United Transp. Union v. Kansas City Southern Ry. Co.

• Decision Date: 31 March 1999
• Docket Number: No. 98-1608,98-1608
• Parties: 160 L.R.R.M. (BNA) 2991 UNITED TRANSPORTATION UNION, Appellee, v. The KANSAS CITY SOUTHERN RAILWAY COMPANY, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 582

172 F.3d 582

160 L.R.R.M. (BNA) 2991

UNITED TRANSPORTATION UNION, Appellee, v. The KANSAS CITY SOUTHERN RAILWAY COMPANY, Appellant.

No. 98-1608.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 19, 1998.

Decided March 31, 1999.

Brian N. Woolley, Kansas City, MO, argued (Jack D. Rowe and William C. Odle, on the brief), for Appellant.

Kevin C. Brodar, Cleveland, OH, argued (Clinton J. Miller, III, General Counsel of United Transportation Union, on the brief), for Appellee.

Before McMILLIAN, WOLLMAN, and HANSEN, Circuit Judges.

HANSEN, Circuit Judge.

The Kansas City Southern Railway Company (KCS) appeals from the district court's grant of declaratory and injunctive relief in favor of the United Transportation Union (UTU) under the Railway Labor Act (RLA). See 45 U.S.C. §§ 151-188 (1994). We vacate the district court's order, and we remand the case.

I. Background

This case stems from a labor dispute at a Kansas City railroad switching yard known as the "Joint Agency." The KCS and I & M Rail Link (I & M) jointly own and operate the switching yard. KCS and I & M workers in the yard make up and break up trains, transfer cars between customers, and service the many industries located within the Joint Agency. The UTU represents certain KCS employees who work in the Joint Agency.

The KCS and the Chicago, Milwaukee, St. Paul and Pacific Railroad (the Milwaukee Road) created the Joint Agency with Interstate Commerce Commission (ICC) approval in the early 1940s. Each ended up a joint owner of the yard with joint operating rights over its rails. (Appellant's App. at 37.) Both the KCS's and the Milwaukee Road's employees worked at the Joint Agency. Two of the UTU's predecessor unions separately represented certain KCS and Milwaukee Road employees who worked in the Joint Agency. The ICC's January 17, 1942, order approving the establishment of the jointly owned yard spoke to the labor relationships involved, as well as considering the effect on interstate commerce due to the creation and operation of the Joint Agency. "The employees of the [Kansas City] Southern and the Milwaukee assigned to the joint agency will be subject to the bargaining agreements between the two companies and the various labor brotherhoods, unless, of course, a separate agreement is negotiated with the agency." (Id. at 29.) The ICC found

that the coordination of the [Kansas City] Southern and Milwaukee track and terminal facilities, through joint ownership and joint operation, will be mutually profitable to them and also will improve their services to the public. We are not impressed by the protestants' [the Railway Labor Executives' Association and seven railway-employee organizations] objections to the method by which the Milwaukee and the [Kansas City] Southern propose to render freight service in the Kansas City area through their proposed joint-agency arrangement. No doubt [the Kansas City Southern and the Milwaukee] and their employees can satisfactorily adjust any difficulties which may arise.

(Id. at 34.)

In 1945, the KCS and the Milwaukee Road entered into a separate labor agreement (the 1945 Agreement) with these predecessor labor organizations covering the unions' workers in the Joint Agency. The agreement allocated the work and specifically permitted crews from either the KCS or the Milwaukee Road to work anywhere within the yard. This arrangement remained in effect for forty years. In or around 1985, the Soo Line Railroad (Soo) purchased much of the Milwaukee Road, including its ownership interest in the Joint Agency. The UTU represented Soo's employees in the Joint Agency as well as KCS's employees, and so both the Soo and the KCS continued to assign work crews pursuant to the 1945 Agreement. In late 1996, it became apparent that I & M was going to acquire the Soo's interest in the Joint Agency. The Brotherhood of Locomotive Engineers (BLE) represents I & M's employees in the Joint Agency. According to the UTU, the I & M employees represented by the BLE earn 30 percent less than the KCS employees represented by the UTU. (See id. at 125.)

In August 1997, the UTU filed the instant suit seeking declaratory and injunctive relief under the RLA, 45 U.S.C. §§ 151-188. The UTU claims that I & M's decision not to recognize the UTU as the representative of I & M's yard workers renders the 1945 Agreement null and void. In fact, the UTU's General Chairman's position before the district court was that the Joint Agency itself no longer exists. (Id. at 117-18; see also id. at 60) ("It is ... my position that the I & M is precluded from any and all Joint Agency operations ...."). According to the UTU, without the 1945 Agreement, there can be no commingling of KCS and I & M employees in the Joint Agency. On January 5, 1998, the district court held a preliminary injunction hearing. The UTU put on one witness--Robert Martin, General Chairman of the UTU. The district court permitted KCS to cross-examine Mr. Martin, and further permitted both parties to argue the merits of their respective positions. Before KCS put on its witness, however, the court terminated the hearing and concluded that this case presented a major dispute under the RLA, and requested the UTU's lawyers to draw up a status quo order.

II. Discussion

Labor relations between the KCS and the UTU are governed by the RLA, 45 U.S.C. §§ 151-188. The RLA obligates unions and employers to negotiate disputes. Sheet Metal Workers' Int'l Ass'n v. Burlington N. R. Co., 893 F.2d 199, 202 (8th Cir.1990) (citing 45 U.S.C. § 152 First and Second general duties). "If negotiation fails ..., the dispute takes one of two courses, depending upon whether the dispute is characterized as major or minor." Id. (footnote omitted). Whether a dispute is "major" or "minor" can be of critical procedural and jurisdictional importance. ¹ Minor disputes follow an administrative resolution process, and the parties must submit their differences to the National Railroad Adjustment Board for final arbitration. See 45 U.S.C. § 153(i). Conversely, in major disputes "the parties are obligated to maintain the status quo" while they pursue "a lengthy process of bargaining and mediation." Consolidated Rail Corp. v. Railway Labor Executives' Ass'n, 491 U.S. 299, 302, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989). Thus, if the dispute between the KCS and the UTU is minor, the district court lacked jurisdiction to enter the status quo injunction and the case should have been referred to an adjustment board. On the other hand, if the case is major, a status quo order was appropriate. See id. at 303, 109 S.Ct. 2477 ("The district courts have subject-matter jurisdiction to enjoin a violation of the status quo pending completion of the required procedures, without the customary showing of irreparable injury."). See also Sheet Metal Workers', 893 F.2d at 202 (noting that the carrier is not required to maintain the status quo in minor disputes).

There is no bright line rule for differentiating between major and minor disputes. The issue is "often a question of degree and turns upon the facts in each case." Id. (quotation and citation omitted). In general, "major disputes seek to create contractual rights, minor disputes to enforce them." Consolidated Rail, 491 U.S. at 302, 109 S.Ct. 2477. Major disputes involve questions relating to the formation of, or efforts to secure, labor agreements. Sheet Metal Workers', 893 F.2d at 202 (citing Elgin, J. & E. Ry., 325 U.S. at 723, 65 S.Ct. 1282). Major disputes " 'look to the acquisition of rights for the future, not to assertion of rights claimed to have vested in the past.' " Brotherhood of Maintenance of Way Employees, Lodge 16 v. Burlington Northern R. Co., (Lodge 16 ), 802 F.2d 1016, 1021 n. 3 (8th Cir.1986) (quoting Elgin, J. & E. Ry., 325 U.S. at 723-24, 65 S.Ct. 1282). In contrast, minor disputes involve the interpretation of existing agreements. Sheet Metal Workers', 893 F.2d at 202-03.

"Characterizing the nature of the dispute 'depends on whether it is arguably comprehended within the agreement of the parties.' " Id. at 203 (quoting Lodge 16, 802 F.2d at 1022). In making "this determination, the court must determine the terms of the agreement." Id. "The parties' agreement includes the written collective-bargaining agreement and [the parties'] past practices." Id. It is important to stress, however, that the court "need not interpret the terms of the agreement." Id. The purpose of the inquiry, rather, "is to determine whether [the] case implicates a question of contract interpretation." Id. (quotations and citations omitted).

Once a court determines the terms of the parties' agreement, it must then determine whether the particular dispute is comprehended within that agreement. "Verbal formulations of this [inquiry] have differed over time and among the Circuits: phrases such as 'not arguably justified,' 'obviously insubstantial,' 'spurious,' and 'frivolous' have been employed." Consolidated Rail, 491 U.S. at 306, 109 S.Ct. 2477 (footnote omitted). See also Sheet Metal Workers', 893 F.2d at 203 (collecting and summarizing the various standards and formulations). For example, a case is deemed minor if the railroad's assertion that the dispute implicates a question of contract interpretation is not obviously insubstantial. The differences between these formulations is not critical, each " 'illustrate[s] the relatively light burden which the railroad must bear' in establishing exclusive arbitral jurisdiction under the RLA." Consolidated Rail, 491 U.S. at 307, 109 S.Ct. 2477 (quoting Lodge 16, 802 F.2d at 1022). With these standards in mind, we turn to the parties' positions and the district court's order.

A. The Parties' Positions

The KCS views this case as a dispute governed by at least one of two labor agreements--either its existing labor agreement with the UTU or the 1945 Agreement. Thus, according to the KCS, this is a minor dispute. The UTU, on the other...