honor michael pursued on behalf of the appellant's i'd like to reserve three minutes for rebuttal you just watch your lights the white one turns on that's that's it this case is really quite different than any of the other railway labor act disputes that i've worked on before this court in the district court in the sense that the parties agree there is no express contract usually what happens in these cases is you know there's a contract the union thinks it's clear and the railroad comes forward with it at least arguable interpretation of it now my clients can question the good faith of that at least an arguable interpretation lots of  times but we don't have that here there's simply no express contract and the parties agree on that can i just quibble with you a little bit about that yes judge i understood that there is actually there are quite a few collective bargaining agreements in place here right and some aspects of the case yes ok so i thought the issue here is whether in those agreements there is an implied power for the for the railroad to take these steps regarding discipline i disagree with that judge please i don't think that union pacific has identified any specific contract language that gives it the right i agree might implement these changes  not the question they're arguing they've got a past practice right yes judge ok but right right in that i have exactly the same question of past practice which particularly in collective bargaining environments the parties custom and practice dealing with one another is an important part of the relationship and it's created under the umbrella of the collective bargaining agreement let me ask the question this way we have mr philips affidavit right from the from the railroad yes that asserts we've got this power we've used this power before and so on we have your affidavits that take a different approach everybody's affidavits look as if they are very carefully worded so let me ask whether you believe that the phillips affidavit is falls and which aspect judge in a yes q ok could you identify this i do not believe that the railroad has reserved a right to make unilateral changes in the absence of an express collective bargaining agreement to the contrary could you be that's that's in essence the ultimate conclusion that's one of that's one of his ok one of his statements ok and you say for factually false in any it mr phillips may it may have testified with the exception that i just highlighted where that was a specific of ermine t made as a matter of fact i disagree that that is true and we can say he made a conclusion of law over there with respect to his laying out a history of arbitration awards that's accurate if that's what you're driving i'm driving at the whole things i'm trying to understand how we should approach this problem where we have these dueling affidavits and in particular one question for the railroad in essence is can a railroad get to arbitration by lying about the history i think is the position the railroad is taking but i don't know whether that's actually needs to whether that actually needs to be decided in this case let me try to answer your question by bringing it back to some basic railway labor act precedence your honor first we have the minor major dispute dichotomy under the railway labor act major disputes it's been clear for a real long time about contract formation so here if you think about it we're saying on the broader section two first issue that's forty five u s c section one fifty two first of the railway labor act and i'll come back to that for a second so we can read statute to you but under the minor major dispute dichotomy a minor dispute is about the meaning of a contract the meaning of a contract a major dispute is about whether a contract exists we highlighted this in the detroit ts  our case that went all the way up to the supreme court and was affirmed this case is about and union pacifics defense to it they come in and say we're not pointing to a contract that gives us this power we're not saying there's anything for the arbitrator to interpret if you send it to the section three really right minor dispute process what they are saying is there's nothing to interpret but we have an implied in fact contract and we're saying you do not have an implied in fact contract and that then becomes a dispute about the formation of a contract a dispute about the existence of a contract does your position then depend on the difference between an in an implied creation of  contract and an implied term of a contract that already exists it's unclear to me which one of those would be the case your honor because you know you can have a contract that has ten terms and that's a contract you can have a contract and have a sten terms only one of them is relevant and then you're looking at that at that term under the railway labor act our contracts don't expire we've had disputes you know seven years ago over the one nine hundred fifty two laying off and leave of absence agreement that came up to  have a piecemeal set of agreements that weren't even negotiate by the same parties because of railway mergers you have agreements between the southern pacific and one part of the b l e the missouri pacific those are all now union pacific agreements so that under the railway labor act the idea of you know what's the collective bargaining agreement is a little bit different than under the national labor relations act and i don't know if that answers your question i did over those either but it's helpful so let me come at this maybe from the slightly different point of view we have the underlying issue you know what what are the terms i'll just say for the time being one of the terms of of this contract is one of the terms by custom and practice the ability of union pacific to change disciplinary things the district court thought that once you had competing factual positions with a but important cabbie and i'm going to mention that enough was just send you over to arbitration that you needed that that turned it into a minor dispute and of course the arbitrator might decide that the terms in the contract or it's out of the contract or the practice is different and so taking some language from from the conrail case the district court said the union pacific didn't have to approve the term they don't assert their it only needs to articulate an argument that is and here's the quote that is neither obviously insubstantial or frivolous nor made in bad faith close quote now i would assume out in outlaw eyes you know are made in bad faith and so that if there's some way of pinning them down to a lie that surely would not be enough to throw it over to arbitration with the district court didn't seem to think that that was what it was looking at it has these various affidavits and information in front of it and so this case strikes me as one about who is go decide these things are these things that the court needs to decide first or is the thumb so heavily on the side of characterizing something as a minor dispute that the district court was right this wasn't obviously insubstantial  frivolous or in bad faith thus off to the arbitrator you go let me briefly distinguish that passage in conrail and then address where the district court erred in its analysis of the comparative competencies between the courts and arbitrators connell decision if you remember involved in interpretation of the contract the parties undisputed that rule g it was an implied in fact current term of the contract so that passage that you just read from the district court it's about whether there's an arguable interpretation of the meaning of a contract  implicit so to give back to the district courts err if you look at the comparative competencies between a federal court and an arbitrator in the context of arbitration and i think that's really what we're talking about here is in the specific context of the railway labor act we're talking about arbitration courts decide if a contract exists that can that requires a party to go to arbitration right if you look at how that survey where it's actually looked into granite rock that's what all these cases say arbitrators decide the meaning of a contract and the district court said if you can at least throw up some arguable basis that maybe some arbitrator could decide a contract exists then it goes to arbitration in my view the court abrogated its duty to decide whether there's a contract that requires arbitration so my question for you actually and part really related to this is whether you could point me to any cases do you think got it right that you think show a court making all of these preliminary determinations resolving these issues it's fact and then saying at the end of the line ok you know here we have whatever it is a major or minor dispute granite rock would scan for this principle i don't have the facts of that specifically but i say if you jump in alexis and look at any court order that compels arbitration in the federal arbitration act i would make that analysis make findings of fact conclusions of law what were the terms of the agreement was there offer notice of a separate with the federal decide that there's no delegation plus you're right but in this instance i'm just wondering when you wind up with these competing factual assertions about the course of business between the railroad and the union here are there cases that have said well that's up to the court to resolve to see if this you've been can you characterize in its management right just point out that case because it's clear that the district court went into some analysis in that instance as to whether the union had acquiesced to the to the practice and that's something that i want to come back to the language of the statute and then segue into the chicago tribune case the language of section two first of the railway labor act says it shall be the duty of all carriers their officers agents and employees to exert every reasonable there's good reasons that you want written collective bargaining agreements you don't want the secret side letters that didn't rank in file i know about you don't readily it was a dissent but you know you don't want nebulous practices floating out there that maybe there's a contract maybe there's not particularly in the light of what is described by the supreme court of the heart of the railway labor act as the duty to make these agreements and less union pacific ensure that my client clearly an  mistakeable he waved its right to demand that they make agreements over mandatory subjects of bargaining we've got that right that it's congress in trying to really labor act like trees or some time your honor certain argument that any time there's silence in a collective bargaining agreement that automatically means that management gets to do whatever it wants because it seems to me that's quite contrary to both the recognition and the railway labor act that there are mandatory statutory subjects of bargaining in the fact that what winds up in a contract is the result of bargaining it doesn't i don't think you can draw that inference from silence first of all your honor you don't need to reach the question in this case as to whether contractual silence standing alone would be sufficient so you can see i mean that's a that's not a supportable proposition i absolutely disagree your honor if i came into this court with nothing but contractual silence it would absolutely be an arguer position and the reason for that is that i have literally dozens of arbitration awards that recognize that that is the rule in this industry now i concede it is not the rule in other industries but in financial and the national labor relations act has a different rule but this court has on multiple occasions recognized the contractual silence alone is the default allows a railroad to do what  an express provision i think well i i mean i wouldn't push this too hard if i were you because i really think there are distinctions in a lot of these cases but as you just said i do understand that your backup argument is that you have more  silence that you have some indication of past practices implicit terms that are actually terms in this contract i can point to three different things you are number one with respect to past practice i have not just my witnesses sworn statement saying that we have a longstanding practice of modifying to says this upgrade policy that had been modified there's two examples that he cites your honor upgrade as one of them which is the predecessor to the policy that we're talking about now maps the record that policy was entered without bargaining they complained about it but it went ahead they never have the right to bargain about the what counts as bargaining you've got you've got exchanges you've got posturing you've got correspondence and maybe there's modification but it's not bargaining system or this is the rule right now correct it looks a lot like bargaining to me well there is this is one of those things where you know what when you see it your honor there's the bargain bargaining on the road with labor act is something that has the potential to produce an agreement and the railroad in the union talk all the time about all different in a written agreement that has both signatures on the same piece of paper or an exchange of correspondence or a telephone exchange that bargaining can be informal there's no doubt about right but but it is something that the railroad has to be able to say to the union we will talk to you about this but we're not bargain about that happens all the time the railroad reserves its right to say look we're going to try to work this out because we have a we're bound together right we're permanent partners in this but we're not going to give away our rights to do the kinds of things that we've been doing for a century so the the example that mr phillips points to is not just upgrade the probably the more pertinent one is the attendance policy which was litigated in this court judge hampton you wrote the decision in that case where union pacific instituted an entirely new attendance policy which has disciplinary consequences and so therefore is analogous to some maps and the union sued us it was deemed a minor dispute we went to arbitration the we won in arbitration on partly on the basis of our reserved rights exactly the argument i'm making here they came to this court and said that was beyond his jurisdiction he can't do that he can't cite to some concept of reserve rights and this court said no or see cat or traitor could do that happens all the time so that leads me to my second point of aside from those two examples of the attendance policy and  and maps i have this entire body of arbitration authority i'm not just pointing to contractual silence i'm pointing to a concrete set of awards that say you can do things like in post in this for duty exams create absenteeism policies do all kinds of things so long as you are not restricted by express agreement terms how can it be for books for me to argue that we have the right to do exactly that well i mean the question is how far does it go because there are certain subjects of mandatory bargaining and in sense we're really talking about how and where does the bargaining happen because if it's a major dispute you can't implement it right away you've got to go to the table thrash it out with the union however bargaining works and you know maybe give up a little bit maybe get things you want and only then do you implement it whereas if it's minor you can implement this right away of course they can take it to arbitration if they want the arbitrator looking at the agreements looking at industry practice looking at the what the relationship between these two particular and these has been doing all the things that arbitrators do will decide you know whether this particular maps policy in other words in some ways you're sort of not out of the woods yet an arbitrator could of course decide that that the maps policy is that it's just too much of a stretch to say that it's a decides right yeah and they're going to the reason why the unions keep coming back to the federal courts about this is they know that the courts don't aren't steeped in the minutiae in the detail railroad the railroad and per men and what they meant is arbitrators who are steeped in this who deal with this day in and day out they know what reserved rights are in this industry that's why there is all these awards  case where we're all roads as we have an implied right to take emergency actions and the emergency actions require a ten percent pay cut for unionized workers executives everybody and we're imposing that unilaterally we assert that we've got this implied right minor or major it would depend on the content of the express agreements between the parties your honor because i think everyone understands that and i'm not arguing otherwise that implied rights are restricted by express agreements could be a minor disappear are but it would depend on the specific seven railroads made some sorts of arguments before about implied emergency powers i can think of one case in which they did the wheeling lake erie case in the sixth circuit and in that case they said well we have an emergency power to operate locomotives with and with management teams without putting a locomotive engineer on the six circuit said no it's a major dispute but the reason it said it's a major dispute is because there was express contract language that said no you must have an engineer on every train that's the difference here they don't change hamilton's getting added to me i'm sure your contract say whether it's thirty five dollars an hour or whatever it is we'll call it that this is how much you have to pay and yet there could be you know some ghastly situation that might cause the need to pay less but you'd have to negotiate that first what's a statutory mandatory subject of bargaining and secondly there's almost certainly an express clause right but the difference here is there is no express clause that restricts our rights on this point moreover this whole mandatory subject to bargain thing is a complete red herring because all minor disputes are about mandatory subjects  parking i can't think of a single one that didn't involve a mandatory subject department all that the designation of it as a mandatory subject to party means is that they serve a section six notice on us we are statutorily obligated to talk to them about it if they want to come in and say here is our section six notice we want to restrict your rights to change discipline we think discipline should include these sanctions for these rules and that's it you can't change it they can sort out a notice so say your position that management rights clauses in these contracts are just so much wasted words i mean you're sensually saying there's always a management rights clause and i'd dubious about that arrangement get your position your honor i'm not aware of any express management rights clause in the railroad industry and the reason for that  record judge posner recognized this doctrine in the duck rick south case i know that the lower court said that he was talking about management products but he talks about both first he talks about management products which means what color are you going to paint the executive dining room and then he goes on to talk about the men who was the meaning of the agreements and what he says is if the agreement does not expressly or imply a lead restrict the railroad it's allowed to do it so what happens council if the union comes back in response to an affidavit like mr philips and says he's lying well again i employees by making them stand out in the rain and we can do that when ever we want and then the union comes in and says look here is here is a document that says you can't do that and it's you know and we don't have circumstances where there's a strike threat which we didn't have here the difference here is that mr phillips the central point and the examples that he pointed to were an rebutted by the you what they came in with is testimony about a bunch of other stuff training and and procedural rights which had nothing to do with discipline policy they did not point to a single circumstance in which we had entered into an agreement restricting our silent on all substantive terms so no this is something that is a function of railroad history element of these agreements over a century and  on the air for on the exact name of the western section eighteen of the western agreement correct i guess i'm i still struggle with how past information about license resit revocations is not information concerning discipline when it is being used as a basis for discipline well if it's not being used as a basis for discipline your honor the discipline it is based on whatever rule the individuals accused of violating so information concerning doesn't that shape things pretty finally i mean it is actually the relevant fact that you're looking at under that rule no i disagree rather i mean that to sanction you saying that that sanctions depend on history right i'm saying that that once that the relative has made a determination that there's been a violation then the degree of sanction will depend on the employee's work history but information concerning discipline under article eighteen is referring to the subsume violation you know in other words the rule that was broken and the evidence submitted and the policy of that we're arguing about here recognizes the distinction between that and license revocation three point two point one addresses license revocation and how that's true three point three is the retention period for substantiated charges that's information concerning discipline and that's totally compliant with article eighteen moreover article eighteen is referring to information concerning discipline contained in personal records they couldn't have been referring to license revocation is because they're not personal records so i don't think there's any of that we're down in the weeds about contract interpretation of this point but surely well glued to the question soon seems to me whether the railroad wins as long as its lawyer can stand up without collapsing in laughter as he makes the argument right isn't that your interpretation conrail well your honor i have attempted i'm sorry i see my  on the question what the district court can do remember that this there's no discovery into this there's no hearing this is on a twelve b one motion to dismiss for lack of jurisdiction with respect to the judicial precedent you know pacific cited no case like this every case which involved a contract interpretation as to whether the hit the procedures were fair and impartial the actually sing case that involved a prole evidence used to interpret a contract the b n s f case didn't involve a mandatory subject of bargaining brack case there actually was some real evidence that the union had acquiesced to this practice and it didn't involve a section two first argument so there's really no present cited at some point and oh he says an elephant and so on and so forth finally the yogi gets exasperated and says it's elephants all the way down but he never explains what's holding it up that's what we've got here there's these you know a bunch of arbitrations most of which don't even involve engineers they involve yardman under the fourth division then rab most of which don't involve my clients and they just have this mystical idea out of thin air that the railroad doesn't have to negotiate a management rights clause which they very it's not like there's a standard management rights clause so you think there are many rights clauses in railway c d s i don't know of something that's expressly called a manager rights clause but they could certainly negotiate one that would have specific terms and i can tell you from representing other industries and other clients means your rights clauses are not uniform and where these holdings just stand in direct violation to the mandate of section two first the railway labor act to exert all efforts to make agreements