Court Opinion

ID: 4660086
Source: CourtListenerOpinion
Date Created: 2021-02-12 22:00:30.716111+00
Date Added: 2024-06-11T08:02:03.632707
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 20-2092
BLET GCA UP, CENTRAL REGION, et al.,
                                               Plaintiffs-Appellants,
                                v.

UNION PACIFIC RAILROAD COMPANY,
                                                Defendant-Appellee.
                    ____________________

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
          No. 1:20-cv-1105 — Ronald A. Guzman, Judge.
                    ____________________

  ARGUED DECEMBER 1, 2020 — DECIDED FEBRUARY 12, 2021
               ____________________

    Before SYKES, Chief Judge, and BRENNAN and SCUDDER, Cir-
cuit Judges.
   SCUDDER, Circuit Judge. In 2020 Union Paciﬁc Railroad an-
nounced a change to its employee attendance policy. Several
regional branches of the Brotherhood of Locomotive Engi-
neers and Trainmen, the nation’s oldest rail labor union, op-
posed the change and went to federal court seeking an order
under the Railway Labor Act requiring Union Paciﬁc to sub-
mit the change to collective bargaining. The district court
2                                                  No. 20-2092

made short work of the Brotherhood’s claim, concluding that
binding precedent from the Supreme Court and our court re-
quired dismissal for lack of jurisdiction. The Brotherhood’s
claim, the district court recognized, belonged not in federal
court but in arbitration before the National Railroad Adjust-
ment Board. We not only aﬃrm, but also grant Union Paciﬁc’s
motion for sanctions under Federal Rule of Appellate Proce-
dure 38. For the second time in three years, the Brotherhood
has pressed a position squarely foreclosed by settled law. So
we once again sanction them for pursuing a frivolous ap-
peal—we hope for the last time.
                               I
                               A
    Union Paciﬁc is one of America’s largest freight-hauling
railroads. The company employs hundreds of engineers to
operate its locomotives as they traverse over 32,000 miles
across 23 states. Many Union Paciﬁc engineers are members
of the Brotherhood of Locomotive Engineers and Trainmen
Union.
    Collective bargaining agreements often deﬁne the rela-
tionship between railroad companies and employees on a
range of matters, including working conditions and wages. As
a result of many mergers and acquisitions, Union Paciﬁc to-
day is an agglomeration of many railroad lines that were once
distinct entities. The company is therefore subject to many dif-
ferent collective bargaining agreements with its employees.
   In February 2020 Union Paciﬁc informed the Brotherhood
that it had adopted and planned to implement a revised com-
pany-wide attendance policy. This modiﬁed policy built on
previous ones the company unilaterally announced and
No. 20-2092                                                    3

imposed and to which the Brotherhood acceded. This pattern
dates at least to 1998, when Union Paciﬁc ﬁrst announced a
system-wide attendance policy. The company has modiﬁed
the policy at least eight times (including the change that insti-
gated this suit) over the ensuing years.
    The revised policy assigns points to an employee’s ab-
sence and authorizes disciplinary action once an employee ac-
cumulates a certain number of points in a 90-day period. The
Brotherhood opposed the modiﬁcation and demanded that
Union Paciﬁc treat the change as a proposal subject to collec-
tive bargaining. When Union Paciﬁc declined the invitation to
the negotiating table, the Brotherhood turned to federal court
for relief.
    The Brotherhood saw the modiﬁed attendance policy as so
substantial as to require collective bargaining under the Rail-
way Labor Act (RLA). The union therefore asked the district
court to enjoin the policy from taking eﬀect pending the out-
come of the collective bargaining and mediation prescribed
by the RLA. For its part, Union Paciﬁc ﬁled its own lawsuit,
seeking a declaration that the company’s modiﬁed attendance
policy was not so major as to require collective bargaining
and, moreover, that any dispute over the validity and legality
of the new policy had to be resolved by arbitration before the
National Railroad Adjustment Board.
    The district court granted Union Paciﬁc’s motion and dis-
missed the Brotherhood’s claim for lack of jurisdiction be-
cause the union’s challenge to the revised policy amounted to
a so-called “minor dispute” subject to mandatory arbitration
under the RLA. Indeed, the district court saw the issue as
open and shut, issuing a short three-page order pointing to
the Supreme Court’s decision in Consolidated Rail Corp. v.
4                                                  No. 20-2092

Railway Labor Executives’ Ass’n, 491 U.S. 299 (1989) (“Conrail”)
and our decision in Railway Labor Executives Ass’n v. Norfolk &
Western Railway Co., 833 F.2d 700 (7th Cir. 1987) (“Railway La-
bor Executives Ass’n 1987”). Those decisions make plain, the
district court reasoned, that the RLA considers any dispute to
be minor (and thus subject to arbitration) if a railroad points
to existing authority—including authority established by a
course of dealing between the parties—to modify the terms or
conditions of a workplace policy. In making this showing, the
district court emphasized, the railroad need only articulate an
interpretation or application of an agreement that is neither
obviously insubstantial nor frivolous.
    Upon examining the parties’ course of dealing over work-
place attendance requirements, the district court saw a clear
pattern and practice of Union Paciﬁc modifying its policies
many times over many years without subjecting changes to
collective bargaining. This pattern of dealing, the district
court concluded, provided the railroad with a nonfrivolous
justiﬁcation to unilaterally modify its attendance policy. That
reality made this dispute a minor one subject to resolution
through mandatory arbitration. In dismissing the Brother-
hood’s claim, the district court also dismissed Union Paciﬁc’s
companion case.
    The Brotherhood now appeals.
                               II
                               A
   As vital as the railroad industry has been to commercial
development, it comes as no surprise that it remains one of
the most regulated industries in America. Labor relations
within the railroad industry are no exception. To guard
No. 20-2092                                                    5

against prolonged labor conﬂict, Congress enacted the Rail-
way Labor Act in 1926. See 45 U.S.C. § 151a. The RLA governs
much of the relationship between employees and employers
in the railroad industry. Employers have two methods
through which they can modify “rates of pay, rules, or work-
ing conditions of [] employees.” 45 U.S.C. § 152 Seventh. A
railroad may act in accordance with any existing agreement
or go through the bargaining and negotiation procedures pre-
scribed in the RLA. See id.
    When disagreements arise over whether a railroad acted
pursuant to an existing agreement, the RLA draws a line be-
tween two classes of dispute: those that “relate[] to disputes
over the formation of collective agreements or eﬀorts to se-
cure them” and those that “contemplate[] the existence of a
collective agreement.” Elgin, J. & E. Ry. Co. v. Burley, 325 U.S.
711, 722–23 (1945). The Supreme Court has clariﬁed this di-
viding line by adopting a distinction between what it calls
“major disputes” and “minor disputes.” See Conrail, 491 U.S.
at 302; see also Railway Labor Executives Ass’n 1987, 833 F.2d at
704 (explaining the same distinction).
    Do not let the labeling create confusion. Whether a dispute
is major or minor in no way relates to a court’s estimation of
the dispute’s relative importance. See Conrail, 491 U.S. at 305.
The inquiry turns instead on whether a railroad can point to
existing authority to justify its action.
   A major dispute arises from the creation of new contracts
or modiﬁcations of existing contracts that aﬀect any of the
mandatory subjects of bargaining established in the RLA. See
Conrail, 491 U.S. at 302–03; see also Brotherhood of Locomotive
Eng’rs & Trainmen v. Union Pac. R.R. Co., 879 F.3d 754, 755–56
6                                                     No. 20-2092

(7th Cir. 2017) (“Brotherhood 2017”) (citing Conrail and ex-
plaining that “[i]f a disagreement arises over the formation or
amendment of a collective bargaining agreement (CBA), it is
considered a ‘major’ dispute under the Act, and it must be de-
cided by a court”). Minor disputes, on the other hand, arise
from the interpretation or application of existing agreements.
See Conrail, 491 U.S. at 303; see also Brotherhood 2017, 879 F.3d
at 756, 758. Put another way, “major disputes seek to create
contractual rights, minor disputes to enforce them.” Conrail,
491 U.S. at 302.
     When confronted with a major dispute, a court may use
its injunctive authority to maintain the status quo while me-
diation and bargaining occur. See Detroit & T.S.L.R. Co. v.
United Transp. Union, 396 U.S. 142 (1969) (explaining that dis-
trict courts have jurisdiction to enjoin a change to the status
quo pending completion of mandatory bargaining and medi-
ation procedures of RLA). But minor disputes must go di-
rectly to binding arbitration, typically conducted by the Na-
tional Railroad Adjustment Board. See Conrail, 491 U.S. at
303–04.
    When a railroad labor dispute reaches a federal court, our
central responsibility is “that of taxonomist”—classifying the
dispute as major or minor. Brotherhood 2017, 879 F.3d at 757.
Given the RLA’s strong preference for arbitration, a railroad
bears a “relatively light burden” in persuading the court that
its action is pursuant to existing contractual authority and
thus a minor dispute under the RLA. Conrail, 491 U.S. at 307
(internal citation omitted). “If the railroad can articulate an ar-
gument that is ‘neither obviously insubstantial or frivolous,
nor made in bad faith,’ the court lacks jurisdiction to do any-
thing but dismiss the case and allow arbitration to go
No. 20-2092                                                       7

forward.” Brotherhood 2017, 879 F.3d at 758 (quoting Conrail,
491 U.S. at 310). Plain and simple, “in making the choice be-
tween major and minor, there is a large thumb on the scale in
favor of minor, and hence arbitration.” Id.
    This legal framework is well-established and known to
railroads and unions alike. The Supreme Court has outlined
the exact contours of a court’s role in labor disputes under the
RLA, and our court has had many opportunities to apply
these principles. See, e.g., Conrail, 491 U.S. 299; Burley, 325 U.S.
711; Brotherhood 2017, 879 F.3d 754; Railway Labor Executives
Ass’n 1987, 833 F.2d 700.
                                 B
    Like the district court, we see no way to distinguish this
case from the principles that guided the Supreme Court in
Conrail or our court in Railway Labor Executives Ass’n 1987 and
Brotherhood 2017. Straightforward application of this prece-
dent leads to but one conclusion: the position Union Paciﬁc
advanced in the district court—that a consistent practice of
unilaterally modifying its attendance policy reﬂects its au-
thority to do so as an implied term of its collective bargaining
agreements with employees—is neither obviously insubstan-
tial nor frivolous. That conclusion has the consequence of ren-
dering the Brotherhood’s challenge to the attendance policy
changes a minor dispute subject to resolution through man-
datory arbitration, not litigation in federal court.
   The links in our chain of reasoning follow directly from
the Supreme Court’s instruction in Conrail. Start by recogniz-
ing that Union Paciﬁc and the employees represented by the
Brotherhood are parties to many diﬀerent bargaining agree-
ments. Some agreements are company-wide in scope while
8                                                  No. 20-2092

others cover only geographic segments of employees ab-
sorbed into Union Paciﬁc by consolidation in the railroad in-
dustry. All agree that no particular contracts expressly au-
thorize Union Paciﬁc to unilaterally modify its attendance
policy. The Brotherhood sees that as the beginning and end of
the inquiry. Far from it.
    A collective bargaining agreement, the Supreme Court
emphasized in Conrail, is a “generalized code to govern a
myriad of cases which the draftsmen cannot wholly antici-
pate.” 491 U.S. at 311–12 (internal citation omitted). These
agreements may also include implied terms, deﬁned by “the
parties’ practice, usage, and custom as they carry out their
agreement.” Brotherhood 2017, 879 F.3d at 758. We have under-
scored this same reality, emphasizing that “any well estab-
lished practices that constitute a ‘course of dealing’ between
the carrier and employees” form part of the agreement the
same as do any speciﬁc terms set out in the text of the agree-
ment. Railway Labor Executives Ass’n 1987, 833 F.2d at 705 (in-
ternal citation omitted).
    It is undisputed that Union Paciﬁc has unilaterally im-
posed changes in attendance policy for at least the past 22
years. In 1998 the company launched a system-wide attend-
ance policy for locomotive engineers known as the Union Pa-
ciﬁc TE&Y Attendance Policy. This change was not bargained
for with the Brotherhood. Union Paciﬁc unilaterally modiﬁed
that policy in 1999. It did so again in 2004, 2006, 2011, 2015,
2017, and 2018—all without going to the bargaining table.
    The point of this tally is not to cement the number of times
a railroad must act to establish a course of dealing. But this
history does show a pattern, and that pattern, in turn, estab-
lishes beyond dispute that Union Paciﬁc stood on solid
No. 20-2092                                                      9

ground in considering the Brotherhood’s challenge to the at-
tendance policy modiﬁcations to reﬂect a minor dispute—a
challenge to the company’s exercise of authority implied and
established as part of existing collective bargaining agree-
ments through the parties’ course of dealing. The district
court saw this as plain as day, dismissed the Brotherhood’s
claim, and directed the union to resolve its diﬀerence with
Union Paciﬁc through arbitration. We agree on all points.
    Recognize what we are not deciding. We are not resolving
the merits of the Brotherhood’s challenge to Union Paciﬁc’s
changes to its attendance policy. “Wading through the com-
peting declarations to determine the actual authority the Rail-
road had to modify the disciplinary policies, based on past
practices, is a job for the arbitrator.” Brotherhood 2017, 879 F.3d
at 759. Our conclusion is more limited: Union Paciﬁc has
made a reasonable argument—all the law requires—that the
2020 change in attendance policy is consistent with its author-
ity under its many collective bargaining agreements, which
include implied terms developed from a consistent pattern of
practice.
    In pressing a contrary contention, the Brotherhood ig-
nored the clear principles outlined in Conrail and Railway La-
bor Executives Ass’n 1987. The Brotherhood reads those deci-
sions as turning entirely on technical factual distinctions. Not
so and not by a long shot. We made that clear in 2017, when
we rejected the Brotherhood’s attempt to turn a minor dispute
over changes Union Paciﬁc made to a disciplinary policy into
a major dispute. See Brotherhood 2017, 879 F.3d 754. And un-
fortunately again here we ﬁnd ourselves needing to remind
the Brotherhood of a legal principle settled beyond debate in
the law: “[T]he relevant terms of an agreement are not only
10                                                 No. 20-2092

those that are written down; they also include the parties’
practice, usage, and custom as they carry out their agree-
ment.” Brotherhood 2017, 879 F.3d at 758; see also Conrail,
491 U.S. at 311–12.
   Union Paciﬁc only had to advance a nonfrivolous argu-
ment that such past practice and course of dealing conferred
authority on the company to modify its attendance policy
without renewed negotiation. It did so and that ends the
Brotherhood’s appeal.
                              III
   That brings us to Union Paciﬁc’s request for sanctions un-
der Rule 38 of the Federal Rules of Appellate Procedure. And
here, too, the proper resolution is clear, for the Brotherhood’s
appeal is frivolous by a wide mark.
    An appeal is frivolous “when the result is obvious or when
the appellant’s argument is wholly without merit.” Arnold v.
Villarreal, 853 F.3d 384, 389 (7th Cir. 2017). But “even when an
appeal is frivolous, whether to impose sanctions under Rule
38 is a discretionary determination.” Quincy Bioscience, LLC v.
Ellishbooks, 961 F.3d 938, 941 (7th Cir. 2020).
   The Brotherhood is no stranger to these principles. As we
noted just three years ago—in sanctioning some of the same
Brotherhood regional branches before us here—“when fed-
eral jurisdiction is limited to narrow grounds, when the argu-
ments on those grounds are implausible, and when the appel-
lant spends much of his time attempting to circumvent those
grounds, sanctions are appropriate.” Brotherhood of Locomotive
Eng’rs & Trainmen v. Union Pac. R.R. Co., 905 F.3d 537, 545 (7th
Cir. 2018). This is such a case.
No. 20-2092                                                  11

    The Brotherhood’s claims, as we have explained, are en-
tirely foreclosed by precedent. There is no way to read the Su-
preme Court’s decision in Conrail and our opinions in Railway
Labor Executives Ass’n 1987 and Brotherhood 2017 and conclude
anything other than that the district court got this 100% right
in ﬁnding the Brotherhood’s challenge to Union Paciﬁc’s
modiﬁed attendance policy to be a minor dispute requiring
resolution by arbitration, not litigation in federal court. The
Brotherhood begs to diﬀer only by reading those cases in such
granular detail—as so entirely limited by their exact facts—as
to empty the word precedent of any meaning. Microscopic
hair-splitting resulted in the Brotherhood advancing posi-
tions that sound in nothing more than distinctions without
diﬀerences. When we pointed some of this out during oral ar-
gument, the Brotherhood’s counsel only dug in further. This
we cannot accept.
    The Brotherhood could have easily avoided today’s out-
come. It could have acknowledged that its position was fore-
closed, urged us to reconsider our prior precedents by sitting
en banc, and relatedly explained that it likewise intended to
ﬁle a petition inviting the Supreme Court to revisit Conrail and
related cases.
   We AFFIRM the district court and award sanctions. Union
Paciﬁc shall provide a schedule of its costs and attorneys’ fees
within 14 days.