Adams v. Burlington Northern R. Co.

• Decision Date: 16 November 1993
• Docket Number: Civ. A. No. 93-2051-GTV.
• Citation: 838 F. Supp. 1461
• Parties: Leroy ADAMS, et al., Plaintiffs, v. BURLINGTON NORTHERN RAILROAD COMPANY, Defendant.
• Court: U.S. District Court — District of Kansas

838 F. Supp. 1461

Leroy ADAMS, et al., Plaintiffs, v. BURLINGTON NORTHERN RAILROAD COMPANY, Defendant.

Civ. A. No. 93-2051-GTV.

United States District Court, D. Kansas.

November 16, 1993.

Michael E. Callen, Callen, Sexton & Shelor, Kansas City, KS, Dan M. Norwood, Michelle B. Walters, The Norwood Law Firm, Memphis, TN, for plaintiffs.

Barbara A. Harmon, David J. Waxse, Shook, Hardy & Bacon, Overland Park, KS, Thomas J. Knapp, Lawrence M. Stroik, Charles Shewmake, Burlington Northern R. Co., Ft. Worth, TX, William A. Brasher, Brasher Law Firm, St. Louis, MO, for defendant.

MEMORANDUM AND ORDER

VAN BEBBER, District Judge.

This is an action under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq., brought by several employees of defendant Burlington Northern Railroad Company. The case is before the court on the following motions:

Defendant's motion to dismiss for lack of subject matter jurisdiction (Doc. 26), and

Defendant's motion to dismiss for failure to allege condition precedent under Fed. R.Civ.P. 9(c) (Doc. 27).

For the reasons set forth in this memorandum and order, both motions are denied.

I. Background

Plaintiffs began their employment in the mid-1950's with four separate railroads. Those railroads merged in 1970 to form Burlington Northern (defendant) which continued plaintiffs' employment. Defendant abolished plaintiffs' positions in February 1991 when it decided to close its National Marketing Center. Plaintiffs allege they were "surplussed," which according to plaintiffs means that they were given jobs with less responsibility and for less pay. Meanwhile, plaintiffs contend that defendant filled jobs for which plaintiffs applied with less qualified, younger employees.

Plaintiffs, after filing their grievances with the Equal Employment Opportunity Commission (EEOC), commenced this action pursuant to ADEA, 29 U.S.C. § 621, et seq. Plaintiffs seek reinstatement to the National Account Manager positions they held prior to those positions being abolished, reinstatement to comparable positions, or front pay.

II. Subject Matter Jurisdiction

Defendant contends that this case should be dismissed for lack of subject matter jurisdiction for two reasons. First, defendant argues that since this case involves a dispute regarding plaintiffs' employment status and labor conditions imposed by the Interstate Commerce Commission (ICC), the ICC has exclusive jurisdiction under the Interstate Commerce Act, 49 U.S.C. §§ 11341-11347. Secondly, defendant claims that the conditions imposed by the ICC provide for mandatory and binding arbitration of all disputes.

Some additional facts are needed in order to understand and discuss defendant's motion to dismiss for lack of subject matter jurisdiction. The following facts are derived primarily from documents submitted by defendant in connection with its motion. When reviewing a motion to dismiss for lack of subject matter jurisdiction, the court may consider matters outside the pleadings in making its determination. Matthews v. United States, 720 F.Supp. 1535, 1536 (D.Kan.1989).

In March 1970, several railroads, including the Great Northern Railway, Chicago, Burlington & Quincy Railroad, Northern Pacific Railway Company, and the Spokane, Portland & Seattle Railway Company merged to form one railroad company, Burlington Northern. This merger was approved by the Interstate Commerce Commission (ICC) pursuant to Section 5 of the Interstate Commerce Act, 49 U.S.C. § 5 (now codified at 49 U.S.C. §§ 11341-11348). See Great Northern Pacific & Burlington Lines, Inc. Merger, 331 I.C.C. 228 (1967), aff'd, United States v. United States, 296 F.Supp. 853 (D.D.C.1968), aff'd, United States v. Interstate Commerce Comm'n, 396 U.S. 491, 90 S.Ct. 708, 24 L.Ed.2d 700 (1970).

In approving the merger, the ICC imposed certain job and benefit assurances, known as labor protective conditions, to protect the employees of the newly formed railroad. See 331 I.C.C. at 276-79. The ICC imposed these labor protective conditions pursuant to § 5(2)(f) of the Interstate Commerce Act, now codified at 49 U.S.C. § 11347, which allows the ICC to approve mergers only if "the employees of the affected rail carrier will not be in a worse position related to their employment as a result of the transaction." 49 U.S.C. § 11347. The ICC can impose its own protective conditions or adopt an agreement reached by the parties. In this merger, the labor protective conditions were taken from pre-merger agreements that the merging railroads had entered into with two labor unions. The ICC ordered that these conditions would apply to all employees, not only employees represented by the unions.

Under the ICC Order, "no employee is to be deprived of his employment status or placed in a worse position with respect to compensation, rules governing working conditions, fringe benefits or rights and privileges pertaining thereto at any time during such employment." 331 I.C.C. at 277-78. The employees of the merging railroads received these guarantees and job assurances "for the rest of their working lives." 331 I.C.C. at 278. Under the labor protective conditions, covered employees whose positions are eliminated are entitled to receive a "monthly allowance" based on the amount of compensation that they received immediately prior to the merger.

All of the plaintiffs were employed by predecessors of Burlington Northern as of the 1970 merger date and are therefore covered by the labor protective conditions imposed by the ICC Order. Although plaintiffs' positions were abolished and they do not presently perform any duties for Burlington Northern, plaintiffs continue to receive their monthly allowance of wages and benefits from Burlington Northern pursuant to the ICC Order.

Under the labor union agreements, adopted by the ICC as the applicable labor protective conditions for all employees, any dispute involving the "interpretation or application of any provision" of the agreements "may be referred by either party to a Disputes Committee for consideration and determination." The agreements further provide that "the decision of the majority of the Disputes Committee shall be final and binding."

Defendant contends that plaintiffs' claims must be resolved by arbitration and therefore this court has no jurisdiction. The central issue before the court on defendant's motion to dismiss is whether the plaintiffs must follow the arbitration procedures contained in the labor protective conditions, even though plaintiffs claims relate to illegal age discrimination and violations of the ADEA, 29 U.S.C. § 621, et seq.

The Interstate Commerce Act, 49 U.S.C. § 11347 (formerly Section 5(2)(f)), expressly requires the ICC to impose appropriate conditions for the protection of railroad employees who are affected by a merger. Brotherhood of Locomotive Engineers v. Boston & Maine Corp., 788 F.2d 794, 800-01 (1st Cir.), cert. denied, 479 U.S. 829, 107 S.Ct. 111, 93 L.Ed.2d 59 (1986); Missouri Pacific Ry. v. United Transp. Union, 782 F.2d 107, 112 (8th Cir.1986), cert. denied, 482 U.S. 927, 107 S.Ct. 3209, 96 L.Ed.2d 696 (1987). The ICC typically uses arbitration procedures to resolve disputes involving the labor protective conditions, and the arbitration process is mandatory. Atkins v. Louisville & Nashville Ry., 819 F.2d 644, 646 (6th Cir.1987); Walsh v. United States, 723 F.2d 570, 572 (7th Cir.1983). When a plaintiff's claim is subject to arbitration, federal courts lack subject matter jurisdiction to entertain the action. Atkins, 819 F.2d at 650.

Plaintiffs do not dispute the exclusive and mandatory nature of the arbitration process, nor do they deny that they are covered by the labor protective conditions of the ICC Order. Rather, the disagreement here centers on whether the mandatory arbitration process is applicable to the type of claim that plaintiffs have brought. Plaintiffs argue that they are not seeking the protection afforded by the ICC merger order, but rather they are seeking relief under the federal age discrimination laws, and therefore the arbitration process is not mandated. Defendant characterizes plaintiffs' claims as disputes relating to the labor protective conditions which require interpretation or application of the ICC merger order, and therefore mandatory binding arbitration is the proper resolution method.

Although courts have consistently upheld the mandatory nature of the ICC arbitration procedures, in every reported case on the subject the plaintiffs' claims related directly to the ICC labor protective conditions. See, e.g., Collins v. Burlington Northern Ry., 867 F.2d 542 (9th Cir.1989) (employees furloughed beginning two years after railroad merger alleging that the furloughs were due to the merger thus entitling them to benefits under the merger order); Atkins, 819 F.2d 644 (actions to enforce labor protective conditions and recover damages for violations of ICC merger order); Walsh, 723 F.2d 570 (plaintiff claiming entitlement to protective benefits after discharge); Anderson v. United Transp. Union, 557 F.2d 165 (8th Cir. 1977) (action against union and railroad alleging that defendants violated provisions of labor protective agreement relating to railroad merger); Atkinson v. Union Pacific Ry., 628 F.Supp. 1117 (D.Kan.1985) (plaintiffs claiming benefits due under labor protective conditions resulting from their furloughs before and after railroad merger); Bond v. Union Pacific Ry., 601 F.Supp. 329 (D.Neb.1984) (plaintiff claiming entitlement to salary and benefits for six years following discharge pursuant to merger order's labor protective conditions). The plaintiffs here are not contesting the application of any provision contained in the ICC merger order or the labor protective conditions. They do not claim that the loss of their jobs is prohibited under the merger order, nor do they dispute the amount of benefits due to them pursuant to the merger order provisions.

Instead...