Court Opinion

ID: 4660833
Source: CourtListenerOpinion
Date Created: 2021-02-17 17:00:30.181829+00
Date Added: 2024-06-11T08:02:09.418588
License: Public Domain

United States Court of Appeals
                           For the Eighth Circuit
                       ___________________________

                               No. 19-3746
                       ___________________________

                       Union Pacific Railroad Company

                                    Plaintiff - Appellant

                                       v.

International Association of Sheet Metal, Air, Rail, and Transportation Workers,
                       (SMART)-Transportation Division

                                 Defendant - Appellee
                       ___________________________

                               No. 19-3747
                       ___________________________

International Association of Sheet Metal, Air, Rail, and Transportation Workers,
                       (SMART)-Transportation Division

                                    Petitioner - Appellee

                                       v.

                       Union Pacific Railroad Company

                                  Respondent - Appellant
                                ____________

                   Appeal from United States District Court
                    for the District of Nebraska - Omaha
                               ____________
                          Submitted: November 17, 2020
                              Filed: February 17, 2021
                                  ____________

Before BENTON, ERICKSON, and GRASZ, Circuit Judges.
                          ____________

GRASZ, Circuit Judge.

      Union Pacific Railroad Company fired train engineer Matthew Lebsack after
he defecated on a train-car connector. An arbitration board reinstated him, citing his
lengthy, faithful service record to the company and other mitigating circumstances.
Union Pacific sought to vacate the arbitration award in federal court; Lebsack’s
union, the International Association of Sheet Metal, Air, Rail, and Transportation
Workers (“SMART”), sought to enforce the award. The district court 1 upheld
Lebsack’s reinstatement by enforcing the award. We affirm.

       In November 2016, Lebsack—an eighteen-year-veteran employee at Union
Pacific—defecated on the connector between two cars, threw soiled toilet paper out
of the window, and told his manager he left a “present” for him. All this despite the
restroom being just steps away. His coworkers then had to clean up the mess using
bottled water and paper towels.

       When Union Pacific learned what happened, it charged Lebsack with
violating company rules. Under the governing collective bargaining agreement
(“CBA”), it opened an investigation and set an evidentiary hearing. SMART
represented him at that hearing. There, Lebsack admitted to and apologized for his
behavior. He also introduced evidence of mitigating circumstances, including health
complications (both psychological and physical) as well as personal matters (that his

      1
        The Honorable Brian C. Buescher, United States District Judge for the
District of Nebraska.

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wife had left him before the incident). After the hearing, Union Pacific terminated
Lebsack.

       SMART timely appealed the termination. Under the Railway Labor Act, 45
U.S.C. § 153, a public law board (“Board”) heard the appeal. After the parties’
arguments, the Board first issued an Interim Award reinstating Lebsack and later
issued a Final Award upholding that decision. The Board viewed termination as too
harsh given Lebsack’s mitigating circumstances and his faithful service record. The
Final Award concluded by emphasizing that “such conduct in the future cannot be
tolerated nor excused.”

       Union Pacific petitioned to vacate that award in federal court and SMART
petitioned to enforce it. In a consolidated decision, the district court granted
summary judgment for SMART, holding the Board had not exceeded its authority
under the CBA. Union Pacific now appeals.

       We review a district court’s grant of summary judgment de novo. Northport
Health Servs. of Ark., LLC v. Posey, 930 F.3d 1027, 1030 (8th Cir. 2019). And in
this context, “[j]udicial review of the arbitrator’s ultimate decision is very deferential
and should not be disturbed ‘as long as the arbitrator is even arguably construing or
applying the contract and acting within the scope of his authority[.]’” N. States
Power Co., Minn. v. Int’l Brotherhood of Elec. Workers, Local 160, 711 F.3d 900,
901 (8th Cir. 2013) (quoting United Paperworkers Int’l Union v. Misco, Inc., 484
U.S. 29, 38 (1987)). “Courts are not authorized to review the arbitrator’s decision
on the merits despite allegations that the decision rests on factual errors or
misinterprets the parties’ agreement.” Sullivan v. Endeavor Air, Inc., 856 F.3d 533,
537 (8th Cir. 2017) (quoting Brotherhood of Maint. of Way Emps. v. Soo Line R.R.,
266 F.3d 907, 909 (8th Cir. 2001)).

      When reviewing an arbitration board’s decision under the RLA, a court may
only set aside an award that (1) fails to comply with RLA requirements, (2) does not
confine itself to matters within the board’s jurisdiction, or (3) involves fraud or
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corruption by a board member. Sullivan, 856 F.3d at 537 (quoting Goff v. Dakota,
Minn. & E. R.R. Corp., 276 F.3d 992, 996 (8th Cir. 2002)). Here, Union Pacific
argues that the Board went outside its jurisdiction to issue a remedy.

        An arbitrator must interpret and apply the applicable CBA. See PSC Custom,
LP v. United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv.
Workers Int’l Union, Local No. 11-770, 763 F.3d 1005, 1009 (8th Cir. 2014) (stating
an arbitrator’s award should “draw[] its essence from the collective bargaining
agreement” (quoting Misco, 484 U.S. at 36)). An arbitration board’s “award must
have a basis that is at least rationally inferable, if not obviously drawn, from the
letter or purpose of the collective bargaining agreement.” Sullivan, 856 F.3d at 539
(quoting Brotherhood of Ry., Airline & S.S. Clerks v. Kansas City Terminal Ry. Co.,
587 F.2d 903, 906 (8th Cir. 1978)). This is not a high bar since the question is not
whether the arbitrator erred, clearly erred, or even grossly erred in interpreting the
contract; it is simply “whether they interpreted the contract.” McClendon v. Union
Pac. R.R. Co., 640 F.3d 800, 804 (8th Cir. 2011) (quoting Hill v. Norfolk & W. Ry.,
814 F.2d 1192, 1194–95 (7th Cir. 1987)).

       Union Pacific first argues that the Board’s remedy does not draw its essence
from the CBA because it unlawfully adds new requirements to the agreement.
Everyone agrees that Rule 82 of the CBA governs this dispute. Rule 82 includes
two requirements that Union Pacific must satisfy to discipline locomotive engineers.
First, it must notify the targeted employee. Second, it must conduct a fair and
impartial investigation prior to discipline. But unlike the CBAs in the cases Union
Pacific cites, Rule 82 does not contain any express restrictions on the arbitrator’s
ability to review and modify a remedy chosen by Union Pacific. Because the
governing CBA contains no such restrictions, we cannot say the Board exceeded its
jurisdiction in reinstating Lebsack.

       Union Pacific relies on two cases which underscore the point. In Northern
States, an arbitration board exceeded its jurisdiction when it crafted a remedy
overturning the company’s decision to terminate for just cause. 711 F.3d at 902–03.
                                         -4-
The operative CBA expressly stated that the arbitration board may only do so where
the employer did not terminate for just cause. Id. Similarly, in Southwest Airlines,
an arbitration board exceeded its jurisdiction when it concluded that a filing was
timely despite an express CBA provision that rendered it untimely. See Sw. Airlines
Co. v. Local 555, Transp. Workers Union of Am., 912 F.3d 838, 846 (5th Cir. 2019).
Unlike Northern States and Southwest Airlines, this CBA does not expressly restrict
the Board’s authority to review and modify Union Pacific’s remedy choice, even in
a just-cause termination. Without such a limit, we hold that the Board’s remedy did
not contradict or alter the CBA’s terms. 2

       Union Pacific next argues that the remedy creates new prerequisites to the
CBA’s discipline requirements—medical and psychological evaluations—that
conflict with existing timing requirements. This argument lacks merit. Union
Pacific relies on an overbroad characterization of the award. The award reads:

      Given that [Lebsack] was a long-term employee with a known history
      of psychological issues, before any disciplinary action was
      contemplated, it would have been reasonable for [Union Pacific] to
      have first sent [Lebsack] for comprehensive psych and medical
      evaluations to determine his fitness for duty and the credibility of his
      explanations. If found fit, it would then have been appropriate to handle
      the incident strictly as a disciplinary matter.

The award only addresses Lebsack’s case. It imposes no prospective, all-
encompassing duty on Union Pacific for any future cases. Further, Union Pacific’s

      2
        Union Pacific also cites a provision of an agreement it made with SMART
establishing the Board, which states that the Board cannot “change existing
agreements or make new rules governing rates of pay, rules and/or working
conditions.” But read in context, the provision does not apply. That provision
contains two subsections. Subsection (a) establishes matters over which the board
has jurisdiction, such as “grievances and disputes,” whereas subsection (b) deals
with matters over which the board lacks jurisdiction. Because the Board
unquestionably has jurisdiction here, subsection (b)—the provision Union Pacific
cites for support—does not apply at all.
                                         -5-
timeliness argument fails because the Board seemingly contemplates postponing the
investigation and other disciplinary procedures to allow for the completion of the
psychological and medical evaluations. The governing CBA allows such a
postponement for “good cause.”

      We share the district court’s bewilderment at the Board’s conclusion that a
company cannot fire someone for purposefully defecating on company property.
Even so, we cannot review the merits. Precedent limits us to asking if the Board is
“arguably construing or applying the contract and acting within the scope of [its]
authority.” N. States, 711 F.3d at 902. We conclude that the Board applied the
governing CBA and acted within the scope of its authority.3

      For the foregoing reasons, we affirm.
                      ______________________________

      3
        There are two additional arguments we do not reach. Union Pacific argues
that the Board’s award requires the company violate the Americans with Disabilities
Act and the Family Medical Leave Act. We need not decide the question because
Union Pacific did not directly raise it before the district court. As such, we will not
consider it for the first time on appeal. See Johnson Tr. of Operating Eng’rs Loc.
#49 Health & Welfare Fund v. Charps Welding & Fabricating, Inc., 950 F.3d 510,
525 n.2 (8th Cir. 2020). SMART argues that we should reverse the district court and
award Lebsack backpay for the period between the reinstatement decision and the
date when he is reinstated. Because SMART did not cross-appeal, this argument—
one urging us to alter the district court’s judgment to enlarge SMART’s rights—is
not properly before us. See Duit Constr. Co. v. Bennett, 796 F.3d 938, 941 (8th Cir.
2015) (“Under [the Supreme Court’s] unwritten but longstanding [cross-appeal]
rule, an appellate court may not alter a judgment to benefit a nonappealing party.”
(alterations in original) (quoting Greenlaw v. United States, 554 U.S. 237, 244
(2008))).
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