NO. 95~235
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
KATHRYN PIKE,
Plaintiff/Appellant,
v .
BURLINGT0N N0RTHERN RAILR0AD c0MPANY, 359 29 B9§
Defendant/ReSpondent. 1M{ `
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APPEAL FROM: DiStrict Court of the Twelfth JudiCial DiStrict,
In and for the County of Hill,
The Honorable John Warner, Judge preSiding.
COUNSEL OF RECORD:
For Appellant:
Elizabeth A. BeSt, BeSt Law Offices, Gzeat Falls,
Montana
For ReSpondent:
Jeff Hedger, Kroschel & Yerger, Billings, Montana
Submitted on BriefS: August 24, 1995
Decided: September 29, 1995
Fil@d:
Justice James C. Nelson delivered the Opinion of the Court.
Kathryn Pike (Pike) appeals from the March 9, 1995 order of
the Twelfth Judicial District Court, Hill County, granting
Burlington Northern Railroad's (BN) motion under Rule 12(b)(l),
M.R.Civ.P., and dismissing her complaint for lack of subject matter
jurisdiction. We reverse and remand for further proceedings
consistent with this opinion.
The sole issue to be decided in this appeal is whether Pike's
state law and federal claims of sex discrimination are preempted by
the Railway Labor Act (RLA), 45 U.S.C. § 15l, et. seq.?
Background
Pike was employed as a carman at BN‘s diesel shop from May
l977, until August lO, l992. The Brotherhood Railway Carmen's
Division, Transportation Communications International Union (the
Union) and BN were parties to a collective bargaining agreement
which was in force at the time of the events alleged in Pike's
complaint. She was a member of the Union.
Pike claims her employment was wrongfully terminated on August
l0, 1992. She alleges that when BN closed its Havre diesel shop,
the five carmen who were employed were given an option to transfer
to other locations or to exercise their seniority in the Montana
district. Pike, apparently the only female carman, contends she
had been advised she would not be placed in a carman position
because she was not qualified to operate an all terrain vehicle.
Pike alleges that this reason was merely a pretext and that she was
actually denied her position and terminated because of her gender
2
in violation of the provisions of the Montana Human Rights Act, §§
49-1-lO2, MCA, et. seq., and Title VII, 42 U.S.C. §§ 2000(e), et.
seq.
In dismissing her complaint, the District Court ruled that
Pike's dispute with BN fit within the definition of a "minor“
dispute under the RLA, 45 U.S.C. § l5l, et. seq. Relying
principally on Consolidated Rail Corp. v. Railway'Labor Executives'
Ass'rl (3_989), 491 U.S. 299, 109 S.Ct. 24'7'7, 105 L.Ed..'£d 250, the
District Court determined that Pike's was a “minor" dispute because
it did not seek to create contractual rights but to enforce them;
it concerned the interpretation or application of a collective
bargaining agreement; and it was inextricably intertwined with the
grievance machinery of the collective bargaining agreement or the
RLA.
Having made that determination, the court, again relying on
Conrail, concluded Pike's discrimination claims were subject to the
exclusive jurisdiction of the National Railroad Adjustment Board
(NRAB) and the court's subject matter jurisdiction over her claims
was preempted by the RLA. It is from this decision that Pike
appeals.
Standard of Review
The District Court concluded, as a matter of law, it did not
have subject matter jurisdiction over Pike's sex discrimination
claims. Our review of the legal conclusions of a trial court is
plenary; we simply determine whether the court's interpretation of
the law is correct. Steer, Inc. v. Department of Revenue (l990),
245 Mont. 470, 474-75, 803 P.2d 60l, 603. In this case, we hold
that the District Court erred in its legal conclusion that it did
not have subject matter jurisdiction over Pike's state law and
federal sex discrimination claims.
Issue
Did the District Court err in determining that Pike‘s state
law and federal claims of sex discrimination are preempted by RLA,
45 U.S.C. § l5l, et. seq.?
Discussion
BN argues that the District Court correctly categorized Pike's
discrimination claims as falling within the definition of a "minor"
dispute, and thus, subject to the
mandatory and exclusive
arbitration procedures of the RLA. While BN does not dispute
Pike's right to make a substantive statutory discrimination claim
under Title VII, it argues that her claim is, nevertheless, a
"minor" dispute over which the court has no subject matter
jurisdiction. Moreover, BN maintains that Pike is substantively
preempted from pursuing her state law claim even in arbitration
because those claims are "inextricably intertwined with the express
and implied provisions of the collective bargaining agreement.
[and]. {s]he must pursue the [state law] claim under the
substantive provisions of the [collective bargaining agreement] and
the RLA or Title VII."
Pike, on the other hand, maintains the RLA does not preempt
claims for unlawful discrimination, and because her right to be
free from unlawful discrimination derives from statute, that right
cannot be bargained away' as part of a collective bargaining
agreement. Pike also argues that, under the District Court's
analysis, an unlawful discrimination claim cannot be classified as
either a "minor" or a “major" dispute, in any event, and that since
her claims derive from statute, as opposed to contract, her state
law claim is not preempted by the RLA.
Since the District Court determined that Pike's claims were
preempted by the RLA, it is instructive to commence our resolution
of the issue in dispute with a brief discussion of that Act and the
interpretative case law. Congress' purpose in enacting the RLA was
to promote stability in labor»management relations by providing a
comprehensive framework for resolving labor disputes. Hawaiian
Airlines, Inc., v. Norris (1994) U.S. , 114 S.Ct. 2239,
2243, 129 L.Ed.2d 203, (citing Atchison, T. & S.F.R. Co. v.
Buell (l987), 480 U.S. SS7, 562, 107 S.Ct. l4l0, l4l4, 94 L.Ed.2d
563, 571 and 45 U.S.C. § l51a.) There are two classes of disputes
distinguished in the RLA. The first class of disputes are deemed
"major" disputes and arise "out of the formation or change of
collective bargaining agreements covering rates of pay, rules, or
working conditions.“ Atchison, 480 U.S. at 562-63 (quoting Detroit
& T.S.L.R. Co. v. Transportation Union (1969), 396 U.S. 142, 145 n.
5, 90 S.Ct. 294, 296 n.5, 24 L.Ed.2d 325, 329 n.5). The second
class of disputes, "minor" disputes, are those "growing out of
grievances or out of the interpretation or application of
agreements concerning rates of pay, rules, or working conditions."
Atchison, 480 U.S. at 563. "Major" disputes seek to create
contractual rights, while "minor" disputes seek to enforce them.
Conrail, 491 U.S. at 302 (citing Elgin, J. & E.R. Co. v. Burley
(l945), 325 U.S. 7ll, 723, 65 S.Ct. l282, l289~90, 89 L.Ed. l8B6,
1894) .
A "minor" dispute, which is how the District Court
characterized Pike's claims, must be dealt with through the
railroad's internal dispute resolution processes. If not settled
there, then it must be settled through compulsory and binding
arbitration under the exclusive jurisdiction of NRAB or before an
adjustment board established by the employer and the union
representing the employee. Conrail, 491 U.S. at 303-304. Judicial
review of the arbitration decision is extremely narrow. Union
PaCifiC R. Co. v. SheehaR (l978), 439 U.S. 89, 9l, 99 S.Ct. 399,
40l, 58 L.Ed.2d 354, 357.
Accordingly, if Pike's sex discrimination claims are properly
categorized as a "minor" dispute, and thus subject to the mandatory
arbitration provisions of the RLA, then the District Court was
correct in its conclusion that it did not have subject matter
jurisdiction over her lawsuit. However, our review of federal case
authority, and most recently, the United States Supreme Court‘s
decision in Hawaiian Airlines, leads us to conclude Pike's sex
discrimination claims are not properly classified as either a
"minor" or "major“ dispute which are preempted by the RLA. Rather,
we agree with Pike that her state law and federal rights to be free
from unlawful sex discrimination are independent of the collective
bargaining agreement, derive from statute, and cannot be bargained
away as part of a collective bargaining agreement. Thus, her
claims are not preempted by the RLA.
Pike relies primarily' on Alexander‘ v. Gardner-Denver Co.
(19'74}, 415 U.S. 36, 94 S.Ct. l0ll, 39 L.E`.d.2d l4'7, and its
progeny, although that case did not arise under the RLA. In
Gardner~Denver, the petitioner (Alexander), alleging that he was
unlawfully discharged because of his race, filed a grievance under
the collective bargaining agreement to which his employer and his
union were parties. Following adverse rulings in his arbitration
hearing and before the EEOC, Alexander filed a complaint in federal
district court alleging race discrimination in violation of Title
VII of the Civil Rights Act of 1964. Gardner-Denver, 415 U.S. at
38-43.
In reversing lower court rulings that Alexander was bound by
the arbitration decision and had no right to sue under Title VII,
the United States Supreme Court held that an employee's right to
sue under a Title VII discrimination claim is not foreclosed by
prior submission of the claim to binding arbitration in accordance
with a collective bargaining agreement. The Court recognized that
claims of unlawful employment discrimination under Title VII could
be adjudicated in different forums. Gardner-Denver, 415 U.S. at
47. In the non-judicial forum, an arbitrator has the authority to
resolve questions of contractual rights under the collective
bargaining agreement while, in the court system, the judiciary
reviews statutory rights independent of that agreement. Gardner-
Denver, 415 U.S. at 49. "The distinctly separate nature of these
Denver,
contractual and statutory rights is not vitiated merely because
both were violated as a result of the same factual occurrence."
Gardner~Denver, 415 U.S. at 50. "Both rights have legally
independent origins and are equally available to the aggrieved
employee." Gardner~Denver, 415 U.S. at 52.
The Court emphasized that,
notwithstanding a collective
bargaining agreement clause against discrimination, an employee's
rights under Title VII are not part of the collective bargaining
process and cannot be prospectively waived. Gardner~Denver, 415
U.S. at 52.
Title `VII's strictures are absolute and represent a
congressional command that each employee be free from
discriminatory' practices. Of necessity, the rights
conferred can form no part of the collective-bargaining
process since waiver of these rights would defeat the
paramount congressional purpose behind Title VII. In
these circumstances, an employee's rights under Title VII
are not susceptible of prospective waiver. [Citation
omitted,]
Gardner~Denver, 415 U.S. at 51, 52.
The arbitrator*s task is to effect the intent of the parties
under the collective bargaining agreement (primarily in accordance
with "the law of the shop, not the law of the land," Gardner-
415 U.S. at 57), and he has authority to resolve only
questions of contractual rights, rather than the requirements of
legislation. Gardner-Denver, 415 U.S. at 53-54, 56-57. On the
other hand, an employee's claim under Title VII is a statutory
right independent of the arbitration process making arbitration a
“comparatively inappropriate" forum for the resolution of such
claims. Gardner-Denver, 415 U.S. at 54, 56. "[T]he resolution of
statutory or constitutional issues is a primary responsibility of
courts, and judicial construction has proved especially necessary
with respect to Title VII, whose broad language frequently can be
given meaning only by reference to public law concepts." Gardner-
Denver, 415 U.S. at 57.
Similarly, in Barrentine v. Arkansas-Best Freight Systems,
InC. (l98l}, 450 U.S. 72S, l0l S.Ct. l437, 67 L.Ed.2d 641 (Citing
Gardner-Denver), the Supreme Court held that petitioner's wage
claims under FLSA are not barred by the prior submission of their
grievance to contractual dispute resolution_procedures--arbitration
being designed to protect contractual rights as opposed to
statutory rights. Barrentine, 450 U.S. at 737, 742-45. Again, the
Supreme Court noted that an arbitrator, unlike a federal judge, has
no institutional obligation to enforce federal legislative policy.
Barrentine, 450 U.S. at 744~45. See also, McDonald v. City of west
BranCh, MiChigan (l984), 466 U.S. 284, l04 S.Ct. l799, 80 L.Ed.2d
302 and Wilko v. SWan (l953}, 346 U.S. 427, 74 S.Ct. l82, 98 L.Ed.
168 (applying the same logic in the context of other federal
statutes).
In Atchison, a case decided in 1987, the Supreme Court again
determined that a statutory claim was not subject to a collective
bargaining agreement’s binding arbitration clause--this time, in a
case involving the RLA. 1n that case, the Court held that the fact
an injury was caused by conduct that may have been subject to
arbitration under the RLA does not deprive a railroad employee of
his right to bring a FELA action for damages. Atchison, 480 U.S.
at 564-65. Citing McDonald, Barrentine, and Gardner-Denver, the
Court reiterated that, while the RLA "minor“ disputes remedy may be
exclusive in some circumstances, that is not the case where the
employee's claim is based on a statute that is designed to
guarantee minimum substantive rights. Atchison, 480 U.S. at 565.
Title VIl is such a statute, having been enacted by Congress "to
assure equality of employment opportunities by eliminating those
practices and devices that discriminate on the basis of race,
color, religion, sex, or national origin." Gardner-Denver, 415
U.S. at 44.
Notwithstanding the line of authority of the above cases, BN
argues that although the RLA does not substantively preempt Title
VII, under federal law Pike's Title VII claim must, nevertheless,
be pursued in the RLA arbitration forum. BN relies on Gilmer v.
Interstate/Johnson Lane Corp. (199l), 500 U.S. 20, 111 S.Ct. 1647,
114 L.Ed.2d 26, and cases incorporating its rationale which, at
first blush, appear to evidence a decided shift from the Court's
reasoning in Gardner-Denver.
Gilmer involved. an age discrimination claim. which, under
Gilmer's NYSE securities representative registration agreement, was
subject to compulsory arbitration. Gilmer, 500 U.S. at 21. After
first filing' his clain1 with_ the EEOC, Gilmer sued. in federal
district court alleging a violation of the Age Discrimination in
Employment Act (ADEA). Citing Gardner-Denver, the trial court
denied the employer's demand for compulsory arbitration. Gilmer's
agreement, however, was not limited to contract-based claims
l0
Gardner-Denver cases did not
pursuant to a collective bargaining agreement, but also mandated
arbitration for statutory claims. Gilmer, 500 U.S. at 35.
The Court held that Gilmer‘s ADEA. claim was subject to
compulsory arbitration pursuant to the Federal Arbitration Act
(FAA). Gilmer, 500 U.S. at 24-29. In distinguishing the Gardner-
Denver line of cases, however, the Gilmer Court noted several
important distinctions which are germane to our resolution of the
issue in the instant case. First, the Court noted, that the
involve the issue of the
enforceability of an agreement to arbitrate statutory claims, but
rather, involved the "quite different" issue of whether arbitration
of contract~based claims precluded subsequent judicial review when
the employees had not agreed to arbitration of their statutory
claims and the arbitrators were not authorized to resolve those
claims. Gilmer, 500 U.S. at 35.
Here, while the BN-Union collective bargaining agreement is
not a part of the record on appeal, neither party has suggested in
their briefs that Pike's statutory' discrimination claims were
specifically made subject to any agreement to arbitrate, and, it is
undisputed that Pike has not, in fact, arbitrated her claims.
Second, the Gilmer Court stated that because the Gardner-
Denver cases arose in the context of collective bargaining
agreements, the claimants were represented by their unions in the
arbitration proceedings and there was, therefore, an important
concern over the "tension between collective representation and
individual rights," a concern not applicable in Gilmer. Gilmer,
ll
500 U.S. at 35.
Since Pike's dispute also arises in the context of a
collective bargaining agreement, the important concern
distinguishing the Gardner-Denver cases from Gilmer is present
here. Even if Pike is entitled to be represented by counsel of her
choice at the arbitration. hearing, the arbitrator‘s source of
authority is the collective bargaining agreement, and his task is
to effectuate the intent of the parties (BN and the Union) by
interpreting the agreement in accordance with the law of the shop
and the various needs of the employer and the union, rather than in
accordance with the law of the land. Gardner-Denver, 415 U.S. at
53, 56-57. Accordingly, the tension between. contractual and
statutory objectives remains. Gardner~Denver, 415 U.S. at 57.
Third, the Court noted that contrary to Gilmer, the Gardner-
Denver line of cases was not decided under the FAA which, as the
Court noted, reflects a "liberal federal policy favoring
arbitration agreements." Gilmer, 500 U.S. at 25 (citing Mitsubishi
Motors Corporation v. Soler Chrysler-Plymouth, Inc. (i985), 473
U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444, and. Moses H. Cone
Memorial Hospital v. Mercury Construction Corp (1983), 460 U.S. 1,
103 S.Ct. 927, 74 L.Ed.2d 765.) Similarly here, the FAA is not
applicable to Pike‘s claim.
while Gilmer may evidence a narrowing of the Supreme Court's
rationale as expressed in the Gardner-Denver cases, the Gilmer
Court did not overrule the latter authority, but rather; carefully
distinguished cases involving agreements to arbitrate statutory
12
rights subject to the FAA from cases arising in the context of a
collective bargaining agreement which neither involve an agreement
to arbitrate statutory rights nor the application of the FAA.
Inasmuch as Pike's case falls into the latter category rather than
the former, we conclude that Gardner-Denver and its progeny
control. we further conclude that the RLA does not mandate
arbitration of Pike's Title VII claims.
Our determination in that regard is further reinforced by the
supreme Court's recent decision in Hawaiian Airlines, a case which
squarely addressed the scope of federal preemption under the RLA.
That state court case involved an employee's claims which were
based upon federal and state statutes, but which the employer and
trial court characterized as a "minor" dispute under the RLA.
In that case, Norris, an aircraft mechanic for Hawaiian
Airlines (HAL), was terminated after refusing to sign a maintenance
record, as required by his collective bargaining agreement, for a
plane he considered unsafe and after reporting his concerns to the
Federal Aviation Administration. His separate state court suits
under the Federal Aviation Act and state whistleblower protection
law' were dismissed. as being' preempted by' the RLA's mandatory
arbitration mechanism for "minor" disputes. Hawaiian.Airlines, 114
S.Ct. at 2241-43. On. granting' certiorari, the Supreme Court
affirmed the Hawaiian Supreme Court's reversal of the trial court's
decision, holding that the RLA did not preempt Norris' state law
causes of action. Hawaiian Airlines, 114 S.Ct. at 2251.
Citing Conrail and Atchison, among other cases, the Court
l3
noted that the "minor" disputes contemplated by the RLA are those
grounded in the collective bargaining agreement, i.e,, those
invo1ving' the interpretation or application of existing labor
agreements. Hawaiian Airlines, 114 S.Ct. at 2245, 2247.
Furthermore, the RLA's mechanism for resolving "minor" disputes
through arbitration does not preempt causes of action to enforce
rights and obligations that exist independently of the collective
bargaining agreement. Hawaiian Airlines, 114 S.Ct. at 2246-47
(citing Atchison, 480 U.S. 557 and Barrentine, 450 U.S. 728).
Substantive protections provided. by state law, independent of
whatever labor agreement might govern, are not preempted by the
RLA. Hawaiian Airlines, 114 S.Ct. at 2246 (citing Missouri Pacific
R. Co. v. Norwood (1931), 283 U.S. 249, 51 S.Ct. 458, 75 L.Ed.
1010}.
Noting that the preemption standard leading to atchison was
virtually identical to that employed in cases involving § 301 of
the Labor Management Re1ations Act (LMRA), the Court then went on
to adopt the framework used in Lingle v. Norge Division of Magic
Chef, InC. (1988), 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410,
as being appropriate for addressing preemption under the RLA.
Hawaiian Airlines, 114 S.Ct. at 2249. Under Lingle, the question
is whether the plaintiff‘s state law claims are independent of the
collective bargaining agreement. while recognizing that "the
state~law analysis might well involve attention to the same factual
considerations as the contractual determination . . . , the Court
disagreed that
14
such parallelism render[ed] the state-law analysis
dependent upon the contractual analysis. For while there
may be instances in which the National Labor Relations
hot pre-empts state law on the basis of the subject
matter of the law in question, § 301 pre-emption merely
ensures that federal law will be the basis for
interpreting collective-bargaining agreements, and says
nothing about the substantive rights a State may provide
to workers when adjudication of those rights does not
depend upon the interpretation of such agreements. In
other words, even if dispute resolution pursuant to a
collective-bargaining agreement, on the one hand, and
state law, on the other, would require addressing
precisely the same set of facts, as long as the state-law
claim can be resolved without interpreting the agreement
itse1f, the claim is 'independent' of the agreement for
§ 301 purposes.
Hawaiian Airlines, 114 S.Ct. at 2248-49 (quoting Lingle, 486 U.S.
at 408-l0.) we have heretofore adopted the Lingle standard in the
context of an employee's wrongful discharge claim. based. upon
allegations of the employer's sexual harassment and discrimination,
and held that her claim was not preempted by the LMRA, although her
employment was governed by a collective bargaining agreement.
Foster v. Albertsons, lnc. (1992), 254 Mont. 117, 835 P.2d 720.
Similarly, in the instant case, utilizing the test set forth
in Lingle, we conclude that Pike's claim of sexual discrimination
is independent of the collective bargaining agreement, and does not
require interpretation of that agreement. Rather, whether BN
terminated Pike because of her gender and whether the reason which
it offered as a basis for that termination was pretextual and in
violation of Pike's substantive rights to be free from sexual
discrimination under the Montana Human Rights Act, is purely a
factual question, the resolution of which requires only the factual
inquiry into BN's motive for discharging her. Hawaiian Airlines,
15
114 S.Ct. at 2251.
Accordingly, we hold that Pike's statutory right to litigate
her Title VII sex discrimination claim in court is not foreclosed
by the arbitration provisions of the RLA, nor is her state law
claim of sex discrimination preempted substantively by that Act.
Here, the source of Pike‘s right to be free from sexual
discrimination is not the collective bargaining agreement. Rather
that source is found in federal and state law. lt is clear that
"minor" disputes are subject to the mandatory dispute resolution
provisions of the RLA. However, it is also clear that where the
employee's claim arises independently of the contractual provisions
of the collective bargaining agreement and is, instead, grounded in
the employee's independent statutory right under federal and state
law to fbe free fron1 sexual discrimination, then. her right to
litigate that claim in a judicial forum is not preempted by the
RLA. Conrail does not control. Neither that case, nor §lgin,
involved preemption analysis and neither involved claims deriving
from statutory grounds independent of the collective bargaining
agreement. Hawaiian Airlines, 114 S.Ct. at 2249-51.
Finally, we note BN's reliance on various federal circuit
court decisions including, among others, Alford v. Dean witter
Reynolds (5th Cir. 1991), 939 F.2d 229; Bender v. A.G. Edwards &
Sons, InC. (llth Cir. 1992), 971 F.Zd 698; Hirras V. Nat'l R.R.
Passenger Corp. (5th Cir. 1994), 10 F.3d 1142, vacated and remanded
(1994), 114 S.Ct. 2732, 129 L.Ed.2d 855, on remand (5th Cir. 1994),
39 F.3d 522 (withdrawn on denial of rehearing and reh. en banc),
16
superseding ooinion, (5th Cir. l995), 44 F.3d 278; and Croston v.
Burlington Northern Railroad Co. (9th Cir. l993), 999 F.2d 381. In
light of the manner in which the Supreme Court distinguished the
Gardner-Denver line of cases in Gilmer and our conclusion that
Pike's case fits within the former rather than the latter line of
authority, and in view of the Court's decision in Hawaiian
Airlines, we do not find the cases cited by BN persnasive.
we hold that the District Court erred in determining that
Pike's state law and federal claims of sex discrimination are
preempted by RLA, and we reverse and remand for further proceedings
consistent with this opinion. jUjj駧§§:`*"h_
4/////¢A'JGstice
We Concur:
Justices
17