155 F.

3d 685
159 L.R.R.M. (BNA) 2202, 136 Lab.Cas. P 10,252

INDEPENDENT ASSOCIATION OF CONTINENTAL

PILOTS,
v.
CONTINENTAL AIRLINES, a Delaware Corporation.
Independent Association of Continental Pilots ("IACP"),
Appellant.
No. 97-7282.

United States Court of Appeals,

Third Circuit.
Argued Jan. 22, 1998.
Decided Sept. 10, 1998.
1

Roland P. Wilder, Jr. (argued), Christy Concannon, Baptiste & Wilder, P.C.,
Washington, DC, for Appellant.

Jon A. Geier (argued), Margaret H. Spurlin, Paul, Hastings, Janofsky & Walker
LLP, Washington, DC; Josy W. Ingersoll, Laura D. Jones, Robert S. Brady,
Young, Conaway, Stargatt & Taylor, Wilmington, DE; Margaret Coullard
Phillips, Continental Airlines, Inc., Houston, Texas, for Appellees.

Before: BECKER, Chief Judge, STAPLETON, Circuit Judge and POLLAK,

District Judge.*

OPINION OF THE COURT

4

POLLAK, District Judge.

This appeal concerns the allocation of authority between judicial and arbitral
tribunals under the Railway Labor Act, 45 U.S.C. 151 et seq. The
International Association of Continental Pilots (IACP) brought this action
against Continental Airlines, Inc. ("Continental") in the District Court for the
District of Delaware, seeking a declaration and order directing that (1)
Continental was required to arbitrate the merits of an issue assertedly raised in
an employee's grievance, and (2) the grievance should be submitted to the

arbitral tribunal on a class-wide basis. Continental counterclaimed, seeking an

order directing that the arbitral tribunal determine the issues the IACP sought
determination of by the district court. Thereafter Continental moved for
judgment on the pleadings. That motion was granted and the case was
dismissed. The IACP has appealed the district court's order granting judgment
on the pleadings. For the reasons set forth below, we affirm.
I.
6

We rehearse the facts as set forth in IACP's complaint and brief on appeal. In
1992, after Continental filed its second petition for protection under Chapter 11
of the bankruptcy code, the airline froze, and then sought to reduce, the pay of
its pilots. In response to the airline's announcement of its intent to reduce pilots'
pay, a group of pilots undertook negotiations with the airline's management;
these talks resulted in a written agreement, the "Cost Reduction Memorandum"
("CRM"). Paragraph 6(A) of the CRM made provision for the phased
restoration, according to an agreed-upon formula, of any reduction in pilot pay:

7 wage reductions (i.e. fuel bonus, line divisor, training, per diem, and crew
The
meals) ... will be restored progressively by Continental, in accordance with the
formula set forth in Attachment A, with full restoration projected by July 1, 1993.
As part of the restoration, the program of quarterly fuel bonus payments to pilots
shall end, and in lieu thereof pilots rates of pay progressively restored shall be ... the
April 1, 1992 rates of pay.
8

Paragraph 6(B) of the CRM (the so-called "me-too" provision) provided that,
until the pilots' pay was restored according to paragraph 6(A), if the airline
granted a raise to any employee group other than the pilots, the pilots would
receive a comparable wage increase:

9
Should
Continental grant a wage or salary increase to any employee group, including
management and executive employees, prior to restoration of pilot wage reductions,
then the company shall at the same time restore pilot wages on a comparable basis.
10

In late 1993, after the airline and the pilots' group entered into this agreement,
the IACP was certified as the bargaining unit for the pilots. The CRM
continued to be operative until Continental and the IACP executed their first
collective bargaining agreement.

11

After the IACP was certified as the pilots' bargaining representative, the airline
and the union entered into an agreement entitled the "Interim Grievance
Procedure" ("IGP") pending the completion of the parties' first collective

bargaining agreement. In accordance with 204 of the Railway Labor Act, 45

U.S.C. 184, the IGP established a system board of adjustment ("System
Board") for the arbitration of grievances.1 The grievance procedure
contemplated by the IGP consisted of two preliminary stages--denominated as
"Step I" and "Step II" hearings--followed by appeal to the system board of
adjustment of any grievance not resolved in the first two stages.
12

On September 9, 1994--after implementation of the IGP but before the effective

date of the first collective bargaining agreement--pilot Jackson Martin filed a
grievance stating:

13 Cost Reduction Memorandum establishes that fuel bonus will be restored, it

The
establishes a protocol for the use of a higher hourly rate in lieu of quarterly fuel
bonus payments and it defines Continental's total liability toward restoration of pilot
wage reductions to April 1, 1992 pay rates plus the value of the fuel bonus program.
Continental Airlines should honor the Agreement it reached with its pilots under the
Cost Reduction Memorandum and fully restore pilot wage reductions; to not do so
would substantially alter the letter and intent of the current Pilot Employment
Policy.
14

Martin pursued his grievance, unsuccessfully, through the first two steps of the
grievance procedure. On January 4, 1995, Martin filed a notice of appeal to the
System Board. On February 8, 1995, the IACP refiled Martin's appeal, stating
"herewith is submitted the grievance filed on behalf of Jackson Martin and all
other similarly situated Continental Airlines pilots." The IACP's appeal
formulated the question at issue as "whether the Company is in violation of the
Cost Reduction Memorandum ... and all related provisions for failure to
properly enact pilot pay restoration rate effective July 1, 1994."

15

Prior to the arbitration hearing, Continental took the position that (1) the IACP
could not bring the appeal on behalf of similarly situated pilots, and (2) the
System Board could not entertain the merits of any claim under paragraph 6(B)
of the CRM (the "me too" provision) because Martin had not invoked this
provision at the earlier stages of the grievance proceeding. When the arbitration
hearing commenced, the IACP announced that it refused to proceed unless
Continental agreed that any determination made by the arbitrator with respect
to Martin's waiver of the "me too" provision or the IACP's right to raise claims
for similarly situated pilots would be reviewable de novo by a federal court.
When Continental refused to make this concession, the IACP voiced its intent
to go to court to secure a judicial determination of the two issues. The arbitrator
thereupon ended the hearing.

16

The IACP brought suit in the district court, seeking an order (1) declaring that
Continental was required to arbitrate the issue of whether the airline violated
paragraph 6(B) of the CRM, and (2) compelling Continental to accept the
System Board's authority to resolve the paragraph 6(B) issue on a class-wide
basis. Continental counterclaimed, seeking an order remanding for arbitration
by the System Board the issues IACP sought to have the district court
determine. Continental then moved for judgment on the pleadings, urging that
the IACP's complaint sought judicial determination of issues that properly
should be addressed by the System Board as part of its overall arbitration of the
Martin grievance as recast by the IACP--the issues the IACP requested judicial
determination of being whether the System Board should entertain the merits of
a claim under paragraph 6(B) and whether any relief awarded pursuant to
paragraph 6(B) should inure to all similarly situated pilots. In opposition to
Continental's motion for judgment on the pleadings, the IACP urged that these
were issues of "substantive arbitrability" for the court to decide in advance of
arbitration. The district court granted Continental's motion for judgment on the
pleadings, stating in its order that "[t]he case is dismissed." IACP then brought
this appeal. Our review of the district court's decision is plenary. Jablonski v.
Pan American World Airways Inc., 863 F.2d 289, 290 (3d Cir.1988).

II.
17

In order to bring the questions posed in this appeal into sharper focus, it may be
useful to review the statutory setting within which these questions arise. The
Railway Labor Act ("RLA") was enacted in 1926 to provide "a comprehensive
framework for the resolution of labor disputes in the railroad industry."
Atchison Topeka & Santa Fe Ry. Co. v. Buell, 480 U.S. 557, 562-63, 107 S.Ct.
1410, 94 L.Ed.2d 563 (1987). Among the "[g]eneral purposes" of the
legislation, as set forth in the 1934 amendments to the statute, are "[t]o avoid
any interruption to commerce or to the operation of any carrier engaged
therein" and "to provide for the prompt and orderly settlement of all disputes
growing out of grievances or out of the interpretation or application of
agreements covering rates of pay, rules or working conditions." Act of June 21,
1934, ch. 691 2, 48 Stat. 1185, 1186-87 (codified at 45 U.S.C. 151a). To
these ends, the legislation, as amended in 1934, required the establishment of
an arbitral tribunal, denominated "the National Railroad Adjustment Board,"
for the resolution of such disputes, and authorized carriers and their employees
to create "system, group, or regional boards" for the resolution of such
controversies, provided that any party dissatisfied with the decision of a
subordinate tribunal might still present the grievance to the National Board.2
RLA 3, 45 U.S.C. 153.

18

In 1936, the RLA was amended to cover the infant airline industry. Act of April
10, 1936, ch. 166, 49 Stat. 1189 (codified at 45 U.S.C. 181). As amended, all
provisions of the RLA, save 3, 45 U.S.C. 153--the provision creating the
National Railroad Adjustment Board--apply to airlines and their employees. 45
U.S.C. 181. In so amending the statute, Congress deferred the issue of
whether to establish a national adjustment board for the airline industry, and
empowered the National Mediation Board ("NMB") to determine when the
creation of such a board would be appropriate. 45 U.S.C. 185. The NMB has
not yet made such a determination.

19

As amended, the RLA directs air carriers and their unions to establish arbitral
tribunals--"system, group, or regional boards"--for the resolution of "disputes
between an employee or group of employees and a carrier or carriers by air
growing out of grievances, or out of the interpretation or application of
agreements concerning rates of pay, rules, or working conditions." 45 U.S.C.
184. The statute requires that such a dispute "be handled in the usual manner up
to and including the chief operating officer of the carrier designated to handle
such disputes; but, in the event of failure to reach an adjustment in this manner,
the dispute may be referred by petition of the parties or by either party to an
appropriate adjustment board." Id. Consequently, until a national adjustment
board is created for the airline industry, a decision rendered by a "system, group
or regional board" is the terminal stop in the pre-judicial grievance process. Id.
Once the appropriate adjustment board enters an award, its decision is
enforceable in the federal courts, see International Ass'n of Machinists v.
Central Airlines, 372 U.S. 682, 685, 83 S.Ct. 956, 10 L.Ed.2d 67 (1963), and is
subject to narrow judicial review. Bower v. Eastern Airlines, 214 F.2d 623, 625
(3d Cir.1954).

20

As the foregoing summary makes plain, the RLA's dispute-resolution

machinery is central to the statutory scheme. As set forth in the statute, and
elaborated by Supreme Court precedent, the RLA regime governs three
different types of disputes: "representation disputes" (disputes concerning the
selection of collective-bargaining representatives), "major disputes," and
"minor disputes." Depending upon the type of dispute involved, the RLA
regime imposes different procedural requirements on the parties and prescribes
different dispute-resolution fora.3 This appeal concerns "major disputes" and
"minor disputes."

21

Under the RLA, questions about whether a dispute is subject to arbitration are
usually answered with reference to the distinction between "major" and "minor"
disputes: "minor disputes" are resolved through arbitration (by the system

boards in the case of the airline industry or by the National Railroad

Adjustment Board in the railroad industry) while "major disputes" are subject
to a lengthy process of bargaining and mediation.
22

The Supreme Court set forth the major/minor framework in Elgin, J & E
Railway Co. v. Burley, 325 U.S. 711, 65 S.Ct. 1282, 89 L.Ed. 1886 (1945).4
This classification scheme determines what kind of dispute resolution
mechanisms may be brought to bear on the controversy and also determines the
extent to which the federal courts may become involved. Association of Flight
Attendants, AFL-CIO v. USAir, Inc., 960 F.2d 345, 348 (3d Cir.1992).

23

The "major dispute" category, as the Supreme Court explained in Burley,

"relates to disputes over the formation of collective agreements or efforts to
secure them. They arise where there is no such agreement or where it is sought
to change the terms of one, and therefore the issue is not whether an existing
agreement controls the controversy." 325 U.S. at 723, 65 S.Ct. 1282. If the
parties are involved in a major dispute, they must bargain over the issue; while
bargaining, the parties are required to maintain the status quo and exhaust the
lengthy mediation procedures set forth in 6 of the statute, 45 U.S.C. 156,
before they may resort to self-help. Compliance with these requirements is
enforceable in the federal courts. Detroit & Toledo Shore Line Railroad v.
United Transportation Union, 396 U.S. 142, 149, 90 S.Ct. 294, 24 L.Ed.2d 325
(1969). If, upon the conclusion of the mediation procedures, the parties are at
an impasse, they may then employ economic weapons (e.g., strikes or
lockouts). See Burley, 325 U.S. at 725, 65 S.Ct. 1282, Consolidated Rail Corp.
v. Railway Labor Executives' Ass'n, 491 U.S. 299, 303, 109 S.Ct. 2477, 105
L.Ed.2d 250 (1989).

24

While the major dispute category concerns efforts to establish or change the
terms of a collective bargaining agreement, the minor dispute category, in the
Burley Court's formulation,

25
contemplates
the existence of a collective bargaining agreement already concluded
or, at any rate, a situation in which no effort is made to bring about a formal change
in terms or to create a new one. The dispute relates either to the meaning or proper
application of a particular provision with reference to a specific situation or to an
omitted case. .... [T]he claim is to rights accrued, not merely to have new ones
created for the future.
26

325 U.S. at 723, 65 S.Ct. 1282. Minor disputes are subject to mandatory
arbitration by the relevant board of adjustment, and may not be the subject
matter of strikes and lockouts. Jurisdiction to entertain the merits of a minor

dispute rests exclusively with the arbitral forum: "Congress considered it

essential to keep these so-called 'minor' disputes within the Adjustment Board
and out of the courts." Union Pacific Railroad Co. v. Sheehan, 439 U.S. 89, 94,
99 S.Ct. 399, 58 L.Ed.2d 354 (1978)(per curiam).
27

Although the Burley Court established the general contours of the distinction
between major and minor disputes, it did not articulate a standard for
differentiating the two. In Consolidated Rail Corp. v. Railway Labor
Executives' Association, 491 U.S. 299, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989)
("Conrail "), the Court undertook to advance the analysis. "[T]he line drawn in
Burley," said the Conrail Court, "looks to whether a claim has been made that
the terms of an existing agreement either establish or refute the presence of a
right to take the disputed action. The distinguishing feature of [a minor dispute]
is that the dispute may be conclusively resolved by interpreting the existing
agreement." Id. at 305, 109 S.Ct. 2477. Accordingly the Court adopted a
standard that sought to synthesize the various verbal formulations adopted by
the several courts of appeals that had addressed the issue: "Where an employer
asserts a contractual right to take the contested action, the ensuing dispute is
minor if the action is arguably justified by the terms of the parties' collectivebargaining agreement. Where, in contrast, the employer's claims are frivolous
or obviously insubstantial, the dispute is major." Id. at 307, 109 S.Ct. 2477.

III.
28

In the case at bar, the district court determined that the "underlying issues in
this case"--Continental's alleged violations of paragraphs 6(A) and 6(B) of the
CRM--"constitute minor disputes under the RLA." Slip opinion at 689. The
district court then stated that "although the RLA requires that minor disputes be
settled in arbitration rather than by strikes or by the federal courts, it does not
prohibit the parties to a collective bargaining agreement from setting procedural
limits to the system boards' jurisdiction. Whether the parties have complied
with the procedural requirements of the collective bargaining agreement such
that the arbitrator may address the merits of a dispute is a matter for the
arbitrator to decide." Slip opinion at 690-691 (citation omitted). The district
court went on to conclude that the issues presented in the IACP's complaint
"are minor disputes" which "must, therefore be decided through arbitration."
Slip opinion at 691.

29

There is no doubt that, as a general matter, a dispute over whether Continental

violated paragraphs 6(A) and 6(B) of the CRM is a minor, rather than major,
dispute. And, more particularly, there is no doubt that the issues posed by the
grievance relating to pilot wages filed by Jackson Martin against Continental

are issues of the sort that are subject to arbitration by the board of adjustment.
This appeal focuses on the question whether the IACP's recasting of the Martin
grievance into one of broader scope has introduced additional and antecedent
issues that should be resolved judicially as a predicate to arbitration or whether
those additional issues are themselves subject to arbitration. Characterizing
these issues as matters of "substantive arbitrability," the IACP contends that
they must be resolved by the district court rather than by the board of
adjustment.5 In pressing this contention on appeal, the IACP argues that the
issues that it asked the district court to resolve prior to arbitration--namely,
whether the alleged violation of paragraph 6(B) of the CRM is properly before
the arbitrator, and whether the 6(B) question must be addressed on a class-wide
basis--are questions of "substantive arbitrability" for the court to decide.
30

The term "substantive arbitrability" derives from National Labor Relations Act
jurisprudence but has been utilized in other contexts. It is used to describe the
question whether the parties' dispute involves a subject matter that is within the
ambit of a contractual arbitration agreement. See John Wiley & Sons, Inc. v.
Livingston, 376 U.S. 543, 557-58, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964); United
Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 58283, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). The Supreme Court used the term
"substantive arbitrability" for the first time in John Wiley, a case arising under
the NLRA, to differentiate "substantive" issues--whether the parties have
agreed to arbitrate the subject matter of the dispute--from "procedural" issues-"whether grievance procedures or some part of them apply to a particular
dispute, whether such procedures have been followed or excused, or whether
the unexcused failure to follow them avoids the duty to arbitrate." 376 U.S. at
557-58, 84 S.Ct. 909. The question of "substantive arbitrability"--that is,
"whether a collective bargaining agreement creates a duty for the parties to
arbitrate the particular grievance"--is, as the Supreme Court instructs,
"undeniably an issue for judicial determination." AT & T Technologies, Inc. v.
Communications Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648
(1986). Issues of "procedural arbitrability," on the other hand, are for the
arbitrator to decide. John Wiley, 376 U.S. at 558, 84 S.Ct. 909.

31

Responding to the IACP's contention that its complaint implicates issues of

"substantive arbitrability" for the court to decide, Continental makes two
arguments: The first argument is that, as the district court ruled, the IACP's
complaint presents a minor dispute solely within the jurisdiction of the board of
adjustment. The second argument is that the IACP's complaint raises questions
not of "substantive arbitrability" but of "procedural arbitrability"--questions
which are for the arbitrator to decide.

32

33

A. Does Continental's Complaint Present a "Minor Dispute"?

In urging the correctness of the district court's determination that the IACP's
complaint presents a minor dispute, Continental contends that the defenses that
it advanced to the Martin grievance and to the IACP's proposed recasting of the
grievance are defenses which, to use the terminology of Conrail--"[a] dispute is
minor if the action is arguably justified by the terms of the parties' collectivebargaining agreement"--are "arguably justified" by, respectively, the Cost
Reduction Memorandum ("CRM") and the Interim Grievance Procedure
("IGP"). Thus, in Continental's view, we need look no further than the
definition of a minor dispute to resolve this case.

34

Although the Court's Conrail discussion of minor disputes is pertinent, we are

called upon to answer a somewhat different question from that posed by the
distinction between major and minor disputes. The function that a court
performs when determining whether a dispute is major or minor is not the
function that a court performs when deciding whether an issue is one of
"substantive arbitrability" or "procedural arbitrability." As the Supreme Court
has pointed out, the "arguably justified" standard announced in Conrail "was
employed only for policing the line between major and minor disputes."
Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 265, 114 S.Ct. 2239, 129
L.Ed.2d 203 (1994). That line determines which statutory route must be
followed as between (1) bargaining, followed by compulsory mediation
procedures under the auspices of the National Mediation Board, which
procedures are judicially enforceable, and (2) binding arbitration, subject to
limited judicial review. Thus, the major/minor question allocates the respective
authority of the National Mediation Board on the one hand, and the arbitral
boards of adjustment on the other, and also delineates the judiciary's role in
each respective statutory path.6 See Burley, 325 U.S. at 722, 65 S.Ct. 1282.

35

This appeal presents a related, but nonetheless different, question. It presents

the question whether, in the adjudication of a dispute concededly to be decided
by an arbitral tribunal (under the RLA, a board of adjustment), it is the arbitral
tribunal or the court which determines the scope of the arbitration. To be more
specific, a decision that the controversy about the adequacy of Continental's
pilots' wages is a "minor" dispute sets the stage for a further question: Granted
that Jackson Martin's grievance is arbitrable, are the additional issues posed by
Continental's objections to the IACP's recasting of the Martin grievance matters
to be decided by the district court or by the System Board?

36

Hence this appeal concerns not whether this case goes to arbitration (as

opposed to another statutory route), but instead concerns what issues the arbitral
tribunal should decide and on whose behalf those issues are to be decided: the
IACP's complaint asks the court to determine (1) whether the arbitral tribunal
must, in entertaining Martin's grievance, decide whether or not Continental
violated paragraph 6(B) of the CRM (the "me-too" provision), and (2) whether
the arbitral tribunal must decide that issue on a class-wide basis. It is the
IACP's contention that these questions fall under the rubric of "substantive
arbitrability" and thus must be decided by the court. Because this contention is
not definitively answered one way or another via the major/minor distinction,
we now turn to the question whether the IACP's complaint involves issues of
"substantive" or "procedural" arbitrability.
37

B. Does the IACP's Complaint Raise Issues of "Substantive" or "Procedural"

Arbitrability?

38

In support of its argument that its complaint raises questions of "substantive

arbitrability," the IACP relies heavily on our discussion in PaineWebber v.
Hartmann, 921 F.2d 507, 512-13 (3d Cir.1990), and PaineWebber, Inc. v.
Hofmann, 984 F.2d 1372, 1378 (3d Cir.1993), two cases arising not under the
RLA or the NLRA, but under the securities laws and the Federal Arbitration
Act. In Hartmann and Hofmann, securities brokerage houses sued to enjoin the
arbitration of customers' claims of fraud and mismanagement. Both cases
concerned contractual language found in the arbitration provisions of the New
York Stock Exchange rules and the National Association of Stock Dealers Code
of Arbitration Procedure, to wit: "No dispute, claim, or controversy shall be
eligible for submission to arbitration ... where six (6) years have elapsed from
the occurrence or event giving rise to the act or dispute, claim or controversy."
921 F.2d at 509. Relying on the specific language, absent in the case at bar,
relating to disputes "eligible for submission to arbitration," we held in
Hartmann (and reiterated in Hofmann ) that the application of the quoted
provision was a question of "substantive arbitrability" for the court. 921 F.2d at
513, 984 F.2d at 1379. In Hartmann, however, we specifically noted the
narrowness of our holding, stating that "[l]anguage less distinct than 'eligible
for submission to arbitration' might well be insufficient to overcome the strong
jurisprudential pull toward arbitration." 921 F.2d at 514.

39

The IACP urges that the agreement in this case--and in particular the
exhaustion requirement of the IGP--presents a "substantive bar" to arbitration
such that our rulings in Hartmann and Hofmann apply. The IACP places
principal reliance on language in the "Jurisdiction" portion of Section III of the
IGP. The language relied on provides: "The System Board shall have authority
to hear only matters which are within the scope of this Agreement and which

have been handled through the prior steps of this grievance procedure." This is
not, however, the only part of the agreement which sets forth exhaustion
principles. In Section IV of the IGP, under the heading "General Provisions,"
the agreement states in relevant part:
40
Unless
the Company and the grievant or the IACP mutually agree otherwise, a
grievant is precluded from raising in subsequent steps issues not raised in his
original grievance. Further, the Step II Hearing Officer and System Board of
Adjustment are precluded from considering issues not raised in the grievant's
original grievance unless the Company and the grievant or the IACP mutually agree
otherwise. Such issues may only be submitted as new grievances subject to all time
limits, jurisdictional restrictions, and any other pertinent provisions of this
Agreement.
41

We do not find the language of Sections III and IV of the IGP to be as "distinct"
as the language at issue in the Hartmann and Hofmann cases. The mere fact
that the exhaustion provisions are framed in obligatory terms does not
necessarily render the provisions a "substantive bar" requiring judicial, rather
than arbitral, interpretation. In Belke v. Merrill Lynch, Pierce, Fenner & Smith,
693 F.2d 1023 (11th Cir.1982), a case we referred to in Hartmann, the
arbitration portion of the agreement between the investor and the broker read,
in pertinent part, "Arbitration must be commenced within one year after the
cause of action accrued." Id. at 1026 n. 4. The Eleventh Circuit concluded that
compliance with this provision was an issue for the arbitrator to decide. Id. at
1028. Noting that the provision at issue in Belke presented a "stark contrast"
with the NYSE and NASD's "eligib[ility] for submission to arbitration"
formulation, we observed in Hartmann that the Belke court "quite reasonably"
held that "its application should be decided by the arbitrator." 921 F.2d at 51314.

42

Even if the exhaustion provisions of the IGP could properly be read as

approximating the distinctness of the Hartmann /Hofmann "eligible for
submission to arbitration" provision, we would be slow to conclude that
interpretation and application of the exhaustion provisions were matters for the
district court rather than matters for the System Board. We think the case for
judicial circumspection in defining the boundaries of the arbitral process is less
compelling in the Hartmann /Hofmann setting, where the disputes to be
addressed arise out of the relationship between a brokerage house and an
individual customer, than in settings governed by a collective bargaining
agreement which covers scores or hundreds or thousands or even tens of
thousands of employees. In the collective bargaining setting, the primacy of the
arbitral role is crucial to the stability of the work place. The Supreme Court

made this plain almost forty years ago in United Steelworkers of America v.
Warrior & Gulf Navigation Co., 363 U.S. 574, 578, 80 S.Ct. 1347, 4 L.Ed.2d
1409 (1960):
43
Thus,
the run of arbitration cases, illustrated by Wilko v. Swan, 346 U.S. 427, 74
S.Ct. 182, 98 L.Ed. 168 [(1953)] [a securities case], becomes irrelevant to our
problem. There the choice is between the adjudication of cases or controversies in
courts with established procedures or even special statutory safeguards on the one
hand and the settlement of them in the more informal arbitration tribunal on the
other. In the commercial case, arbitration is the substitute for litigation. Here
arbitration is the substitute for industrial strife.... For arbitration of labor disputes
under collective bargaining agreements is part and parcel of the collective bargaining
process itself.
44

Id. at 578, 80 S.Ct. 1347.

45

A recent illustration of the centrality of arbitration in the collective bargaining

context is our decision in Association of Flight Attendants v. USAir, 960 F.2d
345 (3d Cir.1992). In Association of Flight Attendants, an RLA case, we were
called upon to decide whether the district court erred in ruling that a particular
item of evidence--the grievant's expunged criminal records--must be admitted in
the arbitral proceeding. While finding that this issue could not correctly be
characterized as presenting either a major or a minor dispute, we determined
that the issue was one of procedure for the arbitrator to decide. Id. at 348-49.7

46

In so holding, we found guidance in John Wiley, which held that under the
National Labor Relations Act, "[o]nce it is determined ... that the parties have
agreed to submit the subject matter of the dispute to arbitration, 'procedural
questions' which grow out of the dispute and bear on its final disposition should
be left to the arbitrator." Id. at 557, 84 S.Ct. 909. Following the logic of John
Wiley, we concluded in Association of Flight Attendants that the general
subject matter of the dispute--i.e., the termination of the grievant--was subject
to arbitration and that the evidentiary question was one for the arbitrator to
decide.8 960 F.2d at 349-350.

47

In the case at bar, the IACP, in its first count for relief, asked the district court
to rule that the arbitrator must determine the merits of the issue of whether
Continental violated paragraph 6(B)--an issue which Continental contended, in
advance of arbitration, was not previously raised in the grievance procedure.
Thus the IACP requested a judicial determination of whether or not any
applicable exhaustion requirement was met (and, if not, whether there was
ground for excusing exhaustion). In doing so, IACP raised, in the RLA context,

an argument which, in the NLRA context, the Supreme Court in John Wiley
had occasion to reject. In John Wiley, the employer resisted arbitration of an
employee's grievance on a number of grounds, one of which concerns us here:
the employer's argument that the court should find arbitration precluded
because the employee failed to exhaust the preliminary steps of the grievance
procedure. 376 U.S. at 556 & n. 11, 84 S.Ct. 909. Rejecting the employer's
argument that it was for the court to decide the exhaustion issue (as well as the
issue whether the grievance was timely instituted) the Court stated:
48
Doubt
whether grievance procedures or some part of them apply to a particular
dispute, whether such procedures have been followed or excused, or whether the
unexcused failure to follow them avoids the duty to arbitrate cannot ordinarily be
answered without consideration of the merits of the dispute which is presented for
arbitration. .... It would be a curious rule which required that intertwined issues of
"substance" and "procedure" growing out of a single dispute and raising the same
questions on the same facts had to be carved up between two different forums, one
deciding after the other. Neither logic nor considerations of policy compel such a
result.
49

376 U.S. at 557, 84 S.Ct. 909. We find this reasoning and result fully applicable
to the case at bar.

50

The second issue raised in IACP's complaint, whether the arbitrator must
entertain the Martin grievance on behalf of all pilots, is likewise an issue for
the arbitrator to decide. This issue is not only "procedural" in nature, but also
requires considerable investigation into the meaning of the parties' agreements.
The IACP in effect requests that the court certify the grievance as a class action
before the arbitrator proceeds to hear the case, a proposed party joinder ruling
that would be "procedural" as that term is normally understood. Furthermore,
resolving this issue would involve an analysis of the interplay between the
CRM's wage-restoration provision--paragraph 6(A)--and the "me too"
provision--paragraph 6(B)--on the one hand, and the IGP's provisions
governing the conduct of grievance proceedings on the other. If we were to
assume that an arbitrator would find any applicable exhaustion requirement
satisfied, then the arbitrator might also find within the language of the parties'
agreements, as elucidated by the law of the shop, a basis for considering
paragraph 6(B) claims to mandate or permit class-wide relief (that is to say,
perhaps the "me too" clause is better understood as an "us too" clause). But
such a determination requires a much more searching interpretation of the
contract than the courts are permitted under the RLA. In this case, as in John
Wiley, this procedural issue cannot "be answered without consideration of the
merits of the dispute which is presented for arbitration." 376 U.S. at 557, 84

S.Ct. 909.
51

The IACP seeks not a determination of the subject matter covered by the
agreement to arbitrate, but a judicial determination of the parameters and scope
of the award that the system board may permissibly enter, that is, (1) whether
the "me-too" clause was properly invoked (and if not, whether the union can
interpolate this claim at the arbitral stage), and (2) whether the arbitrator has
authority to grant relief on a class-wide basis. In the latter regard, it bears
noting that Section III.B of the IGP contains the following general grant of
remedial authority (also under the subheading "Jurisdiction"):

52 System Board shall have the authority to issue rulings and make awards
The
necessary to compensate a pilot for actual damages suffered as a result of any policy
violations it finds to have occurred. The System Board's jurisdiction to award
damages is strictly limited to actual, compensatory damages, and does not include
jurisdiction or authority to award damages in the nature of a penalty, i.e., punitive
damages. The Board shall have the authority, however, to order a party to comply
with any provision(s) of the [agreement] or policies as necessary to remedy or
correct violations, or to require specific enforcement of a provision of the
[agreement] or policies.
53

The interpretation of such remedial provisions is a task for which arbitrators

conversant with industry practice are likely to be better suited than judges. Cf.
Carey v. General Elec. Co., 315 F.2d 499, 508 (2d Cir.1963)("We cannot
divine now, nor do we deem it proper to predict, the precise form in which the
arbitrator will frame his decree."), cert. denied, 377 U.S. 908, 84 S.Ct. 1162, 12
L.Ed.2d 179 (1964).

54

When a court is called on to determine whether aspects of a dispute arising out

of a collective bargaining agreement are to be determined by an arbitrator or by
the court, judicial restraint is an institutional imperative. Excessive judicial
intrusion can undermine arbitral expertise and authority.9 Further, lengthy court
proceedings can seriously undermine the capacity for prompt adjudication
which is the hallmark of arbitration. As the Court cautioned in John Wiley,

55 opportunities for deliberate delay and the possibility of well-intentioned but no

the
less serious delay created by separation of the "procedural" and "substantive"
elements of a dispute are clear.... [S]uch delay may entirely eliminate the prospect of
a speedy arbitrated settlement of the dispute, to the disadvantage of the parties (who,
in addition, will have to bear increased costs) and contrary to the aims of national
labor policy.

376 U.S. at 558, 84 S.Ct. 909.10

56

Accordingly, both of the matters raised by the IACP's complaint are questions
of procedure for the arbitral tribunal to decide.

Conclusion
57

For the foregoing reasons, the judgment of the district court is affirmed.11

Honorable Louis H. Pollak, United States District Judge for the Eastern District
of Pennsylvania, sitting by designation

Section 204 of the Railway Labor Act is among the amendments to the statute
that extended its coverage to the airline industry. This provision declares that "it
shall be the duty of every carrier and of its employees, acting through their
representatives ... to establish a board of adjustment." 45 U.S.C. 184. A
"board of adjustment" so established is an arbitral tribunal to which the parties
may refer any grievances that are not otherwise resolved. Id

The RLA was the product of the joint efforts of labor and industry
representatives, who drafted the legislation in an effort to correct the
weaknesses of the Transportation Act of 1920, 41 Stat. 456, a statute which
provided for the establishment of adjustment boards to hear disputes, but did
not require the establishment of such boards nor render their awards judicially
enforceable. See International Association of Machinists v. Street, 367 U.S.
740, 758, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961); Katherine Van Wezel Stone,
Labor Relations on the Airlines: The Railway Labor Act in the Era of
Deregulation, 42 Stan. L.Rev. 1485, 1498 (1990). The 1926 legislation made it
the "duty of all carriers, their officers, agents, and employees ... to settle all
disputes," and mandated the establishment of system boards for the resolution
of disputes. Railway Labor Act, ch. 347 2-3, 44 Stat. 577, 577-78 (1926).
But when the requirements of the 1926 legislation proved to be easily evaded,
further labor and management dissatisfaction with the process led to
amendments in 1934, strengthening the dispute resolution provisions of the
statute. Act of June 21, 1934, ch. 691 2, 48 Stat. 1186. The history leading up
to the 1934 amendments is recounted in Elgin, J & E Railway Co. v. Burley,
325 U.S. 711, 725-26, 65 S.Ct. 1282, 89 L.Ed. 1886 (1945)

"Representation disputes" are committed to the exclusive jurisdiction of the

National Mediation Board. 45 U.S.C. 152 Ninth; Switchmen's Union v.
National Mediation Board, 320 U.S. 297, 302, 64 S.Ct. 95, 88 L.Ed. 61 (1943).

Major and minor disputes involve, respectively, efforts to secure and to

implement contractual rights; these distinctions will be discussed more fully in
the text. Further, it should be noted that certain of the rights and correlative
obligations created by the RLA--particularly the provisions ensuring the free
choice of bargaining representatives found in Section 2 of the statute, 45 U.S.C.
152--are also enforceable in federal court. Because the RLA (unlike the
National Labor Relations Act) has not established an administrative body for
the enforcement of statutory rights, certain of the rights created by the statute
are enforceable in the courts. See, e.g., Virginian Ry. v. System Fed'n No. 40,
300 U.S. 515, 544, 57 S.Ct. 592, 81 L.Ed. 789 (1937)(duty to negotiate
judicially enforceable); Texas & New Orleans Railroad v. Railway &
Steamship Clerks, 281 U.S. 548, 567, 50 S.Ct. 427, 74 L.Ed. 1034 (1930)(right
to free choice of bargaining representative judicially enforceable). Although a
leading treatise on the RLA--The Railway Labor Act (Douglas Leslie,
ed.1994)--refers, for analytic purposes, to disputes raising such issues as
"statutory disputes," this label has not caught on in the courts
4

The terms "major" and "minor" are not found within the RLA. The Supreme
Court first used the major/minor typology in the Burley decision. In doing so,
the Court adopted the nomenclature that had developed within the railroad
industry. See 325 U.S. at 723-28, 65 S.Ct. 1282. As the Court later clarified in
Consolidated Rail Corp. v. Railway Labor Executives' Ass'n, 491 U.S. 299,
305, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989), the designations "major" and
"minor" are not to be understood as reflecting the relative importance of
particular labor controversies

On page 15 of its brief, the IACP attributes to the district court the statement
that "the doctrine of substantive arbitrability has no application under the
RLA." This language, however, appears neither on the page to which the
IACP's brief refers nor anywhere else in the opinion

The definition of a minor dispute also comes into play when determining
whether a state-law claim raised by a worker covered by a collective bargaining
agreement governed by the RLA is preempted. See Hawaiian Airlines, 512
U.S. at 265, 114 S.Ct. 2239. But the preemption inquiry has no bearing on the
case at bar

It bears noting that we decided Association of Flight Attendants after Hartmann

The "procedural arbitrability" doctrine of John Wiley, long a mainstay of

NLRA jurisprudence, has been held applicable to RLA cases by other courts of
appeals as well. In Brotherhood [of] Railway Carmen v. Atchison, Topeka &
Santa Fe Railway Co., 956 F.2d 156 (7th Cir.1992), the court came to a

conclusion similar to the one we reached in Association of Flight Attendants,

albeit in a case arising in a different procedural posture. In that case, the union
sued on the basis of an arbitral award entered in favor of a discharged employee
by an RLA board of adjustment. On appeal, the issue was whether the district
court erred in ruling, in the first instance, that the employer "had waived its
right to oppose the full award" because it failed to introduce the evidence that
supported its opposition during arbitration. Id. at 158. The court held that the
interpretation of the contractual provision relating to the manner in which
grievances were to be presented to the arbitrators--"each written submission
shall be limited to the material submitted by the parties to the dispute [in the
earlier stages of the grievance proceeding]"--was a procedural question for the
arbitrators to decide. Id. at 158, 159. In doing so, the court pointed out that it is
"customary for collective bargaining agreements to require the exhaustion of
the preliminary stages of the grievance procedure before resorting to arbitration
... for why establish remedies if the parties are free to bypass them?" Id. at 158.
And in Larsen v. American Airlines, Inc., 313 F.2d 599 (2d Cir.1963), the court
noted "[W]here a labor agreement provides for arbitration or other internal
resolution of disputes, this court has held that questions of 'procedural
arbitrability' are for the arbitrator" (citing Livingston v. John Wiley & Sons,
Inc., 313 F.2d 52 (2d Cir.1963), subsequently affirmed as John Wiley & Sons,
Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964))
9

"It is particularly underscored that the arbitral process in collective bargaining

presupposes that the parties wanted the informed judgment of an arbitrator,
precisely for the reason that judges cannot provide it." Concurring Opinion of
Brennan, J., joined by Frankfurter and Harlan, JJ., in United Steelworkers of
America v. American Manufacturing Company, 363 U.S. 564, 570, 80 S.Ct.
1343, 4 L.Ed.2d 1403 (1960)

10

As pointed out in Part II of this opinion, supra note 1, the RLA's provisions for
arbitration by boards of adjustment were drafted in response to the
Transportation Act's ineffectual dispute-resolution machinery; but even those
procedures established by the original statute proved less than satisfactory.
Before the RLA's mechanisms for resolving grievance and contract-application
disputes were strengthened by the 1934 amendments to the statute, "parties
were free at all times to go to court to settle [grievances]" and the intended
dispute-resolution process broke down. Burley, 325 U.S. at 725-26, 65 S.Ct.
1282. Consequently, the 1934 amendments created a compulsory arbitration
system "to remove the settlement of grievances from this stagnating process
and bring them within a general and inclusive plan of decision." Id. at 728, 65
S.Ct. 1282. Hence it is unsurprising that the 1934 amendments were enacted
under the title: "An Act to amend the Railway Labor Act approved May 20,
1926, and to provide for the prompt disposition of disputes between carriers and

their employees." Act of June 21, 1934, ch. 691, 44 Stat. 577
11

Continental concluded its brief on appeal with the recital that "the judgment
[the judgment of the district court which granted Continental's motion for
judgment on the pleadings and recited that '[t]he case is dismissed'] should be
affirmed." Continental has not asked this court to address the counterclaim it
filed prior to moving for judgment on the pleadings. Whether that counterclaim
has any continuing viability, or (as pointed out in the district court's
memorandum opinion but not in the district court's order) vanished with the
district court's grant of judgment on the pleadings and consequent dismissal of
the case, is not a question that is before this court. If this matter reaches the
System Board of Adjustment, we presume that the threshold issues before the
Board will be those identified in Continental's counterclaim, e.g., whether,
under the Interim Grievance Procedure, (1) the IACP may bring a grievance on
behalf of "similarly situated" pilots other than the individual pilot who filed the
grievance; (2) a grievant is precluded from raising before the System Board an
issue not raised in the original grievance; and (3) Jackson Martin raised
Paragraph 6(B) of the Cost Reduction Memorandum in his original grievance
filed on September 9, 1994