to the

5

level of affirmative misconduct, as a rule the court must not foreclose further proceedings by

6

settling the merits according to its own judgment of the appropriate result.” Misco, 484 U.S.

7

at 40 n. 10. To do so “would improperly substitute a judicial determination for the arbitrator’s

8

decision that the parties bargained for in the collective bargaining agreement.” Id.
Accordingly, the Court finds that the proper course is to remand the case to the Board so that

9

it may conduct whatever factual investigation is necessary to fulfill the terms of the CBA,

10

including the IDAP’s LCA provision, and to determine an appropriate remedy in light of

11

Milam’s conduct and Horizon’s procedural improprieties. See Union Pacific R. Co., 3 F.3d at

12

264. It is for the Board to determine whether remand to Horizon for a procedurally correct

13

review of Milam’s relevant employment records is appropriate or whether the necessary
factual determination can be made by the Board itself.3

14
15

Conclusion
For the reasons stated herein, the Court FINDS and ORDERS as follows:

16

1) The Union’s Motion to Strike (Dkt. # 25, p. 3) any and all facts in Horizon’s pleadings

17

inconsistent with the findings of the Board is DENIED.

18

2) Horizon’s Motion to Strike (Dkt. # 28) is GRANTED, and the Court shall strike

19

arguments presented by the Union for the first time through its Reply brief (Dkt. # 25,

20

pp. 11-13).

21

3) The Union’s Motion for Summary Judgment (Dkt. # 16) and Horizon’s Motion for

22

Summary Judgment (Dkt. # 17) are DENIED in part and GRANTED in part. The
Court DENIES Horizon’s request to vacate the Board’s Award on the grounds that it

23

violates public policy. The Court GRANTS in part Horizon’s request to vacate the

24

25

3

As the Court remands the case for further proceedings, it defers ruling on the Union’s request for attorneys’ fees
associated with enforcing the Board’s award.

26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 17 

1

Board’s Award on the grounds that the Board exceeded the scope of its jurisdiction.

2

The Court finds that the Board exceeded its authority only to the extent that it ordered

3

Milam to be reinstated with a last chance agreement prior to making a factual
determination as to whether its offering is supported by a review of Milam’s company

4

records.

5

4) The Court accordingly VACATES the Board’s determination that First Officer Brian

6

Milam was not terminated for cause and the portion of the Board’s Award reinstating

7

Milam with a last chance agreement. The Court REMANDS the case to Horizon Air

8

Pilot’s System Board of Adjustment for further proceedings in accordance with this
Order, including such factual investigations as it deems necessary and proper in order

9

to comply with the parties’ agreement.

10
11
12
13
14

Dated this 25th day of June 2014.

A

RICARDO S. MARTINEZ
UNITED STATES DISTRICT JUDGE

15
16
17
18
19
20
21
22
23
24
25
26

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT ‐ 18