United States District Court, N.D. Illinois, Eastern Division
[Copyrighted Material Omitted]
For Illinois Central Railroad Company, Plaintiff: Andrew J. Rolfes, Robert S. Hawkins, PRO HAC VICE, Buchanan Ingersoll & Rooney, Pc, Philadelphia, PA; James A. Fletcher, Stephen J. Rynn, James Daniel Helenhouse, Fletcher & Sippel, LLC, Chicago, IL.
For Brotherhood of Maintenance of Way Employees, Division of International Brotherhood of Teamsters, Defendant: Richard S. Edelman, LEAD ATTORNEY, Mooney, Green, Saindon, Murphy, and Welch PC, Washington, DC; William Liasson Phillips, William Liasson Phillips, Chicago, IL.
MEMORANDUM OPINION AND ORDER
Harry D. Leinenweber, United States District Judge.
This case arises out of a labor dispute concerning the application of certain cost of living adjustments under two successive collective bargaining agreements governed by the Railway Labor Act (the " RLA" ). Plaintiff Illinois Central Railroad Company (" Illinois Central" ) is a major rail carrier that operates across the central United States, and Defendant Brotherhood of Maintenance of Way Employees, Division of International Brotherhood of Teamsters (the " Union" ) is a labor organization that represents maintenance-of-way workers employed by Illinois Central. In 1991, Illinois Central and the Union became parties to a national labor agreement that was imposed pursuant to congressional legislation. To protect employees against wage erosion during the often lengthy RLA bargaining process, the imposed agreement provided for automatic cost of living adjustments (" COLA" ) that would kick in at scheduled intervals one year after the original contract lapsed and continue until a new labor agreement was reached. This type of provision is better known in the railway industry as a " Harris COLA" - a moniker derived from the name of the Chairman of the Presidential Emergency Board that had been convened at that time for the purpose of resolving the parties' labor disputes.
In following years, Illinois Central and the Union continued to incorporate revised and updated Harris COLA provisions into their successor agreements. Thus, in 2007, when the parties entered into a collective bargaining agreement that was effective retroactively from July 1, 2005, through to July 1, 2009 (the " 2005-2009 CBA" ), they included a Harris COLA entitling Union employees to wage adjustments every six months beginning in July 2010. As in previous agreements, the 2005-2009 CBA also provided for annual general percentage increases to employees' hourly rates of pay for all years for which the agreement was effective. Any back pay owed for prior years now covered under the contract was to be paid to employees in a lump sum " less any COLA amounts previously received" under the Harris COLA as set forth in the parties' preceding bargaining agreement.
When the parties failed to adopt a new agreement following the expiration of the 2005-2009 CBA, Union employees began receiving Harris COLA increases as scheduled. Eventually, a successor agreement was negotiated in February 2014 (the " 2014 CBA" ), which provided for retroactive pay increases commencing in July 2010, the month when the first of the Harris COLA payments had come due under the 2005-2009 CBA.
Unlike prior agreements, however, the 2014 CBA did not expressly eliminate or modify the Harris COLA in place under the 2005-2009 CBA or contain any language substituting that provision for a new one. Similarly, in contrast to previous agreements, which had authorized Illinois Central to reduce its retroactive wage payments by amounts already remitted to employees pursuant to the Harris COLA, the 2014 CBA was silent on the issue of how back pay sums would be calculated.
Despite the absence of those provisions, Illinois Central proceeded as it had in the past by calculating employees' wages as though the previous Harris COLA increases no longer applied and instead referring only to the new negotiated percentage wage increases. Illinois Central also continued with its previous practice of deducting the amounts employees had received
under the Harris COLA from what it determined was owed in overall back pay under the 2014 CBA.
The Union objected to Illinois Central's approach, contending that, because the 2005-2009 CBA's Harris COLA provision had been left unmodified by the 2014 CBA, the employees were entitled to receive not only the percentage wage increases called for by the parties' new agreement, but also the accumulated value of the previous Harris COLA increases. So, for example, when a general 3.8% raise established under the 2014 CBA went into effect on July 1, 2014, it was the Union's position that employees' wages at that time also should have been upped by an additional 4.1% - the accumulated value of prior COLA increases - on top of the 3.8% increase. ...