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McKeon v. Belt Railway Co. of Chicago

August 23, 2006

TERRENCE MCKEON, PLAINTIFF,
v.
THE BELT RAILWAY COMPANY OF CHICAGO AND TIMOTHY E. COFFEY, DEFENDANTS.



The opinion of the court was delivered by: Judge David H. Coar

MEMORANDUM OPINION AND ORDER

Before this Court is The Belt Railway Company of Chicago and Timothy E. Coffey's ("Defendants'") motion to dismiss Terrence McKeon's ("Plaintiff's") complaint for lack of subject matter jurisdiction. For the reasons set forth below, Defendants' motion is DENIED.

I. FACTUAL BACKGROUND*fn1

Defendant The Belt Railway Company of Chicago ("BRC") is an Illinois company and a common carrier by rail engaged in interstate commerce. Defendant Timothy E. Coffey ("Coffey") is BRC's General Counsel, Secretary, and Director of Human Resources. Plaintiff is an Illinois resident who, at all relevant times, was employed by BRC as a locomotive engineer. BRC and The Brotherhood of Locomotive Engineers and Trainmen ("BLE"), which represented Plaintiff, had a collective bargaining agreement ("CBA") that governed the terms and conditions of Plaintiff's employment.

On August 1, 2003, Defendant Coffey, acting as an agent of BRC, told Plaintiff that "as of November 2003, due to remote control technology being installed, we are offering you a $50,000 buyout if you agree to stay until the remote control technology is installed and train a replacement employee, and at that time we will assist you in finding other employment with Indiana Harbor Railroad or Union Pacific Railroad." Compl. ¶ 4. Defendants state that they offered this buyout, or "separation allowance," to accommodate the engineers like Plaintiff who lacked dual seniority and therefore could not transition to switchman/conductor jobs in the event that installation of the remote control technology eliminated engineer jobs. Def.'s Notice of Removal ¶ 5.

Upon hearing the offer, Plaintiff contacted his union. Union representatives told him that there were no provisions in the CBA pertaining to any kind of "buyout" situation and he was free to negotiate on his own behalf. Indeed, BRC and BLE never negotiated the buyout offered to Plaintiff, and they never made amendments or attachments to the CBA regarding buyouts.

Defendants maintain that Plaintiff did not accept the buyout offer. Despite their fears, however, there continued to be sufficient work for engineers like Plaintiff once the remote control technology was installed. Plaintiff, therefore, continued to work. He approached Defendants nine months later, they maintain, to discuss the buyout offer again. But before the discussions concluded, Defendants learned that Plaintiff had accepted a position with Indiana Harbor Belt Railroad. Defendants then terminated Plaintiff, they assert, for violating a rule against conflicting employment.

Plaintiff, by contrast, maintains that on or about the same day Defendants offered him the buyout (August 1, 2003), he and Defendants entered into an oral agreement. Plaintiff maintains that he agreed to continue his employment with BRC until the remote control technology was installed and he trained a replacement employee; and Defendants agreed to give Plaintiff a $50,000 buyout and assist him in finding other employment with Indiana Harbor Railroad or Union Pacific Railroad.

Plaintiff contends that he performed his part of the agreement, but Defendants have not paid him $50,000 or any part of thereof, despite his demand for payment. Nor have Defendants assisted him with finding other employment. In addition, Plaintiff alleges, Defendants knew their statements (offering the buyout and employment assistance) were false, but made them anyway to deceive Plaintiff and to induce him to continue at BRC and train a replacement employee.

Plaintiff has charged Defendants with common law fraud (Count I) and breach of contract (Count II). He seeks compensatory damages of $50,000, plus interest. On July 27, 2005, Defendants removed this action from the Circuit Court of Cook County, Illinois to this Court, pursuant to 28 U.S.C. § 1441.

II. LEGAL STANDARD

When reviewing a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1),*fn2 the court must accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff. See Long v. Shorebank Development Corp., 182 F.3d 548, 554 (7th Cir. 1999). The movant may use affidavits and other material to support its motion, United Phosphorus, Ltd. v. Angus Chemical Co., 322 F.3d 942, 946 (7th Cir. 2003), and the court may look beyond the pleadings and weigh any evidence that has been submitted on the issue to determine whether subject matter jurisdiction exists. See id; Long, 182 F.3d at 554.

III. ANALYSIS

Defendants move for dismissal on the grounds that Plaintiff's claims are pre-empted by the Railway Labor Act ("RLA"), 45 U.S.C. ยง 151, et seq., and therefore subject to the mandatory arbitration ...


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