Opinion ID: 64033
Heading Depth: 1
Heading Rank: 4

Heading: The NRAB acted within its jurisdiction in directing BNSF to produce the source documents.

Text: The role of the arbitrator is confined to interpretation and application of the [CBA]; he does not sit to dispense his own brand of industrial justice. United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). The Supreme Court has explained that: [T]he arbitrator's award settling a dispute with respect to the interpretation or application of a labor agreement must draw its essence from the contract and cannot simply reflect the arbitrator's own notions of industrial justice. But as long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision. Misco, 484 U.S. at 38, 108 S.Ct. 364; [6] see also Cont'l Airlines, 391 F.3d at 617 (noting that an award must be grounded in the CBA); Bhd. of Locomotive Eng'rs v. Atchison, Topeka & Santa Fe Ry. Co., 768 F.2d 914, 922 (7th Cir.1985) (The test is not error; it is ultra vires. ). In drawing on the essence of the contract, the NRAB is not limited to interpreting the explicit language in the CBA, but can look to implied terms as well as the parties' practice, usage, and custom. Bhd. of Ry. Carmen v. Atchison, Topeka & Santa Fe Ry. Co., 894 F.2d 1463, 1468 (5th Cir.1990) (citing Consol. Rail, 491 U.S. at 311, 109 S.Ct. 2477). In concluding that the NRAB acted outside of its jurisdiction, the district court noted that the CBA does not include any language regarding the production of data under Article XV. BNSF Ry., 523 F.Supp.2d at 507. Because the CBA is silent on BNSF's obligation to turn over such information, the district court concluded that the NRAB added a new term to the CBA. Id. (holding that the absence of a term means that only the parties, and not the NRAB, can resolve that issue). The district court also gave significant consideration to Norfolk & Western Railway Company v. Transportation Communications International Union, 17 F.3d 696 (4th Cir.1994). In Norfolk & Western, the collective bargaining agreement contained a clause stating that the arbitration board shall have authority to request the production of additional evidence from any party. Id. at 700 n. 3. The arbitration board acknowledged that the power to request was not the same as the power to compel the production of documents, but concluded that it could draw an adverse inference from the carrier's failure to comply with its request. Id. at 698. Based on that adverse inference, the arbitration board sustained the union's claim. [7] Id. The district court differentiated Norfolk & Western based on the fact that the CBA in this case did not have a clause allowing the NRAB to request the production of documents. BNSF Ry., 523 F.Supp.2d at 507 (The Fourth Circuit concluded that the action of the Board was within the Board's jurisdiction because of the special provision in the contract.). In other words, the district court assumed that, but for the agreement expressly granting the arbitration board the power to request documents, the board would not have been acting within its jurisdiction. Although in Part II.B supra we have agreed that the claims should not have been sustained, we disagree with the district court's interpretation of Norfolk & Western and the remainder of its analysis. The district court too literally interprets Norfolk & Western to mean that the NRAB's power to direct the production of documents can exist only incidental to an express clause in the CBA. Its ruling is based on the premise that it was not possible for the NRAB to have been arguably construing or applying the contract unless there was explicit language describing either the parties' duty to produce documents or the NRAB's power to request production. This ruling does not give sufficient deference to the NRAB. The NRAB acts within its jurisdiction so long as its decision is drawn from the essence of the CBA. See Misco, 484 U.S. at 38, 108 S.Ct. 364. The essence of the CBA includes not just the express language contained within the four corners of the document, but also implied terms and the parties' practice, usage, and custom. Bhd. of Ry. Carmen, 894 F.2d at 1468 (citing Consol. Rail, 491 U.S. at 311, 109 S.Ct. 2477). Under the district court's analysis, the NRAB lacked authority to direct the production of documents because there was no express provision in the CBA allowing it. Were this true, Article XV would be rendered nugatory. See Reliant Energy Servs., Inc. v. Enron Can. Corp., 349 F.3d 816, 828 (5th Cir.2003) ([A]n interpretation that gives a reasonable and effective meaning to all terms of a contract is generally preferred to one that leaves a part unreasonable or of no effect. (internal quotation marks omitted)). If BNSF (i) could rely on its records as a defense to BMWE's claim that it had increased subcontracting levels, (ii) refuse to allow BMWE to see the source documents for the summaries that BNSF was relying upon, (iii) take the position that BMWE had not provided evidence to support its claim, and finally (iv) assert that the NRAB could not compel production of the source documents, then BNSF would be able to defeat any Article XV claim by refusing to turn over the relevant documents which are in its sole possession. Again, that would render Article XV a dead letter. Article XV represents a compromise in national collective bargaining negotiations. It attempted to solve the larger impasse in those negotiations regarding subcontracting, but did not address the practical disputes that would arise regarding the administration of claims. The NRAB has the duty to arbitrate claims under Article XV, but was given little guidance in the CBA on how to do so. Considering the Delphic language in Article XV, it was reasonable for the NRAB to conclude that implicit in Article XV was a requirement that BNSF produce documentation that would enable the NRAB to assess the validity of its defense to BMWE's claim. Otherwise, BNSF would be able to stonewall its way out of any liability under Article XV. We conclude that it was within the NRAB's jurisdiction to direct BNSF to produce documentation supporting BNSF's defense that it had not increased subcontracting when that documentation was in BNSF's sole possession. [8] The district court also expressed concern over the NRAB's use of the phrase basic concepts of fairness in the Award to justify why the source documents had to be produced. It equated this phrase with Misco 's directive that an arbitration board not rule based on its own notions of industrial justice. We disagree. The NRAB was not trying to enforce some abstract equitable consideration; rather, it was determined to not allow BNSF to circumvent its liability under Article XV by refusing to produce documents. The district court was equally troubled by the reference in the Award to the national implication of the NRAB's ruling on future Article XV claims and in Interpretation No. 1 to the ramifications of what this case means to the parties and to the industry. Because these were the first claims filed under Article XV, the NRAB was aware of the impact of its ruling on other carriers and unions. However, this concern does not appear to have invaded the Award. This passing reference to industry-wide concerns does not show that the Award was not drawn from the essence of the CBA. The NRAB was not, as the district court described, off on a procedural tangent. BNSF Ry., 523 F.Supp.2d at 506. The NRAB was simply trying to fulfill its function and reach the merits of BMWE's claim. In order to do this, it was necessary to compare the base and current levels of subcontracting. Therefore, it was reasonable for the NRAB to interpret the CBA as containing an implied obligation requiring BNSF to turn over the source documents after BNSF relied on its records as a defense to BMWE's claim that it had increased subcontracting levels and, at the same time, took the position that BMWE had not provided evidence to substantiate that claim. Having determined that the Award was within the NRAB's jurisdiction, we next consider whether the NRAB erred in refusing to interpret the Award.