Opinion
8:23CV324
2023-12-08
BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYES DIVISION/IBT, Plaintiff, v. BNSF RAILWAY COMPANY, Defendant.
Aaron S. Edelman, Richard S. Edelman, Mooney, Green Law Firm, Washington, DC, John E. Corrigan, Dowd & Corrigan, LLC, Omaha, NE, for Plaintiff. David Pryor, BNSF Railway, Fort Worth, TX, Nichole S. Bogen, O'Neill, Heinrich Law Firm, Lincoln, NE, for Defendant.
Aaron S. Edelman, Richard S. Edelman, Mooney, Green Law Firm, Washington, DC, John E. Corrigan, Dowd & Corrigan, LLC, Omaha, NE, for Plaintiff.
David Pryor, BNSF Railway, Fort Worth, TX, Nichole S. Bogen, O'Neill, Heinrich Law Firm, Lincoln, NE, for Defendant.
MEMORANDUM AND ORDER
Robert F. Rossiter, Jr., Chief United States District Judge.
This matter is before the Court on defendant BNSF Railway Company's (the "railway") Motion to Dismiss (Filing No. 20) plaintiff Brotherhood of Maintenance of Way Employees Division/IBT's (the "union") Complaint (Filing No. 1) pursuant to Federal Rule of Civil Procedure 12(b)(1) and Nebraska Civil Rule 7.1. According to the railway, the Court lacks subject-matter jurisdiction of the union's claim because the dispute raised in the Complaint is a "minor dispute" under the Railway Labor Act ("RLA"), 45 U.S.C. § 151 et seq., and must be resolved "not by the Court but through binding arbitration." The union unsurprisingly opposes dismissal (Filing No. 29). For the reasons stated below, the railway's motion to dismiss is granted.
I. BACKGROUND
The union represents the railway's maintenance-of-way employees for collective bargaining under the RLA. As that description implies, those employees are responsible for constructing, inspecting, repairing, renewing, and maintaining the railway's track, right of way, bridges, buildings, and other structures.
For years, the union and the railway have been signatories to multiple collective-bargaining agreements (often referred to as "CBAs") that govern the employment relationship between the railway and its maintenance-of-way employees, including hours of service, rates of pay, work rules and conditions, and, as pertinent here, the railway's outsourcing of maintenance-of-way work to subcontractors. Those agreements include what the parties describe as a North CBA ("North CBA"), a South CBA ("South CBA"), and a National Agreement that requires the railway to make good-faith efforts to reduce the amount of work subcontracted ("National Agreement" and together, the "collective-bargaining agreements").
Drawing on the National Agreement, the South CBA sets a limit on subcontracting, requires the railway to give the union notice if it plans to subcontract out maintenance-of-way work, and requires the parties to make a good-faith effort to resolve any issues. If they can't, the railway can proceed, and the union can file claims and grievances contesting the railway's decision to subcontract work the union thinks should be done in-house.
The North CBA is a little more specific —designating five limited situations in which the railway can subcontract work out to nonunion workers—but otherwise operates similarly. If the railway plans to
subcontract work, it generally must give the union notice. Again, the parties are required to make a good-faith effort to resolve any differences, and the union can file claims if they cannot agree.
Since 2016, the railway has been reducing the size of its maintenance-of-way workforce and changing how the remaining workers perform their duties. The railway attributes the reduction to its evolving approach to engineering needs and production modifications, including the use of concrete ties and stronger steel with longer lifespans, increased investment in steel bridges and larger turnouts, and improved maintenance planning and predictive maintenance. The railway also cites lower volume in 2023.
The union alleges the railway is squeezing more out of the remaining maintenance-of-way workers and increasingly relying on subcontractors to do maintenance-of-way work. Objecting to the reduction in force and increase in subcontracting, the union has requested the railway return to 2016 workforce levels to no avail.
On July 28, 2023, the union filed this action (Filing No. 1), alleging the railway violated the RLA "by reducing its maintenance of way workforce by 19% since 2016, while increasing its contracting-out of maintenance of way work." According to the union, the railway "failed to exert every reasonable effort to maintain its agreements with [the union] and failed to deal with [it] in good faith, in violation of Section 2 First of the RLA." See 45 U.S.C. § 152, First.
The union then quickly moved for summary judgment (Filing No. 11). The railway responded with a motion to stay (Filing No. 23), which the Court granted (Filing No. 25), and the present motion to dismiss for lack of subject-matter jurisdiction.
As the railway sees it, the dispute raised by the union's Complaint is a "minor dispute" under the RLA because "it requires interpreting and applying the plain terms of collective bargaining agreement out-sourcing rules and, therefore" must be resolved in binding arbitration, not in federal court. See Richardson v. BNSF Ry., 2 F.4th 1063, 1070 (8th Cir. 2021) ("It is settled law in this circuit that the RLA divests courts of subject-matter jurisdiction over claims arising out of the interpretation or application of a collective-bargaining agreement between a carrier and its employees.").
The union maintains it "has pleaded a matter within the Court's subject-matter jurisdiction unless [the railway] carries its burden of demonstrating that the case actually concerns a minor dispute." The railway's motion is now fully briefed and ready for decision.
II. DISCUSSION
A. Standard of Review
A motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1) can either challenge the complaint "on its face or on the factual truthfulness of its averments." Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). The parties agree the railway's jurisdictional challenge is a factual one and have submitted outside evidence in support of their arguments. With a factual challenge, the Court can consider "matters outside the pleadings and" the union does not get "the benefit of" Rule 12(b)(6)'s usual safeguards. Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990); see also Titus, 4 F.3d at 593 (explaining courts can "receive competent evidence such as affidavits, deposition testimony, and the like" as needed "to determine the factual dispute"). To withstand a motion to dismiss under Rule 12(b)(1), the plaintiff must "establish subject-matter jurisdiction by a preponderance of the evidence." Richardson, 2 F.4th at 1067. The railway bears "the 'relatively light burden' of establishing the exclusive arbitral jurisdiction of the [National Railroad Adjustment Board] under the RLA," Schiltz v. Burlington N. R.R., 115 F.3d 1407, 1414 (8th Cir. 1997) (quoting Consol. Rail Corp. v. Ry. Lab. Executives' Ass'n, 491 U.S. 299, 307, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989), and recognizing the "presumption that disputes between railroads and their unionized employees are minor, and thus, arbitrable"). Although the Court will not dismiss for lack of subject-matter jurisdiction lightly, see Wheeler v. St. Louis Sw. Ry., 90 F.3d 327, 329 (8th Cir. 1996), dismissal is required unless "the case belongs in federal court." Avina v. Union Pac. R.R., 72 F.4th 839, 842 (8th Cir. 2023) ("When a dispute over the meaning of a collective-bargaining agreement crops up in a case involving a railroad or an airline, federal courts cannot hear it.").
B. The Duty to Settle Disputes
By design, the RLA prevents "the disruption of the Nation's rail service," Sheet Metal Workers' Int'l Ass'n v. Burlington N. R.R., 893 F.2d 199, 202 (8th Cir. 1990), and promotes "stability in labor-management relations by providing a comprehensive framework for resolving labor disputes," Wheeler, 90 F.3d at 329 (quoting Taggart v. Trans World Airlines, 40 F.3d 269, 272 (8th Cir. 1994)). To that end, "the RLA imposes a judicially enforceable legal obligation on railroads and employee unions to bargain in good faith." Int'l Ass'n of Sheet Metal, Air, Rail, & Transp. Workers v. Iowa N. Ry., 37 F.4th 1399, 1404 (8th Cir. 2022) (citing 45 U.S.C. § 152, First and Chi. & N. W. Ry. v. United Transp. Union, 402 U.S. 570, 576-79, 79, 91 S.Ct. 1731, 29 L.Ed.2d 187 (1971)). More specifically, the RLA requires
all carriers, their officers, agents, and employees to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes, whether arising out of the application of such agreements or otherwise, in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof.
45 U.S.C. § 152, First.
In other words, the RLA requires the railway and the union to negotiate when a labor dispute arises. See United Transp. Union v. Kan. City S. Ry., 172 F.3d 582, 585 (8th Cir. 1999). "If negotiation fails to resolve the dispute, the dispute takes one of two courses, depending upon whether the dispute is characterized as major or minor." Sheet Metal Workers' Int'l Ass'n, 893 F.2d at 202 (contrasting the "almost interminable process" for "major disputes" with the less-arduous mandatory arbitration for "minor disputes" (quoting Bhd. of Maint. of Way Emps. v. Chi. & N. W. Transp. Co., 827 F.2d 330, 333 (8th Cir. 1987))).
"The terms major and minor dispute do not appear in the RLA itself. Instead, they are judicially-created nomenclature for the statutory categories." Sheet Metal Workers' Int'l Ass'n, 893 F.2d at 202 n.2.
Under the RLA, "major disputes" generally involve "the formation of collective-bargaining agreements or efforts to secure them," whereas "minor disputes" generally involve "controversies over the meaning of an existing collective-bargaining agreement in a particular fact situation." Avina, 72 F.4th at 842 (brackets
omitted) (quoting Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252-53, 114 S.Ct. 2239, 129 L.Ed.2d 203 (1994)); accord Schiltz, 115 F.3d at 1413 ("Major disputes are defined as those disputes that create contractual rights between railroads and their employees; minor disputes involve the enforcement of those contractual rights.").
"Although there is no bright line to differentiate between major and minor disputes, a dispute that is arguably justified by the terms of [a collective-bargaining agreement] is minor." Bhd. of Maint. of Way Emps. v. Burlington N. Santa Fe R.R., 270 F.3d 637, 639 (8th Cir. 2001) (per curiam) (reiterating "minor disputes" often involve controversies arising out of the interpretation or application of a collective-bargaining agreement). If "the employer's claims are frivolous or obviously insubstantial, the dispute is major." Consol. Rail, 491 U.S. at 307, 109 S.Ct. 2477. If doubts arise "about the classification of a dispute, the dispute is also considered to be minor." Bhd. of Maint. of Way Emps., 270 F.3d at 639.
In moving to dismiss, the railway contends § 152, First does not apply to the union's challenge to its subcontracting decisions because the dispute does not involve an action that threatens to interrupt commerce, like a strike. See Burlington N. & Santa Fe Ry. Co. v. Bhd. of Maint. of Way Emps., 286 F.3d 803, 807 (5th Cir. 2002) (concluding § 152, First's reasonable-effort requirement only applies to actions that interrupt commerce or the operations of a carrier). According to the railway, the union raises a mill-run "minor dispute" that is subject to mandatory arbitration because it involves the interpretation and application of the three collective-bargaining agreements discussed at length in the Complaint. See United Transp. Union, 172 F.3d at 586 ("[M]inor disputes involve the interpretation of existing agreements.").
The railway credibly argues its interpretation of its rights to subcontract under the collective-bargaining agreements is at least "arguably justified" by the circumstances of this case—leaving this Court without jurisdiction to hear the union's claim. See Consol. Rail, 491 U.S. at 304, 307, 109 S.Ct. 2477; Bhd. of Maint. of Way Emps. v. Burlington N. Santa Fe Ry. Co., 596 F.3d 1217, 1223 (10th Cir. 2010) (explaining that given "the primary importance of labor arbitration under the RLA[,]... the default position for courts is to deem a dispute as minor if it even remotely touches on the terms of the relevant collective bargaining agreement") (emphasis added).
In response, the union urges the Court to reject the railway's assertion that the parties' dispute is minor. Yet the union does not expressly contend the dispute is major. Rather, it argues the Court has subject-matter jurisdiction over this case because the Complaint sets forth facts demonstrating that the railway has directly violated its statutory duty under § 152, First "to exert every reasonable effort to maintain its agreements with the Union which provide for performance of [its] rail maintenance of way work by its employees represented by [the union], limit the circumstances in which [the railway] can use contractors to perform such work, and commit the [railway] to making good faith efforts to reduce its contracting-out of maintenance of way work and to increase the use of its own forces to perform that work." As the union sees it, "[t]he dispute here is not over interpretation of the parties' agreements, but rather over [the railway] rendering itself unable to comply with the agreements." The union's arguments are unpersuasive. See Bhd. of Maint. of Way Emps. v. CSX Transp.,
Inc., 143 F. App'x 155, 160 (11th Cir. 2005) (unpublished per curiam) (rejecting the argument that an "alleged statutory violation renders irrelevant the question of whether the dispute is major or minor").
The union relies on the Supreme Court's decision in Chicago & North Western and subsequent circuit cases to demonstrate that § 152, First is not simply a "mere statement of policy or exhortation to the parties" and is instead a legal obligation enforceable by the courts in certain circumstances. 402 U.S. at 578, 91 S.Ct. 1731. While that is true, see id., neither Chicago & North Western—nor any other case cited by the union—found that a dispute like the present one could be resolved in federal court. See, e.g., BNSF Ry. Co. v. Int'l Ass'n of Sheet Metal, Air, Rail & Transp. Workers — Transp. Div., 973 F.3d 326, 340 (5th Cir. 2020) (noting that "injunctions granted under Section 152, First have been issued almost exclusively to enjoin a union's strike that would have interrupted the service of transportation to the public").
In Chicago & North Western, the parties had exhausted the formal RLA procedures mandated for a "major dispute," and the union threatened to strike. 402 U.S. at 573, 583, 91 S.Ct. 1731. The Supreme Court decided that a federal court could exercise jurisdiction in those circumstances and enjoin a threatened strike "when such a remedy is the only practical, effective means of enforcing the duty to exert every reasonable effort to make and maintain agreements." Id. at 583, 91 S.Ct. 1731. In reaching that conclusion, the Supreme Court warned that the "not insignificant danger that parties will structure their negotiating positions and tactics with an eye on the courts" and the risk that "the vagueness of the obligation under [§ 152, First] could provide a cover for freewheeling judicial interference in labor relations" counseled "restraint" in ordering such relief. Id.
In light of those important concerns and the judicious call for restraint, the union fails to make a compelling argument for exercising federal jurisdiction in this case. Notably, the union seeks a declaration from the Court "that by reducing its workforce by since [sic] 2016, while increasing its contracting-out of maintenance of way work, [the railway] has violated [§ 152, First] of the RLA." That requested relief bears little resemblance to the strike injunction in Chicago & North Western and the circumstances in the other cases the union cites.
The union simply fails to adequately explain how the narrow ruling in Chicago & North Western warrants the Court intervening in a dispute that is rooted in the terms of the parties' collective-bargaining agreements. See id. at 579, 91 S.Ct. 1731 (concluding "the duty to exert every reasonable effort" was necessary to avoid one party going through the motions of negotiating with a desire to not reach an agreement, but stating courts should be circumspect in going beyond that because "doing so risks infringement of the strong federal labor policy against governmental interference with the substantive terms of collective-bargaining agreements"); Int'l Ass'n of Machinists & Aerospace Workers, AFLCIO v. Trans World Airlines, Inc., 839 F.2d 809, 814 (D.C. Cir.), amended, 848 F.2d 232 (D.C. Cir. 1988) ("The independent duty found by the Court under [§ 152, First] in the Chicago and North Western case is a limited one."). The union's proposed uncoupling of the railway's subcontracting decisions from its "systemic practices" regarding subcontracting falls short of justifying judicial intervention on the facts of this case.
All in all, the union's proposed interpretation of § 152, First casts aside the Supreme
Court's warnings about distorted negotiations and "freewheeling judicial interference in labor relations." Chicago & North Western, 402 U.S. at 583, 91 S.Ct. 1731. The union's unduly "broad and overarching" interpretation of the duty imposed by § 152, First could lay waste to the RLA's comprehensive framework for arbitrating minor disputes and dramatically alter the delicate balance that is so central to stable labor relations under the RLA. See CSX Transp., Inc., 143 F. App'x at 161-62 (rejecting a broad reading of § 152, First that would have effectively circumvented "Consolidated Rail's minor dispute rule" and opened "the door to federal subject matter jurisdiction" for "[v]irtually any dispute" over the meaning of a collective-bargaining agreement by recasting it "as a dispute over the corresponding [§ 152, First] requirements").
Though the union tries to deny that its claim involves a "minor dispute" under the RLA, the issues it presents effectively turn on the proper interpretation and application of the terms of its collective-bargaining agreements and past practices with the railway. See, e.g., United Transp. Union, 172 F.3d at 586 (clarifying "minor disputes involve the interpretation of existing agreements," which includes the parties' written collective-bargaining agreements and their past practices); Alton & S. Lodge No. 306 Bhd. Ry. Carmen of U.S. & Canada v. Alton & S. Ry. Co., 849 F.2d 1111, 1114 (8th Cir. 1988) ("Longstanding working relationships, customs, and practices, although not reduced to writing, are to be considered as implied terms in the agreement when they have ripened into an established and recognized custom between the parties."). That much is clear from the union's Complaint and arguments, which are permeated by the terms and obligations of the parties' agreements. See, e.g., Schiltz, 115 F.3d at 1414 (noting the presumption of arbitrability and finding a dispute was minor where the "gravamen" of the argument revolved "around the interpretation of the contract language").
"The RLA assigns arbitration boards 'exclusive jurisdiction' over claims arising out of the application or interpretation of a collective-bargaining agreement between a carrier and its employees." Richardson, 2 F.4th at 1067 (quoting Consol. Rail, 491 U.S. at 304, 109 S.Ct. 2477). That includes claims—like the union's subcontracting claim—that rely "on rights that exist only by virtue of the collective-bargaining agreement." Id.; see also Avina, 72 F.4th at 843 (concluding "dismissal is the only option" if any doubt remains "about whether the dispute" at issue requires a district court to interpret the terms of a collective-bargaining agreement).
When a "minor dispute" like this one "ends up in formal litigation, the [RLA] strips federal courts of subject-matter jurisdiction and places it in the National Railroad Adjustment Board." Id. at 842. For that reason,
IT IS ORDERED:
1. Defendant BNSF Railway Company's Motion to Dismiss (Filing No. 20) is granted.
2. Plaintiff Brotherhood of Maintenance of Way Employees Division/IBT's Motion for Summary Judgment (Filing No. 11) is denied as moot.
3. This case is dismissed without prejudice.
4. A separate judgment will issue.