Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 05 C 2401-Virginia M. Kendall, Judge.
The opinion of the court was delivered by: Rovner, Circuit Judge
Before FLAUM, ROVNER, and EVANS, Circuit Judges.
Five aggrieved railroad employees of the Union Pacific Railroad (Union Pacific or the Carrier) filed claims through their representatives on the Brotherhood of Locomotive Engineers and Trainmen (the Organization) in each case contesting a discharge or discipline imposed by the Carrier. Rather than resolving the dispute over the propriety of the discipline, the National Railroad Adjustment Board (NRAB or Board) concluded that the Organization had failed to submit conclusive evidence that the parties had held a conference to attempt to resolve the dispute-a procedural prerequisite to arbitration-and thus the Board determined that it was required to dismiss the claim for lack of jurisdiction. The district court agreed. Although we agree with the district court that it has always been clear that the parties must conference, and that they must submit evidence of that fact, it heretofore has not been clear when and how that evidence must be presented. We find that the Board denied the Organization due process by requiring evidence of conferencing to be presented in the on-property record, a requirement not clearly enunciated in the statutes, regulations, or the collective bargaining agreement of the parties. Consequently, we reverse.
Grievance procedures for resolving disputes between railroads and their employees are regulated intricately under the Railway Labor Act (RLA or Act). Under the Act, railroad employees with grievances against their employers-the railroad-must first attempt to resolve those grievances through an internal process before turning to the courts. The procedure for dispute resolution is set forth in the parties' collective bargaining agreement and begins with investigations, hearings, and appeals that take place on the railroad property and are generally referred to as "on-property" proceedings. If one of the parties is dissatisfied with the result, the dispute is submitted to a conference. 45 U.S.C. § 152 Second. If the parties fail to resolve their differences in conference, an aggrieved party may initiate an arbitration proceeding before the NRAB. 45 U.S.C. § 153 First (i).
In 2000 and 2001, Union Pacific discharged or disciplined five locomotive engineers whose claims form the basis of this litigation. The Organization filed grievances and sought reinstatement, back pay, and removal of the discipline for the five engineers. The Organization then proceeded through the "on-property" process in the manner dictated by the collective bargaining agreement between the parties. Each aggrieved party had an on-property hearing before an investigating officer or superintendent of the carrier. In each case the hearings were recorded and transcribed with exhibits attached. The Carrier declined each of the claims. The parties then met in a conference in a last-chance effort to settle the case. When those efforts failed, and the Organization did not prevail, it sent letters of intent to the NRAB to initiate arbitration proceedings. In its original submission, the Organization included the on-property record which contained the notices of discipline, the hearing transcript, all of the exhibits, and all of the evidence used in the grievance procedure below relating to the merits of the underlying discharge or discipline. The Organization did not, however, include any written documentation that the parties had met in conference. The Carrier raised no objection to the Organization's submission and, in due course, presented its own counter-submission on the merits of the dispute. It did not mention the Organization's failure to include evidence that a conference had occurred.
After the parties filed their submissions, they met on March 15, 2005, for a hearing before the NRAB. Each arbitration panel of the Board consists of an equal number of members chosen by the carrier and by the labor organization. Where the panels are deadlocked, a neutral person known as a referee sits with the panel to make an award.
45 U.S.C. § 153 First (l). As a practical matter, therefore, the outcome is usually determined by the referee. See United Transp. Union v. Gateway W. Ry., 284 F.3d 710, 711 (7th Cir. 2002). Just prior to the start of the oral argument, the Carrier's representative on the panel requested an executive session of the NRAB panel, out of the presence of the Organization's representative. During that session, the Carrier's representative informed the referee that the Organization's submission to the Board did not contain any evidence of conferencing. Without such evidence, the railroad argued, the Board must draw the inference that the conferences had not occurred. The Carrier did not argue that conferencing had not occurred-indeed, it had- only that the Organization had failed to offer any evidence of it in the on-property record submitted to the Board.
The Organization's advocate offered to submit documentation that the conferences had occurred and the referee gave the Organization time to do just that. The Organization did eventually proffer proof that a conference had occurred, which included phone logs, informal notes, and other documents. The majority of the panel consisting of the neutral member and the Carrier's representative, however, voted not to allow this later submitted evidence, and voted to dismiss all five of the appeals for lack of jurisdiction.
In the five nearly identical decisions, the Board concluded that without evidence in the on-property record that the conference had occurred, it had no jurisdiction to consider the Organization's claims. (R. at 1, Ex. A, Award Nos., 26089, 26090, 26092, 26093, 26094, all at p.3) (App. at 16, 24, 37, 45, 53). The Board further concluded that it could not consider evidence not contained in the on-property record. Id. (App. at 17, 25, 38, 46, 54). The Organization's representative filed a dissent in each of the five awards.
The Organization sought review in the district court of all five of these identically reasoned awards pursuant to 45 U.S.C.A. § 153 First (q). In appealing to the district court to dismiss the complaint for failure to state a claim, the Carrier argued as a preliminary matter, that the NRAB's decisions were evidentiary rulings, which could not be set aside absent misconduct or bad faith by the arbitrator. It then sought to convince the district court that the conference is a mandatory precursor to arbitration, and that without written evidence of the conference-evidence that could not be added to the record later-the Board had no jurisdiction to hear the claim. The Organization countered that neither federal law nor the CBA required conferencing and that even if conferencing were required, no rule dictates that conferencing must be proved by evidence in the on-property record. Consequently, the Organization argued, the Board failed to conform to its jurisdiction and violated due process.
The district court concluded that conferencing is indeed required before parties can refer their disputes to the NRAB and that the NRAB did not violate due process by refusing to consider evidence of conferencing outside of the on-property record. Consequently, the district court dismissed the Organization's suit pursuant to Fed. R. Civ. P. 12(b)(6), concluding that the Organization had failed to state a claim upon which relief could be granted. On appeal, the Organization has not challenged the district court's holding that the RLA requires conferencing, but instead focuses on ...