AMERICAN AIRLINES, INC., Plaintiff-Appellee, v. ROBERT STEVEN MAWHINNEY, Defendant-Appellant. TRANSPORT WORKERS UNION, LOCAL 591, Plaintiff-Appellee, v. ROBERT STEVEN MAWHINNEY, Defendant-Appellant.
No. 16-56638, No. 16-56643
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Filed September 26, 2018
D.C. No. 3:16-cv-02270-MMA-BLM, D.C. No. 3:16-cv-02296-MMA-BLM. Appeal from the United States District Court for the Southern District of California. Michael M. Anello, District Judge, Presiding. Argued and Submitted July 11, 2018 Pasadena, California.
Before: Marsha S. Berzon and N. Randy Smith, Circuit Judges, and P. Kevin Castel,* District Judge.
Opinion by Judge Berzon
SUMMARY**
Labor Law / Arbitration
In two related appeals concerning claims for whistleblowing retaliation under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, the panel denied motions to dismiss the appeals, affirmed the district court‘s order compelling arbitration of the plaintiff‘s claim against his employer, and reversed its order compelling arbitration of the plaintiff‘s claim against his union.
Denying the motions to dismiss, the panel held that it had jurisdiction over the appeals because the district court‘s orders compelling arbitration were no longer interlocutory once the district court dismissed the actions and entered judgment.
Affirming as to the AIR21 retaliation claim against the employer, the panel held that the employer did not waive its right to arbitrate by waiting to move to compel until after an agency investigation into its conduct was complete. The panel held that private AIR21 retaliation claims are not inherently nonarbitrable. The panel also held that arbitration was not barred by the state statute of limitations or by the Federal Arbitration Act.
Reversing as to the retaliation claim against the union, the panel concluded that the union was not a party to the arbitration provision at issue and was not otherwise entitled to enforce the provision under agency law.
COUNSEL
Robert Steven Mawhinney (argued), La Jolla, California, pro se Defendant-Appellant.
John D. Hayashi (argued), Morgan Lewis Bockius LLP, Costa Mesa, California; Robert Jon Hendricks, Morgan Lewis Bockius LLP, San Francisco, California; for Plaintiff-Appellee American Airlines, Inc.
Lee Saham (argued) and Lucas K. Middlebrook, Seham Seham Meltz & Petersen LLP, White Plains, New York; Nicholas P. Granath, Seham Seham Meltz & Petersen LLP, Minneapolis, Minnesota; for Plaintiff-Appellee Transport Workers Union, Local
OPINION
BERZON, Circuit Judge:
In these related appeals, we consider whether the district court properly compelled arbitration of Robert Steven Mawhinney‘s claims for whistleblowing retaliation, brought under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (“AIR21“),
I
Mawhinney is an aircraft maintenance technician formerly employed by American Airlines in San Diego. He was fired by the Airline in 2001—according to Mawhinney, in retaliation for protected whistleblowing activity. Shortly after his discharge, Mawhinney filed a complaint with the Department of Labor (“DOL“), invoking the whistleblower protections of AIR21.
As here relevant, AIR21 bars air carriers from firing or otherwise penalizing workers for alerting the air carrier or federal agencies to “any violation or alleged violation of any order, regulation, or standard of the Federal Aviation Administration or any other provision of Federal law relating to air carrier safety.”
In December 2002, Mawhinney reached a settlement agreement (“the Agreement“) with the Airline on his retaliation complaint. DOL issued an order formally approving the Agreement. The Agreement reinstated Mawhinney to his former position. See Mawhinney v. Am. Airlines, No. 15-cv-0259-MMA (BGS), 2015 WL 13604265, at *1 (S.D. Cal. Aug. 13, 2015). It also contained an arbitration provision:
In the event of any dispute as to the compliance by either party with the terms of this Agreement, or in the event of any dispute arising at any time in the future between the Parties (including but not limited to the Released Parties, and any [of] their past, present or future successors, and their past, present or future officers, directors, employees, agents and representatives) involving Plaintiff‘s employment which may lawfully be the subject of pre-dispute arbitration agreements, and which Plaintiff chooses not to grieve under any Collective Bargaining Agreement governing his employment, Plaintiff and American Airlines agree to submit such dispute to final and binding arbitration (“Private Arbitration“) for resolution. Private Arbitration shall be the exclusive means of resolving any such disputes and no other action will be brought in any other forum or court. . . . The arbitrator shall have the authority to order any legal and or equitable relief or remedy which would be available in a civil or administrative action on the claim.
Also included in the Agreement was a California choice-of-law clause.
Between 2010 and 2011, Mawhinney received several disciplinary letters related to his management style. These disciplinary letters culminated in a “career decision advisory” in which Mawhinney was given the choice of (1) signing a letter committing to abide by the Airline‘s policies, (2) resigning with severance in exchange for a promise not to exercise grievance rights, or (3) being fired without relinquishing grievance rights. Mawhinney refused to accept the career decision advisory, believing it motivated by his renewed whistleblowing activities in 2010 and 2011. Mawhinney was then terminated.
In September and October of 2011, Mawhinney initiated parallel proceedings based on his new allegations of retaliation. One proceeding was an arbitration covering state law claims for retaliation, wrongful termination, breach of contract, fraud, harassment, and intentional infliction of emotional distress. The other was an administrative proceeding before DOL, again invoking the whistleblower protections of AIR21. In his complaint to DOL, Mawhinney named as respondents both the Airline and the Union, as Mawhinney believed the two joined in the alleged retaliation against him.
The arbitration and DOL proceedings unfolded separately, both along bumpy paths. In November 2011, the Airline petitioned for bankruptcy. The arbitration was then stayed, but DOL‘s independent investigation of Mawhinney‘s AIR21 retaliation complaint was not. In mid-2012, DOL concluded that there was “no reasonable cause to believe” the Airline or the Union retaliated against Mawhinney, as the Airline had supplied clear and convincing evidence that Mawhinney‘s disciplinary action was
Mawhinney pursued adversary proceedings against the Airline and Union by filing objections to DOL‘s investigation and requesting a hearing before an ALJ. The ALJ then split the retaliation action. As to the Airline, the ALJ stayed the case in view of the pending bankruptcy. As to the Union, the ALJ dismissed Mawhinney‘s claim, concluding that the Union fell outside the scope of AIR21. As here relevant, AIR21 bars retaliation by an “air carrier or contractor or subcontractor of an air carrier.”
Mawhinney appealed the ALJ‘s decision in his now-separate retaliation action against the Union to DOL‘s Administrative Review Board (“ARB“). The ARB reversed and remanded to the ALJ for reconsideration, reasoning that, at their broadest, the generic terms “contractor” and “company” can include labor unions. In particular, the ARB concluded that a “contractor” is potentially any party to a contract, and so a union may be a “contractor” by virtue of being party to a collective bargaining agreement with an employer.
With respect to the Airline, proceedings resumed, both in arbitration and before the ALJ, after the bankruptcy stay was lifted in late 2013. The arbitration of Mawhinney‘s state law claims was resolved in short order; in November 2014, the Airline prevailed in full. The Southern District of California then confirmed the arbitral award, and a panel of this court affirmed. Mawhinney v. Am. Airlines, Inc., 692 F. App‘x 937 (9th Cir. 2017).
The proceedings before DOL, however, turned more complex. In April 2014—several months after the bankruptcy stay was lifted, and while the arbitration of the state law claims was still pending—the Airline filed a motion to compel arbitration of the action pending before the ALJ. The Airline argued that, like the factually related state law claims, the administrative action fell within the 2002 Agreement approved by DOL. The ALJ granted the motion to compel arbitration the following month. Mawhinney then appealed the order compelling arbitration to the ARB, which in January 2016 reversed.
In reversing, the ARB reasoned that the Airline‘s demand for arbitration could be viewed equally as a breach of the Agreement or as a breach of the DOL order approving it.1 With respect to the former,
In response, the Airline initiated a second arbitration, limited to the claim of retaliation under AIR21. Mawhinney refused to abandon his ongoing administrative action in favor of arbitration, so the Airline filed suit in the Southern District of California for breach of contract, invoking both the Agreement and the district court‘s authority, under AIR21, to enforce the DOL order approving the Agreement. The Union, which had also lost at the ARB, brought a similar action.
Soon after filing their complaints, the Airline and the Union moved to compel arbitration.2 The district court granted both motions. It then dismissed the underlying actions and entered judgment. Mawhinney filed timely appeals.
II
We consider first the pending motions to dismiss. Both the Airline and the Union have moved to dismiss Mawhinney‘s appeals for lack of appellate jurisdiction, on the theory that the Federal Arbitration Act “generally permits immediate appeal of orders [refusing] arbitration, whether the orders are final or interlocutory, but bars appeal of interlocutory orders [enforcing] arbitration.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 86 (2000); see also
The motions fail because we are not here presented with interlocutory appeals. As we have repeatedly held, an order compelling arbitration is no longer interlocutory once a district court—like the district court in this case—dismisses the action and enters judgment. See
III
We turn next to Mawhinney‘s appeal involving the Airline.
The district court rejected Mawhinney‘s arguments for avoiding arbitration. We review the district court‘s decision de novo, Rogers v. Royal Caribbean Cruise Line, 547 F.3d 1148, 1151 (9th Cir. 2008), and affirm.
A
Mawhinney argues first that the Airline waived its right to arbitrate his AIR21 action by participating in the initial investigation of Mawhinney‘s complaint at DOL. As Mawhinney notes, litigation on the merits is a common basis for finding a waiver of the right to arbitrate on the merits. Litigating in court is inconsistent with asserting one‘s arbitration right. Litigation may also expose the opposing party to prejudice—for example, prolonged or duplicative proceedings, or a risk of inconsistent rulings—if arbitration is later demanded. See United States v. Park Place Assocs., Ltd., 563 F.3d 907, 921 (9th Cir. 2009); Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1124-26 (9th Cir. 2008); St. Agnes Med. Ctr. v. PacifiCare of Cal., 31 Cal. 4th 1187, 1196 (2003).
In this case, however, there was no “litigation” at DOL from which to infer a waiver.3 The AIR21 complaint Mawhinney filed did not initiate adversarial proceedings before an ALJ. It initiated a DOL investigation, see
As the Airline could not have compelled arbitration of DOL‘s independent investigation, the Airline cannot be faulted for failing to have sought to do so. The Airline‘s demand for arbitration, filed with the ALJ shortly after the bankruptcy stay was lifted, reflects a timely and diligent assertion of the right to arbitrate, and so precludes a finding of waiver.
B
Mawhinney next argues that his AIR21 action cannot be arbitrated because AIR21 itself forbids it. In support of this proposition, Mawhinney points to no statutory language so stating, as there is none. Instead, he emphasizes the importance of
Mawhinney misconceives the administrative process provided by the statute. DOL‘s independent interest in Mawhinney‘s AIR21 retaliation complaint—grounded in its responsibility for assuring the safety of air travel, see H.R. Rep. No. 106-167, pt. 1, at 100 (1999)—ceased once its investigation concluded with a finding of no violation. At that point, DOL‘s investigatory role was complete, see
Williams v. United Airlines, Inc., 500 F.3d 1019 (9th Cir. 2007), does not support a contrary conclusion. There, we rejected the argument that an implied private right of action exists in federal district court for a claim brought under AIR21. We so concluded because AIR21 reflects “a carefully-tailored administrative scheme” for adjudicating retaliation claims, with federal district court actions available only for “suits brought to enforce the [DOL]‘s final orders.” Id. at 1024. It does not follow from the absence of a private right of action in federal district court that other forums for dispute resolution—in this case, arbitration—are foreclosed if agreed upon by the parties. As the Supreme Court has explained, federal claims are generally amenable to arbitration unless there exists a “contrary congressional command.” CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012) (citation omitted). Such a command need not be express, see Gilmer, 500 U.S. at 29, but it must consist of more than just entrusting the resolution of purely private claims to an executive agency adjudicator in the first instance, see id. at 28–29; Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 (1985).
C
Finally, Mawhinney argues that arbitration is barred either by the state statute of limitations, or the FAA. Neither argument survives scrutiny.
1
In California, the limitations period for a breach of contract—including breach of a covenant to arbitrate—is four years.
Mawhinney mistakes the point at which the limitations period began to run. Under California law, the limitations period on an arbitration demand begins to run when “a party can allege not only the existence of the [arbitration] agreement,
2
With respect to the FAA, Mawhinney argues that the Agreement falls within the statutory exemption for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”
As an initial matter, it is doubtful the FAA‘s interstate exemption for contracts of employment in foreign or interstate commerce applies in this case. The Agreement was not the contract under which Mawhinney was hired. See J.I. Case Co. v. N.L.R.B., 321 U.S. 332, 335-36 (1944) (observing that a contract of employment, at its most basic, is an “act of hiring“). Nor was it a contract setting the terms and conditions of employment. See Am. Postal Workers Union of L.A. v. U.S. Postal Serv., 861 F.2d 211, 215 n.2 (9th Cir. 1988) (per curiam) (suggesting that collective bargaining agreements, which do not “hire” workers, but which do set the terms and conditions of employment, also fall within the section 1 exemption); see also United Paperworkers Int‘l Union v. Misco, Inc., 484 U.S. 29, 40 n.9 (1987) (so assuming). Instead, the Agreement was a contract settling a dispute between the parties, albeit an employment-related one, by restoring the status quo ante and providing for the resolution of later disputes. Cf. Gilmer, 500 U.S. at 25 n.2 (concluding that the section 1 exemption does not extend to an agreement simply because it was reached in furtherance of or in relation to one‘s employment).
More to the point, though, recourse to the FAA is not a condition of enforcing the arbitration agreement in this case. The FAA governs requests to enforce contractual arbitration provisions, see
In sum, Mawhinney‘s private retaliation claim was a proper subject of arbitration, which the Airline timely requested.
IV
We turn to the appeal involving the Union.
The key question in the Union‘s case is the Union‘s relationship to the Agreement. If the Union is neither a party to nor a beneficiary of the Agreement, it cannot enforce the arbitration provision within the Agreement by way of a direct action on the contract. See Comer v. Micor, Inc., 436 F.3d 1098, 1101 (9th Cir. 2006); The H.N. & Frances C. Berger Found. v. Perez, 218 Cal. App. 4th 37, 43 (2013).6 Nor can it enforce the Agreement by way of DOL‘s order approving the Agreement, as AIR21 only allows private enforcement of DOL orders by “[a] person on whose behalf” the order was issued.7
The Union recognizes that it is not named as a party to the Agreement or to its arbitration provision.9 It nonetheless contends that it can enforce the arbitration provision because it qualifies, at least for the purposes of Mawhinney‘s AIR21 action, as an “agent” of the Airline, a category of third parties specifically authorized in the Agreement to enforce the arbitration provision against signatories.
The Union‘s theory of agency is convoluted: The Union notes that the ARB reversed and remanded the ALJ‘s dismissal of the Union from Mawhinney‘s retaliation claim. The ARB‘s thesis was that the Union potentially fell within the scope of AIR21 because it could qualify as an Airline “contractor,”
We review the district court‘s order de novo, Rogers, 547 F.3d at 1151, and reverse. Under the established meaning of the term “agent,” and the statutory role of the Union under the Railway Labor Act,
B
“Agency is the fiduciary relationship that arises when [a principal] manifests assent to [an agent] that the agent shall act on the principal‘s behalf and subject to the principal‘s control, and the agent manifests assent or otherwise consents so to act.” Restatement (Third) of Agency § 1.01; Edwards v. Freeman, 34 Cal. 2d 589, 592 (1949); Secci v. United Indep. Taxi Drivers, Inc., 8 Cal. App. 5th 846, 855 (2017). To establish an agency relationship, “[t]he principal must in some manner indicate that the agent is to act for him, and the agent must act or agree to act on his behalf and subject to his control.” Edwards, 34 Cal. 2d at 592 (citation omitted); Secci, 8 Cal. App. 5th at 855.
Nothing in the Union‘s pleadings or moving papers suggests that the Airline and the Union had agreed that the Union would act on behalf of the Airline and under its control with regard to Mawhinney‘s employment status. That vacuum is not surprising. Generally, a union does not act on behalf of an employer or subject to an employer‘s control; it acts on behalf of the represented workers, to whom it owes a duty of fair representation vis à vis the employer. Int‘l Bhd. of Elec. Workers v. Foust, 442 U.S. 42, 46–47 & n.8 (1979). In that capacity, the Union‘s obligation is to oppose the employer‘s interests during collective bargaining and in processing grievances when its role as the workers’ representative so requires, not to act on behalf of and under the control of the employer. See Bautista v. Pan Am. World Airlines, Inc., 828 F.2d 546, 549 (9th Cir. 1987). Indeed, under the Railway Labor Act, which governs Mawhinney‘s employment with the Airline, it is illegal for the a union to operate under an employer‘s control.
The Union does not really engage with the anomaly of contending that it is the agent of the employer with whom it is obligated to bargain on the employer‘s behalf. Instead, the Union‘s contention, at bottom, is that it should be treated as an agent on a counterfactual basis—not because it truly is an agent, but because the ARB‘s conclusion that the Union may have “contractor” status under AIR21 can only hold true if an agency relationship exists between the Airline and the Union.10 We
forum is approaching parallel litigation. The Union‘s proposition that we should do so here is particularly weak, as the ARB‘s decision is neither final nor certain—nor even directly about whether the Union is the Airline‘s “agent.”
The district court did not agree with the Union‘s position concerning its status as the Airline‘s “agent.” Instead, the district court invoked the familiar maxim that “doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Moses H. Cone, 460 U.S. at 24–25.
The preference for a broad construction of an ambiguous arbitration agreement has no application here. The federal preference for a broad construction of an arbitration agreement refers to “ambiguities as to the scope of the arbitration clause itself,” Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 475–76 (1989), not the threshold question whether a person entered into or is covered by an agreement to arbitrate, see First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 943 (1995); Volt, 489 U.S. at 478. Here, “[t]he question... is not whether a particular issue is arbitrable, but whether a particular party is bound by the arbitration agreement. Under these circumstances, the liberal federal policy regarding the scope of arbitrable issues is inapposite.” Comer, 436 F.3d at 1104 n.11 (emphasis omitted).
V
As the present appeals are not interlocutory, the motions to dismiss are DENIED.
In American Airlines v. Mawhinney, No. 16-56638, the Airline did not waive arbitration by waiting until after DOL‘s independent investigation was complete to file a motion to compel. Nor is there any inherent arbitrability problem with a private AIR21 action litigated before an ALJ following an unfavorable DOL investigation. The district court‘s order compelling arbitration is AFFIRMED.
In Transportation Workers Union, Local 591 v. Mawhinney, No. 16-56643, applying ordinary principles of agency law, the Union is not in a position to enforce the 2002 settlement agreement or the DOL order approving it. The district court‘s order compelling arbitration is REVERSED.