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June 19, 2002


The opinion of the court was delivered by: John D. Bates, United States District Judge


Pan American Airways Corporation ("Pan Am") and the Air Line Pilots Association, International ("ALPA") are before the Court on cross-motions for summary judgment in these consolidated cases. Pan Am brought suit here to vacate the award of the Pan American Airways Systems Board of Adjustment ("Arbitration Board") requiring the reinstatement of Captain Donald Simonds, a Pan Am pilot terminated after he refused to fly a plane because he believed it would force him to violate a Federal Aviation Administration regulation. ALPA initially brought suit in the District of New Hampshire to enforce the Arbitration Board's award, but the parties agreed to consolidate the two cases here. After considering the parties' motions and oral argument, the Court concludes that the Arbitration Board's award must be upheld in light of the extremely narrow review available in this Court, because the award is drawn from the essence of the collective bargaining agreement and does not violate public policy.


Since November 15, 1999, ALPA and Pan Am have operated under a collective bargaining agreement ("Agreement") that includes a "management rights" clause which states that "[e]xcept as expressly restricted by this Agreement, the Company retains all authority and rights to manage its operations and direct its pilot workforce." Agreement, Section 1.C. It also includes a provision prohibiting Pan Am from disciplining or discharging a pilot "without just cause." Id., Section 19.A.

On September 20, 2000, the chairman of the Allied Pilots Association sent an inquiry to the Federal Aviation Administration ("FAA") with a number of hypothetical scenarios regarding the FAA's interpretation and application of certain Federal Air Regulations ("FARs"), including 14 C.F.R. § 121.471, which sets federal limits on the amount of flight time and rest requirements for pilots. See Pan Am Motion, Ex. D. Promulgated in 1985, FAR § 121.471 prohibits an airline from scheduling — and a pilot from accepting — any assignment that would require flight duty for more than 16 hours during a 24-hour period. Pan Am has maintained that the industry understood the regulation to mean that while a pilot could not be scheduled for more than 16 hours of duty, a pilot could complete a properly scheduled assignment that went beyond 16 hours due to a delay in assignment caused by weather, mechanical or air traffic problems. See September 13, 2001 Arbitration Board Opinion ("Board Op.") at 2.

The FAA's Deputy Chief Counsel, James W. Whitlow, responded on November 20, 2000. See Pan Am Complaint ¶ 12. Whitlow's response ("Whitlow Letter") stated that the FAA would interpret FAR § 121.471 to prohibit a pilot from even initiating a flight or a leg of a flight if the anticipated arrival time was not within 16 hours of the pilot's initial takeoff, notwithstanding any weather, mechanical, or air traffic delays. Board Op. at 2. On December 1, 2000, ALPA sent copies of the Whitlow Letter to Captain Larry Schott, the chairman of its Master Executive Committee, and shortly thereafter disseminated the letter to ALPA pilots. Id.*fn1

Captain Don Simonds is a pilot with 33 years of flying experience — including 28 years with commercial airlines, 11 of those with Pan Am — who over the course of his lengthy career had never been disciplined by an employer or the FAA. Id. at 1. On January 3, 2001, Pan Am scheduled Simonds to fly a four-leg flight from Portsmouth, New Hampshire to Bangor, Maine; from Bangor to Pittsburgh, Pennsylvania; from Pittsburgh to Sanford, Florida; and then return from Sanford to Portsmouth — a schedule that would finish in under 14 hours, safely within the FAA's regulation and interpretation. Pan Am Complaint ¶ 8; see also Board Op. at 1. After timely completing the first three legs of this flight schedule, Simonds's plane developed mechanical problems. Pan Am Complaint ¶ 9. Following a lengthy delay, it became clear to Simonds that he could not push back from the gate at Sanford in time to return to Portsmouth within the FAA's 16-hour time limit. Board Op. at 2. Simonds informed Pan Am's Director of Operations, Captain Jim Baker, that he and the other two members of his crew would not fly the plane, citing his "take on the law" pursuant to the Whitlow Letter, because the last leg of the flight would violate FAR § 121.471, creating a risk of punishment for both Pan Am and Simonds.*fn2 Baker told Simonds that Pan Am disputed this interpretation of the FAR, and that Simonds and his crew would be in serious trouble if they did not complete the flight as scheduled. Simonds nonetheless refused to fly, left the plane (with 149 passengers on board), and checked into a hotel. Board Op. at 2-3. Baker, who himself replaced Simonds to fly the plane, immediately terminated Simonds for insubordination (the other two crewmembers reluctantly agreed to fly after Pan Am threatened them with termination as well). Id. at 3. The FAA brought enforcement actions against Pan Am and the other two crew members, but withdrew the complaints against the crew members because they flew under the threat of losing their jobs. Id. at 3.*fn3 Simonds filed a grievance challenging his termination on January 8, 2001, and ALPA (his union) demanded arbitration. Id. at 1.

On January 18, 2001, an organization representing the nation's airline industry brought suit challenging the Whitlow Letter. See Air Transport Ass'n of America v. Federal Aviation Administration, Nos. 01-1027, 01-1303 and 01-1306 (D.C. Cir., filed January 18, 2001). Meanwhile, the Arbitration Board held a two-day hearing on Simonds's grievance on July 19 and July 20, 2001. On September 5, 2001, the Court of Appeals granted a stay of enforcement of the Whitlow Letter and its interpretation of FAR § 121.471 pending the Court's determination of its legality. See Pan Am Motion, Ex. H. Subsequently, on May 31, 2002, the Court of Appeals resolved that action, upholding the FAA's interpretation of FAR § 121.471 as set out in the Whitlow Letter. The Court concluded that the Whitlow Letter and the FAA's subsequent enforcement policy constituted a reasonable interpretation of FAR § 121.471 and did not require notice-and-comment rulemaking under the APA. Air Transport Ass'n of America v. FAA, Nos. 01-1027, 01-1303 & 01-1306, 2002 U.S. App. LEXIS 10270 (D.C. Cir. May 31, 2002).*fn4

On September 17, 2001, the Arbitration Board, by a vote of 2-1, sustained Captain Simonds's grievance, and determined that Pan Am did not have "just cause" to terminate him for insubordination. Board Op. at 8-9. The Board quoted three "pertinent contractual provisions" of the collective bargaining agreement: the "management rights" provision in Section 1.C, the "discipline and discharge" or "just cause" provision in Section 19.A, and the provision governing pilot hours of service set forth in Section 12.A:

1. A pilot will not be scheduled or rescheduled for more than fourteen (14) hours of duty between rest periods.
2. If permitted by applicable FAR's, the limitations of subsection A.1 above can be extended to eighteen (18) hours if a series of flights normally scheduled within the fourteen (14) hour limit exceeds the planned duty time because of weather or mechanical delays.

In the Board's view, Pan Am saw this as a "simple case of insubordination" in which Simonds "willfully refused a direct order from his supervisor, even after being told that the Company disputed the Whitlow Letter and that the legitimacy of the new interpretation was unsettled." Board Op. at 5. Pan Am argued that it had a "contractual right to manage and direct its pilots, which is what it did on January 3, 2001" when it terminated Simonds for refusing to fly. Id. ALPA, on the other hand, maintained that "the Company's order to [Simonds] was illegal because it conflicted with the FAA's interpretation of the controlling FAR." Id. ALPA contended that Simonds acted in good faith, and that termination was "too severe for a long-term employee with an exemplary record." Id. Pan Am countered that a pilot is only justified in refusing an order from a superior "when the pilot believes a flight would be unsafe," and that Simonds was required to fly the last leg and then file a grievance, in accordance with the long-recognized "obey now, grieve later" labor rule. Id. ALPA responded that an "illegality" exception to this rule applied because Simonds reasonably believed that accepting the flight duty would violate the FAA's interpretation of the FAR set forth in the Whitlow Letter. Id.

The Board rejected Pan Am's arguments, concluded that an illegality exception to the "obey now, grieve later" rule applied in this instance, and found that Simonds had acted in good faith and reasonable reliance on the Whitlow Letter interpretation of the FAR. Id. at 8-9. Consequently, the Board applied Section 19 of the Agreement to hold that Pan Am did not have "just cause" to terminate Simonds. Id. Pan Am had also argued that the Board should defer the hearing until the courts could resolve the legality of the Whitlow Letter interpretation of the FAR. The Board found, however, that was not the issue the parties brought to arbitration:

That argument mistakes the ultimate issue in this case. If the question before the System Board was whether [Simonds] was right or wrong in his interpretation of the FAR, we would, of course, have to wait until the final court decision on the pending cases. That is not the issue posed by the parties. Rather, we are to determine whether the Company had just cause to terminate [Simonds] — quite ...

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