The U.S. Court of Appeals for the Fifth Circuit recently held that collective bargaining agreements cannot provide for judicial review of the Railway Labor Act’s (RLA) exclusive and mandatory dispute resolution process. Retired Continental Airline pilots alleged that Continental had breached the retirees’ pension plan by improperly calculating their salaries when determining their pension benefits. The collective bargaining agreement (CBA) between the parties required that, for “minor disputes” involving the interpretation of the pension plan, the retirees must seek review through arbitration before a System Board composed of two representatives from the company and two representatives from the pilot’s union. Although resolution of minor disputes through the System Board was required, the CBA also provided that, if the System Board’s ruling was adverse to a retiree, the retiree could seek judicial review of the dispute under the Employee Retirement Income Security Act (ERISA).

The retirees received an adverse ruling from the System Board, and, as they were expressly permitted to do both by the CBA and the System Board’s decision, commenced an action in federal court under ERISA challenging the ruling. The federal district court for the Southern District of Texas dismissed the action for lack of subject matter jurisdiction and the Fifth Circuit affirmed.

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