Sheet Metal Workers' Intern. Ass'n v. Burlington Northern R. Co., 88-2142

• Decision Date: 10 January 1990
• Docket Number: No. 88-2142,88-2142
• Citation: 893 F.2d 199
• Parties: 133 L.R.R.M. (BNA) 2296, 113 Lab.Cas. P 11,723, 118 Lab.Cas. P 10,674 SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, Appellant, v. BURLINGTON NORTHERN RAILROAD COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 199

893 F.2d 199

133 L.R.R.M. (BNA) 2296, 113 Lab.Cas. P 11,723,

118 Lab.Cas. P 10,674

SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, Appellant, v. BURLINGTON NORTHERN RAILROAD COMPANY, Appellee.

No. 88-2142.

United States Court of Appeals,

Eighth Circuit.

Submitted Jan. 9, 1989.

Decided Jan. 10, 1990.

Michael S. Wolly, Washington, D.C., for appellant.

Richard J. Schreiber, Chicago, Ill., for appellee.

Before WOLLMAN and BEAM, Circuit Judges, and Floyd R. GIBSON, Senior Circuit Judge.

WOLLMAN, Circuit Judge.

The Sheet Metal Workers' International Association (the Association) appeals the decision of the district court ¹ denying its request for declaratory and injunctive relief under the Railway Labor Act (the RLA), 45 U.S.C. Secs. 151-188. The Association sought to enjoin the Burlington Northern Railroad Company (BN) from having employees of its wholly-owned subsidiary, Electro-Northern, Inc., repair and maintain locomotives owned or leased by Oakway, Inc. until bargaining procedures required by the RLA were exhausted. We affirm the denial of injunctive relief.

I. BACKGROUND

The Association is the exclusive bargaining representative for sheet metal workers employed by BN. The Association and BN are parties to a collective bargaining agreement that governs rates of pay, rules, and working conditions. The scope clause of their agreement provides that work required on locomotives "acquired through purchase or lease, will not be subcontracted outside the warranty period."

On July 30, 1984, the Association served a bargaining proposal on BN pursuant to section 6 of the RLA, 45 U.S.C. Sec. 156, to amend the existing collective bargaining agreement. The notice stated the following:

Effective September 1, 1984 the existing agreements between this carrier and the Sheet Metal Workers' International Association shall be amended to provide that all work or services presently performed by the Sheet Metal Workers in any manner or hereafter assigned to the Sheet Metal Workers shall not be contracted, transferred, assigned, or relocated in whole or in part and shall be performed by the Sheet Metal Workers covered by this agreement in any department or subdivision of this carrier whether on or off the property of this carrier except by written agreement between the duly authorized representative of the Sheet Metal Workers' International Association and this carrier.

The statutory bargaining procedures have not yet been exhausted on this notice.

In October 1986, BN entered into an Electrical Power Purchase Agreement (EPPA) with Oakway, Inc., a subsidiary of Connell Finance Company, Inc. Oakway agreed to provide BN the use of 100 locomotives (less than four percent of the approximately 2,600 locomotives owned or leased by BN). BN agreed to pay a rate determined by the amount of electrical power generated by the locomotives, as measured in megawatt hours by means of microprocessors installed on the locomotives. The agreement provides that BN will purchase a minimum of 240,000 megawatt hours per six month period on a "take or pay" basis. The agreement further provides that BN is granted no ownership, leasehold, or other proprietary interest in any of the locomotives used to generate the electrical power purchased by BN. The EPPA requires Oakway to ensure that the locomotives are repaired and maintained. To meet this obligation, Oakway contracted with the Electro Motive Division of General Motors (EMD) to repair and maintain the locomotives.

After BN signed the EPPA with Oakway, several shopcraft unions threatened a nationwide strike against all carriers, including BN. The Association was not included among these unions. Various individual carriers, including BN, filed an action in the United States District Court for the Northern District of Illinois to enjoin the strike on the ground that the controversy regarding the EPPA was a minor dispute.

The nationwide strike was enjoined and the conflict was found to be subject to arbitration because the court determined that the dispute was minor. See National Ry. Labor Conf. v. International Ass'n of Machinists & Aerospace Workers, 124 L.R.R.M. 2224, 2230-31, 1986 WL14640 (N.D.Ill.1986), aff'd, 830 F.2d 741 (7th Cir.1987). The injunction against striking was conditioned on BN's maintaining the status quo while the arbitration was pending. Id. at 2231-32. In accordance with the district court's order, the dispute was submitted to the adjustment board having jurisdiction over the 1964 national shopcraft agreement and the local BN agreement. Although the Association had not been a party in the district court, it was a party to the arbitration. See Burlington N. R.R. v. Sheet Metal Workers Int'l Ass'n, Special Board of Adjustment No. 570, Award No. 734, Case No. 1092 (July 10, 1987). After concluding that it had no proper basis for not complying with the district court's finding that the dispute was minor, the board determined that it lacked jurisdiction to hear the dispute because the dispute did not fall within either the employee protection or subcontracting articles of the collective bargaining agreement.

In an effort to avoid further litigation, BN formed a new wholly-owned subsidiary, Electro-Northern, Inc. (Electro-Northern), to provide the work force and equipment for EMD to maintain the locomotives. Electro-Northern began operations on July 15, 1988, at facilities leased from BN in North Kansas City, Missouri. Of the twenty-six employees constituting Electro-Northern's work force, thirteen are former EMD employees, and thirteen are former BN employees from the machinists' and electricians' crafts. Major repairs on the Oakway locomotives, such as overhaul work, are performed by all crafts, including members of the Association, at BN's facility in West Burlington, Iowa.

When the Association learned about the Electro-Northern arrangement, it protested that the arrangement violated the status quo provisions of the RLA. BN denied this claim. The Association then filed this action seeking to enjoin BN from commencing the Electro-Northern operation.

The district court denied the Association's motion for a preliminary injunction. The district court found that the motion was premised on the existence of work at the North Kansas City facility that was required to be done by the Association's members under the collective bargaining agreement between the Association and BN. Resolution of this dispute, according to the court, therefore involved interpreting and applying the parties' existing agreement. Because the court found that the dispute involved a matter covered by the agreement, it held that the dispute was minor and therefore denied injunctive relief.

II. DISCUSSION

Denial of injunctive relief will not be reversed on review unless the trial court "clearly erred in its characterization of the facts, made a mistake of law, or abused its discretion in considering the equities." Brotherhood of Maintenance of Way Employees, Lodge 16 v. Burlington N. R.R., 802 F.2d 1016, 1020 (8th Cir.1986) (Lodge 16 ). Moreover, "our inquiry as to the probity of an injunction is limited to those issues directly related to the injunction, for '[a]n injunction does not settle a dispute--it simply disables one of the parties.' " International Ass'n of Machinists, Dist. Lodge No. 19 v. Soo Line R.R., 850 F.2d 368, 374 (8th Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 1118, 103 L.Ed.2d 181 (1989) (quoting Burlington N. R.R. v. Brotherhood of Maintenance of Way Employees, 481 U.S. 429, 451, 107 S.Ct. 1841, 1854, 95 L.Ed.2d 381 (1987)). Whether an injunction is appropriate depends on the nature of the dispute, which is a question of law requiring de novo review. Id.

A. Resolution Process for Major and Minor Disputes

One purpose of the RLA is to prevent the disruption of the Nation's rail service by requiring unions and management to attempt to settle all contractual disputes and minor grievances using the procedures provided in the RLA. 45 U.S.C. Sec. 151a. The RLA requires both the union and the railroad to negotiate whenever a dispute arises. 45 U.S.C. Sec. 152 First, Second. 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. ²

A dispute is major if one party seeks to change the rates of pay, rules, or working conditions in a manner not contemplated by the collective-bargaining agreement. If direct negotiation fails and the dispute is characterized as major, the RLA requires the parties to undergo an "almost interminable process." See Brotherhood of Maintenance of Way Employees v. Chicago & N.W. Transp. Co., 827 F.2d 330, 333 (8th Cir.1987), cert. denied, 485 U.S. 988, 108 S.Ct. 1291, 99 L.Ed.2d 502 (1988). Initially, either party may invoke the services of the National Mediation Board (NMB). 45 U.S.C. Sec. 155, First. If mediation fails, the NMB must attempt to persuade the parties to submit the controversy to arbitration, which is binding only if both parties consent. 45 U.S.C. Sec. 155, First, Sec. 157. If the parties fail to submit to arbitration, the President may create an Emergency Board to help resolve the dispute. See 45 U.S.C. Sec. 160. During this entire process, neither party may unilaterally alter the status quo. See Brotherhood of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 379, 89 S.Ct. 1109, 1115, 22 L.Ed.2d 344 (1969).

If a dispute between a carrier and its employees is characterized as minor, a different resolution process is followed. All disputes over the "interpretation or application" of existing agreements and practices that are not resolved during direct negotiations between the parties must be submitted for final arbitration to the National Railroad Adjustment Board. See 45 U.S.C. Sec. 153, First (i). See also Brotherhood of R.R. Trainmen v. Chicago River & I. R.R., 353 U.S. 30, 39, 77 S.Ct. 635, 639, 1 L.Ed.2d 622 (1957); International...