Airline Pilots Ass'n v. Pan American Airways Corp.

          United States Court of Appeals
                        For the First Circuit


No. 04-2256

              AIRLINE PILOTS ASSOCIATION, INTERNATIONAL,

                         Plaintiff, Appellee,

                                  v.

                  PAN AMERICAN AIRWAYS CORPORATION,

                        Defendant, Appellant.


          APPEAL FROM THE UNITED STATES DISTRICT COURT

                  FOR THE DISTRICT OF NEW HAMPSHIRE

         [Hon. James R. Muirhead, U.S. Magistrate Judge]


                               Before

                        Lipez, Circuit Judge,

                    Stahl, Senior Circuit Judge,

               and Oberdorfer,* Senior District Judge.



     John T. Alexander with whom R. Matthew Cairns and Ransmeier &
Spellman P.C. were on brief for appellant.
     Suzanne L. Kalfus with whom Jerry D. Anker, Andrew W. Serell
and Rath, Young & Pignatelli were on brief for appellee.


                           April 19, 2005



     *
          Of the District of the District of Columbia, sitting by
designation.
            OBERDORFER, Senior District Judge.                  This is an appeal

from a district court decision enforcing an arbitration award. The

Airline Pilots Association, International (the “Association” or

“ALPA”) petitioned the district court to enforce an award on behalf

of Shahir Selim against Pan American Airways Corporation (“Pan

Am”).    The district court granted that petition in full.                      We now

affirm in part and reverse in part, with directions that the

district    court       remand    to    the    original   arbitration        panel   for

clarification of the award.

                                   I.    BACKGROUND

            Shahir Selim is an airline pilot.               He worked for Pan Am

under a collective bargaining agreement (the “Agreement” or “CBA”).

The Association is the collective bargaining representative for the

pilots employed by Pan Am.

            The Agreement provides for unresolved grievances arising

under it to be submitted to binding arbitration before the Pan Am

Airway     Pilots'       System    Board        of   Adjustment   (the       “Board”).

Grievances are heard by panels comprised of representatives of Pan

Am and the Association, along with one neutral arbitrator.

            Between       August       and    October   2001,   Selim    filed       five

grievances against Pan Am.              Only two are relevant here:

                    •      Failure       to    Promote.   Selim   was    a

            Flight Engineer when he began working for Pan

            Am in 1999.          He submitted a permanent bid to


                                              -2-
          be upgraded to First Officer or, preferably,

          Captain.         He became a First Officer in January

          2000.        In March 2000, Pan Am promoted to

          Captain a pilot with less seniority than Selim

          without giving him a chance to train for and

          be upgraded to Captain upon completion of the

          required training.         On August 28, 2001, Selim

          grieved the Company's failure to promote him.

                  •        Improper Discharge.    On October 5,

          2001, while Selim was preparing to board a Pan

          Am flight as a passenger, he took issue with

          instructions from flight personnel that he

          check baggage that he thought he could carry

          on.     Pan Am fired Selim on October 29, 2001

          based       on    that   incident.     Selim   filed   a

          grievance challenging his termination.

          When the parties could not resolve Selim's grievances,

the Association pursued arbitration before the Board.                A three-

member Board panel held hearings on all five grievances in May and

June 2002.   It issued its decision and award (the “Arbitration

Decision” and “Award”) on November 7, 2002.

          Meanwhile, according to Pan Am, economic difficulties

forced it to institute a system-wide furlough of its pilots,

beginning in September 2002.           Pan Am claims that a pilot with


                                      -3-
Selim's seniority would have been placed on unpaid furlough on

September 12, 2002.1

           The   Association    claims    Pan   Am   never   notified Selim

(before or after the Board decision) that he was being furloughed,

as required by the Agreement.      According to the Association, this

failure to notify Selim prevented him from grieving the furlough if

he had thought it improper.       The Association also claims that if

Selim had been furloughed, rather than discharged, he would have

been entitled to benefits he did not receive.          It notes that there

may be other factual issues or problems with Pan Am's claim that

Selim would have been furloughed on the specified dates.

           On May 28, 2003, Pan Am sent Selim a letter notifying him

that he was “hereby recalled from furlough status and directed to

report for active employment,” effective June 23, 2003.               Selim

returned   to    work   as   directed.     Meanwhile,    the    Association

maintained, and it has continued to maintain, that he was never in

fact furloughed.




     1
          Pan Am's allegations regarding the furlough are contained
in an affidavit it submitted in district court in opposition to the
Association's summary judgment motion. See infra pp. 6 and 20-21.
The Association does not deny that the system-wide furlough
occurred, nor that Selim would have been subject to it (in
accordance with his seniority) if he had not previously been fired.
As discussed below, there is some question as to whether Pan Am
properly introduced the facts regarding the furlough.            We
nonetheless recite these facts here for background.

                                    -4-
     A.    The Arbitration Decision and Award

           In the November 2002 Arbitration Decision, the Board

resolved four grievances in Selim's favor2 and one against him.3

The Award concluded with a “Note” (by the neutral arbitrator)

stating:   “Concerning all of the above awards, I shall retain

jurisdiction to resolve any financial matters if the parties are

unable to agree.”

           As to the grievances relevant on appeal:

           1.   Failure to Promote.   The Board found that Pan Am

should have chosen Selim for Captain training in March 2000.     It

held that Pan Am's failure to give him the opportunity to complete

this training represented a continuing violation of his seniority

rights. Because Selim had not filed his grievance until August 28,

2001, the Board was “reluctant to grant back pay for one and one-

half years since no official complaint had been made.”     The Award

therefore provided:

           The Company shall retroactively recompute the
           Grievant's wage scale to that of Captain
           effective August 28, 2001 and he shall be
           selected for Captain's training for the next
           upgrade to Captain. . . .




     2
          The four grievances resolved in Selim's favor involved:
(1) reimbursement of moving expenses; (2) unreasonably keeping
Selim out of service for medical reasons despite his having passed
two physicals; (3) failing to give him the chance for promotion to
Captain in accord with his seniority; and (4) his discharge.
     3
           This grievance involved reimbursement of travel expenses.

                                -5-
            2.        Improper Discharge.     The Board found that, in the

incident for which he was fired, Selim had “resisted a reasonable

instruction to check his flight bag.”              The Board determined that

this conduct, while “serious,” was not as egregious as Pan Am

alleged.         It   noted   that     “Grievant    had     never    been   warned,

disciplined, or even counseled about his conduct” previously.                   The

Board held that his conduct did “not justify discharge for a first

offense.”    It “reduced [the discharge] to a 90 day suspension.”

The Award provided:

            The termination of the Grievant is set aside.
            He shall be reimbursed to service with
            retention of seniority and other benefits, but
            he shall receive a 90 day suspension.

     B.     Proceedings in the District Court

            In April 2003, the Association filed this lawsuit to

enforce the Award.         Pan Am had not then complied with any of the

Award's requirements, despite several demand letters from the

Association.

            On March 15, 2004, the Association filed a motion for

summary judgment supported by a statement of material facts not in

dispute. Pan Am responded with an “Objection” to the motion.                     In

both its Objection and its supporting memorandum of law, Pan Am

maintained   that       “there   are    genuine    issues    of     material   fact”

precluding summary judgment.             Pan Am bolstered this claim with

specific citations to supporting affidavits.                It did not, however,



                                        -6-
support its legal memorandum with a separate statement of the

material facts that it claimed were in dispute.

           Pan   Am   argued,   inter    alia,   that:   (1)     the     award   of

Captain's pay to Selim was improper because the Agreement allowed

only those who had completed Captain's training to be paid at that

rate, and Selim had not done so; and (2) any back pay award should

not include pay for the time Selim would have been on furlough if

he had not been discharged.

           On June 22, 2004, the district court granted the summary

judgment   motion     in    full.   The    district      court    adopted        the

Association's statement of facts.         It deemed those facts admitted

pursuant to Rule 7.2 of the Local Rules of the District of New

Hampshire because Pan Am “did not include a statement of material

facts as to which it contends a genuine dispute exists.”

           The district court rejected Pan Am's argument that the

retroactive   award    of    Captain's    pay    to   Selim,     prior    to     his

completion of training, was inconsistent with the Agreement and

therefore exceeded the Board's authority.              The court focused on

arbitrators' broad discretion in shaping remedies:

           When   an  arbitrator   is   commissioned   to
           interpret and apply the collective bargaining
           agreement, he is to bring his informed
           judgment to bear in order to reach a fair
           solution of a problem.     This is especially
           true when it comes to formulating remedies.
           There the need is for flexibility in meeting a
           wide variety of situations.



                                    -7-
(citing United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363

U.S. 593, 597 (1960)).      Recognizing that the Agreement did not

provide “specific remedies . . . for breach of contract,” the court

held that the “arbitrators had discretion to formulate an award to

effectuate the purposes of the agreement.”

          The district court also rejected Pan Am's argument that

Selim should not receive back pay for the period from September 11,

2002 through June 23, 2003, when he allegedly would have been on

unpaid furlough if he had been reinstated on January 13, 2002, when

the 90-day   suspension   authorized   by   the   Award   expired.   The

district court refused to consider Pan Am's claim that the back pay

award should be understood not to include pay for that nine-month

furlough period. The court explained that this “partial defense to

payment” was “not raised before the arbitrators” nor in Pan Am's

answer or discovery plan.    It held that:

          Defendant could have, and should have, raised
          this matter before the Board either before the
          Award or shortly thereafter. It is beyond the
          jurisdiction of this court to change the Award,
          that is, to address the merits. The award is
          enforced as issued and plaintiff is to be paid
          effective as of January 13, 2002.

(Emphasis added.)




                                 -8-
                                  II.    DISCUSSION

     A.        Standard of Review

               We review the district court's grant of summary judgment

de novo.     Boston & Maine Corp. v. Bhd. of Maint. of Way Employees,

94 F.3d 15, 17 (1st Cir. 1996).

               In reviewing a decision enforcing an arbitration award,

we give great deference to the arbitration process, as we expect

the district court to do.           Id. at 18-19.       Indeed, court review of

arbitral       decisions     is    “extremely         narrow    and      exceedingly

deferential.”       Bull HN Info. Sys., Inc. v. Hutson, 229 F.3d 321,

330 (1st Cir. 2000) (internal quotation omitted).                      Courts should

“vacate an arbitral award only in rare circumstances, such as when

there    was    misconduct   by    the    arbitrator,      when    the    arbitrator

exceeded the scope of her authority, or when the award was made in

manifest disregard of the law.”             JCI Communications v. Int'l Bhd.

of Elec. Workers, 324 F.3d 42, 48 (1st Cir. 2003).

        B.     Failure to Promote

               Pan Am argues that the Board “cannot have . . . intended”

to award Selim Captain's pay prior to his completion of Captain's

training       because   that     “would        be   contrary     to   several   CBA

provisions.”      Therefore, Pan Am claims, the Award is ambiguous and

this issue should be remanded to the Board for reconsideration.

               The Award provides that the “Company shall retroactively

recompute the Grievant's wage scale to that of Captain effective


                                          -9-
August 28, 2001.”    (Emphasis added.)         There is nothing ambiguous

about this directive.

           The Award further provides that Selim “shall be selected

for Captain's training for the next upgrade to Captain.”                       The

simultaneous award of a retroactive raise and provision for future

training confirms the Board's awareness that Selim would receive

Captain's pay before completing that training. Moreover, the Board

acknowledged that “Grievant would have to successfully complete

that training before he could actually serve as a Captain . . . .”

There is no reason to believe the Board did not mean what it said,

and so no reason to send the promotion issue back to the Board.

           Pan Am's argument therefore reduces to the claim that the

Board   exceeded   its    authority    by    crafting      a   remedy   that    is

inconsistent with the Agreement. Pan Am points to the provision in

the Agreement that a “pilot may not be promoted based on seniority

unless he [h]as met the basic Company qualifications . . . .”                  CBA

Section 22(D)(3).    It also cites to the provision that a pilot's

pay is to be “based on his status and longevity with the Company.”

CBA Section 3 (emphasis added).        Pan Am further notes that a pilot

promoted   to   Captain   receives    a     raise   only   after   “successful

completion” of training, and the raise is retroactive only to the

date training began.      CBA Section 24(F).

           According to Pan Am, these provisions preclude paying

anyone who has not qualified to serve as a Captain at the Captain's


                                     -10-
rate.     Pan Am points out that the Board's “jurisdiction shall not

extend to changes in . . . rates of compensation” covered by the

Agreement.     CBA § 21(C)(1).      Therefore, Pan Am argues, the Board

exceeded its jurisdiction by requiring payment to Selim at a rate

to which he was not entitled under the Agreement.

             The district court was right to reject this argument.

“[W]here it is contemplated that the arbitrator will determine

remedies for contract violations that he finds, courts have no

authority to disagree with his honest judgment in that respect.”

United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38

(1987).     The Supreme Court has recognized that in “formulating

remedies,” arbitrators must have “flexibility in meeting a wide

variety of situations.”          Enter. Wheel, 363 U.S. at 597.              Courts

must not “review the merits of an arbitration award.”                    Id. at 596.

            Nothing in the Agreement establishes the appropriate

remedy for     a   violation     such   as     the   one   found   here.      It   is

unquestionably within the Board's jurisdiction to interpret the

Agreement    as    needed   to   resolve       grievances    and    to    determine

appropriate remedies for any violation of it. “Where, as here, the

agreement    neither   requires     nor      bars    particular    remedies,       the

arbitrator's discretion is at its zenith.”                 Kraft Foods, Inc. v.

Office & Prof'l Employees Int'l Union, 203 F.3d 98, 102 (1st Cir.

2000) (internal quotation omitted).              The Board had discretion to




                                        -11-
determine that Selim ought not be penalized for Pan Am's failure to

provide him the opportunity to train for and become a Captain.

            Pan   Am    also     argues     that    the      Board    exceeded     its

jurisdiction by “chang[ing]” “rates of compensation” under the

collective bargaining agreement.               See CBA § 21(C)(1).             On the

contrary, however, the Board did not change the rates of pay

provided for under the Agreement.               Instead, it determined what

damages Selim had suffered as a result of Pan Am's breach of

contract and crafted a remedy to compensate him for those damages.

There is nothing extraordinary or problematic about such a remedy.

Cf. Kraft Foods, 203 F.3d at 101-02 (clause barring arbitrator from

modifying      collective      bargaining      agreement      does     not     prevent

arbitrator from crafting appropriate remedy to cure breach).

            Pan Am argues that the Award improperly placed Selim in

a   position    “that   he   had   no   right      to   be   in”     without    having

successfully qualified for it.            The lone case it cites for this

merely affirms a decision by a district court (as distinguished

from an arbitrator) denying back pay in a particular case. Cabarga

Cruz v. Fundacion Educativa Ana G. Mendez, Inc., 822 F.2d 188, 192-

93 (1st Cir. 1987) (approving denial of back pay where plaintiff

neither asked for a chance to pass the test the employer denied him

nor provided any evidence he would have passed it).                    Cabarga does

not hold, or even suggest, that back pay is never an acceptable

remedy when an employer's actions prevented an employee from


                                        -12-
satisfying some prerequisite to the position in question, much less

that it is an unacceptable remedy in an arbitration.                          The case is

simply inapplicable here, as we do not review the merits of an

arbitrator's       decision.        The    question       of   whether    this       is   an

appropriate or fair remedy goes directly to the merits -- and is

thus well within the Board's discretion.

     C.     Improper Discharge

            The     Board    reduced       Selim's      discharge        to    a     90-day

suspension.    The Award provided that Selim “shall be reimbursed to

service with retention of seniority and other benefits” following

his suspension.       The suspension period expired January 13, 2002.

            The    parties     agree      that   this     means   Selim       was    to   be

reinstated with back pay as of January 13, 2002.                   They disagree as

to what that means with respect to the 9-month period (from

September 12, 2002 through June 23, 2003) during which Pan Am

claims Selim would have been on furlough along with all other

pilots of his seniority.

            The district court refused to consider this argument. It

held that “Defendant could have, and should have, raised this

matter    before    the     Board   either       before    the    Award       or    shortly

thereafter.”       (Emphasis added.)             The court stated that it was

beyond its jurisdiction “to change the Award, that is, to address

the merits.       The Award is enforced as issued . . . .”                     (Emphasis

added.)


                                          -13-
              In reviewing this holding, we distinguish between two

questions -- one substantive, one procedural -- that the district

court did not address separately. First, what does the Award mean?

Does it require payment for the hypothetical furlough period, or is

it ambiguous?      Second, it is a separate question whether, if the

Award is ambiguous, Pan Am has forfeited its right to pursue its

interpretation of the Award.

              We must determine whether each of these questions is for

the arbitrator or the court in the first instance.

              1.   What the Award Means

              Implicit in the district court's holding that it could

not “change” the Award is the assumption that the Award “as issued”

meant what the Association said the Award meant.           Though claiming

to avoid the issue of what the Award required, the court simply

adopted, without       analysis   or    justification,   the   Association's

reading of it.     That is, the holding assumes that the Award in fact

requires back pay for all days after January 13, 2002, and not just

those days that Selim would have been paid absent his wrongful

termination.

              We find that Pan Am has raised a legitimate question as

to how the Award should be interpreted.             The Award is naturally

silent as to how a furlough period should be treated, since that

issue   was    never   raised   before    the   Board.   The   Board's   only

statement -- that Selim should “be reimbursed to service with


                                       -14-
retention of seniority” -- does not directly mention back pay, much

less   address   how   it   is   to   be     calculated,   in   light   of   the

hypothetical furlough period or otherwise.

           While the Board's opinion establishes that the award for

back pay is to begin 90 days after Selim's wrongful termination

(i.e., January 13, 2002), this need not mean that he is entitled to

be paid from that day forward, without regard to any changes in

circumstance or relevant external factors.           Pan Am points out that

the Board approved disciplining Selim for his conduct (albeit less

harshly than it had originally done).            Pan Am thus argues that it

is unreasonable to think the Board intended Selim to receive more

than he would have received had he never been fired, as would

happen here if he is paid for the hypothetical furlough period.

           Instead, Pan Am argues that the back pay remedy should be

interpreted as a traditional “make-whole” remedy. It points to the

Agreement's provision that a pilot who has wrongly been held out of

service shall “be reinstated without loss of seniority, and shall

be paid for such time lost in an amount which he normally would

have earned had he been continued in service during such period.”

CBA Section 19(E)(1) (emphasis added).            According to Pan Am, the

Board's Award should be understood as consistent with this remedial

provision.   The “clear intent,” Pan Am says, “is for a wrongfully-

discharged employee to be reinstated and reimbursed so as to put

him in the position he would have been in if the termination had


                                      -15-
not taken place.”      Here, Pan Am says, that cannot be accomplished

by paying Selim for a nine-month period when all other pilots of

his seniority level were on unpaid furlough.

          Pan   Am's    construction      of   the   Award   is    sufficiently

plausible for us to find the Award ambiguous with respect to how

back pay should be calculated in light of the furlough.                    Given

this, Pan Am's interpretation -- that back pay should be calculated

so as to put Selim in the position he would have been but for the

unlawful discharge      --    is   not   inconsistent   with      the   Award   or

otherwise unreasonable.        Cf. Roman v. Maietta Constr., Inc., 147

F.3d 71, 76-77 (1st Cir. 1998) (upholding deduction of compensatory

time from back pay award even though deduction was not statutorily

authorized; calculation was “fair and permissible,” and “plaintiffs

are entitled to be made whole, not to a windfall”); E. Me. Med.

Ctr. v. NLRB, 658 F.2d 1, 11 (1st Cir. 1981) (“caution[ing] the

Board to exercise care in calculating back pay to include only

those amounts that would have been granted but for the hospital's

unlawful conduct”).          We therefore reject the district court's

conclusion that enforcing the Award “as issued” requires adopting

the Association's interpretation of it.

          2.    Procedural Objections to Clarification of the Award

          Ordinarily, a dispute as to how to interpret an arbitral

award such as the present one should be remanded to, and resolved

by, the Board that issued it.        Although the parties do not mention


                                     -16-
it, the Railway Labor Act4 requires arbitration agreements between

airlines and their employees to “provide that any difference

arising as to the meaning, or the application of the provisions, of

an award made by a board of arbitration shall be referred back for

a ruling to the same board, or, by agreement, to a subcommittee of

such board.”   45 U.S.C. § 158(m).

          Where an attempt to “enforce” an award generates or

reveals a dispute requiring interpretation of the award's scope or

application, that dispute “must be referred to a reconvened board

of arbitration for determination.”    W. Air Lines, Inc. v. Labor

Comm'r of Div. of Labor Law Enforcement, 167 F.2d 566, 567 (9th

Cir. 1948) (reversing district court order enforcing arbitration

award and directing remand to arbitrator for clarification of

award). See Locals 2222, 2320-2327, Int'l Bhd. of Elec. Workers v.

New Eng. Tel. & Tel. Co., 628 F.2d 644, 647 (1st Cir. 1980)

(confirming authority of courts to resubmit arbitration award to

original arbitrators for interpretation and affirming remand for

that purpose); see generally Stanton v. Delta Air Lines, Inc., 669

F.2d 833, 836 (1st Cir. 1982) (affirming remand for arbitration)

(“The policy favoring arbitration extends with particular force to

arbitration by system boards of adjustment[, which] . . . are


     4
          The provisions of the Railway Labor Act (with a few
exceptions not relevant here) “cover every common carrier by air
engaged in interstate or foreign commerce.” 45 U.S.C. § 181. The
applicable provisions include those requiring and governing
arbitration of employment disputes, including 45 U.S.C. §§ 157-159.

                               -17-
created by the Railway Labor Act for the resolution of disputes

between an air carrier and its employees [and] are the mandatory,

exclusive      and   comprehensive       system    for    resolving        grievance

disputes.”) (internal citations and quotations omitted).

              Moreover, the Award here expressly notes the retention of

“jurisdiction to resolve any financial matters if the parties are

unable to agree.”         All this argues for remanding the question of

how the Award should be interpreted to the Board.

              Nonetheless, the Association argues that the district

court properly found that “Pan Am's contention that Mr. Selim would

have been furloughed from September 2002 to June 2003 . . . was

untimely raised and therefore would not be considered.”                    It claims

that Pan Am “had an obligation to raise the matter” of whether

Selim would have been on furlough “before the System Board.”

              Pan Am argues that “[n]othing in the Arbitration Decision

or   ALPA's    petition     put   [it]    on    notice   of   a    claim    for   the

extraordinary relief of an award of back pay for unpaid furlough

time.”   That is,     since the Award is ambiguous, there is no reason

to   charge    Pan   Am   with    any   greater   reason      to   anticipate     the

Association's interpretation than the Association had to anticipate

Pan Am's interpretation.           Thus, Pan Am argues that the district

court “penalize[d] [it] for failing to predict a highly unusual

interpretation of an arbitration award.”




                                         -18-
             We cannot accept the parties' invitation to enter this

thicket and determine whether Pan Am's actions, or failures to act,

preclude it from seeking clarification of the Award from the Board.

The question of whether Pan Am has forfeited its right to have this

issue arbitrated is itself properly addressed initially to the

Board rather than to the federal courts.

             Although it might not be apparent on the surface, at

bottom   the       question   here    is   a   classic   one    of   procedural

arbitrability:        is it for the court or the arbitrator to decide

initially    whether      a   party   is   foreclosed    from   arbitrating    a

particular issue, otherwise subject to arbitration?                     We have

addressed this question in related contexts: “issues of procedural

arbitrability are for the arbitrator to decide.”               Local 285, Serv.

Employees Int'l Union v. Nonotuck Res. Assocs., Inc., 64 F.3d 735,

739 (1st Cir. 1995) (citing John Wiley & Sons, Inc. v. Livingston,

376 U.S. 543, 557 (1964)).           “Once it is determined, . . . that the

parties are obligated to submit the subject matter of a dispute to

arbitration, ‘procedural’ questions which grow out of the dispute

and   bear    on    its   final   disposition     should   be    left   to   the

arbitrator.”        John Wiley, 376 U.S. at 557.         Such issues include

“whether [grievance] procedures have been followed or excused, or

whether the unexcused failure to follow them avoids the duty to

arbitrate.”    Id.




                                        -19-
             It is thus up to the Board to determine in the first

instance here whether Pan Am, by its conduct, forfeited its right

to argue that Selim was (or would have been) furloughed, or that

the   back   pay   award   does   not   (or   should   not)   encompass   the

hypothetical furlough period.           These questions “grow out of the

dispute and bear on its final disposition.”            Id.    Barring Pan Am

from seeking remand to the Board based on conduct that is for the

Board to evaluate would interfere with the parties' agreed method

of resolving their disputes, and would not reflect the deference

federal courts owe arbitrators whose awards are before the courts

for enforcement.

             Similarly, the factual issues the Association has raised

regarding whether Selim was, or would have been, on furlough for

the period in question are not for the federal courts to resolve.

For example, whether Pan Am was required to notify Selim of the

furlough and failed to do so, whether it failed to provide him with

benefits the Agreement required it to provide, and, if so, whether

it should be estopped from claiming he would have been furloughed

are all questions that go to the merits of the dispute and so

should be addressed to the Board. That such factual disputes might

exist does not foreclose us from causing the matter to be returned

to the Board.

             Nor do we believe that the Association could prevail by

arguing that Pan Am forfeited its right to seek remand to the Board



                                    -20-
because of its failure to raise this issue earlier in federal court

(as opposed to before the Board).     First, this was not the basis

for the district court's decision.    Although the court criticized

Pan Am for failing to raise this issue earlier in federal court,

and adopted the Association's statement of facts because of Pan

Am's violation of Local Rule 7.2, the court did not treat this

conduct as grounds for procedural default.      Instead, the court

rested its holding that Pan Am could not raise this “partial

defense” because it had not “raised this matter before the Board”

on the premises that: (1) any change to the Award could come only

from the Board; and (2) the Award      “as issued” required payment

without any deduction for the furlough dates in question. We agree

with the former proposition, but not the latter.     Indeed, it is

precisely because foreclosing Pan Am from making this argument

might change the Award -- by giving it an effect the Board never

intended -- that we hesitate to reach such a result unnecessarily.

While there may be some circumstances in which a party's conduct in

court can control or alter the resolution of a matter the parties

agreed to handle through arbitration, this is not such a case.

          Pan Am's technical violation of Local Rule 7.2 does not

provide a reason to bar Pan Am from pursuing its interpretation of

the Award before the Board.    We need not determine whether the

factual issues regarding the furlough were adequately raised below

or are properly in the record.        Because we conclude that the



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parties' dispute must be resolved by the Board, not the federal

courts, what matters for our purposes is only the existence of the

dispute, not its merits.   It is therefore irrelevant whether the

facts underlying the dispute are properly before us.

          Although the Association suggests that Pan Am's argument

that the back pay award does not include the furlough time should

be considered an “affirmative defense” that Pan Am waived by not

pleading it in its answer, it does not explain why.    Any action to

enforce an award necessarily (though often implicitly) involves the

question of how that award is to be interpreted.       In a dispute

between two potentially plausible interpretations, there is no

basis for considering one interpretation an “affirmative defense.”

Pan Am's “failure” to include its interpretation in its answer or

as part of the discovery plan cannot justify taking away from the

Board the first opportunity to interpret the Award with respect to

a question the Board had not earlier confronted or anticipated.

Cf. Stanton, 669 F.2d at 838 (holding that airline's conduct was

“neither so shocking nor so likely to taint the workings” of the

arbitration board “that somehow [it] ought to be ‘estopped’ from

using grievance arbitration” in particular case).

          For the foregoing reasons, the district court's opinion

is AFFIRMED in part and REVERSED in part, and this case is REMANDED

with directions that the district court remand the matter to the

original arbitration panel for clarification of the Award.



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