988 F.3d 409
7th Cir.2021Background:
- Union Pacific (UP) adopted a revised company-wide attendance policy in 2020; the Brotherhood of Locomotive Engineers and Trainmen (the Brotherhood) objected and demanded collective bargaining.
- UP and the Brotherhood are parties to many collective bargaining agreements covering different groups and regions; none expressly authorized the 2020 change.
- UP has unilaterally modified attendance policies repeatedly since 1998 (multiple modifications in 1999, 2004, 2006, 2011, 2015, 2017, 2018, and 2020), creating a longstanding course of dealing.
- The Brotherhood sued in federal court seeking an injunction under the Railway Labor Act (RLA) to require bargaining; UP filed for a declaration that the dispute was a minor one subject to arbitration before the National Railroad Adjustment Board (NRAB).
- The district court dismissed the Brotherhood’s complaint for lack of jurisdiction, holding the dispute was a minor dispute subject to mandatory arbitration; the Brotherhood appealed.
- The Seventh Circuit affirmed dismissal and awarded Rule 38 appellate sanctions to UP for pursuing a frivolous appeal.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the dispute is a "major" (court-decided) or "minor" (arbitrable) dispute under the RLA | Brotherhood: 2020 policy change is a major change requiring bargaining and injunctive relief | UP: longstanding course of dealing and implied contract terms justify unilateral changes, so dispute is minor and for arbitration | Held: Minor dispute — dismissal for lack of jurisdiction; arbitration required |
| Whether UP met its light burden to show a nonfrivolous contractual basis (implied authority via course of dealing) | Brotherhood: no express authorization, so UP’s position fails | UP: course of dealing and past unilateral changes supply an implied term and a nonfrivolous argument | Held: UP met the light burden; its argument was neither insubstantial nor frivolous |
| Whether the court should resolve the merits of the attendance-policy validity | Brotherhood: court may enjoin and decide the change | UP: merits are for the arbitrator/NRAB to decide | Held: Merits reserved for arbitrator; court declined to decide |
| Whether appellate sanctions under Fed. R. App. P. 38 are warranted | Brotherhood: appeal raised issues (argued at length) | UP: appeal was frivolous and foreclosed by binding precedent | Held: Sanctions awarded to UP; Brotherhood’s appeal frivolous |
Key Cases Cited
- Consolidated Rail Corp. v. Railway Labor Executives' Ass'n, 491 U.S. 299 (1989) (establishes major/minor dispute framework under the RLA and deference to arbitration for minor disputes)
- Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. 711 (1945) (distinguishes disputes over formation of agreements from disputes about application/interpretation)
- Detroit & T.S.L.R. Co. v. United Transp. Union, 396 U.S. 142 (1969) (district courts may enjoin changes in major disputes to preserve the status quo pending bargaining/mediation)
- Railway Labor Executives' Ass'n v. Norfolk & W. Ry. Co., 833 F.2d 700 (7th Cir. 1987) (party practice/course of dealing can be an implied term of a collective-bargaining agreement)
- Brotherhood of Locomotive Eng'rs & Trainmen v. Union Pac. R.R. Co., 879 F.3d 754 (7th Cir. 2017) (applies Conrail; practices can render disputes minor and arbitrable)
- Arnold v. Villarreal, 853 F.3d 384 (7th Cir. 2017) (defines frivolous appeals for purposes of sanctions)
- Quincy Bioscience, LLC v. Ellishbooks, 961 F.3d 938 (7th Cir. 2020) (Rule 38 sanctions are discretionary; describes standards for awarding sanctions)