CSX Transportation v. Transportation Comm Intl Union ( 2007 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CSX TRANSPORTATION, 
INCORPORATED,
Plaintiff-Appellant,
v.
 No. 06-1414
TRANSPORTATION COMMUNICATIONS
INTERNATIONAL UNION; UNITED
TRANSPORTATION UNION,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Deborah K. Chasanow, District Judge.
(8:05-cv-00419-DKC)
Argued: November 29, 2006
Decided: March 28, 2007
Before MICHAEL and SHEDD, Circuit Judges, and
David A. FABER, Chief United States District Judge
for the Southern District of West Virginia, sitting by designation.
Affirmed by published opinion. Judge Faber wrote the opinion, in
which Judge Michael and Judge Shedd joined.
COUNSEL
ARGUED: Ronald Maurice Johnson, AKIN, GUMP, STRAUSS,
HAUER & FELD, L.L.P., Washington, D.C., for Appellant. John A.
2 CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS
Edmond, GUERRIERI, EDMOND, CLAYMAN & BARTOS, P.C.,
Washington, D.C., for Appellees. ON BRIEF: Nilufer Loy, AKIN,
GUMP, STRAUSS, HAUER & FELD, L.L.P., Washington, D.C., for
Appellant. Soye Kim, GUERRIERI, EDMOND, CLAYMAN &
BARTOS, P.C., Washington, D.C., for Appellee Transportation Com-
munications International Union.
OPINION
FABER, Chief District Judge:
Appellant CSX Transportation, Inc., ("CSXT") appeals the district
court’s grant of summary judgment to appellee Transportation Com-
munications International Union ("TCU") and denial of summary
judgment to CSXT in a labor dispute case. CSXT brought suit to
vacate several arbitration awards issued by the National Railroad
Adjustment Board ("NRAB") in favor of TCU. CSXT argued that the
NRAB did not have jurisdiction to resolve those disputes; rather,
CSXT claimed that the Surface Transportation Board ("STB") (for-
merly known as the Interstate Commerce Commission1 ("ICC")) had
exclusive jurisdiction over the matter. We affirm the judgment of the
district court.
I.
CSXT is a large railway carrier that is the product of various rail-
road mergers and consolidations. Pursuant to the Interstate Commerce
Act, 49 U.S.C. § 11322(a), the ICC approved these mergers. The
Interstate Commerce Act grants the STB the "exclusive authority to
examine, condition, and approve proposed mergers and consolida-
tions." CSX Transp. Inc. v. United Transp. Union, 86 F.3d 346, 349
(4th Cir. 1996) (quoting Norfolk & W. Ry. Co. v. Am. Train Dispatch-
ers Ass’n, 499 U.S. 117, 119 (1991)). Before railway carriers can
merge, the Interstate Commerce Act requires them to "establish pro-
tective conditions for employees who are adversely affected by a con-
1
The ICC Termination Act of 1995 abolished the ICC and created the
STB. The STB then adopted the precedents and regulations of the ICC.
CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS 3
solidation." Id. at 348; 49 U.S.C. § 11326. These protective
conditions were outlined by the ICC in New York Dock Railway-
Control Brooklyn Eastern District Terminal, 360 I.C.C. 60 (1979),
aff’d sub nom., New York Dock Railway v. United States, 609 F.2d 83(2d Cir. 1979), and are known as the "New York Dock conditions."
See Norfolk & W. Ry. Co., 499 U.S. at 120.
In 1990, CSXT decided to capitalize on merger efficiencies by
establishing a centralized customer service center in Jacksonville,
Florida. Its plan was to transfer certain customer service functions
that were performed by clerical employees to the customer service
center. Before CSXT could transfer these employees from various
transportation service centers to the centralized customer service cen-
ter, it had to comply with the New York Dock conditions, according
to which the creation of the customer service center was a covered
transaction. See New York Dock, 360 I.C.C. at 77. The New York
Dock conditions apply to any "transaction which may cause the dis-
missal or displacement of any employees, or rearrangement of forces"
as a result of a change in a railroad’s "operations, services, facilities,
or equipment." Id.
Article I, Section 4 of the New York Dock conditions requires that
a railroad contemplating such changes provide advanced notice to
affected employees and their representatives. Id. This provision also
requires that the railroad carrier and the unions enter into an agree-
ment, known as a New York Dock Implementing Agreement, to gov-
ern the covered transaction. Id. at 77-78. If the parties fail to reach
such an agreement, they are required to submit the dispute to arbitra-
tion before the proposed changes can take place. Id. at 78.
In accordance with the New York Dock conditions, CSXT served
a New York Dock notice on TCU, the union representing the trans-
ferred clerical workers. On January 29, 1991, CSXT and TCU conse-
quently entered into a New York Dock Implementing Agreement
which provided detailed information on how the transfer would take
place. The Implementing Agreement stated that the clerical work
transfers were to be progressively phased in over a 36-month period
ending in March, 1994. It also provided that work remaining at the
transportation service centers and work transferred to the customer
service center would continue to be performed under the respective
4 CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS
general collective bargaining agreements already in place. The collec-
tive bargaining agreement that applied to the new customer service
representative positions created at the customer service center was
known as the TCU-SCL Agreement. In addition, the Implementing
Agreement expressly incorporated the New York Dock conditions.
Article 1, Section 11 of the New York Dock conditions provides for
arbitration "in the event a railroad and its employees or their autho-
rized representatives cannot settle any dispute or controversy with
respect to the interpretation, application or enforcement" of the New
York Dock conditions. New York Dock, 360 I.C.C. at 80.
Shortly after CSXT and TCU signed the Implementing Agreement,
disputes arose between them about work assignments. TCU asserted
that employees not covered by the TCU-SCL Agreement were per-
forming tasks that belonged to the customer service representatives at
the customer service center. TCU maintained that this violated the
TCU-SCL Agreement, which contains a scope rule that defines the
types of positions and types of work covered and provides that
"[p]ositions or work covered under this Rule 1 shall not be removed
from such coverage except by agreement . . . ." CSXT maintained that
the disputed tasks were "shared functions" that had never been exclu-
sively assigned to the clerical employees covered by the TCU-SCL
Agreement.
Neither CSXT nor TCU invoked the New York Dock arbitration
procedures incorporated into the Implementing Agreement to resolve
these disputes. Instead, the parties entered into a comprehensive
agreement on December 1, 1994, pursuant to the grievance proce-
dures in the TCU-SCL Agreement, which are governed not by the
Interstate Commerce Act, but by the Railway Labor Act. This Agree-
ment resolved the disputes at all but three locations.
In order to resolve their remaining disputes, CSXT and TCU estab-
lished a Public Law Board, a voluntary alternative dispute resolution
forum for disputes referable to the NRAB. 45 U.S.C. § 153 Second.
In 1997, neutral Public Law Board member R.E. Dennis sustained
TCU’s position in five separate decisions. CSXT never sought to have
these claims arbitrated pursuant to the New York Dock arbitration
procedures incorporated into the Implementing Agreement.
CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS 5
After the Public Law Board arbitrations, TCU continued to file
numerous claims against CSXT. In stating its claims, TCU cited both
the terms of the Implementing Agreement, as evidence that the work
was transferred, as well as the Scope Rule of the TCU-SCL Agree-
ment. When these claims were not resolved through on-the-property
grievance procedures, CSXT consolidated the claims into fifty-seven
cases that were submitted to the Third Division of the NRAB.2
Neutral Arbitrator Edwin Benn determined that in order to prevail,
TCU would first have to show that the disputed tasks (1) were per-
formed by someone other than a customer service representative at
the customer service center; (2) were performed by a clerical worker
at the specific location in dispute before the 1991 Implementing
Agreement took effect; and (3) were performed by a customer service
representative at the customer service center after the 1991 Imple-
menting Agreement took effect. CSX Transp., Inc. v. TCU, Award
No. 37227, NRAB Third Div., 15 (2004) (Benn, Arb.). Arbitrator
Benn concluded that if TCU succeeded in making all three showings,
it would have established that the disputed tasks were transferred to
the customer service center by virtue of the Implementing Agreement,
and thus fell under the TCU-SCL Agreement. Any work covered by
the TCU-SCL Agreement’s Scope Rule could not be removed from
the customer service representatives at the customer service center
without separate agreement. Thus, if employees who were not cus-
tomer service representatives at the customer service center were per-
forming the covered work without a separate agreement, CSXT would
be violating the TCU-SCL Agreement. Using this framework, Arbi-
trator Benn sustained TCU’s claims in eight of ten awards. Several
months after these awards were issued, the Carrier members of the
NRAB filed a dissent ("Carrier dissent"), claiming that because the
disputes could not be resolved without interpreting the Implementing
Agreement, the NRAB did not have jurisdiction to adjudicate them.
Following the Benn awards, TCU submitted another claim against
CSXT to the Third Division of the NRAB. Arbitrator Elizabeth Wes-
man served as the neutral arbitrator. After the hearing, but before
2
The NRAB has four "divisions," each of which has jurisdiction over
different crafts. The Third Division has jurisdiction over clerical employ-
ees, among others. 45 U.S.C § 153 First(h).
6 CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS
issuance of the award, CSXT submitted the Carrier dissent to Wes-
man and asserted that the NRAB lacked subject matter jurisdiction
over the present claim because it, too, required interpretation of the
Implementing Agreement. Applying Arbitrator Benn’s analysis, Wes-
man sustained TCU’s claim. Without explanation, she also found that
the NRAB had jurisdiction over the dispute.
On February 11, 2005, the same day that the Carrier dissent to the
Benn awards was filed, CSXT filed a petition in federal court to
vacate the Benn awards on the grounds that the NRAB had exceeded
its jurisdiction in deciding the claims. TCU filed a counterclaim, seek-
ing to enforce the eight Benn awards it had won. On September 9,
2005, CSXT filed a separate petition in federal court to vacate the
Wesman award, also on jurisdictional grounds. The district court con-
solidated the actions and, with cross motions for summary judgment
pending, awarded summary judgment to TCU on February 6, 2006.
The district court found that the jurisdictional issue was not one of
subject matter jurisdiction, but rather an issue of immunity or per-
sonal jurisdiction. CSX Transp., Inc. v. Transp.-Commc’ns Int’l
Union, 413 F. Supp. 2d 553, 567 (D. Md. 2006). The court then held
that the NRAB’s jurisdiction was waivable and that CSXT had,
indeed, waived its immunity from NRAB adjudication by participat-
ing in and even initiating some of the proceedings. Id. The district
court further held that, waiver aside, the Benn and Wesman arbitra-
tions were within the jurisdiction of the NRAB because they did not
actively interpret the Implementing Agreement, but instead "look[ed]
at what actually transpired" in terms of whether work was transferred
after 1991. Id. at 568 n.19. Because the transfer of the clerical func-
tions to the customer service center had long ended, the district court
held that the Interstate Commerce Act no longer preempted dispute
resolution by the NRAB, in accordance with the Railway Labor Act.
II.
We review a district court’s grant of summary judgment de novo.
Wilson v. Drapner & Goldberg, P.L.L.C., 443 F.3d 373, 374 (4th Cir.
2006). The orders of a railway labor arbitration panel constituted
under the Railway Labor Act are subject to a unique standard of
review that is among the narrowest known to the law. Norfolk & W.
Ry. Co. v. Transp. Commc’n Int’l Union, 17 F.3d 696, 699 (4th Cir.
CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS 7
1994). Only three grounds exist for setting aside an NRAB award: (1)
failure to comply with the requirements of the Railway Labor Act; (2)
failure of the NRAB to conform or confine itself to matters within the
scope of its jurisdiction; and (3) fraud or corruption by a member of
the NRAB division making the order. 45 U.S.C. § 153 First(q).
III.
The Railway Labor Act grants the NRAB exclusive jurisdiction to
resolve "disputes between an employee or group of employees and a
carrier or carriers growing out of grievances or out of the interpreta-
tion or application of agreements concerning rates of pay, rules, or
working conditions" that at least one of the parties refers to it by peti-
tion. 45 U.S.C. § 153 First(i). Such disputes are commonly referred
to as "minor disputes" because they contemplate the existence of an
already-negotiated collective bargaining agreement and relate to the
interpretation of such an agreement. Consol. Ry. Corp. v. Ry. Labor
Executives’ Ass’n, 491 U.S. 299, 303-05 (1989) (citations omitted);
Petersen v. Air Line Pilots Ass’n, Int’l, 759 F.2d 1161, 1169 (4th Cir.
1985) (noting that "minor disputes" involving rights under the collec-
tive bargaining agreement are ordinarily subject to the exclusive juris-
diction of the NRAB).3 A court may reverse an arbitral decision as in
excess of the NRAB’s jurisdiction "where the arbitration board’s
order does not draw its essence from the collective bargaining agree-
ment." Norfolk & W. Ry. Co., 17 F.3d at 700 (internal quotation omit-
ted). Work assignment disputes are generally considered minor
disputes that fall within the exclusive jurisdiction of the NRAB. See
e.g., Transp.-Commc’n Employees Union v. Union Pac. R.R., 385
U.S. 157, 164 (1966) ("The Adjustment Board has jurisdiction, which
petitioner admits, to hear and decide the controversy over the inter-
pretation of the telegraphers’ contract with the railroad as it relates to
the work assignments."); Slocum v. Del., Lackawanna & W. R.R. Co.,
339 U.S. 239, 244 (1950).
3
By contrast, major disputes relate to the formation of collective bar-
gaining agreements. Consol. Ry. Corp., 491 U.S. at 302. The Railway
Labor Act prescribes a much lengthier dispute resolution process for
major disputes than for minor disputes. Id. at 302-04.
8 CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS
The Interstate Commerce Act exempts carriers from antitrust law,
and all other law, when necessary to carry out an STB-approved
transaction. 49 U.S.C. § 11321(a). This exemption is provided in
order to promote "economy and efficiency in interstate transportation
by the removal of the burdens of excessive expenditure." Norfolk &
W. Ry. Co., 499 U.S. at 132 (quoting Texas v. United States, 292 U.S.
522, 534-35 (1934)). The Supreme Court has held that the Railway
Labor Act and collective bargaining agreements are included in the
definition of "all other law." Id. at 131 (applying this principle to
override the Railway Labor Act’s lengthy and costly major dispute
proceedings). The ICC has held that
the "necessity" predicate is satisfied by a finding that some
"law" (whether antitrust, [Railway Labor Act], or a collec-
tive bargaining agreement formed pursuant to the [Railway
Labor Act]) is an impediment to the approved transaction.
In other words, the necessity predicate assures that the
exemption is no broader than the barrier which would other-
wise stand in the way of implementation.
CSX Corp.-Control-Chessie-Sys., Inc., & Seaboard Coast Line Indus.,
Inc., 8 I.C.C.2d 715, 721-22 (1992); see also City of Palestine, Tex.
v. United States, 559 F.2d 408, 414 (5th Cir. 1977) ("Actions taken
by the ICC in connection with [approved] transactions but not neces-
sary to them exceed the scope of its authority.").
We have previously held that while the STB is considering whether
to approve a transaction subject to its jurisdiction, it has "exclusive
authority to resolve . . . objections by unions that a particular proposal
to alter a collective bargaining agreement is not necessary to the
transaction." Norfolk & W. Ry. Co. v. Bhd. of R.R. Signalmen, 164
F.3d 847, 855 (4th Cir. 1998). The Seventh Circuit has recognized,
however, that in a post-merger dispute, the STB is not alone in being
able to decide when it is necessary to exempt carriers from other laws.
See Harris v. Union Pac. R.R., 141 F.3d 740, 743 (7th Cir. 1998).
Rather, where the STB has not indicated that it is necessary for a par-
ticular law to yield in order for an approved transaction to take place,
courts have jurisdiction to decide whether it is necessary for that law
to give way. Id.CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS 9
In addition, the STB has recognized that its exclusive jurisdiction
pursuant to the Interstate Commerce Act over disputes arising from
approved transactions or implementing agreements may not be "time-
less and limitless." Del. & Hudson Ry. Co.-Lease & Trackage Rights
Exemption-Springfield Terminal Ry. Co., 8 I.C.C.2d 839, 845 (1992).4
At some point, STB jurisdiction over the interpretation of an imple-
menting agreement ceases, and "the parties will be required to resort
to the Railway Labor Act to resolve disputes arising under the collec-
tive bargaining agreements then in effect." Id. at 845-46; see also
Harris, 141 F.3d at 744 (rejecting the railroad’s understanding of 49
U.S.C. § 11341(a), the predecessor to 49 U.S.C. § 11321(a), that the
STB is "forever in charge of all legal disputes related to a merger").
In this case, TCU argues that the disputes here are "minor dis-
putes," because they center on whether CSXT violated the Scope Rule
of the TCU-SCL Agreement by allowing employees who are not cov-
ered by the TCU-SCL Agreement to perform tasks transferred to the
customer service representatives at the customer service center under
the Implementing Agreement. By contrast, CSXT argues that the
NRAB exceeded its jurisdiction in resolving these disputes because
before addressing the Scope Rule and the merits of the work assign-
ment disputes, the arbitrators had to determine whether the tasks had
indeed been transferred to the customer service center under the
Implementing Agreement. CSXT argues that to do so, they had to
interpret the Implementing Agreement, and thus the disputes should
have been submitted for arbitration according to the dispute resolution
procedures of the New York Dock conditions, rather than those of the
Railway Labor Act.
This dispute arises from the tension between the Railway Labor
Act’s exclusive grant of jurisdiction to the NRAB to resolve minor
labor disputes and the Interstate Commerce Act’s grant of exclusive
authority to the STB to examine, condition, and approve proposed
4
Delaware & Hudson Railway Co., 8 I.C.C.2d at 845, involved labor
protective conditions known as the Mendocino Coast conditions, which
provide similar dispute resolution procedures to the New York Dock
conditions, in addition to virtually identical substantive benefits. See Del.
& Hudson Ry. Co.-Lease & Trackage Rights Exemption - Springfield
Terminal Ry. Co., 4 I.C.C. 322, 326 (1988).
10 CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS
railway mergers and consolidations. We conclude that CSXT con-
fuses the STB’s statutorily granted authority to oversee railway merg-
ers and consolidations with the exclusive jurisdiction to adjudicate all
disputes that in any way reference the New York Dock Implementing
Agreements that govern mergers and consolidations, even years after
the approved transaction has been completed. We hold that because
the disputed NRAB decisions drew their essence from the interpreta-
tion and enforcement of the collective bargaining agreement between
the parties, rather than from the Implementing Agreement, the NRAB
had jurisdiction to resolve the claims. See Norfolk & W. Ry. Co., 17
F.3d at 700 (citations omitted).
The claims involved in this case are classic minor disputes over
which the NRAB has exclusive jurisdiction, because they relate to the
interpretation of a collective bargaining agreement. See Consol. Ry.
Corp., 491 U.S. at 303-05. The analysis set forth by Arbitrator Benn,
which Arbitrator Wesman followed, relied on the plain terms of the
Implementing Agreement only to determine retrospectively whether
the disputed tasks were transferred to the customer service center in
the first place. The key issue in all of these claims, however, was
whether the tasks at issue belonged to the customer service represen-
tatives at the customer service center, who are covered by the TCU-
SCL Agreement, or whether they could be performed by workers at
other locations, who are not covered by the TCU-SCL Agreement.
Work assignment disputes such as these have long been recognized
as the province of NRAB. See Transp.-Commc’n Employees Union,
385 U.S. at 164. Indeed, both parties treated these disputes as such for
ten years, until Arbitrator Benn sustained TCU’s position in eight
awards and CSXT decided to challenge his decision in federal court.
Furthermore, CSXT has not argued that having the STB decide
these disputes, rather than the NRAB, is in any way necessary to car-
rying out its plans to build the customer service center. In fact, it
would be difficult to make that argument, given that the transfer of
clerical workers to the customer service center was completed in
March, 1994. Therefore, allowing the NRAB to resolve these work
assignment disputes does not "frustrate the orderly execution of the
CSX TRANSPORTATION v. TRANSPORTATION COMMUNICATIONS 11
terms of the implementing agreement." Del. & Hudson Ry. Co., 8
I.C.C.2d at 845.5
IV.
For the foregoing reasons, we affirm the ruling of the district court.
Because we hold that the NRAB had jurisdiction to resolve the dis-
putes between CSXT and TCU, we will not reach the second issue
presented to us, whether CSXT’s objections to NRAB’s jurisdiction
were waivable.
AFFIRMED
5
The amount of time that has passed since the approved transaction
was successfully completed militates against our finding that the STB
would have jurisdiction over this dispute. Its predecessor, the ICC, as
well as the Seventh Circuit, has indicated that the STB’s jurisdiction over
legal disputes related to a merger should not extend indefinitely. See id.;
Harris, 141 F.3d at 744. In addition, two years before the New York
Dock conditions were articulated, the ICC, the predecessor to the STB,
registered its reluctance to decide matters such as "certain work assign-
ment disputes" that are "traditionally within the confines of labor-
management relations." Leavens v. Burlington N., Inc., 348 I.C.C. 962,
976 (1977) (holding that the ICC should undertake to enforce protective
conditions "to the extent that affected employees have suffered harm in
violation of the adopted conditions as a result of the transaction . . . other
alleged violations of the agreement should be left to the applicable
machinery set up under the labor acts . . . ."). As the district court pointed
out, were CSXT to prevail, no future work assignment dispute involving
workers at the customer service center could be brought before the
NRAB, because no dispute would be resolvable without reference to the
Implementing Agreement. CSX Transp., Inc., 413 F. Supp. 2d at 569. We
agree with the district court that this cannot be the result Congress
intended when it endowed the STB with its authority.