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Part 2: Arbitration Answers

Part 2: Arbitration Answers

December 15, 2018

Binding Arbitration

First things first, arbitrations come in two flavors: binding and non-binding. However, in our industry, by law, any labor arbitration we do will be binding. That means that when we enter arbitration, we are going to come out at the end with a decision that we must accept, like it or not. Arbitrations can be unpredictable, and the risk of a bad outcome can outweigh its advantages for both parties.

For us, binding arbitration shows up in a couple of places: 1) It is mandatory in grievance resolution (if the grievance progresses that far), and 2) as a voluntary option when the parties are unable to reach agreement in Section 6 mediation. For those who enjoy statutory dissection, you’ll note that our right to arbitrate grievances is statutory (meaning it’s written in the law), unlike other industries (like auto workers or food service workers) where the right is established in their individual CBAs. 

The RLA has different sections, some of which apply to airlines, like SWA, and some don’t. Under the RLA, our right to arbitrate grievances is covered in Section 204 (45 USC §184), while railroads are covered under Section 3 (45 USC §153). Airline grievances are resolved by the System Board of Adjustment (SBOA), whereas railroad grievances are resolved by the National Railroad Adjustment Board (NRAB) if they don’t go to a special board of adjustment or Public Law Board. While unfair labor practices in other industries are reviewed by the National Labor Relations Board (NLRB), we will focus on the one that affects us: the SBOA process.

System Board Arbitrations 

The System Board doesn’t hear all disagreements between management and labor, only those disputes over the application or interpretation of the CBA (also called “minor” disputes). Don’t let the term “minor” fool you. It does not describe the size or significance of the dispute. It’s simply a term used by the courts to distinguish grievances from disputes concerning the making of collective bargaining agreements, which are referred to as “major” disputes. (More on “major” disputes later.)

Minor disputes cover the gamut of everything in our CBA, from the Home Study Exam (HSE) grievance, which went to SBOA, to the Advanced Qualification Program (AQP) grievance, which was resolved on the eve of arbitration. To hold the Company accountable for what it agreed to in our CBA, we have had no choice but to grieve and arbitrate when the Company refuses to fix problems that we bring to its attention.

All minor disputes must be resolved through binding arbitration, which means that Pilots cannot sue airlines in court for violations of the CBA. Why is it mandatory? Because the law (RLA) says so. But besides that, the primary benefits of arbitration over litigation include the reduction of delays and uncertainty in the judicial system, the savings in legal fees, and (believe it or not) the preservation of workplace unity. If you’re interested, there are historical accounts of labor bloodshed and massacres over labor conditions that resulted in this legislation aimed at promoting access, efficiency, and fairness in resolving labor disputes. Arbitrations achieve this by doing away with onerous court rules, having less formality, and being a process that facilitates dialogue and potential settlement.

Sounds like a great deal, right? For the most part, it is; but it has its warts. Arbitrators are not bound to follow any rules of law, evidence, or civil procedure (outside those agreed to by both sides). The real risk, however, is that the award is binding and generally not appealable. That means that even if the arbitrator makes a clear mistake of law, it isn’t grounds for reversal. There must be something more, such as fraud, corruption, or serious misconduct by the arbitrator for the courts to overturn an arbitrated award. 

Thankfully, the SBOA process in our CBA is preferable to those I’ve seen at other airlines. We have a five-member panel consisting of the arbitrator and two board members appointed by each party. Each side bears its own costs, and the costs of the arbitration (including arbitrator fees and court reporter costs) are split evenly between SWAPA and Southwest Airlines. Because the Company holds the data in most, if not all, cases, it is important that the parties are required to exchange information in advance of the hearing, as we have noted in our CBA, to allow for meaningful dialogue. This gives the parties a chance to settle the dispute before the need for arbitrator decision. You can check out our grievance and SBOA process in Sections 16 and 17 of the CBA.

NMB Proffered Arbitration

I mentioned that there are two types of arbitration in our industry. There is also a binding arbitration in the Section 6 mediation process. Unlike the compulsory System Board arbitration, this arbitration is voluntary. (But once again, if you voluntarily enter it, the result is binding.) 

When does this come into play? When the NMB determines the parties to be at an impasse in negotiations. Before the NMB releases the parties to self-help, the NMB must proffer the parties the opportunity to enter into binding arbitration over any unresolved issues. This opportunity is not mandatory, so either party can say no. There are arguments in favor of succumbing to binding arbitration, but should SWAPA enter into binding arbitration, we are essentially letting arbitrators decide our Pilots’ fate, which goes against our Pilots’ fundamental ability to dictate our own future. But just as importantly, an arbitrator must balance the interests of not just management and labor, but interstate commerce and political pressures, so we would not expect any advantage to our side.

In Part 3, we will cover Section 6 Notice.