BIFURCATED DRC ARBITRATION PROCEEDINGS

(JURISDICTION)

****************************************************************************

In the Matter of the DRC Phase 1 Arbitration

Involving The Pilots of NEW AMERICAN AIRLINES

Subject: L-AA DRC Representatives' Submission to Phase 1

Arbitration of DRC Claims by Charles Hartman, Bruce Taylor, N.K.
Hoppe, Andrew Brassell, David Fallon James Calloway and Keith
Bounds.

**************************************************************************

Phase 1 Arbitrator

Dana Edward Eischen

APPEARANCES

L-AA DRC: ALLISON SLUTSKY &

KENNEDY, P.C.
By: Wesley A. Kennedy

L-US East DRC: BAPTISTE & WILDER, P.C.

By: William R. Wilder

L-US West DRC: BREDHOFF & KAISER, P.L.L.C.

By: Roger Pollak
Joshua B. Shiffrin

NEW AMERICAN: OMELVENY & MYERS LLP

By: Robert A. Siegel
Tristan Morales
 PROCEEDINGS

By submissions dated December 14, 2016 and January 13, 2017, seven (7)

DRC claims were presented by the Legacy American Airlines DRC

Representatives ("L-AA DRC") for Phase 1 arbitration, under procedures

specified in Exhibit B of the September 6, 2016 ISL Award. An initial arbitration

position statement was filed by Counsel for L-AA on January 23, 2017. That was

followed, on February 6, 2017, by responsive statements from Counsel for the

Legacy West DRC Representatives ("West DRC"), Counsel for the Legacy US-East

DRC Representatives ("East DRC") and Counsel for the Company.

Upon reviewing the initial briefs of the Parties, I determined it was

appropriate to bifurcate this proceeding, in accordance with the following

provisions of ISL Award Exhibit B:

Miscellaneous
***
In the event a claim is presented which raises a jurisdictional question as to
whether the proper forum for the claim is through this process or a contractual
grievance under the CBA, the Phase 1 arbitration may be bifurcated to determine
this initial jurisdictional question. If it is determined by the Phase 1 arbitrator
that there is jurisdiction under the process set forth herein to address the claim,
that decision shall be final and binding, and shall bar the claim from being
processed as a grievance under the CBA. In the event a decision is made that the
DRC does not have jurisdiction to hear the dispute, the grievant may file a
grievance up to 30 days after the decision is issued.
***
On that basis, I requested additional briefs from the Parties1, limited to the

jurisdictional issue; whereupon the record on the bifurcated jurisdictional

question was closed on February 23, 2017.

1
A Motion to Intervene and request for special appearance by Counsel for an individual
pilot was denied because only a party to DRC arbitration has standing to contest the
jurisdiction and authority of the Phase I arbitrator over a claim or claims submitted by a
DRC member. The only parties to Phase 1 DRC arbitration are the designated DRC
Representatives, and the Company if it chooses to participate in Phase 1.

2
 BACKGROUND

The LOA 12-05 Arbitration and Supplement C

On July 2013 an interest arbitration panel issued an award under

authority of the following provision of LOA 12-05, between pre-merger American

Airlines ("AA") and the Allied Pilots' Association ("APA"):

***
The interest arbitration panel shall consist of three neutral arbitrators who are
members of the National Academy of Arbitrators with Richard Bloch as the
principal neutral if he is available and willing to serve. The arbitrators shall
decide what non-economic conditions should be provided to TWA Pilots as a
result of the loss of flying opportunities due to the termination of Supplement CC
and the closing of the STL base, provided that training costs associated with the
closure of the base shall be considered non-economic. In no event shall the
arbitrators have authority to modify the Pilots System Seniority List, require the
establishment or continuation of any flight operation at any location, or impose
material costs beyond training costs on the Company, and any preferential flying
rights under the award shall not modify or be deemed a modification of the TWA
Pilots seniority placements on the Pilots System Seniority List. The Company
and APA shall agree to the procedures and standards governing this arbitration.
Assuming he serves as the principal neutral, Richard Bloch shall have continuing
jurisdiction to resolve disputes over the implementation and interpretation of the
decision by the panel.
***
That "Supplement C Award" of the LOA 12-o5 Panel reads, in parts most

pertinent to the present case, as follows (pp. 16-17):

***
6) Duration of the Fenced Flying

The alternative protections provided by this Award shall continue in effect for the
same period as the current AA-APA Agreement. These protections may not be
amended prior to January 1, 2019, and may be changed thereafter only in accord
with the procedures for changing the terms of the AA-APA Agreement as set forth
in that Agreement and the Railway Labor Act.

The existing Duration provisions of Supplement CC, however, are also to be

continued. All guarantees and preferences related to SWB (B-757 or B-767)
positions will end as of the date Morgan Fischer has sufficient seniority to hold a
four-part bid status as CA on one of those aircraft types. All such guarantees and
preferences related to the NB CA positions (MD-80 or Airbus Category II
domestic aircraft) will end as of the date that Magnus Alehult has sufficient

3
 seniority to hold a four-part bid status as CA on any aircraft, including a
Category I aircraft.

Summarizing, the guarantees and preferences provided for pursuant to this

Award will end upon the earlier of pilots Fischer/Alehult having sufficient
seniority to hold four- part bid status as CA in the SWB/NB (including, for the
latter, Category I) aircraft respectively or the date under which AA and APA have
reached agreement to change or eliminate those guarantees and preferences
following January 1, 2019.
***
Subsequently, APA and pre-merger American Airlines renegotiated

Supplement C (JCBA Rev.1 SUPPLEMENT C - November 1, 2015), which reads in

parts most pertinent:

***
E. Duration

1. The alternative protections awarded as a result of the LOA 12-05 Arbitration

shall continue in effect for the same period as the current AA/APA agreement.
The current AA-APA agreement includes the Merger Transition Agreement
(MTA) and the Joint Collective Bargaining Agreement (JCBA) as specified in the
Memorandum of Understanding Regarding Contingent Collective Bargaining
Agreement (MOU).

2. This Supplement may not be amended prior to January 1, 2019, and may be
changed thereafter in accord with the procedures for changing the terms of the
AA-APA Agreement as set forth in that Agreement and the Railway Labor Act.
***
4. All guarantees and preferences related to the NB CA positions (MD-80 or
domestic Airbus Group II aircraft) will end as of the date that Magnus Alehult,
DOH 7/17/97 (or, in the event that Magnus Alehult ceases to be on the System
Seniority List, the remaining TWA Pilot immediately senior to Magnus Alehult)
has sufficient seniority to hold a four part bid status as CA on any aircraft.
***
H. American Airlines / US Airways Merger

1. The Memorandum of Understanding among American Airlines, US Airways,

APA, and USAPA provides at Paragraph 10.i that: Nothing in this paragraph 10
shall modify the decision of the arbitration panel in Letter of Agreement 12-05 of
the 2013 [2012 sic] CBA. Accordingly, any subsequent agreement or arbitration
with respect to integration of seniority or a collective bargaining agreement
covering all pilots at any merged operation will not serve to modify the
alternative guarantees and preferences awarded in this matter by the Panel.

I. Reporting

1. During the period this Supplement is in effect, the Company will prepare a
compliance summary report each month, showing TWA Pilots who represent a
protected and/or counted pilot bid position in accordance with this Supplement.

4
 The report will be made available electronically and will identify each pilot by
name, employee number, system seniority number and four-part bid status.

J. Dispute Resolution

1. Pursuant to the terms of LOA 12-05, the Board shall continue to have
jurisdiction of any disputes arising under LOA 12-05 and the interim terms with
respect to the STL operation that applied prior to the effective date of this
Supplement. The Board shall have jurisdiction to review and approve the
language of this Supplement and to determine whether such language conforms
with the meaning of its Award.

All other disputes following approval of the language of this Supplement will be
handled in accordance with the CBA, Sections 21, 22, and 23. If available, Richard
Bloch shall sit as the neutral member of the System Board for disputes arising
under this Supplement. If Richard Bloch is unable or unwilling to serve, the
parties will select the first available date from either Stephen Goldberg or Ira
Jaffe, the other two members of the LOA 12-05 Interest Arbitration Panel. In the
event that neither of them is willing or able to serve, the arbitrator selection
procedures of Section 23 of the CBA will be utilized to select an arbitrator.

The Integrated Seniority List Arbitration and Supplement C

The September 6, 2015 Integrated Seniority List ("ISL") Award of the

McCaskill-Bond Board of Arbitration ("Board") states:

***
A. The Integrated System Seniority List

The ISL for the pilots at American Airlines, Inc. shall be the List attached to this
Award as Exhibit A.

B. Conditions and Restrictions

1. These conditions and restrictions are an integral part of the Integrated

Seniority List (ISL) and shall remain in full force and effect until expiration by
their terms.

***
3. In accordance with MOU Paragraphs 10(i) and 28 of the MOU nothing in this
Award shall modify the decision of the arbitration panel in Letter of Agreement
12- 05 of the 2012 CBA, as implemented in Supplement C of the American/APA
Joint Collective Bargaining Agreement, which shall continue to govern the
relationship between the Legacy AA Pilots and former TWA Pilots.

5
 The Opinion of the Board, which accompanied that ISL Award, reads as

follows (pp. 51-52):

***
The Supplement C Restriction

The Parties stipulated that the decision of the Board would include the following
condition and restriction:

Nothing in the Award may modify the decision of the arbitration panel in
Letter of Agreement 12-05 of the 2012 CBA, as implemented in
Supplement C of the American/APA Joint Collective Bargaining
Agreement, which shall continue to govern the relationship between the
Legacy AA Pilots and former TWA pilots.

. . . It is sufficient for us to note that nothing in this Award is intended to modify

the provisions of Supplement C which constitutes an additional condition and
restriction relative to the use of integrated seniority. It should be noted that: a)
the protected Supplement C positions are included in the count of AA pilot
positions as of the ISL snapshot date; and b) the former TWA pilots,
notwithstanding the priority granted to them to fly in certain NB and SWB
aircraft as Captains and First Officers, will be otherwise integrated in the ISL in
the same positions that they would occupy as if the special protections of
Supplement C did not exist.

This ISL Award explicitly recognizes and incorporates as a condition and

restriction the provisions of Supplement C to the AA-APA Agreement and further
states that those conditions and restrictions are to continue until they lapse
according to the terms of Supplement C. Although it was mandated by
agreement of the Parties, we find that condition and restriction to be fair and
equitable in light of the history that led to Supplement C and have taken into
consideration the effects of Supplement C on the East and West Pilots when
making our Award.
***
ISL Award Implementation and Supplement C

The Company implemented the ISL Award for bid awards awarded on or

about November 29, 2016, to be effective on or about January 31, 2017; for bid

awards awarded on or about December 23, 2016, effective March 2, 2017; and,

for bid awards awarded January 18, 2017, effective April 1, 2017. Since ISL

Award implementation date, the Company apparently has awarded Narrow Body

Captain positions protected by Supplement C to former TWA Pilots in the same

order that those pilots appear on the ISL; including former TWA Pilots whose

6
relative placement on the ISL was enhanced by "dual list" status on pre-merger

American and pre-merger US Airways seniority lists. The aftermath of those bid

awards was a blizzard of DRC claims and JCBA Supplement C grievances from

former TWA pilots in the L-AA cadre.

The L-AA Dispute Resolution Committee Claims

Several former TWA pilots filed mutually contradictory DRC claims

concerning Condition and Restriction B.3 of the ISL Award and the Supplement

C Narrow Body Captain bid awards, supra. On December 14, 2016 the L-AA DRC

Representatives submitted four (4) such related DRC claims to me for

consolidated determination in Phase 1 arbitration under Exhibit B of the ISL

Award. On January 13, 2017, the L-AA DRC Representatives submitted three

more such DRC claims to me for consolidated Phase 1 arbitration.

The January 23, 2017 initial position statement of the L-AA DRC

Representatives described the several submitted claims, as follows:

* Charles Hartman, Bruce Taylor and N.K. Hoppe challenge the Companys
awarding of protected Narrow-Body Captain positions to dual-list pilots based on
their improved placement on the ISL.

* A. K. Brassell and D. S. Fallon have filed claims responsive to the position

asserted in the Hartman, Taylor and Hoppe claims, and supporting the
Companys treatment of the dual-list pilots, including Brassell and Fallon.

* James Callaway, a dual-list pilot who exercised his right to recall at

America in August 2016, has filed a claim raising the same issue regarding the
proper sequence to award positions protected by Supplement C to dual-list pilots.
Callaway also challenges the Companys removal of his name from the monthly
Supplement C report of pilots in line for the future awards of protected positions.

* Keith Bounds asserts that the Supplement C Narrow-Body fence remains

in place, notwithstanding the E-190 Captain awards to pilots junior to Magnus
Alehult, but that the position awards to the dual list pilots are in the wrong
sequence.

7
The JCBA Supplement C Grievances

More or less contemporaneously with the filing of those DRC claims, other

L-AA pilots filed JCBA grievances, alleging the disputed bid awards had violated

Supplement C. On February 6, 2017, the Allied Pilots' Association submitted four

(4) such JBCA grievances to Supplement C arbitration, as follows:

***

Statement Of Facts

On September 29, 2016, First Officer David Crowe filed Grievance #16-131,
protesting the Company's action in failing to end the Narrow Body CA set-aside
positions (MD-80 or domestic Airbus Group II aircraft) despite the fact that, in
his view, the trigger for ending such preferences and set-asides has been satisfied
by the Single Seniority List. On October 24,2016, First Officer Mark Peters filed
Grievance #16-141, on the same issue and on January 26, 2017, First Officer
Phillip Csoros filed Grievance #17-005 on the same issue. On January 27, 2017,
Captain Keith Bounds filed a grievance in direct opposition to the claims of First
Officer Crowe and First Officer Peters, stating that the Company did not violate
Supplement C by not ending the Narrow Body CA set-aside positions (MD-80 or
domestic Airbus Group II aircraft) (Bounds Grievance #17-002).

***
Question At Issue:

Whether the requirements for ending the Narrow Body CA set-aside positions
(MD- 80 or domestic Airbus Group II aircraft) provided under Supplement C to
the Agreement have been met? If so, what is the appropriate remedy for the
Company's failure to end the Narrow Body CA set-aside positions (MD-80 or
domestic Airbus Group II aircraft)?

***

WHEREFORE, APA requests that the System Board of Adjustment:

(1) Determine whether the requirements for ending the Narrow Body CA set-
aside positions (MD-80 or domestic Airbus Group II aircraft) provided under
Supplement C to the Agreement have been met;

(2) If so, determine the appropriate remedy for the Company's failure to end the
Narrow Body CA set-aside positions (MD-80 or domestic Airbus Group II
aircraft) and award such other relief that the System Board of Adjustment finds
just and proper.

***

8
 The position of each named Grievant, at least some of whom are

represented by outside Counsel, was set forth in the respective grievances that

they had filed independent of APA. The APA arbitration submission stated

further: "[T]he Company and APA were neutral on the submitted issues and

would not be advocating a position with respect to the merits of the grievances".

On March 8, 2017, the Supplement C Arbitrator determined he had arbitral

jurisdiction over the issues presented by the submitted JCBA grievances and

denied a motion to postpone hearings scheduled for March 14-15-16, 2017.

BIFURCATED PHASE 1 DRC JURISDICTIONAL ISSUES

1) Are the DRC claims of Charles Hartman, Bruce Taylor, N.K. Hoppe,
Andrew Brassell, David Fallon, James Calloway and Keith Bounds,
submitted by the L-AA DRC Representatives for consolidated Phase 1
arbitration, "claims concerning interpretation or application of the ISL
Award" subject to the Phase 1 Arbitrator's exclusive jurisdiction and
authority under ISL Award Exhibit B?

2) If so, what "common issue(s)" concerning the interpretation or

application of the ISL Award do those DRC claims present for
determination in this Phase 1 DRC arbitration proceeding?

POSITIONS OF THE PARTIES

A typical DRC arbitration submission would raise an issue or issues upon

which the Claimant(s)' DRC Representatives advocated a "unitary position",

reflecting the common interests of their constituents. See Beardsly v. Chicago &

North Western Transportation Co., 850 F2d 1255 (81h Cir. 1988), cert. denied,

489 U.S. 1066 (1989). However, this case presents for Phase 1 arbitration

multiple DRC claims wherein the interests of individual Claimants and indeed

those of the L-AA Pilots group appear to be in direct conflict.

9
 The L-AA DRC position statement of January 23, 2017 asserts the

consolidated claims "encompass the following 'common issues' ":

* Whether, under the SLI Award, the implementation and/or application of

the ISL pursuant to the SLI Arbitration Award has triggered and/or will trigger
the termination of the Small Wide-Body fence and/or Narrow-Body fence
provisions of Supplement C; including, without limitation, whether the Narrow-
Body Captain provisions of Supplement C are terminated by bid awards to E-190
Captain position to pilots junior to Magnus Alehult, before New American has at
least 32 E-190 aircraft in service, and/or if Magnus Alehult (sic)

* Whether the implementation and/or application of the SLI Award

modifies the order in which former TWA Pilots have access to Captain positions
protected under Supplement C, including former TWA Pilots who appeared on
multiple pre-merger seniority lists and were assigned seniority placement by the
SLI Arbitration Board which modified their relative seniority placement among
former TWA Pilots;

* Whether the Captain bid awards effective January 31, 2017, to pilots D.S.
Fallon, A.K. Brassell, and M.A. Boyd were, therefore, improper; and

* Whether, if so, the affected bid awards should on that basis be rescinded
and/or modified.

Regarding the first asserted "common issue", the West DRC

Representatives, the East DRC Representatives and the Company unanimously

maintain that no issues concerning Supplement C fence termination triggers are

presented by any of the DRC claims submitted for Phase 1 arbitration by the L-AA

DRC Representatives. Arguendo, the other DRC Representatives and the

Company point out that any such issues currently are the subject of Supplement

C arbitration of JCBA grievances, pursuant to APA's February 6, 2017

submission and the Supplement C Arbitrator's jurisdictional determination of

March 8, 2017.

10
 Regarding Phase 1 DRC arbitrability of the issue concerning the

Company's post-ISL Award implementation treatment of "dual-list" pilots in the

awarding of positions protected by Supplement C, each of the other Parties stakes

out a unique position. The East DRC Representatives maintain that, as with the

"fence termination trigger" issue, any colorable "dual-list" issues presented by the

L-AA DRC claims would be subject to the exclusive jurisdiction of the

Supplement C Board of Adjustment. The West DRC Representatives concede

DRC Phase 1 jurisdiction of the "dual-list" issues presented by the L-AA DRC

claims and urge prompt determination of that issue by the Phase 1 DRC

Arbitrator.

For its part, the Company proposes something akin to NLRB

"Dubo/Collyer" deference to the Supplement C arbitration process by the Phase 1

DRC Board. In short, the Company urges that the Phase 1 DRC Board "allow the

Supplement C Board to first decide the JCBA grievances submitted by APA on

February 6, 2017, before determining whether the 'dual-list' issues require any

interpretation or application of the ISL Award". The Company hedges that

deferral proposition by also requesting "an opportunity to provide further

argument regarding those claims" in this proceeding.

11
 CONCLUSIONS

1) The DRC Phase 1 Arbitrator has exclusive authority, specified in the

second Miscellaneous provision of the ISL Award Exhibit B, to determine
whether DRC claims submitted to arbitration by DRC Representatives "concern
the interpretation or application of the ISL Award".

2) A jurisdictional determination by the Supplement C Board concerning

certain JCBA grievances does not moot or supersede the independent authority
and responsibility of the DRC Phase 1 Arbitrator to determine whether the claims
submitted by the L-AA DRC Representatives on December 14, 2016 and January
13, 2017 are arbitrable in Phase 1 DRC arbitration.

3) The proper analytical focus for such jurisdictional/arbitrability

determinations by the DRC Phase 1 Arbitrator must be the actual claim or claims
filed for arbitration by a DRC Representative, per se, not artfully articulated
"common issues" fashioned by learned counsel in pleadings and briefs.

4) None of the DRC claims submitted to Phase 1 arbitration by the L-AA DRC
Representatives present any issue concerning the triggers for termination of the
Narrow-Body fence provisions of Supplement C.

5) The DRC claim filed on December 20, 2016 by Keith Bounds, on its face a
copy of JCBA Grievance No. 16-169, actually presents an ISL Award
interpretation/application issue similar to those presented by the December 27,
2016 DRC claim of James Calloway and the December 5, 2016 DRC claim of Neil
Hoppe.2

6) The DRC Claims of Charles Hartman, Bruce Taylor, N.K. Hoppe, Andrew
Brassell, David Fallon, Keith Bounds and (in part) the DRC Claim of James
Calloway3 present the common issue whether the ISL Award modified the pre-
ISL Award order in which former TWA Pilots have access to Captain positions
protected under Supplement C (specifically so-called "dual-listers", i.e., those
former TWA Pilots appearing on more than one pre-merger seniority list who
were assigned a seniority status on the ISL that differed from their pre-merger
seniority status relative to the other former TWA Pilots).

2 Exhibit
B provides: ...ISL disputes may not be processed under both the process
contained herein and the CBA". (Emphasis added).
3 That portion of Mr. Calloway's DRC Claim which contests the accuracy of
monthly Supplement C compliance summary reports is not arbitrable under Exhibit B.

12
7) ISL Award Exhibit B vests the DRC Board with exclusive jurisdiction and
authority to decide the matters of ISL Award interpretation/application
presented by the consolidated DRC claims submitted by the L-AA DRC
Representatives on December 14, 2016 and January 13, 2017.4

8) Purported pro se "briefs" tendered by Claimant Andrew Brassell on January

26, 2017 and by Claimant David Fallon on February 6, 2017 are rejected for the
same reason the January 30, 2017 Motion to Intervene in this DRC arbitration by
another individual pilot was denied, to wit: "The parties to Phase 1 arbitration are
the designated DRC Representatives, and the Company if it chooses to participate
in Phase 1."

9) No good cause is shown to postpone Phase 1 DRC arbitral determination

of the merits of the issues presented by above-referenced DRC claims pending
arbitral determination of individual pilot JCBA grievances submitted for
Supplement C arbitration by APA on February 6, 2017.

10) No hearing is required to resolve the ISL Award interpretation/application

matter presented by the above-referenced DRC claims the L-AA DRC submitted
to Phase 1 DRC arbitration. That matter will be resolved based on the written
submissions from each of the Parties, which are already in the record of this
proceeding; plus a supplemental written submission from the Company, of no
more than 5 pages, to be filed not later than 6:00 pm (East) on April 3, 2017.

4
..."If it is determined by the Phase 1 arbitrator that there is jurisdiction under
the process set forth herein to address the claim, that decision shall be final and
binding, and shall bar the claim from being processed as a grievance under the CBA."

13
 JURISDICTIONAL AWARD

The DRC Claims of Charles Hartman, Bruce Taylor, N.K. Hoppe, Andrew
Brassell, Keith Bounds, David Fallon (and in part the DRC Claim of James
Calloway), submitted for Phase 1 arbitration by the L-AA DRC Representatives on
December 14, 2016 and January 13, 2017, present common substantive issues
concerning the interpretation or application of the ISL Award subject to the
Phase 1 DRC Arbitrator's exclusive jurisdiction and authority under ISL Award
Exhibit B.

The common substantive issues presented by those DRC claims for DRC
Phase 1 arbitral determination are:

1) Did the September 6, 2016 ISL Award change the pre-ISL Award order in
which former TWA Pilots (including so-called "dual-listers") have access to
Captain positions protected under Supplement C?

2) If not, what remedial action is appropriate regarding the bid awards

awarded on or about November 29, 2016, to be effective on or about January
31, 2017; bid awards awarded on or about December 23, 2016, effective March
2, 2017; and, bid awards awarded January 18, 2017, effective April 1, 2017?

Dana E. Eischen
________________________________________________
s/Dana Edward Eischen

STATE OF NEW YORK

COUNTY OF TOMPKINS SS:

On this 19th day of March 2017, I, DANA E. EISCHEN, do hereby affirm

and certify, upon my oath as Arbitrator and pursuant to Section 7507 of
the Civil Practice Law and Rules of the State of New York, that I have
executed and issued the foregoing instrument and I acknowledge that it is
my bifurcated jurisdictional Award in the above ISL Award Exhibit B
matter.

14