### The Honorable Stephen M. Reasoner, Chief Judge, United 1 

### States District Court for the Eastern District of Arkansas, sitting by designation. Schiltz appeals various portions of the Honorable David S. 2 

### Doty's Orders of March 3, 1994 and December 22, 1994, and the Honorable John R. Tunheim's Order of June 5, 1996. ____________ No. 96-2810

____________ George A. Schiltz, * * Appellant, * * Appeal from the United States v. * District Court for the * District of Minnesota Burlington Northern Railroad; * Transportation Communications * Union, et al., * * Appellees. *

____________ Submitted: March 13, 1997 Filed: June 23, 1997

____________ Before WOLLMAN and BEAM, Circuit Judges, and REASONER, District Judge

. 1

____________ REASONER, District Judge.

Th is is an appeal from the district court's granting summar y 2 judgment in favor of Appellees Burlington Northern Railroad (BNR) and the Transportation Communications International Union (TCU), and agains t Appellant George Schiltz (Schiltz). Schiltz argues that the district cour t erred in: (1) determ ining that BNR had not discriminated against Schiltz on the basis of age when it failed to hire him for various jobs for which Schiltz had applied; (2) determining that Schilt z's union seniority rights
were based in the Northeastern District, Number 5, as opposed to the St. Paul District, Number 3; (3) determining that BNR's refusal to grant

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Schiltz's union seniority rights in the St. Paul District was not base d upon improper age discrimination; and (4) determining that TCU's refusal to rep resent Schiltz in his grievance before the National Railroa d Adjustment Board (NRAB) was not a breach of its duty of fair representatio n and was not discriminatory. We affirm.

I. Background

A. Factual Background

Schiltz b egan working for the Chicago, Burlington & Quincy Railroad (CB&Q) at the age of eighteen in May of 1962; he was a clerical employee for the r ailroad in Chicago, Illinois. In this position, Schiltz was a union, or scheduled, employee and covered by the applicable collectiv e bargaining agreement (CBA) between CB&Q and the Brotherhood of Railway and Airline Clerks (now TCU). In 1967, TCU and BNR entered into a CBA known
as the "Orange Book" which covered all union employees working for tha t rail road. Subsequently, in 1970, the CB&Q, along with several othe r railroads , merged with BNR. Therefore, in 1970, Schiltz, now a BN R employee, fell under the ambit of the Orange Book.

In Ma rch of 1970, various union positions of BNR's Chicago offic e
were transferred to BNR's office in St. Paul, Minnesota. However, at abou t this same time, Schiltz took an exempt, or non-union, position with BNR. Schiltz did move to St. Paul in 1970, and he worked there as a non-union emp loyee for twenty-one years, that is, until he received a terminatio n notice on September 16, 1991, effective October 31, 1991. This notice , sent by BNR's Senior Vice President for Human Resources, James Dagno n (Dagnon), informed Schiltz that his exempt position would be eliminated an d

### In part, the notice states: 3 

### As has been communicated to you, Burlington Northern is undergoing significant efforts to reduce its overall expenses, including employee related expenses. Regrettably, but out of necessity, we have reached the conclusion that programs to reduce our exempt work force in 1991 are both appropriate and timely. As a result of careful study and consideration, your position will be eliminated or you will be removed from your position effective October 31, 1991. BN has provided a separation package designed to assist you in your pursuit of another career or other interests. Sept. 16, 1991 Letter from Dagnon to Schiltz. By agreement, BNR and TCU had restructured the seniority 4 

### districts during the time that Schiltz had been a non-union employee in St. Paul. Originally, Schiltz was listed on the Chicago district's seniority roster. Under the terms of the new agreement, the Chicago district was reorganized and renamed the Northeastern seniority district.
-3- that he would not be placed in another one. This notice also gave Schiltz 3 three options: (1) t o sign a separation release which included severance pay; (2) to elect to exercise his union seniority rights to a locatio n where he had union seniority; or (3) to terminate his employment without severance and without signing a release.

In October of 1991, Schiltz opted to return to the union ranks ; however, he sought to exercise his seniority rights in the St. Pau l dist rict. Schiltz sent both BNR's Dagnon and TCU's General Chairma n Richard A. Arndt (Arn dt) letters to this effect. By letter dated October 29, 1991, Arndt informed Schiltz that his seniority was not in the St. Pau l district, but in the Northeastern district. On October 31, 19 91, BNR also 4 informed Schiltz that his seniority rights had remained in the Northeaster n district, and he could not exercise his seniority rights in the St. Paul district. Subsequently, Schiltz informed BNR that he would grieve th e location of his seniority rights; however, in November 1991,

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Schiltz also exercised, under protest, his seniority in the Northeastern senioritydistrict and accepted a union position in LaCrosse, Wisconsin, a location within the Northeastern seniority district. Schiltz currently holds the position he took there. Moreover, bot h before and after Schiltz received his termination notice from Dagnon, Schiltz applied for various exempt positions with BNR. He was never offered any of the positions for which he applied.
Schiltz then grieved the location of his seniority rights throu gh the appr opriate channels within BNR. On November 25, 1991, BNR decline d Schiltz's grievance. By letter dated December 6, 1991, Schiltz turned ove r his grievance to TCU's local representative for appeal. Arndt advise d Schiltz in a letter dated December 30, 1991, that TCU would not progress his gri evance to arbitration due to its lack of merit. Schilt z subsequently appealed Arndt's determination thro ugh proper channels within the union, and Arndt's determination that Schiltz's claim was meritless wa s affirmed at each stage in the process. Ultimate ly, Schiltz progressed his seniority appeal to the NRAB. On May 10, 1995, the NRAB rendered it s decision regarding Schiltz's seniority status. The NRAB found that Schilt z seniority was based in the Northeastern seniority district. The NRAB foun d Sch iltz had transferred to St. Paul in 1970 as an exempt employee ; ther efore, his seniority remained in the Northeastern district

. Alt ernatively, the NRAB found that Schiltz's claim was barred under th e equitable doctrine of laches, as each year the seniority roster for the St

. Paul district had been posted in a conspicuous place, and Schiltz had neve r contested his name's not appearing thereon until the instigation of this suit.

B. Procedural Background Schiltz originally filed this action against BNR and TCU on Augus t 19, 1993. Schiltz's original Complaint included counts of

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age di scrimination under the Age Discrimination in Employment Act, 2 9 U.S.C
. § 621 et seq. , and age discrimination and retaliation under th e Minnesota Human Right s Act, Minn. Stat. § 363.01 et seq. , against BNR and TCU. The Complaint further alleged that BNR had violated the Employe e Retirement Income Security Act (ERISA), 29 U.S.C . § 1001 et seq. , and that BNR had breached its contract with Schiltz. Finally, the Complaint allege d TCU had breached its duty of fair representation that it owed Schiltz unde r the Railway Labor Act, 45 U.S.C. § 151 et seq.
By its Order dated March 3, 1994, the district court found the breach of contract claim against BNR to be arbitrable before the NRAB an d dismissed the claim due to its lack of jurisdict ion over the matter. This
same O rder separated the discrimination claims against BNR into thre e parts, and it dismissed as arbitrable the claim that BNR had discriminated against Schiltz on the basis of age in determining his seniority lay in th e Northeastern district. By Order of December 22, 1994, the court granted summary judgment on the age discrimination claim based on BNR's refusal to place Schiltz in another management position. Finally, based upo n stipulation of the parties in an Order dated November 3, 1995, the court dismis sed the claim concerning BNR's age discrimination based upon th e elimination of Schiltz's position. This same Order also dismissed th e ERISA claim based upon stipulation of the parties.
By its Order dated December 22, 1994 , the district court granted the motion of TCU and the other individually named defendants for summar y judgme nt on Schiltz's claims under the Minnesota Human Rights Act

. Moreover, the court d enied TCU's motion for summary judgment on Schiltz's ADEA clai m and his claim that the union had breached its duty of fai r representation.

Schiltz's breach of contract claim then proceeded to arbitratio n before the NRAB, and on May 10, 1995, that body handed

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down its decision. T he NRAB denied Schiltz's claim on the grounds listed above. See supra p. 4.
Schiltz then sought reversal of the NRAB decision in district court. By its Order dated June 5, 1996, the district court denied Schiltz's motio n to reverse the NRAB decision and granted TCU's m otion for summary judgment
on Sch iltz's ADEA claim and his claim for breach of duty of fai r representation. Schiltz raised four issues on a ppeal. See supra pp. 1-2.
II. Age Discrimination Claim Based on BNR's Failure to Hire

Withregard to the summary judgment granted on Schiltz's ag e discrimination, we review the district court's grant of summary judgment de novo , applying the same standards as did the district court. Garner v. Arvin Indus., Inc. , 77 F.3d 255, 257 (8th Cir. 1996)(citations omitted). Summary judgment is only appropriate when the record is viewed in the ligh t most favorable to the nonmoving party, when it reveals that no genuin e issue of material fact is present, and when the moving party is entitled to judgment as a matter of law. Fed. R. Civ. Pro. 56 (c).

The ADEA makes it unlawful for an employer to fail to hire a prosp ective employee due to his or her age. 29 U.S.C. § 623(a)(1). I n pre senting a case based upon age discrimination, a plaintiff may eithe r present direct evidence of the claimed discrimination or he may make out
a case of discrimination under the burden-shifting analysis set forth in McDonnell Douglas v. Green , 411 U.S. 792 (1973). Bashara v. Black Hills Corp. , 26 F.3d 820, 823 (8th Cir. 1994). In this case Schiltz attempted to prosecute his case with both direct and circumstantial evidence.

A. Direct Evidence

### See supra note 2. 5


### -7- Schil tz points to two pieces of "direct" evidence which he claim s illustrates BNR's discriminatory intent in not w anting to hire him for one of the eight jobs for which he made application: Dagnon's letter t o Schiltz dated September 16, 1991 an d Andres' use of factors such as grade 5 lev el and salary in making hiring decisions for filling open positions

. While the Dagnon letter may be unartfully written, when considered in ligh t of the clarification letter sent by Mr. Steven Klug, BNR's Manager of Huma n Resour ces Planning, we find no error with the district court' s dete rmination that this evidence was insufficient to constitute direc t evidence of discriminatory intent on the part of BNR.
As to the factors used by Andres in making his hiring decisions , such
as salary and grade level, the court finds that the Supreme Court' s decisio n in Hazen Paper Co. v. Biggins , 507 U.S. 604 (1993), i s dispositive. In Bigg ins , the Supreme Court stressed that the ADEA sought to prohibit discrimination based upon age due to the stereotype that older individuals were less productive or competent. Id. at 610. The Court hel d that factors other than age, but which may be co rrelative with age, do not implic ate the prohibited stereotype, and are thus not prohibite d considerations. Id. at 611. See also Bialas v. Greyhound Lines, Inc. , 59 F.3d 759, 763 (8th Cir. 1995); Anderson v. Baxter Healthcare Corp. , 13 F.3 d 1120, 1125-26 (7th Cir. 1994). The factors usedby Andres are correlative with age, but are not prohibited considerations. We find no error in the district court's conclusion that Schiltz failed to establish discriminator y intent by direct evidence.

B. Circumstantial Evidence/Prima Facie Case As to the issue of discrimination based upon circumstantial evi dence, this court must employ the familiar burden-shifting

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ana lysis established by the Supreme Court in McDonnell Douglas Corp. v

. Green , 411 U.S. 792 (1973). We have held this b urden-shifting analysis to be appli cable in ADEA cases. Richmond v. Board of Regents of Univ. o f Minn. , 957 F.2d 595, 598 (8th Cir. 1992)(citations omitted). However, in applying the McDonnel l Douglas analysis, a court should vary the elements of the test in accordance with the facts of each individual case. Texas Dep't. of Community Affairs v. Burdine , 450 U.S. 248, 253-54 n.6 (1981). Therefore, for Schiltz's failure to hire claim, he may establish a prima facie cas e of age discrimination by proving that (1) he belonged to th e prot ected class; (2) he was qualified for the positions for which h e applied; (3) he was not hired for the position applied for despite hi s being sufficiently qualified; and, (4) the employer finally filled th e position with a perso n sufficiently younger to permit an inference of age dis crimination. See Kralman v. Illinois Dep't of Veterans' Affiars , 2 3 F.3d 150, 155 (7th Cir.), cert. denied , 513 U.S. 948 (1994). If Schiltz makes a prima facie case, thus raising an infere nce of age discrimination, the burden of production then shifts to BNR to articulate a legitimate , nondisc riminatoryreason for its decision not to hire him. McDonnel l Douglas , 411 U.S. at 802. If BNR meets that burden of production, the n Schiltz must prove that BNR's reason is merely a pretext fo r discrimination. Id. at 804.

1. Six Jobs Filled by "Sufficiently Younger" Persons

As to six

of the jobs for which Schiltz applied, the district court concluded that Schiltz was unable to make out a prima facie case for these positi ons as the jobs were ultimately filled with individuals no t "suf ficientlyyounger" than Schiltz. Relying on Rinehart v. City o f Independence, Mo. , 35 F.3d 1263 (8th Cir. 1994), cert. denied , 115 S. Ct. 1822 (1995), the district court granted summary judgment for BNR regarding these positions.

### The positions Schiltz applied for were Manager-Accounting 6 

### Services, Assistant Paymaster-Legal, Assistant Manager Administration, Manager-Tracing, Manager-Revenue Services, and Assistant Paymaster. These positions were respectively filled with individuals aged 43, 46, 51, 44, 48, and 47. At this same time, Schiltz was aged 48.
-9- As it d id before the district court, BNR contends Schiltz fails t o meet the fourth element of the prima facie case as the positions for which Schilt z applied were ultimately filled with individuals less than fiv e years younger than he. Schiltz argues the district court must be reversed 6 in light of the recent Supreme Court case of O'C onnor v. Consolidated Coin Caterers Corp. , 116 S. Ct. 1307 (1996), which he maintains overturns the Rinehart decision. We cannot agree with Schiltz that the O'Connor decisio n demands the reversal of the district court on this point.

In the O' Connor case, plaintiff brought suit alleging his discharge violated the ADEA. At the time of his discharge , plaintiff was 56 and his replacement was 40. The Fourth Circuit upheld the district court's grant of summary judgment and stated that plaintiff could only establish th e fourth element of a p rima facie case of age discrimination if plaintiff's rep lacement was someone outside the protected class. The Supreme Cour t reversed the Fourth Circuit holding that a prima facie case in the ADE A context is not made out simply because the ADEA plaintiff is or is no t repl aced by someone outside the protected class. Instead, the Cour t stated: "[T]he ADEA prohibits discrimination on the basis of age and not class membership, the fact that a replacement is substantially younger tha n the plaintiff is a fa r more reliable indicator of age discrimination than is the fact that the plaintiff was replaced by someone outside th e protected class." Id. at 1310.
The district court essentially follo wed the reasoning in O'Connor in granting summary judgment for BNR in this case. The district court did no t rely on an arbitrary above 40/below 40 rule

### The July 29, 1991, job posting for this particular position 7 

### indicated the following education and/or experience was required: "College degree desirable; professional management courses and railroad accounting experience preferred; or a minimum of four years' railroad accounting experience, including supervisory experience." (Supplemental Appendix, p. 7.)
-10- as had th e Fourth Circuit in its decision. Instead, the district cour t determined that the i ndividuals hired for the six positions at issue were not " sufficiently younger" than Schiltz for him to make out the fourt h element of the prima facie case under the McDonnell Douglas analysis. We agree. We conclude that the facts surrounding Schiltz's claim for a new position do not raise an inference of discrimination. Two positions were filled by individuals older than or the same age as Schiltz. Fou r positions were filledwith individuals younger than Schiltz. However, of the se four positions, the largest age disparity between Schiltz and th e individua l hired for the job was five years. On these facts, the ag e disparities do not raise an inference of discrim ination as the individuals hired for the position were not "substantially y ounger" than Schiltz. Id. We fin d that the district court properly analyzed Schiltz's ag e discrimination claim under the ADEA and granted summary judgment under the appropriate standard.

2. Two Other Jobs For Which Schiltz Was Not Hired

As to the two other positions for which Schiltz was not hired, on e was never filled. Kr alman 23 F.3d at 155. The other position was filled by a per son twenty-six years younger than Schiltz, Mr. Todd Marol t ("Maro lt"). However, Marolt possessed a college degree in busines s administration, an educational preference for the position. S chiltz could 7 not make out a prima facie case for a job that was never filled, and w e find th at BNR articulated a legitimate, non-discriminatory reason fo r hiring Marolt. Id

.
III. Breach of Contract Regarding Place of Union Seniority Rights

### -11- With regard to the summary judgment granted on Schiltz's claim o f brea chof contract surrounding the determination of the place of th e vesting of his seniority rights, we again review the district court's gran t of summar y judgment de novo , applying the same standards as did th e district court. Garner , 77 F.3d at 257. Summary judgment is onl y appropriate when the record is viewed in the light most favorable to the nonmoving party, when it reveals that no genuine issue of material fact is present, and when the moving party is entitled to judgment as a matter of law. Fed. R. Civ. Pr o. 56 (c). We find no error in the district court's analysis.

Schiltz c laim is governed by the Railroad Labor Act ("RLA"), 4 5 U.S.C. § 151 et seq. Disputes between railroads and their employees are cl assified as either major or minor disputes under the RLA. Se e Consolidated Rail Cor p. v. Railway Labor Executives' Assoc. , 491 U.S. 299 (1989) (" Conrail "). Major disputes are defined as those disputes tha t
crea te contractual rights between railroads and their employees; mino r disputes involve the enforcement of those contractual rights. Elgin, J. & E. Ry. v. Burley , 3 25 U.S. 711, 723-24 (1945). A dispute is classified
as "minor" if it "relates either to the meaning or proper application of
a p articular provision" in a CBA. Conrail , 491 U.S. at 303 (citatio n omitted). Moreover, minor disputes are subject to compulsory and binding arbitration before the NRAB Id. at 303-04.

BNR has t he "relatively light burden" of establishing the exclusive arbit ral jurisdiction of the NRAB under the RLA. Id. at 307. In fact , there is a presumption that disputes between rai lroads and their unionized employees are minor, and thus, arbitrable. If d oubts arise as to the type of dispute at issue, a court should construe the dispute as minor

. International Assoc. of Machinists & Aerospace W orkers, Dist. Lodge No. 19

v. Soo Lin e R.R. , 850 F.2d 368, 377 (8th Cir. 1988)(en banc)(citatio n omitted). The gravamen of Schiltz's argument revolves around the

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interpretation of the contract language in the CBA known as the Orange Boo k and the place of the vesting of Schiltz's senior ity rights. Article VIII, Section 4 (c) of the Orange Book states: "When a Protected Employe e transfers to another seniority district as a result of changes of operatio n
or wo rk transfer, his seniority shall be dovetailed into the roster t o which transferred and his name shall be removed from the roster from which he transfers." Under the Orange Book, Schiltz a rgued his rights vested in th e St. Paul district, while BNR argued his rights vested in th e Northeastern district . If BNR's position regarding the interpretation of contra ct language is "arguably justified," then the dispute is deeme d "minor, " and it proceeds to arbitration. Conrail , 419 U.S. at 307. W e find n o error with the district court's conclusion that BNR' s interp retation of the provisions at issue was "arguably justified," an d thus, the dispute between BNR and Schiltz was minor and should hav e proceeded to arbitration before the NRAB as it did.
Turning now to the NRAB's arbitration award, this court's power o f revie wis "'among the narrowest known to the law.'" See Internationa l Assoc. of Machinists and Aerospace Workers v. No rthwest Airlines , 858 F.2d 427, 429 (8th Cir. 19 88)(citations omitted). "Courts may set aside board orders on three grounds: (1) the board's failure to comply with th e provisions of the Railway Labor Act; (2) failure of the order to confine itself to matters within the scope of its jurisdiction; and (3) fraud or corruption." Id. (ci ting 45 U.S.C. § 153, First (q)); Union Pacific R.R.

v. Sheehan , 439 U.S. 89, 99 (1978)(per curium); Brotherhood of Ry., Airlin e and Steamship Clerks v. Kansas City Terminal Ry. , 587 F.2d 903, 905-06 (8t h Cir. 1978), cert. den ied , 441 U.S. 907 (1979). However, Schiltz does not seek to overturn the NRAB's decision based upon one of these three grounds

. Instead, h e seeks reversal of the decision upon the ground of "publi c policy. " See Union Pacific R.R. Co. v. United Trans. Union , 3 F.3d 25 5 (8th Cir. 1993), cert. denied , 510 U.S. 1072

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(1994). Under narrow circumstances, the public policy ground disallows th e courts to lend their authority to a board decision which might harm th e public. Id. at 261-62 (concluding that a well-d efined and dominant public poli cyagainst a railroad's employment of a person who used drugs o r alcohol would be grounds for the overturning of an arbitration board' s decision to reinstate such an individual).

Schilt z argues for a reversal of the NRAB decision on the basis o f a "well-defined and d ominant" public policy, that is the public policy of protection of workers . Schiltz contends that the job security provisions of th e Orange Book aided BNR in receiving the Interstate Commerc e Commission's approval for its merger with other railroads back in 1967, an d he further argues that to allow the NRAB's decis ion to stand would violate the general policy of protecting workers. The court finds Schiltz' s argumen t unpersuasive. The court simply cannot find that the privat e bene fit that would inure to Schiltz, that is, the placement into on e seniority district as opposed to another, is the type of "well-defined and dominant" public poli cy which courts have had in mind in recognizing this exception. Id. at 260-62.
IV. Age Discrimination Based Upon BNR's Refusal to Grant Seniority in the St. Paul District

We ag ain review the district court's grant of summary judgment o n this claim d e novo . Garner , 77 F.3d at 257. And, we again have onl y narrow powers to review the NRAB's decision. No rthwest Airlines , 858 F.2d at 429. Schiltz argues that BNR violated the ADEA by refusing to allow hi m to exercise his seniority rights in the St. Paul seniority district. He contends that he should be allowed to pursue his statutory cause of action under the ADEA outside any arbitration decision made by the NRAB. However , the acceptance of this

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argument would lead to the evisceration of the grievance and arbitration procedures provided by the RLA. This court real izes that the scope of RLA preemption has been narrowed by recent Supreme Court decision. Hawaiian Airline s, Inc. v. Norris , 512 U.S. 246 (1994)(allowing an employee t o assert a statutory right under Hawaii's Whistleblower Act instead o f
res olving the dispute under the terms of the CBA because of the RLA' s preemp tion). However, Schiltz's claim is distinguishable from that i n Hawaiian Airlines as Schiltz's claim is inextricably intertwined with the language contained in the CBA. The issue of where Schiltz could assert hi s seni orityrights had to be determined by the CBA's language. Claim s arisin g out the interpretation of labor agreements should proceed t o arbitration for resolution. See Fry v. Airline Pilots Ass'n Inter. , 8 8 F.3d 831, 835 (10th Cir. 1996). V. Breach of Duty of Fair Representation

As already noted, the court has very limited power of review ove r arbitration awards. Northwest Airlines , 858 F.2d at 429. To begin to mak e a claim for breach of duty of fair representatio n arising out of a union's handling of a grievance, a plaintiff must demonstrate both that th e underlyi ng grievance has merit and that the union failed to fairl y represent him. Hines v. Anchor Motor Freight, Inc. , 424 U.S. 554 (1976). Here the NRAB found against Schiltz on the merits of his contract claim. Since Schiltz's underlying grievance regarding the interpretation of the CBA lacked merit, TCU's duty to represent Schilt z was never breached. See DeCostello v. Teamsters , 462 U.S. 151, 164-65 (1983).

VI. Conclusion

We concl ude that summary judgment was properly entered for BNR an d TCU by the district c ourt in this matter. Therefore, the judgment of the district court is affirmed.

### -15- A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT