Opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

BROTHERHOOD OF MAINTENANCE

OF WAY EMPLOYES DIVISION OF THE

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS,

No. 25-cv-3913

Petitioner, Judge Franklin U. Valderrama

v.

GRAND TRUNK WESTERN RAILROAD

COMPANY,

Respondent.

ORDER

Petitioner Brotherhood of Maintenance of Way Employes Division of the

International Brotherhood of Teamsters (“BMWED”) filed this enforcement action

against Grand Trunk Western Railroad Company (“Grand Trunk”), to enforce Award

No. 138 of Public Law Board (“PLB”) 7599, an arbitral board created by the parties

under the Railway Labor Act (“RLA”). R.1 14, Answer & Countercl. ¶¶ 17–24. Grand

Trunk, in turn, filed a counterclaim seeking to vacate the Award on public-policy

grounds. Id. BMWED now moves to dismiss the counterclaim under Federal Rule of

Civil Procedure 12(b)(6). R. 17, Mot. Dismiss; R. 18, Mem. Dismiss. For the reasons

stated below, the motion is granted.

1 Citations to the docket are indicated by “R.” followed by the docket number or filing name,

and, where necessary, a page or paragraph citation.

Background

BMWED is the collective bargaining representative under the RLA for certain

employees of Grand Trunk. Answer & Countercl. ¶ 1. Grand Trunk is a carrier within

the meaning of the RLA. Id. ¶ 2. The parties are bound by a collective bargaining

agreement (“CBA”) governing the terms and conditions of employment for BMWED-

represented employees. Id. ¶ 3. Michael Belcher was previously a member of the

bargaining unit covered by the CBA and had established seniority in Grand Trunk’s

Maintenance of Way Department. Id. ¶ 9. Belcher later moved into management but

continued to claim seniority rights under the CBA. Id. ¶ 10.

Illinois Central terminated Belcher on October 19, 2022. Id. ¶ 1. Shortly

thereafter, on November 4, 2022, Belcher attempted to exercise his seniority and

report to a Trackman position covered by the CBA. Id. ¶¶ 12–13. Grand Trunk

refused to allow him to return to work and directed him to leave the property. Id. ¶

13. BMWED then advised Grand Trunk that, if it sought to remove Belcher from

service under the CBA, it was required to proceed under Rule 25 and hold a formal

investigation hearing. Id. ¶ 14. When no such hearing was scheduled, BMWED filed

a claim on Belcher’s behalf. Id. ¶¶ 15–16. Grand Trunk denied the claim, taking the

position that Belcher’s termination from management ended his employment with

the railroad for all purposes, including under the CBA. Id. ¶ 16.

The parties then created Public Law Board 7599 (“PLB 7599”) under the RLA

to resolve the dispute. Id. ¶ 17. In its submission to the Board, BMWED asserted that

Grand Trunk violated the Agreement when it refused to allow Belcher to exercise his

Trackman seniority beginning November 4, 2022, and sought a remedy requiring that

Belcher be compensated for all lost time and permitted to return to work. Mem.

Dismiss at 3. Grand Trunk, for its part, argued that Belcher was not entitled to return

to service under the CBA and, at most, was entitled only to a Rule 25 hearing. Id. at

3–4.

On January 10, 2025, PLB 7599 issued Award No. 138 (the Award). Answer &

Countercl. ¶¶ 22–24. The Board sustained BMWED’s claim and directed Grand

Trunk to comply with the Award within 30 days. Id. ¶ 24. The Award required Grand

Trunk to permit Belcher to return to work and compensate him for lost time. Mem.

Dismiss, at 4. Grand Trunk did not comply. Instead, it sent Belcher a notice of formal

investigation dated January 17, 2025. Id. ¶ 25. It also has not paid him the

compensation awarded by the Board. Id. ¶ 27.

BMWED sued Grand Truck seeking to enforce the award. R.1. Grand Truck

answered the complaint, along with a counterclaim, seeking to vacate the Award on

public policy grounds. See generally id. Grand Trunk’s counterclaim relies heavily on

separate litigation brought in the Northern District of Indiana by Illinois Central

against Belcher. According to the counterclaim, Belcher worked for Illinois Central

from 2002 until his termination in October 2022, most recently in its finance

department. Id. ¶ 1. Grand Trunk alleges that Belcher wrote and maintained code

for Illinois Central’s financial systems, disabled those systems, and then demanded

compensation in exchange for restoring them. Id. ¶¶ 13–24. Illinois Central then sued

Belcher and obtained a temporary restraining order (TRO). Id. ¶ 27; R. 14-2, R. 14-2,

Exh. 2, TRO at 1. Grand Trunk further alleges that Belcher violated the TRO, failed

to return company materials, lied to the Indiana court, and destroyed evidence.

Answer & Countercl. ¶¶ 31–39; R. 14-3, R. 14-3, Exh. 3, Contempt Order at 4–10. The

Indiana district court later entered contempt sanctions and a preliminary injunction

after finding, among other things, that Illinois Central had shown a likelihood of

success on its trade-secret claims. Id. ¶¶ 37–39; R. 14-3, at 1; R. 14-4, Exh. 4, Prelim.

Inj. at 12–13.

Legal Standard

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the

complaint. Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811,

820 (7th Cir. 2009). Under Rule 8(a)(2), a complaint must include only “a short and

plain statement of the claim showing that the pleader is entitled to relief.” Fed. R.

Civ. P. 8(a)(2). To survive a motion to dismiss, a complaint need only contain factual

allegations, accepted as true, sufficient to “state a claim to relief that is plausible on

its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads

factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing

Twombly, 550 U.S. at 556). The allegations “must be enough to raise a right to relief

above the speculative level.” Twombly, 550 U.S. at 555. The allegations that are

entitled to the assumption of truth are those that are factual, rather than mere legal

conclusions. Iqbal, 556 U.S. at 678–79.

That said, because the counterclaim seeks vacatur of an arbitration award, the

Rule 12(b)(6) analysis must be considered in light of the law’s highly deferential

treatment of arbitral decisions. “Judicial review of arbitration awards is tightly

limited. Confirmation is usually routine or summary, and a court will set aside an

arbitration award only in very unusual circumstances.” Bartlit Beck LLP v. Okada,

25 F.4th 519, 522 (7th Cir. 2022) (cleaned up).2 Still, the FAA authorizes a court to

vacate an arbitrator’s award:

(1) where the award was procured by corruption, fraud, or undue means; (2)

where there was evident partiality or corruption in the arbitrators, or either of

them; (3) where the arbitrators were guilty of misconduct in refusing to

postpone the hearing, upon sufficient cause shown, or in refusing to hear

evidence pertinent and material to the controversy; or of any other misbehavior

by which the rights of any party have been prejudiced; or (4) where the

arbitrators exceeded their powers, or so imperfectly executed them that a

mutual, final, and definite award upon the subject matter submitted was not

made.

9 U.S.C. § 10(a).

“This list is exclusive; neither judges nor contracting parties can expand it.”

Affymax, Inc., v. Ortho-McNeil-Janssen Pharms., Inc., 660 F.3d 281, 284 (7th Cir.

2011). Under the FAA, “parties may agree to have an arbitrator decide not only the

merits of a particular dispute but also gateway questions of arbitrability, such as

whether the parties have agreed to arbitrate or whether their agreement covers a

particular controversy.” Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63,

68 (2019) (cleaned up). A party seeking vacatur under Section 10(a)(4) “bears a heavy

2 This Opinion uses (cleaned up) to indicate that internal quotation marks, alterations, and

citations have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations,

18 Journal of Appellate Practice and Process 143 (2017).

burden.” Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569 (2013). So long as “the

arbitrator (even arguably) interpreted the parties’ contract,” it does not matter if he

or she “got its meaning right or wrong.” Id.; see also Johnson Controls, Inc. v. Edman

Controls, Inc., 712 F.3d 1021, 1025 (7th Cir. 2013).

Analysis

Grand Trunk seeks vacatur of the Award on the basis that enforcing the Award

would contravene public policy. Answer & Countercl. ¶¶ 40–42. Judicial review of

arbitration awards under the RLA, however, is “among the narrowest known to the

law.” Union Pac. R.R. Co. v. Sheehan, 439 U.S. 89, 91, 94 (1978). The statute permits

a court to set aside an award only where the Board failed to comply with the RLA,

failed to conform or confine itself to matters within its jurisdiction, or where fraud or

corruption infected the award. 45 U.S.C. § 153 First (q). Grand Trunk asserts none of

those grounds. Rather, it asks the Court to vacate the Award because Belcher’s

reinstatement purportedly offends the public policies embodied in trade-secret law

and the Indiana court’s related orders. Answer & Countercl. ¶¶ 40–42.

BMWED moves to dismiss the counterclaim, arguing that public policy is not

a cognizable basis to vacate an RLA award and that, even if it were, Grand Trunk

has failed to plausibly allege that this award violates such a policy. Mem. Dismiss at

5–13. Because the latter argument is dispositive, the Court begins there.

I. Public Policy Review

Even where available, a public-policy challenge to an arbitration award is

limited. Zimmer v. Biomet Holdings, Inc. v. Insall, 108 F.4th 512, 517 (7th Cir. 2024).

A court may vacate an award only where it violates an “explicit,” “well defined,” and

“dominant” public policy, and that policy must be ascertained “by reference to the

laws and legal precedents and not from general considerations of supposed public

interests.” W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 766 (1983); Zimmer

108 F.4th at 517. Just as important, the inquiry focuses on the Award itself rather

than the employee’s underlying conduct. United Paperworkers Int’l Union v. Misco,

Inc., 484 U.S. 29, 43 (1987). The question, then, is whether enforcement of the

Award—not the employee’s alleged conduct—would violate public policy. E.

Associated Coal Corp. v. United Mine Workers of Am., Dist. 17, 531 U.S. 57, 62–63

(2000). Thus, even assuming without deciding that such review applies in the RLA

context, Grand Trunk must plausibly show that the Award itself requires relief the

law forbids.

Grand Trunk’s counterclaim alleges that the Award should be vacated because

Belcher’s reinstatement would violate the public policies reflected in federal and state

trade-secret law and the Indiana court’s orders. Answer & Countercl. ¶¶ 40–42.

According to the counterclaim, Belcher disabled Illinois Central’s financial systems,

demanded compensation to restore them, violated a temporary restraining order, lied

to the Indiana court, and became subject to contempt sanctions and a preliminary

injunction. Id. ¶¶ 11–42. In Grand Trunk’s view, those allegations establish that

enforcement of the Award would offend well-defined policies against trade-secret

misappropriation and disobedience of court orders. Id. ¶¶ 40–42.

BMWED argues that Grand Trunk fails to state a claim for vacatur even if the

Court assumes that a narrow public-policy challenge is available under the RLA.

Mem. Dismiss at 8-13. The way BMWED sees it, Grand Trunk identifies no statute,

court order, or precedent that specifically forbids reinstating or compensating an

employee accused of trade-secret misconduct. Id. at 10-13. Rather, BMWED contends

that Grand Trunk improperly focuses on Belcher’s conduct when the governing case

law requires the Court to focus on the Award itself. Id. at 9-11. According to BMWED,

the relevant question is not whether Belcher’s alleged misconduct offended public

policy, but whether enforcement of the Award would. Id. (citing Misco, 484 U.S. at

43; Eastern Associated Coal Corp. v. United Mine Workers of America, 531 U.S. 57,

62-63) (2000). BMWED further argues that courts may not use public policy to

“judicialize” arbitration whenever the underlying conduct appears troubling. Id. at 9

(citing E.I. DuPont de Nemours & Co. v. Grasselli Emps. Indep. Ass’n of E. Chi., Inc.,

790 F.2d 611, 615 (7th Cir. 1986)).

BMWED also submits that Grand Trunk’s theory fails because the cases

require a policy that specifically militates against the relief ordered by the arbitrator,

not merely a policy condemning the employee’s behavior. Id. at 10-13 (citing Chrysler

Motors Corp. v. Allied Indus. Workers of Am., 959 F.2d 685, 687 (7th Cir. 1992); BLET

v. Union Pac. R.R. Co., 882 F. Supp. 2d 1032, 1040 (N.D. Ill. 2012), aff’d, 719 F.3d 801

(7th Cir. 2013)). In BMWED’s view, the Award’s commanded relief is limited to

reinstatement and lost wages. Id. It does not require Grand Trunk to violate trade-

secret law, disobey the Indiana court’s orders, or place Belcher back in the Illinois

Central finance position involved in the Indiana litigation. Id. at 10-13.

Grand Trunk responds that its theory is not based on abstract public-interest

concerns, but on positive law. R. 21, Resp. at 9-12. According to Grand Trunk, the

relevant legal sources are the Defend Trade Secrets Act, Indiana trade-secret law,

and the Indiana court’s TRO, contempt order, and preliminary injunction. Id. at 10-

11. Grand Trunk maintains that these authorities satisfy the requirement that the

asserted policy be “explicit,” “well defined,” and “dominant.” Id. at 9 (citing W.R.

Grace, 461 U.S. at 766; Chrysler Motors, 959 F.2d at 687). Grand Trunk further

argues that the Court cannot view the Award in a vacuum. Id. at 10-12. In Grand

Trunk’s view, the practical effect of the Award is to require reinstatement despite

judicial findings and allegations that Belcher misappropriated trade secrets and

violated court orders. Id. When viewed through that prism, asserts Grand View, an

arbitration award may be vacated where compliance with the relief ordered would

itself violate positive law. Id. at 10 (citing Titan Tire Corp. of Freeport, Inc. v. United

Steelworkers of Am., 734 F.3d 708, 729 (7th Cir. 2013)). Grand Trunk thus insists

that its counterclaim targets the Award itself, not merely Belcher’s misconduct in the

abstract. Id. at 9–10.

BMWED replies that Grand Trunk’s attempt to ground its theory in positive

law does not save the counterclaim. R. 22, Reply at 4-8. According to BMWED, Titan

Tire cuts the other way, as there, the award affirmatively required illegal payments

in violation of Section 302(a) of the LMRA, whereas Grand Trunk identifies no

comparable statute or order that specifically bars reinstatement or backpay here. Id.

(citing Titan Tire, 734 F.3d at 729). BMWED further argues that the Indiana orders

concern Illinois Central’s confidential information and Belcher’s conduct in that

litigation, while Award No. 138 concerns Belcher’s return to a bargaining-unit

position at Grand Trunk. Id. at 7-8. From BMWED’s point of view, even serious

misconduct does not itself establish a public-policy bar unless the policy specifically

militates against the arbitrator’s actual relief. Id. at 4-6 (citing BPS Guard Servs.,

Inc. v. Int’l Union, United Plant Guard Workers of Am., 735 F. Supp. 892, 895 (N.D.

Ill. 1990); Stead Motors of Walnut Creek v. Auto. Machinists Lodge No. 1173, 886 F.2d

1200, 1212–13 (9th Cir. 1989); Univ. of Chi. Med. Ctr. v. Int’l Bhd. of Teamsters, Loc.

743, 235 F. Supp. 3d 1023, 1026 (N.D. Ill. 2016)). BMWED also points to cases

upholding reinstatement awards involving egregious conduct where no law

specifically required discharge or prohibited reinstatement. Id. at 5-6 (citing U.S.

Postal Serv. v. Nat’l Ass’n of Letter Carriers, 839 F.2d 146, 150 (3d Cir. 1988); Chrysler

Motors, 959 F.2d at 687-89; Saint Mary Home, Inc. v. SEIU, Dist. 1199, 116 F.3d 41,

45–46 (2d Cir. 1997)). In short, BMWED maintains that Grand Trunk alleges serious

wrongdoing, but not a legal prohibition on enforcement of the Award itself. The Court

agrees.

The Supreme Court has made clear that the public-policy exception is narrow.

W.R. Grace, 461 U.S. at 766. The inquiry does not turn on whether the employee

engaged in serious or even unlawful misconduct. Rather, the relevant question is

whether enforcement of the award itself would violate public policy. Misco, 484 U.S.

at 43. As the Supreme Court later reiterated, the Court’s focus must remain on “the

specific acts ordered by the arbitrator,” not on the employee’s underlying conduct in

the abstract. Eastern Associated Coal, 531 U.S. at 62-63. The Seventh Circuit has

applied the same principle, emphasizing both that the asserted policy must be

grounded in positive law and that the exception does not permit a court to revisit the

merits of the arbitrator’s decision. See Chrysler Motors, 959 F.2d at 687; E.I. DuPont,

790 F.2d at 615. Accordingly, it is not enough to identify an important public policy

against some category of wrongdoing. The policy must specifically militate against

the relief the arbitrator ordered. See BPS Guard Services, 735 F. Supp. at 895

(quoting Stead Motors, 886 F.2d at 1212-13). As the Seventh Circuit has explained,

“[a]n arbitral award most clearly violates public policy when it creates an explicit

conflict with statutory laws or well-established and easily discernible precedent.”

Zimmer, 108 F.4th at 520 (7th Cir. 2024)

Here, Grand Trunk’s counterclaim does not plausibly allege that the Award

itself violates an explicit, well-defined, and dominant public policy. Rather, the

counterclaim alleges serious misconduct by Belcher. Answer & Countercl. ¶¶ 11–42.

The Court does not minimize the gravity of those allegations; those allegations may

implicate public policies reflected in the Defend Trade Secrets Act, Indiana trade-

secret law, and the Indiana court’s orders. Id. ¶¶ 40-42. Crucially, however, Grand

Trunk identifies no statute, order, or precedent that specifically prohibits Grand

Trunk from doing what the Award requires—allowing Belcher to return to work and

paying him lost wages. See id. ¶¶ 22–27, ¶¶ 40–42. That omission is dispositive.

Nor does Titan Tire save Grand Trunk’s counterclaim. There, the Seventh

Circuit vacated an arbitration award because compliance with the award itself would

have required the employer to violate Section 302(a) of the LMRA by making

unlawful payments to union representatives. Titan Tire, 734 F.3d at 729. No such

conflict is plausibly alleged here. Answer & Countercl. ¶¶ 40-42. At most, the

counterclaim alleges that Belcher’s prior conduct makes reinstatement inadvisable.

Id. ¶¶ 11-42. Under W.R. Grace, Misco, and Eastern Associated Coal, such

allegations, without more, are insufficient.

The same conclusion follows from the reinstatement cases BMWED cites.

Courts have upheld reinstatement awards where the employee’s conduct was

troubling—even unlawful—so long as no positive law specifically required discharge

or prohibited reinstatement. See United States Postal Serv., 839 F.2d at 150; Chrysler

Motors, 959 F.2d at 687-89; Saint Mary Home, 116 F.3d at 45-46. Courts in this

district have likewise recognized that proving an arbitration award violates public

policy is a “formidable task.” Univ. of Chi. Med. Ctr., 235 F. Supp. 3d at 1026. Grand

Trunk has not made that showing here.

Nor does the Indiana litigation alter this analysis. Those orders concern

Belcher’s alleged misuse of Illinois Central’s financial systems, confidential

information, and trade secrets. Answer & Countercl. ¶¶ 11–39; R. 14-2, at 1, 9–10; R.

14-3, at 1, 4–10; R. 14-4, at 12–13. The Award, however, addresses something

different: Belcher’s reinstatement to a bargaining-unit Maintenance of Way position

at Grand Trunk and compensation for lost time. Answer & Countercl. ¶¶ 22–27.

Grand Trunk does not plausibly allege that the Indiana court held Belcher could not

hold that position or that complying with the Award would violate any specific term

of those orders. Grand Trunk alleges circumstances from which it says a public-policy

conflict should be inferred, but it does not identify any express legal prohibition on

reinstatement or backpay. Id. ¶¶ 11-42. These allegations thus fall short under Misco

and Eastern Associated Coal.

Grand Trunk plausibly alleges serious misconduct by Belcher and an

important public policy against trade-secret misappropriation. However, it fails to

plausibly allege that the Award itself commands conduct forbidden by law. Because

the counterclaim fails to connect the asserted public policy to a legal prohibition on

the arbitrator’s actual relief—reinstatement and backpay—it fails to state a claim for

vacatur on public-policy grounds. The Court concludes that Grand Trunk has failed

to plausibly allege that Award No. 138 violates any explicit, well-defined, and

dominant public policy, and therefore, the Court need not resolve BMWED’s other

argument, that public policy is not a cognizable basis to vacate an RLA award. Even

assuming, without deciding, that such review is available, Grand Trunk’s

counterclaim fails for the reasons explained above.

The next issue is whether the dismissal should be with or without prejudice.

In its motion to dismiss, BMWED asks the Court to dismiss the counterclaim with

prejudice. See Mem. Dismiss at 11. Grand Trunk did not ask for leave to file an

amended counterclaim should the Court agree with BMWED. While the Court is

mindful of the admonition from the Seventh Circuit that district courts should allow

a litigant at least one opportunity to amend before dismissing the complaint with

prejudice under Rule 12(b)(6), Tate v. SCR Medical Transp., 809 F.3d 348, 346 (2015),

here Grand Trunk did not ask for leave to amend. Accordingly, the dismissal is with

prejudice.

Conclusion

For the reasons stated herein, the Court grants BMWED’s motion to dismiss

Grand Trunk’s counterclaim [17] with prejudice.

Dated: March 30, 2026 KC nbloy 7 Lp

United States District Judge

Franklin U. Valderrama

14