BNSF Ry. Co. v. Int'l Ass'n of Sheet Metal, Air, Rail & Transp. Workers - Transp. Div.

• Decision Date: 28 August 2020
• Docket Number: No. 20-10162,20-10162
• Citation: 973 F.3d 326
• Parties: BNSF RAILWAY COMPANY; Kansas City Southern Railroad Company; CSX Transportation, Incorporated; Grand Trunk Western Railroad Company; Norfolk Southern Railway Company; Illinois Central Railroad Company; Union Pacific Railroad Company; Belt Railway Company of Chicago, Plaintiffs—Appellees, v. INTERNATIONAL ASSOCIATION OF SHEET METAL, AIR, RAIL AND TRANSPORTATION WORKERS - TRANSPORTATION DIVISION, Defendant—Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

973 F.3d 326

BNSF RAILWAY COMPANY; Kansas City Southern Railroad Company; CSX Transportation, Incorporated; Grand Trunk Western Railroad Company; Norfolk Southern Railway Company; Illinois Central Railroad Company; Union Pacific Railroad Company; Belt Railway Company of Chicago, Plaintiffs—Appellees,

v.INTERNATIONAL ASSOCIATION OF SHEET METAL, AIR, RAIL AND TRANSPORTATION WORKERS - TRANSPORTATION DIVISION, Defendant—Appellant.

No. 20-10162

United States Court of Appeals, Fifth Circuit.

August 28, 2020

Donald James Munro, Esq., Jones Day, Washington, DC, Braden C. Allman, Kelly, Hart & Hallman, L.L.P., Fort Worth, TX, Aaron Samuels Markel, Esq., Jones Day, Detroit, MI, for Plaintiffs - Appellees.

Kevin Charles Brodar, Esq., Erika A. Diehl-Gibbons, Esq., Associate General Counsel, Shawn M. McKinley, Sheet Metal Air Rail Transportation, Transportation Division, North Olmsted, OH, Sanford Ross Denison, Esq., Baab & Denison, L.L.P., Dallas, TX, for Defendant - Appellant.

Before Smith, Higginson, and Engelhardt, Circuit Judges.

Kurt D. Engelhardt, Circuit Judge:

This appeal arises out of a railway labor dispute between Plaintiffs, a group of railroad companies (collectively, "the Railroads"), and Defendant, International Association of Sheet Metal, Air, Rail, and Transportation Workers-Transportation Division ("SMART-TD"), a labor organization that represents the Railroads' employees who are employed in the craft and/or class of train service. This dispute began—as so many other railway labor disputes have—when the Railroads proposed new and streamlined procedures for the operation of the train, and SMART-TD pumped the brakes on their progress. Despite its familiar origins, however, this case presents novel questions regarding a court's authority to intervene in a railway labor dispute. Specifically, we consider whether the district court properly issued an injunction requiring SMART-TD to bargain on the Railroads' proposal. We vacate and remand.

I.

In anticipation of the November 1, 2019 opening of a new round of collective bargaining, the Railroads sent a letter to SMART-TD's President, notifying the union that the Railroads intended to seek changes in crew consist. It suffices to say that crew consist, the number of workers manning a train, has been a topic of fierce debate between the parties over the decades.¹ Crew consists in the early 1900s comprised as many as ten workers. But with the advent of various technological advances, fewer employees were required to operate a train, and the Railroads progressively sought to reduce crew size.² Invoking safety and efficiency concerns, SMART-TD and its predecessors resisted these proposals tooth and nail. Despite their best efforts, the current typical crew consist has been reduced to just one or two employees.

In exchange for reduced crew sizes, the Railroads offered unions certain benefits, including special allowance payments, a "productivity fund," and a guarantee that crew size would only be reduced through a process of "pure attrition." "Pure attrition" means that the positions would be eliminated only as the employees who held those positions died, retired, or voluntarily terminated their employment, rather than eliminating the positions through furloughs or layoffs. Because crew size is negotiated on a local basis,³ there are a total of 45 distinct collective bargaining agreements ("CBA") between SMART-TD and the Railroads. Most of these CBAs contain a moratorium provision, which bars the parties from making proposals to change "specific provisions" in the agreement until all employees who were working as of the date of the agreement have left via attrition.

Of the 45 CBAs, 31 have a "standard" moratorium, which generally provides:

The parties to this Agreement shall not serve or progress, prior to the attrition of all protected employees, any notice or proposal for changing the specific provisions of this Agreement governing pure attrition, car limits and train lengths, special allowance payment to reduced crew members, employee productivity fund deposits and the administration thereof.

Seven of the CBAs have a moratorium provision that does not track this standard language. These moratoria read:

The parties to this agreement shall not serve or progress, prior to the attrition of all protected employees, any notice or proposal for changing the crew size and or productivity fund provided for in this agreement. As it pertains to this Article, protected employees are Trainmen with a seniority date as of July 28, 2003.

The remaining seven either have no moratorium provision or one that has expired.

The meaning of these provisions lies at the heart of this dispute. According to SMART-TD,

The purpose of these agreements was to regulate crew size and how crew size would be reduced. Crews could only be reduced by "pure attrition," i.e. , only when those employees voluntarily left their positions. The moratoria bar proposals on crew size until the last protected employee left. There is no dispute that protected employees are still employed.

In sum, SMART-TD takes the position that the Railroads are not permitted to request any changes in crew consist until the last protected employee under the moratorium has voluntarily left the position. Therefore, when the Railroads sent notice that they were seeking to change crew consist—while protected persons were still employed—SMART-TD refused to negotiate.

Unsurprisingly, the Railroads disagree about the meaning of the standard moratorium.⁴ They have interpreted it as a protection to

[P]revent renegotiation of the quid pro quos given to employees in exchange for the last round of crew size reductions. Most, if not all, of the modern moratoriums were based on the "Milwaukee Road" agreement, which provided various benefits to employees, such as special allowances, productivity funds, furlough protections, limits on train lengths, and the like. It is those employee benefits – not new changes in "crew consist" – that are the subject of the moratoriums.

According to the Railroads, after SMART-TD was served with notice regarding crew consist proposals, collective bargaining was required under the applicable provisions of the Rail Labor Act ("RLA"). 45 U.S.C. § 152, et seq.

Accordingly, given this impasse, the Railroads served their complaint on SMART-TD on October 25, 2019, alleging that its refusal to bargain over crew consist violated the RLA. On November 7, the Railroads moved for a preliminary injunction that would require SMART-TD to begin negotiating over the crew consist proposals. The district court held a hearing on December 19, during which the Railroads requested that the court convert its preliminary injunction to a permanent one, should the court find in its favor. The court did just that in an order on February 11, 2020. Namely, it permanently enjoined SMART-TD (1) "from refusing and/or failing to bargain in good faith with each of the Railroads over the November 2019 Crew Consist Proposals in the manner required by the RLA"; and (2) "from refusing and/or failing to bargain in good faith with the multi-carrier group of Railroads with respect to the Railroads' November 2019 Alternative Wage Proposal." SMART-TD timely appealed, and we granted its motion to expedite the appeal.

II.

A trial court's grant of a permanent injunction⁵ is reviewed for abuse of discretion. State v. Ysleta Del Sur Pueblo , 955 F.3d 408, 413 (5th Cir. 2020), as revised (Apr. 3, 2020). The district court abuses its discretion if it "(1) relies on clearly erroneous factual findings when deciding to grant or deny the permanent injunction, (2) relies on erroneous conclusions of law when deciding to grant or deny the permanent injunction, or (3) misapplies the factual or legal conclusions when fashioning its injunctive relief." M. D. by Stukenberg v. Abbott , 907 F.3d 237, 248 (5th Cir. 2018). The district court's order is entitled to deference, but we review de novo any questions of law underlying the decision. Ysleta , 955 F.3d at 413.

III.

The parties' entitlement, and the court's authority, to issue an injunction depend upon the type of dispute the court was presiding over, so we must first decide whether the district court properly classified the present dispute. We hold that it did, but that does not end the analysis. We must also determine if the injunction it issued was a proper remedy considering the type of dispute present. We hold that it was not.

A. Classifying the dispute

The RLA, enacted in 1926, was "an agreement worked out between management and labor, and ratified by the Congress and the President." Chicago & N. W. Ry. Co. v. United Transp. Union , 402 U.S. 570, 576, 91 S.Ct. 1731, 29 L.Ed.2d 187 (1971). The "heart" of the RLA is the duty imposed by 45 U.S.C. § 152, First upon management and labor

[T]o exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes 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.

Chicago & N. W. Ry. Co. , 402 U.S. at 574, 91 S.Ct. 1731. To effectuate peaceful dispute resolution, the RLA sets out a mandatory and "virtually endless" process of "negotiation, mediation, voluntary arbitration, and conciliation." Burlington N. R.R. v. Bhd. of Maint. of Way Emps. , 481 U.S. 429, 444, 107 S.Ct. 1841, 95 L.Ed.2d 381 (1987).

Specifically, the RLA delineates two tracks of resolution, depending upon whether the dispute is "major" or "minor." Consol. Rail Corp. v. Ry. Labor Execs. Ass'n , 491 U.S. 299, 302–04, 109 S.Ct. 2477, 105 L.Ed.2d 250 (1989) (" Conrail "). A dispute is "major" where a party seeks new agreement terms "affecting rates of pay, rules, or working conditions." 45 U.S.C. § 152, Seventh; § 156. Major disputes "relate[ ] to ... the formation of collective agreements or efforts to secure them." Elgin, J. & E. Ry. Co. v. Burley , 325...