BLET GCA UP, Central Region v. Union Pacific Railroad Compan ( 2021 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 20-2092
BLET GCA UP, CENTRAL REGION, et al.,
Plaintiffs-Appellants,
v.
UNION PACIFIC RAILROAD COMPANY,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:20-cv-1105 — Ronald A. Guzman, Judge.
____________________
ARGUED DECEMBER 1, 2020 — DECIDED FEBRUARY 12, 2021
____________________
Before SYKES, Chief Judge, and BRENNAN and SCUDDER, Cir-
cuit Judges.
SCUDDER, Circuit Judge. In 2020 Union Pacific Railroad an-
nounced a change to its employee attendance policy. Several
regional branches of the Brotherhood of Locomotive Engi-
neers and Trainmen, the nation’s oldest rail labor union, op-
posed the change and went to federal court seeking an order
under the Railway Labor Act requiring Union Pacific to sub-
mit the change to collective bargaining. The district court
2 No. 20-2092
made short work of the Brotherhood’s claim, concluding that
binding precedent from the Supreme Court and our court re-
quired dismissal for lack of jurisdiction. The Brotherhood’s
claim, the district court recognized, belonged not in federal
court but in arbitration before the National Railroad Adjust-
ment Board. We not only affirm, but also grant Union Pacific’s
motion for sanctions under Federal Rule of Appellate Proce-
dure 38. For the second time in three years, the Brotherhood
has pressed a position squarely foreclosed by settled law. So
we once again sanction them for pursuing a frivolous ap-
peal—we hope for the last time.
I
A
Union Pacific is one of America’s largest freight-hauling
railroads. The company employs hundreds of engineers to
operate its locomotives as they traverse over 32,000 miles
across 23 states. Many Union Pacific engineers are members
of the Brotherhood of Locomotive Engineers and Trainmen
Union.
Collective bargaining agreements often define the rela-
tionship between railroad companies and employees on a
range of matters, including working conditions and wages. As
a result of many mergers and acquisitions, Union Pacific to-
day is an agglomeration of many railroad lines that were once
distinct entities. The company is therefore subject to many dif-
ferent collective bargaining agreements with its employees.
In February 2020 Union Pacific informed the Brotherhood
that it had adopted and planned to implement a revised com-
pany-wide attendance policy. This modified policy built on
previous ones the company unilaterally announced and
No. 20-2092 3
imposed and to which the Brotherhood acceded. This pattern
dates at least to 1998, when Union Pacific first announced a
system-wide attendance policy. The company has modified
the policy at least eight times (including the change that insti-
gated this suit) over the ensuing years.
The revised policy assigns points to an employee’s ab-
sence and authorizes disciplinary action once an employee ac-
cumulates a certain number of points in a 90-day period. The
Brotherhood opposed the modification and demanded that
Union Pacific treat the change as a proposal subject to collec-
tive bargaining. When Union Pacific declined the invitation to
the negotiating table, the Brotherhood turned to federal court
for relief.
The Brotherhood saw the modified attendance policy as so
substantial as to require collective bargaining under the Rail-
way Labor Act (RLA). The union therefore asked the district
court to enjoin the policy from taking effect pending the out-
come of the collective bargaining and mediation prescribed
by the RLA. For its part, Union Pacific filed its own lawsuit,
seeking a declaration that the company’s modified attendance
policy was not so major as to require collective bargaining
and, moreover, that any dispute over the validity and legality
of the new policy had to be resolved by arbitration before the
National Railroad Adjustment Board.
The district court granted Union Pacific’s motion and dis-
missed the Brotherhood’s claim for lack of jurisdiction be-
cause the union’s challenge to the revised policy amounted to
a so-called “minor dispute” subject to mandatory arbitration
under the RLA. Indeed, the district court saw the issue as
open and shut, issuing a short three-page order pointing to
the Supreme Court’s decision in Consolidated Rail Corp. v.
4 No. 20-2092
Railway Labor Executives’ Ass’n, 491 U.S. 299 (1989) (“Conrail”)
and our decision in Railway Labor Executives Ass’n v. Norfolk &
Western Railway Co., 833 F.2d 700 (7th Cir. 1987) (“Railway La-
bor Executives Ass’n 1987”). Those decisions make plain, the
district court reasoned, that the RLA considers any dispute to
be minor (and thus subject to arbitration) if a railroad points
to existing authority—including authority established by a
course of dealing between the parties—to modify the terms or
conditions of a workplace policy. In making this showing, the
district court emphasized, the railroad need only articulate an
interpretation or application of an agreement that is neither
obviously insubstantial nor frivolous.
Upon examining the parties’ course of dealing over work-
place attendance requirements, the district court saw a clear
pattern and practice of Union Pacific modifying its policies
many times over many years without subjecting changes to
collective bargaining. This pattern of dealing, the district
court concluded, provided the railroad with a nonfrivolous
justification to unilaterally modify its attendance policy. That
reality made this dispute a minor one subject to resolution
through mandatory arbitration. In dismissing the Brother-
hood’s claim, the district court also dismissed Union Pacific’s
companion case.
The Brotherhood now appeals.
II
A
As vital as the railroad industry has been to commercial
development, it comes as no surprise that it remains one of
the most regulated industries in America. Labor relations
within the railroad industry are no exception. To guard
No. 20-2092 5
against prolonged labor conflict, Congress enacted the Rail-
way Labor Act in 1926. See 45 U.S.C. § 151a. The RLA governs
much of the relationship between employees and employers
in the railroad industry. Employers have two methods
through which they can modify “rates of pay, rules, or work-
ing conditions of [] employees.” 45 U.S.C. § 152 Seventh. A
railroad may act in accordance with any existing agreement
or go through the bargaining and negotiation procedures pre-
scribed in the RLA. See id.When disagreements arise over whether a railroad acted
pursuant to an existing agreement, the RLA draws a line be-
tween two classes of dispute: those that “relate[] to disputes
over the formation of collective agreements or efforts to se-
cure them” and those that “contemplate[] the existence of a
collective agreement.” Elgin, J. & E. Ry. Co. v. Burley, 325 U.S.
711, 722–23 (1945). The Supreme Court has clarified this di-
viding line by adopting a distinction between what it calls
“major disputes” and “minor disputes.” See Conrail, 491 U.S.
at 302; see also Railway Labor Executives Ass’n 1987, 833 F.2d at
704 (explaining the same distinction).
Do not let the labeling create confusion. Whether a dispute
is major or minor in no way relates to a court’s estimation of
the dispute’s relative importance. See Conrail, 491 U.S. at 305.
The inquiry turns instead on whether a railroad can point to
existing authority to justify its action.
A major dispute arises from the creation of new contracts
or modifications of existing contracts that affect any of the
mandatory subjects of bargaining established in the RLA. See
Conrail, 491 U.S. at 302–03; see also Brotherhood of Locomotive
Eng’rs & Trainmen v. Union Pac. R.R. Co., 879 F.3d 754, 755–56
6 No. 20-2092
(7th Cir. 2017) (“Brotherhood 2017”) (citing Conrail and ex-
plaining that “[i]f a disagreement arises over the formation or
amendment of a collective bargaining agreement (CBA), it is
considered a ‘major’ dispute under the Act, and it must be de-
cided by a court”). Minor disputes, on the other hand, arise
from the interpretation or application of existing agreements.
See Conrail, 491 U.S. at 303; see also Brotherhood 2017, 879 F.3d
at 756, 758. Put another way, “major disputes seek to create
contractual rights, minor disputes to enforce them.” Conrail,
491 U.S. at 302.
When confronted with a major dispute, a court may use
its injunctive authority to maintain the status quo while me-
diation and bargaining occur. See Detroit & T.S.L.R. Co. v.
United Transp. Union, 396 U.S. 142 (1969) (explaining that dis-
trict courts have jurisdiction to enjoin a change to the status
quo pending completion of mandatory bargaining and medi-
ation procedures of RLA). But minor disputes must go di-
rectly to binding arbitration, typically conducted by the Na-
tional Railroad Adjustment Board. See Conrail, 491 U.S. at303–04.
When a railroad labor dispute reaches a federal court, our
central responsibility is “that of taxonomist”—classifying the
dispute as major or minor. Brotherhood 2017, 879 F.3d at 757.
Given the RLA’s strong preference for arbitration, a railroad
bears a “relatively light burden” in persuading the court that
its action is pursuant to existing contractual authority and
thus a minor dispute under the RLA. Conrail, 491 U.S. at 307(internal citation omitted). “If the railroad can articulate an ar-
gument that is ‘neither obviously insubstantial or frivolous,
nor made in bad faith,’ the court lacks jurisdiction to do any-
thing but dismiss the case and allow arbitration to go
No. 20-2092 7
forward.” Brotherhood 2017, 879 F.3d at 758 (quoting Conrail,
491 U.S. at 310). Plain and simple, “in making the choice be-
tween major and minor, there is a large thumb on the scale in
favor of minor, and hence arbitration.” Id.This legal framework is well-established and known to
railroads and unions alike. The Supreme Court has outlined
the exact contours of a court’s role in labor disputes under the
RLA, and our court has had many opportunities to apply
these principles. See, e.g., Conrail, 491 U.S. 299; Burley, 325 U.S.
711; Brotherhood 2017, 879 F.3d 754; Railway Labor Executives
Ass’n 1987, 833 F.2d 700.
B
Like the district court, we see no way to distinguish this
case from the principles that guided the Supreme Court in
Conrail or our court in Railway Labor Executives Ass’n 1987 and
Brotherhood 2017. Straightforward application of this prece-
dent leads to but one conclusion: the position Union Pacific
advanced in the district court—that a consistent practice of
unilaterally modifying its attendance policy reflects its au-
thority to do so as an implied term of its collective bargaining
agreements with employees—is neither obviously insubstan-
tial nor frivolous. That conclusion has the consequence of ren-
dering the Brotherhood’s challenge to the attendance policy
changes a minor dispute subject to resolution through man-
datory arbitration, not litigation in federal court.
The links in our chain of reasoning follow directly from
the Supreme Court’s instruction in Conrail. Start by recogniz-
ing that Union Pacific and the employees represented by the
Brotherhood are parties to many different bargaining agree-
ments. Some agreements are company-wide in scope while
8 No. 20-2092
others cover only geographic segments of employees ab-
sorbed into Union Pacific by consolidation in the railroad in-
dustry. All agree that no particular contracts expressly au-
thorize Union Pacific to unilaterally modify its attendance
policy. The Brotherhood sees that as the beginning and end of
the inquiry. Far from it.
A collective bargaining agreement, the Supreme Court
emphasized in Conrail, is a “generalized code to govern a
myriad of cases which the draftsmen cannot wholly antici-
pate.” 491 U.S. at 311–12 (internal citation omitted). These
agreements may also include implied terms, defined by “the
parties’ practice, usage, and custom as they carry out their
agreement.” Brotherhood 2017, 879 F.3d at 758. We have under-
scored this same reality, emphasizing that “any well estab-
lished practices that constitute a ‘course of dealing’ between
the carrier and employees” form part of the agreement the
same as do any specific terms set out in the text of the agree-
ment. Railway Labor Executives Ass’n 1987, 833 F.2d at 705 (in-
ternal citation omitted).
It is undisputed that Union Pacific has unilaterally im-
posed changes in attendance policy for at least the past 22
years. In 1998 the company launched a system-wide attend-
ance policy for locomotive engineers known as the Union Pa-
cific TE&Y Attendance Policy. This change was not bargained
for with the Brotherhood. Union Pacific unilaterally modified
that policy in 1999. It did so again in 2004, 2006, 2011, 2015,
2017, and 2018—all without going to the bargaining table.
The point of this tally is not to cement the number of times
a railroad must act to establish a course of dealing. But this
history does show a pattern, and that pattern, in turn, estab-
lishes beyond dispute that Union Pacific stood on solid
No. 20-2092 9
ground in considering the Brotherhood’s challenge to the at-
tendance policy modifications to reflect a minor dispute—a
challenge to the company’s exercise of authority implied and
established as part of existing collective bargaining agree-
ments through the parties’ course of dealing. The district
court saw this as plain as day, dismissed the Brotherhood’s
claim, and directed the union to resolve its difference with
Union Pacific through arbitration. We agree on all points.
Recognize what we are not deciding. We are not resolving
the merits of the Brotherhood’s challenge to Union Pacific’s
changes to its attendance policy. “Wading through the com-
peting declarations to determine the actual authority the Rail-
road had to modify the disciplinary policies, based on past
practices, is a job for the arbitrator.” Brotherhood 2017, 879 F.3d
at 759. Our conclusion is more limited: Union Pacific has
made a reasonable argument—all the law requires—that the
2020 change in attendance policy is consistent with its author-
ity under its many collective bargaining agreements, which
include implied terms developed from a consistent pattern of
practice.
In pressing a contrary contention, the Brotherhood ig-
nored the clear principles outlined in Conrail and Railway La-
bor Executives Ass’n 1987. The Brotherhood reads those deci-
sions as turning entirely on technical factual distinctions. Not
so and not by a long shot. We made that clear in 2017, when
we rejected the Brotherhood’s attempt to turn a minor dispute
over changes Union Pacific made to a disciplinary policy into
a major dispute. See Brotherhood 2017, 879 F.3d 754. And un-
fortunately again here we find ourselves needing to remind
the Brotherhood of a legal principle settled beyond debate in
the law: “[T]he relevant terms of an agreement are not only
10 No. 20-2092
those that are written down; they also include the parties’
practice, usage, and custom as they carry out their agree-
ment.” Brotherhood 2017, 879 F.3d at 758; see also Conrail,
491 U.S. at 311–12.
Union Pacific only had to advance a nonfrivolous argu-
ment that such past practice and course of dealing conferred
authority on the company to modify its attendance policy
without renewed negotiation. It did so and that ends the
Brotherhood’s appeal.
III
That brings us to Union Pacific’s request for sanctions un-
der Rule 38 of the Federal Rules of Appellate Procedure. And
here, too, the proper resolution is clear, for the Brotherhood’s
appeal is frivolous by a wide mark.
An appeal is frivolous “when the result is obvious or when
the appellant’s argument is wholly without merit.” Arnold v.
Villarreal, 853 F.3d 384, 389 (7th Cir. 2017). But “even when an
appeal is frivolous, whether to impose sanctions under Rule
38 is a discretionary determination.” Quincy Bioscience, LLC v.
Ellishbooks, 961 F.3d 938, 941 (7th Cir. 2020).
The Brotherhood is no stranger to these principles. As we
noted just three years ago—in sanctioning some of the same
Brotherhood regional branches before us here—“when fed-
eral jurisdiction is limited to narrow grounds, when the argu-
ments on those grounds are implausible, and when the appel-
lant spends much of his time attempting to circumvent those
grounds, sanctions are appropriate.” Brotherhood of Locomotive
Eng’rs & Trainmen v. Union Pac. R.R. Co., 905 F.3d 537, 545 (7th
Cir. 2018). This is such a case.
No. 20-2092 11
The Brotherhood’s claims, as we have explained, are en-
tirely foreclosed by precedent. There is no way to read the Su-
preme Court’s decision in Conrail and our opinions in Railway
Labor Executives Ass’n 1987 and Brotherhood 2017 and conclude
anything other than that the district court got this 100% right
in finding the Brotherhood’s challenge to Union Pacific’s
modified attendance policy to be a minor dispute requiring
resolution by arbitration, not litigation in federal court. The
Brotherhood begs to differ only by reading those cases in such
granular detail—as so entirely limited by their exact facts—as
to empty the word precedent of any meaning. Microscopic
hair-splitting resulted in the Brotherhood advancing posi-
tions that sound in nothing more than distinctions without
differences. When we pointed some of this out during oral ar-
gument, the Brotherhood’s counsel only dug in further. This
we cannot accept.
The Brotherhood could have easily avoided today’s out-
come. It could have acknowledged that its position was fore-
closed, urged us to reconsider our prior precedents by sitting
en banc, and relatedly explained that it likewise intended to
file a petition inviting the Supreme Court to revisit Conrail and
related cases.
We AFFIRM the district court and award sanctions. Union
Pacific shall provide a schedule of its costs and attorneys’ fees
within 14 days.