Brotherhood of Maint v. Union Pacific

In the
United States Court of Appeals
For the Seventh Circuit
____________

No. 03-3083
BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYEES,
Plaintiff-Appellant,
v.

UNION PACIFIC RAILROAD COMPANY,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 03 C 1639—Arlander Keys, Magistrate Judge.
____________
ARGUED DECEMBER 5, 2003—DECIDED FEBRUARY 12, 2004
____________

Before FLAUM, Chief Judge, and MANION and WILLIAMS,
Circuit Judges.
FLAUM, Chief Judge. The Brotherhood of Maintenance of
Way Employees (“BMWE”) represents maintenance of way
workers, including employees of the Union Pacific Railroad
Company (“UP”). BMWE filed suit in the district court
alleging that UP violated the Railway Labor Act (“RLA”) by
refusing to refer certain disputes to expedited arbitration.
UP responded by filing a counterclaim against BMWE,
seeking to enjoin them from engaging in a strike, work
stoppage, picketing, or other form of self-help against UP
over the dispute. The district court denied BMWE’s request
2 No. 03-3083

for declaratory relief and granted UP’s motion for a prelimi-
nary injunction to stop BMWE members from striking.
BMWE argues that the district court misapplied the RLA
and its attendant case law and that the injunction was an
inappropriate remedy under the Norris-LaGuardia Act. For
the reasons stated herein, we affirm the judgment of the
district court.

I. Background
BMWE and UP are parties to a collective bargain-
ing agreement (“CBA”) which provides that, with limited
exceptions, UP must hire BMWE members to perform all
work in connection with the construction, maintenance,
repair and dismantling of tracks, structures, and other
facilities used in the performance of UP’s common carrier
service. On October 30, 2001, UP gave BMWE notice that
UP would be contracting out work in connection with
establishing a new facility in Rochelle, Illinois, to non-
BMWE members under one of the CBA’s exceptions. BMWE
did not agree that the exception applied, and BMWE
threatened to strike. Eventually, the parties entered into a
settlement agreement to end the dispute. The settlement
agreement provided that UP could use contract workers,
but if a BMWE employee with seniority and the appropriate
credentials requested work on the Rochelle project, UP
would create a position for that employee for the period of
time that contractors were performing work.
While the settlement agreement may have resolved
the parties’ disputes over the CBA, it was only a matter of
time before new disagreements arose over the settlement
agreement itself. In the fall of 2002, UP began hiring fewer
workers than BMWE believed the settlement agreement
required. In response to BMWE’s objections, UP argued,
among other things, that the settlement agreement re-
quired only that UP provide a number of BMWE positions
No. 03-3083 3

equal to the number of contractors working, not that all
eligible BMWE workers be given jobs.
BMWE challenged UP’s interpretation of the settlement
agreement. BMWE offered to arbitrate its disagreements
with UP in an expedited arbitration before a Special Board
of Adjustment (“SBA”), pursuant to RLA § 3 Second. 45
U.S.C. § 153 Second (West 2003). UP agreed that the dis-
pute should be arbitrated, but refused expedited arbitration
and offered instead to participate in the arbitration proce-
dures that were outlined in the CBA. BMWE declined this
offer, stating that the arbitration procedures in the CBA
would take more than three years to complete, whereas the
expedited arbitration could be completed in a few months.
However, because the contractual time limit to file claims
under the CBA was about to expire, BMWE did file individ-
ual claims under the procedures outlined in the CBA, which
UP then offered to arbitrate.
BMWE refused UP’s offer to arbitrate the individual
claims, asserting that arbitration of individual claims would
not provide an authoritative determination of the meaning
of the settlement agreement. BMWE also refused to
arbitrate these claims because it was concerned that
it would be difficult to identify particular employees who
could be claimants and that certain employees would lose
health insurance coverage and seniority rights that could
not be retroactively restored.
BMWE then filed suit in the district court, requesting
declaratory judgment that the RLA required UP to parti-
cipate in expedited arbitration. UP filed a counterclaim
requesting that the district court enter a preliminary in-
junction against a threatened BMWE strike. After a
hearing, the magistrate judge denied BMWE’s motion for
relief and granted UP’s motion for a preliminary injunction.
BMWE now appeals both decisions.
4 No. 03-3083

II. Discussion
A. Declaratory Relief
The RLA grants exclusive jurisdiction to resolve “minor”
disputes regarding railway labor agreements to arbitrators
on the National Railroad Adjustment Board or adjustment
boards established by an employer and a union. See Consol.
Rail Corp. v. Ry. Labor Executives’ Ass’n, 491 U.S. 299, 303-
04 (1989). In contrast, to resolve “major” disputes the RLA
requires the parties to submit to a lengthy process of
bargaining and mediation, during which they must main-
tain the status quo. Bhd. of Maint. of Way Employees v.
Atchison, Topeka & Santa Fe Ry. Co., 138 F.3d 635, 638
(7th Cir. 1998). In the context of interpreting classes of
controversy in railway labor disputes, these terms are not
used in their ordinary sense; they are terms of art in the
case law under the RLA. Chi. & N.W. Transp. Co. v. Ry.
Labor Executives’ Ass’n, 908 F.2d 144, 148 (7th Cir. 1990).
Minor disputes are those disputes regarding
the interpretation or application of existing railway labor
agreements. Consol. Rail Corp., 491 U.S. at 303; Chi. &
N.W. Transp. Co., 908 F.2d at 148. “Where an employer
asserts a contractual right to take a contested action, the
ensuing dispute is minor if the action is arguably justified
by the terms of the parties’ collective-bargaining agreement.
Where, in contrast, the employer’s claims are frivolous or
obviously insubstantial, the dispute is major.” Consol. Rail
Corp., 491 U.S. at 307.
It is uncontested that this case presents only a minor
dispute regarding the interpretation of BMWE’s and UP’s
settlement agreement. Although UP’s interpretation of the
settlement agreement is subject to challenge, UP’s position
is not so obviously insubstantial as to constitute the sort of
departure from an existing agreement that compels
the inference that UP is trying to circumvent the major
dispute procedures of the RLA. Accordingly, the Court con-
No. 03-3083 5

cludes that the disputes over the settlement agreement as
well as the parties’ disagreement over the availability of
expedited arbitration before an SBA are minor disputes.
Therefore, the district court was divested of jurisdiction
over BMWE’s claim for a declaration that UP violated
Section 2 First of the RLA by not submitting to expedited
arbitration. By virtue of the fact that the underlying dis-
putes are minor and therefore subject to the mandatory
dispute resolution procedures set forth in Section 3 of the
RLA, 45 U.S.C. § 153, the district court properly denied
BMWE’s motion for declaratory relief.

B. Preliminary Injunction
In reviewing a district court’s grant or denial of a pre-
liminary injunction, we review the district court’s findings
of fact for clear error, its balancing of the factors for a pre-
liminary injunction under the abuse of discretion standard,
and its legal conclusions de novo. United Air Lines v. Int’l
Ass’n of Machinist and Aerospace Workers, 243 F.3d 349,
360 (7th Cir. 2001). BMWE does not argue that the district
court improperly balanced the factors in granting the
injunction, rather BMWE’s appeal is premised on its belief
that the district court misinterpreted and misapplied the
relevant law.
Although the selected adjustment board enjoys exclusive
jurisdiction to resolve minor disputes under the RLA, dis-
trict courts are granted jurisdiction over minor disputes to
the extent that they may enjoin strikes by railway workers.
Consol. Rail Corp., 491 U.S. at 304. BMWE argues that the
district court erred by granting UP a preliminary injunction
for two reasons. First, BMWE asserts that when UP refused
expedited arbitration, UP violated its duty under Section 2
First of the RLA, to exert “every reasonable effort” to make
and maintain agreements and settle disputes. See 45 U.S.C.
§ 152 First (West 2003). Specifically, BMWE argues that
6 No. 03-3083

UP has rejected the manner of arbitrating the parties’
dispute that would most efficiently and comprehensively
resolve the disagreement.1 Second, BMWE claims that
Norris-LaGuardia Act (“NLGA”) deprived the district court
of jurisdiction to enter an injunction because Section 8
denies injunctive relief to any party in a labor dispute who
fails to “make every reasonable effort to settle” the dispute.
29 U.S.C. § 108 (West 2003).
Section 2 First of the RLA provides that carriers and
unions must “exert every reasonable effort to . . . settle all
disputes . . . in order to avoid any interruption to commerce
or to the operation of any carrier.” 45 U.S.C. § 152 First
(West 2003). The Supreme Court has considered Section 2
First analogous to the “duty under the National Labor
Relations Act to bargain in good faith.” Chi. & N.W. Transp.
Co. v. United Transp. Union, 402 U.S. 570, 574-75 (1971).
It is a substantive legal duty that is enforceable by the
courts and requires more than just strictly adhering to the
duties set forth in other parts of the RLA or in applicable
collective bargaining agreements. See United Air Lines, 243
F.3d at 349 (holding that a union has an obligation to
discourage or prevent a slowdown despite the union’s
contention that it did not initiate the slowdown or have a
legal duty to end it).
Similarly, the NLGA contains a provision preventing
parties that have failed to negotiate in good faith from ob-
taining injunctive relief. Section 8 of the NLGA provides
that “[n]o restraining order or injunctive relief shall be
granted to any complainant who has failed to . . . make

1
BMWE’s claim for a declaration, which this Court lacks juris-
diction to consider, put forth this same argument. However, as
explained above, we have jurisdiction to consider the argument to
the extent that it impacted the district court’s decision to enjoin
a workers’ strike.
No. 03-3083 7

every reasonable effort to settle such dispute either by
negotiation or with the aid of any available governmental
machinery of mediation or voluntary arbitration.” 29 U.S.C.
§ 108 (West 2003).
According to BMWE, UP’s refusal to accept expedited
arbitration violates its duties under the RLA and NLGA to
make all reasonable efforts to settle disputes and therefore
UP should not have been granted an injunction. We dis-
agree.
While UP has a duty to arbitrate the dispute in good
faith, there is no support for BMWE’s position that UP
must agree to arbitrate the dispute through the fastest and
most effective means available. Understandably, BMWE
would prefer an expedited arbitration of this matter.
However, such a preference does not warrant forcing UP to
either accede to BMWE’s demands or allow BMWE to
strike. This case is similar to United Air Lines, 243 F.3d at
349. In that case, the unionized workers engaged in
a slowdown of work. When United filed for an injunction to
force the union to end the slowdown, the union argued that
United did not deserve an injunction because it did not take
the reasonable step of disciplining the employees responsi-
ble for the slowdown. This Court disagreed, holding that it
would not be reasonable to require United to discipline its
employees because then an “injunction could never issue
against a union, since in virtually every case an employer
presumably could take some such measures.” Id. at 364. In
other words, the law requires that a party make every
reasonable effort, not every conceivable one.
In this case, the parties entered into an agreement to
arbitrate individual employee claims with a specific arbi-
tration procedure. Because BMWE now considers that pro-
cedure to be too time consuming and not as efficient as an
expedited arbitration of general contract claims, it expects
UP to agree or suffer a strike. Although UP’s agreement
8 No. 03-3083

with these demands would certainly end the dispute, for-
cing such agreement exceeds the bounds of the “every
reasonable effort” requirement. If we were to hold other-
wise, unions could always force an employer into an unbar-
gained-for dispute resolution or else claim that the em-
ployer was not acting reasonably. Even though the duty
to exert every reasonable effort requires a party to do
more than discharge its legal obligations, the duty does
not mandate that a party already engaging in good-faith
negotiation participate in a dispute resolution that directly
circumvents a contract voluntarily entered into by both
parties.
There is no evidence of bad faith on the part of UP. UP
has offered to arbitrate the individual claims of BMWE
workers, which are those claims that have been handled in
the proper manner based on the CBA. Provisions of the
CBA and RLA provide mechanisms for resolving the parties’
disputes, but BMWE chose not to avail itself of those
mechanisms. UP’s refusal to submit to expedited arbitration
does not violate the RLA. Furthermore, Section 8 of the
NLGA does not bar UP from obtaining an injunction.
Accordingly, we conclude that the district court properly
held BMWE to its duty under the RLA to avoid interrupting
commerce.

III. Conclusion
For the foregoing reasons, we AFFIRM the decision of the
district court.
No. 03-3083 9

A true Copy:
Teste:

________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit

USCA-02-C-0072—2-12-04