CSX Transportation v. Transportation Comm Intl Union

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.