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Brotherhood of Locomotive Engineers and Trainmen v. Union Pacific Railroad Co.

United States Court of Appeals, Seventh Circuit

November 17, 2017

Brotherhood of Locomotive Engineers and Trainmen (General Committee of Adjustment, Central Region), et al., Plaintiffs-Appellants,
v.
Union Pacific Railroad Company, Defendant-Appellee.

          Argued September 14, 2017

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 16 C 2730 - Edmond E. Chang, Judge.

          Before Wood, Chief Judge, and Ripple and Hamilton, Circuit Judges.

          WOOD, CHIEF JUDGE.

         Labor-management relations in the railroad industry have been subject to a distinctive regulatory regime ever since the Railway Labor Act (RLA or Act) took effect in 1926. See 45 U.S.C. §§ 151-88. No one wants to see the nation's transportation network brought to a standstill because of labor conflict. The RLA therefore is designed to substitute bargaining, mediation, and arbitration for strikes.

         Embedded in the Act is a strong preference for arbitration, as opposed to judicial resolution of disputes. If a disagreement arises over the formation or amendment of a collective bargaining agreement (CBA), it is considered a "major" dispute under the Act, and it must be decided by a court. See Consolidated Rail Corp. v. Ry. Labor Execs.' Ass'n, 491 U.S. 299, 302-03 (1989). If, on the other hand, it relates only to the interpretation or application of an existing agreement, it is labeled "minor" and must go to arbitration. Id. at 303. In the case before us, the Union Pacific Railroad (the Railroad) issued a modified disciplinary policy for its engineers without first sitting down at the bargaining table with their union, the Brotherhood of Locomotive Engineers and Trainmen (the Union). The Union argues that the Railroad could not take this step before bargaining and that its unilateral action violates the RLA. It also contends that the dispute itself is a major one not suitable for arbitration.

         Observing that the playing field is tilted heavily in favor of arbitration, the district court agreed with the Railroad that the dispute is minor, and it accordingly dismissed the lawsuit in favor of arbitration. Although the Union has made a number of good points, we conclude that there is at least a non-frivolous argument that interpretation of the agreement between the parties, not change, is at stake. We therefore affirm the district court's decision dismissing the suit for lack of subject-matter jurisdiction.

         I

         Our summary of the underlying facts can be brief. The Brotherhood of Locomotive Engineers and Trainmen is composed of three unions that represent engineers employed by the Railroad, which is itself an amalgamation of several former railroad carriers. As a result, the Railroad is a party to multiple overlapping CBAs with different groups of employees.

         The current dispute originates from the Railroad's decision in 2015 to modify a set of disciplinary rules; the new policy was set forth in something called MAPS, which stands for Managing Agreement Professionals for Success. Before that time, the same subset of the Union's members was subject to disciplinary rules contained in a mid-1990s agreement, known as UPGRADE. In the years before 2015, the Railroad made several changes to UPGRADE over the Union's objections. When it shifted from UPGRADE to MAPS it again did not consult the Union. Around the time MAPS was being rolled out, however, the Railroad polled members of the Union about what changes they would like to see in the existing disciplinary rules.

         Another subset of the Union's members is party to an agreement called the 1995 Southern Pacific Agreement, a CBA that also establishes disciplinary rules. The Railroad became subject to this agreement when it absorbed the former Southern Pacific Western Lines.

         II

         The RLA allows employers to use either of two methods for changing "rates of pay, rules, or working conditions of [] employees": first, they may act in any way permitted by an existing CBA; or second, they may go through the bargaining and negotiation procedure prescribed in section 156 of the Act. See 45 U.S.C. § 152 Seventh. In other words, the central topics of rates of pay, rules, and working conditions are subject to mandatory bargaining. Both parties agree that MAPS is a disciplinary policy that falls within the scope of "rules" and "working conditions" and is thus subject to these limits.

         The Union sees this case as straightforward, in its favor. Since MAPS is subject to RLA section 152 Seventh and it was implemented without going through the section 156 procedures, the Union reasons, the Railroad changed a mandatory subject of bargaining without the necessary participation of the Union. But matters are not that simple. Critically, the Union overlooks the fact that even in the absence of negotiation, changes are permitted if authorized by contract. For the same reason, the primary case on which the Union relies is inapposite. That case holds that the courts, rather than arbitrators, are the proper forum for cases in which a carrier unilaterally changes conditions of employment. See Airline Pilots Ass'n Int'l. v. Nw. Airlines, Inc.,199 F.3d 477, 479-80 (D.C. Cir. 1999) (airline industry, to which the RLA also applies). But a change is "unilateral" only if it was accomplished without contractual authority; if it is made under the aegis of a contract, it would not (by definition) be unilateral. Thus, Airline Pilots is helpful to the ...


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