American Airlines, Inc. v. Robert Mawhinney , 904 F.3d 1114 ( 2018 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AMERICAN AIRLINES, INC., No. 16-56638
Plaintiff-Appellee,
D.C. No.
v. 3:16-cv-02270-
MMA-BLM
ROBERT STEVEN MAWHINNEY,
Defendant-Appellant.
TRANSPORT WORKERS UNION, No. 16-56643
LOCAL 591,
Plaintiff-Appellee, D.C. No.
3:16-cv-02296-
v. MMA-BLM
ROBERT STEVEN MAWHINNEY,
Defendant-Appellant. OPINION
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
Filed September 26, 2018
2 AMERICAN AIRLINES V. MAWHINNEY
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
*
The Honorable P. Kevin Castel, United States District Judge for the
Southern District of New York, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
AMERICAN AIRLINES V. MAWHINNEY 3
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 591.
4 AMERICAN AIRLINES V. MAWHINNEY
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”), 49 U.S.C. § 42121.
With respect to the retaliation claim against Mawhinney’s
employer, American Airlines (“the Airline”), we affirm. The
Airline did not waive its right to arbitrate by waiting to move
to compel until after an agency investigation into its conduct
was complete, nor is there reason to believe private AIR21
retaliation claims are inherently nonarbitrable. With respect
to the retaliation claim against Mawhinney’s union,
Transportation Workers Union, Local 591 (“the Union”), we
reverse. The Union is not a party to the arbitration provision
at issue in these cases and is not otherwise entitled to enforce
the provision.
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
AMERICAN AIRLINES V. MAWHINNEY 5
order, regulation, or standard of the Federal Aviation
Administration or any other provision of Federal law relating
to air carrier safety.” 49 U.S.C. § 42121(a)(1). “A person
who believes that he or she has been discharged . . . may . . .
file . . . a complaint with the [DOL] alleging such discharge
. . . .” 49 U.S.C. § 42121(b)(1). AIR21 provides that DOL
must then issue, for each retaliation complaint it resolves, “a
final order providing . . . relief . . . or denying the complaint.”
49 U.S.C. § 42121(b)(3)(A). If the order is later violated, “[a]
person on whose behalf” the order was issued may invoke
AIR21 in federal district court to “commence a civil action
. . . to require compliance with [the] order.” 49 U.S.C.
§ 42121(b)(6)(A).
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
6 AMERICAN AIRLINES V. MAWHINNEY
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
AMERICAN AIRLINES V. MAWHINNEY 7
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 the result of his “poor
judgment and deficient leadership.” See 49 U.S.C.
§ 42121(b)(2)(B)(iv); 29 C.F.R. §§ 1979.104(c), 1979.105(a).
DOL advised Mawhinney that he had the right to “appeal”
DOL’s investigation by making objections and requesting a
hearing before an administrative law judge (“ALJ”). See 29
C.F.R. § 1979.106(a). However, DOL also noted that, as it
had not reached a finding in his favor, it would not conduct
any further investigation on its own, and any adversary
proceedings against the Airline or Union would be
Mawhinney’s sole responsibility. See also 29 C.F.R.
§ 1979.108.
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
8 AMERICAN AIRLINES V. MAWHINNEY
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.” 49 U.S.C. § 42121(a). A
“contractor” is defined as “a company that performs safety-
sensitive functions by contract for an air carrier.” 49 U.S.C.
§ 42121(e). According to the ALJ, the Union was not a
“company” within the meaning of AIR21.
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
AMERICAN AIRLINES V. MAWHINNEY 9
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, the ARB concluded that the issue
was essentially one of contract “construction and enforcement
. . . dictated by principles of contract law,” such that the
proper forum for addressing the Airline’s demand was a
judicial rather than an administrative proceeding. With
respect to the latter, the ARB noted that, under AIR21, the
only specified federal forum for enforcing a DOL order
disposing of a retaliation complaint is a district court, see
49 U.S.C. § 42121(b)(6)(A); the statute makes no mention of
enforcement of a DOL order in proceedings before an ALJ.
The ARB therefore remanded Mawhinney’s AIR21
retaliation action to the ALJ for consideration of the merits,
but noted that the Airline retained the option of attempting to
compel arbitration in court.
1
DOL’s order approving the 2002 Agreement does not expressly
incorporate the terms the Agreement. DOL regulations currently treat
“[a]ny settlement approved” as “the final order of the Secretary.”
29 C.F.R. § 1979.111(e); see also 29 C.F.R. § 1979.113. Although these
regulations came into effect in 2003, after the DOL order approving the
2002 Agreement, DOL’s 2016 order treated the 2002 settlement and the
DOL order approving it as one, consistent with the later agency
regulations. The parties do not dispute the point, and we have no reason
to question DOL’s 2016 interpretation of its own 2002 order. We
therefore treat the 2002 DOL order as incorporating the settlement.
10 AMERICAN AIRLINES V. MAWHINNEY
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.
2
Strictly speaking, neither the Airline nor the Union moved to compel
arbitration of the claims brought in district court; they moved to compel
arbitration of the underlying AIR21 retaliation action. In a sense, then, the
motion to compel was incorrectly styled. It was in fact a motion for
judgment on the pleadings, seeking the relief demanded in the complaint
— enforcement of the Agreement or of the DOL order approving it. We
nonetheless refer to the dispositive motion as one to compel arbitration,
as that is the terminology the parties have used. As we explain in the next
section, the distinction does not matter; we have jurisdiction even if the
motion is viewed as one to compel arbitration of the retaliation claim.
AMERICAN AIRLINES V. MAWHINNEY 11
Corp.-Ala. v. Randolph, 531 U.S. 79, 86 (2000); see also
9 U.S.C. § 16(b)(2).
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 9 U.S.C.
§ 16(a)(3); 28 U.S.C. § 1291; Interactive Flight Techs., Inc.
v. Swissair Swiss Air Transp. Co., 249 F.3d 1177, 1179 (9th
Cir. 2001). That factually related claims may be pending in
some other forum, such as at DOL, has no impact on the
finality of the district court’s decision. Nor does it matter that
dismissal is without prejudice. See Interactive Flight,
249 F.3d at 1179; Montes v. United States, 37 F.3d 1347,
1350 (9th Cir. 1994). The motions to dismiss are denied.
III
We turn next to Mawhinney’s appeal involving the
Airline.
Mawhinney does not dispute that, absent some provision
of law providing otherwise, his AIR21 retaliation action falls
within the scope of the Agreement’s arbitration clause. Nor
can he, given that he himself invoked the arbitration clause to
resolve a parallel claim for retaliation under state law.
Mawhinney argues instead that arbitration is unavailable for
the AIR21 action, either because a defense to enforcement of
the settlement applies or because the Federal Arbitration Act
(“FAA”) or AIR21 precludes an arbitration order in this
instance.
12 AMERICAN AIRLINES V. MAWHINNEY
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
29 C.F.R. § 1979.104, in which DOL had an independent
interest. Had DOL’s investigation come out in Mawhinney’s
favor, DOL would have issued an administrative order
3
The district court did not make a factual finding regarding waiver.
However, as the relevant facts are not in dispute, we address the issue de
novo. See Britton v. Co-op Banking Grp., 916 F.2d 1405, 1409 (9th Cir.
1990).
AMERICAN AIRLINES V. MAWHINNEY 13
providing statutorily and regulatorily defined remedies, see
49 U.S.C. § 42121(b)(3)(B); 29 C.F.R. § 1979.105(a)(1),
which DOL would have been entitled to enforce in its own
name, 49 U.S.C. § 42121(b)(5). The Agreement between
Mawhinney and the Airline does not extend to a proceeding
of that kind, which concerns not a dispute between the parties
to the Agreement, but a potential enforcement action by the
government. Cf. E.E.O.C. v. Waffle House, Inc., 534 U.S.
279, 289 (2002). “[A]rbitration agreements will not preclude
[the agency] from bringing actions seeking . . . relief.”
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32
(1991).
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 DOL’s role in hearing and resolving retaliation
complaints under AIR21.
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.
14 AMERICAN AIRLINES V. MAWHINNEY
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
29 C.F.R. §§ 1979.104, 1979.105(a). An administrative
AIR21 action did remain, as Mawhinney elected to pursue his
complaint against the Airline in a hearing before an ALJ, as
he was entitled to do. See Murray v. Alaska Airlines, Inc.,
50 Cal. 4th 860, 868 (2010) (observing that the procedure
available following DOL’s unfavorable investigation was “a
full de novo trial-like hearing before an ALJ”). But as DOL
emphasized in its letter to Mawhinney regarding his post-
investigation “appeal” right, the AIR21 action at that point
concerned only Mawhinney’s purely private dispute with the
Airline, not the government’s independent interest in
advancing the public interest in airline safety. Once DOL
found no violation, that is, the agency provided only the
forum, but was not a party to the dispute. The proceeding
before the ALJ was therefore squarely controlled by the
arbitration provision in the Agreement.
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
AMERICAN AIRLINES V. MAWHINNEY 15
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. Cal. Civ. Proc. Code § 337(1); Wagner Constr.
Co. v. Pac. Mech. Corp., 41 Cal. 4th 19, 29 (2007).
According to Mawhinney, the Airline exceeded this
limitations period because its action in district court, filed in
September 2016, came more than four years after
Mawhinney’s AIR21 complaint with DOL, filed in October
2011.
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, but also that the opposing party refuses to
arbitrate.” Spear v. Cal. State Auto. Ass’n, 2 Cal. 4th 1035,
1041 (1992) (emphasis omitted). Mawhinney did not refuse
to arbitrate when he filed his AIR21 complaint. He refused
16 AMERICAN AIRLINES V. MAWHINNEY
to arbitrate in early 2014, when, after the bankruptcy stay was
lifted, he refused the Airline’s request to fold his AIR21
claim into the then-pending arbitration. At that point the
Airline had no option but to move to compel. The Airline’s
action in district court was filed within four years of that date,
and is therefore not time-barred.4
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.”
9 U.S.C. § 1.
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
4
The district court concluded that Mawhinney did not refuse
arbitration until September 2016, after the Airline initiated an arbitration
in which Mawhinney refused to participate. That determination was
incorrect. California law does not require that an arbitration be initiated
before the limitations period starts running; only a refusal to arbitrate is
required. See Spear, 2 Cal. 4th at 1041.
AMERICAN AIRLINES V. MAWHINNEY 17
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 9 U.S.C. § 2, not the enforcement of a
governmental order to arbitrate a particular dispute. As
discussed, see supra note 1, the DOL’s order provides an
independent basis for enforcing arbitration. The order
incorporates the terms of the Agreement, including the
arbitration provision for future disputes, and is separately
enforceable under 42 U.S.C. § 42121(b)(6)(A).5
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.
5
We do not address the district court’s holding that airline mechanics,
unlike “seamen” or “railroad employees,” are not “engaged in foreign or
interstate commerce.” See 9 U.S.C. § 1; Circuit City Stores, Inc. v.
Adams, 532 U.S. 105, 114–15 (2001).
18 AMERICAN AIRLINES V. MAWHINNEY
A
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 49 U.S.C. § 42121(b)(6)(A). On the other hand, if
the Union is in some sense a party to or a beneficiary of the
Agreement (and therefore of the DOL order, see supra note
1), it may validly compel arbitration of Mawhinney’s AIR21
retaliation claim, just as the Airline did.8
6
We apply California law because the Agreement included a
California choice-of-law provision. See Volt Info. Scis., Inc. v. Bd. of Trs.
of Leland Stanford Junior Univ., 489 U.S. 468, 474–76 (1989).
7
The Union could not maintain an action in federal court on the
Agreement alone, as the Union and Mawhinney are not diverse, see
Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 462 n.9 (1980), and the FAA
does not create federal question jurisdiction for a request to compel
arbitration, Vaden v. Discover Bank, 556 U.S. 49, 59 (2009). However,
the Union has nonfrivolously invoked the provision in AIR21 permitting
enforcement of a final DOL order concerning an AIR21 retaliation
complaint. See 49 U.S.C. § 42121(b)(6)(A). The statute is therefore a
basis for federal jurisdiction, even if the Union’s claim ultimately fails on
the merits. See Cement Masons Health & Welfare Tr. Fund for N. Cal. v.
Stone, 197 F.3d 1003, 1008 (9th Cir. 1999).
8
The Union does not contend that the threshold question of its
authority to enforce the arbitration provision is itself arbitrable.
AMERICAN AIRLINES V. MAWHINNEY 19
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,” 49 U.S.C. § 42121(e), and so as a respondent in
a retaliation claim. The Union notes also that AIR21
prohibits retaliation by “contractors” only against their
“employees.” 49 U.S.C. § 42121(a). It follows, according to
the Union, that Mawhinney’s retaliation action could only
proceed if he was deemed an “employee” of the Union. Yet,
according to the collective bargaining agreement between the
Airline and the Union, the Airline retains “sole” control over
“the direction of its working force . . . and the right . . . to
hire, discipline and discharge employees.” Accordingly, says
the Union, it could only have been engaged in an employer-
employee relationship with Mawhinney if it functioned as an
agent of the Airline, carrying out the Airline’s “direction.”
See generally Restatement (Third) of Agency § 1.01 (2006).
9
The Agreement defines the “Parties” as Mawhinney and the Airline,
defines the “Parties Bound” as Mawhinney and the Airline, and is signed
only by Mawhinney, Mawhinney’s attorney, and a representative of the
Airline.
20 AMERICAN AIRLINES V. MAWHINNEY
The district court did not reach the question whether the
Union could be treated as an agent of the Airline. Instead, the
district court cited the maxim that “doubts concerning the
scope of arbitrable issues should be resolved in favor of
arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 24–25 (1983). It then compelled
arbitration because the Union’s legal argument for agency,
and thus for an entitlement to compel arbitration, was at least
colorable.
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, 45 U.S.C. §§ 151–165,
181–188, the Union simply was not the Airline’s agent with
regard to its role in Mawhinney’s employment dispute, and so
was not covered by the arbitration provision in the
Agreement. Whether the Union was a “contractor” for
purposes of AIR21 is a separate matter, not before us.
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.
AMERICAN AIRLINES V. MAWHINNEY 21
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. 45 U.S.C. § 152,
Fourth; 45 U.S.C. § 182; Barthelemy v. Air Lines Pilots
Ass’n, 897 F.2d 999, 1015–16 (9th Cir. 1990).
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 do not resolve cases based on how another
10
It may well be that the Union is no more a “contractor” under
AIR21 than it is an “agent” under the Agreement. The ARB’s view, under
which any party to a contract is a “contractor,” is strangely literal, and
22 AMERICAN AIRLINES V. MAWHINNEY
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
seems to confuse contracting out or for something with simply being a
party to any contract. Cf. Contractor, Webster’s Third New International
Dictionary (2002) (“[O]ne that formally undertakes to do something for
another . . . ; one that performs work . . . or provides supplies on a large
scale . . . according to a contractual agreement . . . .”). In any event,
AIR21 itself defines “contractor” narrowly, as “a company that performs
safety-sensitive functions by contract for an air carrier.” 49 U.S.C.
§ 42121(e). There is little reason to believe the Union meets that
definition — that is, that the Union, which is a representative for the
workers in collective bargaining and in the grievance process, “performs
safety-sensitive functions” for the Airline.
AMERICAN AIRLINES V. MAWHINNEY 23
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.