Airline Pilot’s Disability Claim Does Not “Fly” In Federal Court — Must Be Arbitrated

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Where do you litigate an ERISA disability claim governed by a collective bargaining agreement?

It has to be sent to arbitration, not to federal court, if the Railway Labor Act applies.

Here’s the case of Oakey v. US Airways Pilots Disability Income Plan, __ F.3d __, (D.C. Cir. July 19, 2013) (attached).

FACTS: Oakey, an airline pilot, submitted a disability claim with a Plan created through a union collective bargaining agreement, governed by the Railway Labor Act (RLA). Under the CBA, claims are reviewed and decided by the Retirement Board, comprised of two US Airways representatives, and two union representatives. A board decision is “final and binding.”  After Oakey was denied benefits, Oakey brought suit in federal court. The Plan contended the claim should be arbitrated, under the provisions of the RLA.

HELD: The District Court dismissed the case for lack of ERISA subject matter jurisdiction.

DC CIRCUIT HELD:  AFFIRMED Dismissal of Plaintiff’s Claim.

  1. ERISA does not displace the Railway Labor Act requirement that disputed claims be arbitrated.  Op. 6-10.
  2. Oakey’s claim for unpaid disability benefits involves “the application and interpretation” of the plan for which arbitration is compulsory under the RLA. Op. at 7.
  3. “[E]very circuit that has considered the issue has reached the same conclusion:…the district court lacks ERISA jurisdiction over a dispute involving the interpretation of a collectively bargained benefit plan within the exclusive jurisdiction of the appropriate adjustment board pursuant to the RLA.”  Op. at 7.

Key Take Away:  If you have an ERISA claim originating out of a collective bargaining agreement, check to see if the Railway Labor Act applies.  If it does, it is likely the case should be dismissed from federal court and arbitrated.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Lane Powell PC - ERISA Law Blog | Attorney Advertising

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