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

United States Court of Appeals, Seventh Circuit

January 11, 2018

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

          Amended on Petition for Rehearing January 11, 2018

         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 originating from several sources. One is a written agreement referred to as the 1996 System Agreement-Discipline Rule. Another is a mid-1990s agreement, known as UPGRADE. The parties do not agree on the genesis of UPGRADE, but the record indicates that it was developed with input from both labor and management. In the years before 2015, the Railroad made several changes to its disciplinary policies over the Union's objections. When it shifted 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 ...


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