(CN) - The 9th Circuit on Wednesday revived claims that corruption led an arbitration panel to fire a railroad conductor for allegedly drinking on the job.
Richard Kite, a 27-year employee of the BNSF Railway Co., was fired in 2005 after being cited twice in 10 years for reporting to work under the influence of alcohol. Kite and the United Transportation Union appealed the dismissal internally. Kite claimed that he had been drinking the night before he took the breathalyzer test that got him fired, but was not under the influence when he arrived at work.
After Kite's internal appeals failed, the case went to a "public law board" composed of BNSF labor relations director Roger Boldra; union chairman Jay Schollmeyer; and Jacalyn Zimmerman, a "neutral arbitrator" assigned by the National Mediation Board (NMB).
After a 2008 hearing on the case, Zimmerman sent a "draft award" to the other board members in which she concluded that Kite should be reinstated without backpay because the railway had failed to prove that he had been cited for the same offense twice in 10 years, which made the current offense his first.
The board later convened in executive session to discuss the draft ruling. During that meeting, BNSF's Boldra allegedly told Zimmerman, "If you are going to issue these kinds of opinions, you will never work for a Class One railroad again," according to the latest court ruling.
Zimmerman subsequently recused herself, dismissed Kite's case without prejudice, and resigned from the NMB. Meanwhile, Boldra moved to have a different neutral arbitrator assigned to rehear the case.
In 2010, a different neutral arbitrator ruled for the railway and found that Zimmerman's previous ruling in Kite's favor had never been formally adopted.
The union and Kite cried foul and asked the U.S. District Court in Tacoma, Wash., to review the case, claiming that Boldra had threatened Zimmerman with "financial ruin" and had thus corrupted the process.
They also argued that the railway committed further corruption by working to "re-list" the case simply because it didn't like the initial outcome.
Holding to the railway's line that Zimmerman's "draft award" was merely that, U.S. District Judge Ronald Leighton dismissed the petition for lack of jurisdiction. He dismissed the union's other allegations for failure to state a plausible claim.
In a unanimous ruling Wednesday, the Seattle-based federal appeals court reversed on both points.
"If Boldra, as a high-ranking railway official and as the railway's representative on the board, made such a statement and intended it as an economic threat against Zimmerman if she did not change the outcome of the Zimmerman order, then Boldra committed an act of attempted extortion and impaired the integrity of the arbitral process itself," Judge Stephen Reinhardt wrote for the three-judge panel. "Because such conduct by any member of a board would justify setting aside the order, we conclude that the union properly stated a plausible claim for which relief could be granted with regard to both the Zimmerman order and the board's failure to decide the dispute."
The panel found also rejected the District Court's finding that it lacked jurisdiction to review, finding that it had "failed to appreciate that the railway's alleged conduct, if proven to constitute an attempt at extortion, was not merely a threat to Zimmerman but to the integrity of the arbitral process."
The panel remanded the case so that it "may determine the appropriate procedure for allowing the union to attempt to prove Kite's claim."
If the union is ultimately able to do so, and the District Court is compelled to set aside the ruling against Kite, the court can then remand the case back to the board for an "untainted hearing," among several options, according to the ruling
"In its petition for review, the union asked for reinstatement of the Zimmerman draft award," Reinhardt wrote. "Although the district court is empowered to provide for such a remedy or to allow the board to decide whether to do so, we cannot determine at this stage of the proceedings that this would be an appropriate remedy in this case. Nor is it our function to make such a determination now. Any such decision must be based on the facts, as established at summary judgment or proven at trial."
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