Union Pacific R. Co. v. United Transp. Union

• Decision Date: 27 September 1993
• Docket Number: No. 92-2547,92-2547
• Citation: 3 F.3d 255
• Parties: 144 L.R.R.M. (BNA) 2027, 126 Lab.Cas. P 10,826, 126 Lab.Cas. P 10,904 UNION PACIFIC RAILROAD COMPANY, Appellee, v. UNITED TRANSPORTATION UNION, also known as C & T, also known as UTU; Kent H. Madison, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 255

3 F.3d 255

144 L.R.R.M. (BNA) 2027, 126 Lab.Cas. P 10,826,

126 Lab.Cas. P 10,904

UNION PACIFIC RAILROAD COMPANY, Appellee, v. UNITED TRANSPORTATION UNION, also known as C & T, also known as UTU; Kent H. Madison, Appellants.

No. 92-2547.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 22, 1993.

Decided Aug. 19, 1993.

Rehearing and Suggestion for Rehearing En Banc Denied Sept.

27, 1993.

Kevin C. Brodar, Cleveland, OH, argued (Robert E. O'Connor, Omaha, NE, on the brief), for appellants.

Kathleen J. Ford, Omaha, NE, argued, for appellee.

Before McMILLIAN, WOLLMAN, and BEAM, Circuit Judges.

WOLLMAN, Circuit Judge.

United Transportation Union (the "union") and Kent H. Madison appeal from the district court's order vacating an arbitration award in Madison's favor on the ground that the award violates public policy. We affirm in part, reverse in part, and remand for further proceedings.

I.

The facts in this case are essentially undisputed. On January 9, 1989, W.R. Lake, a manager for the Union Pacific Railroad Company ("Union Pacific"), overheard a radio communication concerning a run-through switch at the Cheyenne, Wyoming railroad yard. Lake went to the Cheyenne yard to investigate and conducted separate interviews with each member of the crew involved in the incident. Madison, a brakeman, admitted that he had improperly lined the switch against the movement of the train, causing two and a half cars to run through and damage the switch.

Lake sent Madison to the Laramie County Memorial Hospital for a reasonable-cause toxicological test pursuant to Federal Railroad Administration regulations. See 49 C.F.R. Sec. 219.301. Madison submitted to two urine tests, which were forwarded to a medical laboratory for review. Lake drove Madison back to the depot and informed Madison that he was being removed from service pending receipt of the drug test results.

On January 13, 1989, Union Pacific notified Madison that it would conduct a hearing to investigate Madison's possible violations of Union Pacific's Rule G, an industry-wide rule that prohibits the use of drugs or alcohol on the job, while subject to duty, or on company property. ¹ Union Pacific held an on-property hearing on January 17 to determine whether Madison had violated either Rule G or company rules concerning the lining of the switch. Near the conclusion of the hearing, the hearing officer remarked on the record that Madison "reek[ed] of alcohol." The hearing officer then asked two other Union Pacific employees to determine whether they also smelled alcohol on Madison's person. Although the two employees stated that they smelled something, they could not tell what it was. After the union representative voiced his objection to the hearing officer's statement and actions, the hearing officer concluded the hearing. On January 24, 1989, Union Pacific notified Madison that the charges against him had been sustained and that he was being discharged for violating Rule G.

The union appealed on Madison's behalf, and the dispute was ultimately submitted to arbitration before a Public Law Board (the "Board") ², consisting of one union representative, one Union Pacific representative, and a neutral chairman. The chairman ruled on the Board's behalf that Union Pacific's hearing officer had violated Madison's due process rights as established in the collective bargaining agreement because the hearing officer's comments had strayed outside the issues submitted for determination and had denied Madison a fair hearing. Consequently, the Board never considered whether Madison had, in fact, violated Rule G. ³ The Board ordered Union Pacific to reinstate Madison with full rights and backpay for all lost time except for ninety calendar days, which the Board assessed as Madison's penalty for admittedly mislining the switch. The Board conditioned Madison's reinstatement on passing the normal back-to-work examinations. Union Pacific's representative dissented, asserting that the Board's award "[put] back to work a proven user of alcohol and drugs," in violation of public policy.

Rather than reinstating Madison, Union Pacific filed a complaint in federal district court, seeking to have the Board's award overturned. The union and Madison counterclaimed for enforcement of the award. Both sides filed summary judgment motions. The district court granted Union Pacific's motion and vacated the award, finding that reinstating Madison would violate the public policy against the use of drugs and alcohol by railroad employees. See Union Pac. R.R. v. United Transp. Union, 794 F.Supp. 891, 895 (D.Neb.1992). The district court remanded the action to the Board, directing it to order a new on-property hearing before a Union Pacific hearing officer. This appeal followed.

II.

After oral argument in this case, we directed the parties to file supplemental briefs on the question whether we possess jurisdiction to hear this appeal. Having considered the parties' contentions and the relevant case law, we conclude that under the facts of this case the district court's decision is a final order, appealable under 28 U.S.C. Sec. 1291.

"A 'final decision' [under section 1291] generally is one which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945); see also Thomas v. Basham, 931 F.2d 521, 523 (8th Cir.1991); Transportation-Communication Div. v. St. Louis-San Fran. Ry., 419 F.2d 933, 935 (8th Cir.1969), cert. denied, 400 U.S. 818, 91 S.Ct. 34, 27 L.Ed.2d 45 (1970). The district court's ruling in this case, which it styled as an "order and judgment," granted Union Pacific's motion for summary judgment and vacated the Board's award, rendering the award a nullity. The effect of the district court's order was to resolve completely the question whether Union Pacific's procedural violations in the first on-property hearing entitled Madison to reinstatement. Moreover, if we do not review the district court's order at this point, it will become essentially unreviewable because an enforcement action after a second Board award would be limited to the propriety of that award.

Although the court did remand the case, it remanded with directions for a new on-property hearing, impliedly on the merits of the Rule G violation. This remand was not for the purpose of seeking clarification from the Board or directing the Board to receive additional evidence. Cf. Transportation-Communication Div., 419 F.2d at 935 (district court's remand was not appealable where remand order directing public law board to consider additional evidence did not rule on either parties' summary judgment motions); United Steelworkers v. Aurora Equip. Co., 830 F.2d 753, 754-55 (7th Cir.1987) (court of appeals lacked jurisdiction to review remand order directing arbitrator to consider new report and to decide two additional factual issues). Rather, the remand for a new on-property hearing on the merits of the Rule G allegation was, in practical effect, an order compelling a second arbitration, which generally constitutes a final decision for purposes of section 1291. See Goodall-Sanford, Inc. v. United Textile Workers Local 1802, 353 U.S. 550, 551-52, 77 S.Ct. 920, 920-21, 1 L.Ed.2d 1031 (1957) (order compelling arbitration under section 301 of Labor Relations Management Act is appealable as final order); University Life Ins. Co. of America v. Unimarc Ltd., 699 F.2d 846, 848 (7th Cir.1983) (discussing generally when orders to arbitrate constitute final orders for purposes of section 1291).

III.

Turning to the merits of the appeal, we must initially confront the question whether federal courts possess authority to vacate arbitration awards under the Railway Labor Act on public policy grounds. We conclude that federal courts may do so when those awards violate well-defined and dominant public policies.

The Railway Labor Act contains a comprehensive system of dispute resolution for employer/employee disputes involving the interpretation of collective bargaining agreements. Congress created this system, under which these "minor" disputes are resolved by mandatory arbitration, to promote stability in labor-management relations in the nation's vital railroad industry. See Union Pacific R.R. v. Sheehan, 439 U.S. 89, 94, 99 S.Ct. 399, 402-03, 58 L.Ed.2d 354 (1978) (per curiam). Accordingly, the Railway Labor Act contains only three statutory bases for review of a decision issued by a public law board: (1) failure of the adjustment board or public law board to comply with the requirements of the Railway Labor Act; (2) failure of the adjustment board or public law board to conform, or confine itself, to matters within the scope of its jurisdiction; and (3) fraud or corruption on the Board's part. 45 U.S.C. Sec. 153 First (q); see Sheehan, 439 U.S. at 93, 99 S.Ct. at 402. We, as other courts, have noted that statutory review of arbitration awards under the Railway Labor Act is "among the narrowest known to the law." International Ass'n of Machinists v. Northwest Airlines, 858 F.2d 427, 429 (8th Cir.1988); Benoni v. Boston and Maine Corp., 828 F.2d 52, 54 n. 3 (1st Cir.1987); Diamond v. Terminal Ry. Alabama State Docks, 421 F.2d 228, 233 (5th Cir.1970).

The union and Madison argue that Congress's choice in enacting such narrow grounds for review in the Railway Labor Act precludes federal courts from reviewing such awards on public policy grounds. Moreover, they assert that since the enactment of the Railway Labor Act's review scheme in 1934, the Supreme Court has not seen fit to create any additional nonstatutory bases for review.

The strongest support for the union and Madison's argument stems from the Supreme Court's opinion in Union Pacific R.R. v. Sheehan. In that case, Sheehan had filed a breach of contract suit in state court arising out of his discharge. While his state court case was...