Opinion
05 CV 446 (ARR) (RML).
March 7, 2005
REPORT AND RECOMMENDATION
By order dated January 28, 2005, the Honorable Allyne R. Ross, United States District Judge, referred plaintiff's motion for a preliminary injunction to me for Report and Recommendation. Oral argument took place before me on February 18, 2005. For the reasons stated below, I respectfully recommend that plaintiff's motion for a preliminary injunction be granted. Further, I respectfully recommend that defendants' cross-motion for a preliminary injunction be denied.
BACKGROUND AND FACTS
On December 8, 2004, plaintiff Long Island Rail Road ("plaintiff" or "LIRR") notified defendants Robert Evers and the Brotherhood of Locomotive Engineers and Trainmen ("defendants" or "BLET") in writing that the new Arch Yard and Facility ("Arch Shop") was to be leased to Bombardier Transit Corporation ("Bombardier"), for a thirty-month term, to perform warranty work on Bombardier manufactured M-7 electric powered cars for LIRR and the Metro-North Railroad. (See Affidavit of Steven M. Drayzen, sworn to Jan. 26, 2005 ("Drayzen Aff."), Ex. A). LIRR notified BLET that, to perform the work, Bombardier would be responsible for the movement of "all cars on the leased tracks adjacent to the shop building as well as within the shop building itself." (Id.)
In response, Robert Evers, General Chairman of the BLET, informed LIRR, both orally and in writing, that permitting Bombardier to move cars on the leased tracks violated the status quo that was in effect after the parties' collective bargaining agreement ("CBA") expired on December 31, 2002. (Id., Ex. J.) He stated that he considered this a "major dispute" under the Railway Labor Act ("RLA"), 45 U.S.C. § 151, et seq., and that if plaintiff proceeded as planned, his union members would "walk off the job." (Id., Exs. B, G, H, J.) According to plaintiffs, Mr. Evers communicated BLET's intent to walk off the job on three occasions: in a press release on December 22, 2004; in a telephone call to LIRR's president on December 29, 2004; and in a Newsday article dated January 26, 2005. (See Plaintiff's Memorandum of Law in Support of its Motion for a Temporary Restraining Order and Preliminary Injunction, dated Jan. 26, 2005 ("Pl.'s Mem."), at 4.) Mr. Evers also notified LIRR that the union membership had voted to authorize the strike. (Id.)
In response, LIRR notified Mr. Evers that a strike or any other work slow-down was an illegal job action and that BLET should direct its members to refrain from such activities. (Id.) On January 28, 2005, plaintiff moved by Order to Show Cause for a Temporary Restraining Order and a Preliminary Injunction enjoining BLET from striking and directing that the dispute be ordered to binding arbitration. LIRR argued that this is a "minor dispute," as it involves an interpretation of existing agreements and practice. Consequently the RLA forbids the union from striking and requires that the dispute be decided through arbitration before the National Railroad Adjustment Board. (Pl.'s Mem. at 4.) Plaintiff also noted that Bombardier is doing warranty work that is mandated under its Purchase Agreement with LIRR, and that the work is being performed on leased property. (Id. at 5.) LIRR claimed that its use of manufacturers to do warranty work, as well as the leasing of LIRR facilities to accomplish such warranty work, has long been an accepted practice at LIRR and throughout the railroad industry without causing a status quo violation of the RLA. (Id.) Judge Ross issued a Temporary Restraining Order, enjoining the union from striking, on January 26, 2005.
In opposition to the instant preliminary injunction motion, defendants argue that this is a major dispute and that there is no provision in the CBA that permits LIRR to contract out the work of BLET. (See Defendants' Memorandum of Law in Opposition to Plaintiff's Order to Show Cause for a Temporary Restraining Order and Preliminary Injunction and in Support of Defendants' Motion for a Preliminary Injunction, dated Feb. 4, 2005 ("Defs.' Mem."), at 4.) They argue that while the primary purpose of the RLA is to "avoid interruption to commerce or to the operation of any carrier engaged therein," it does not permit a carrier to violate the status quo provisions. (Id. at 4.)
By letter dated November 26, 2002, LIRR served upon BLET a notice pursuant to Section 6 of the RLA ("Section 6 Notice"), for changes in "rates of pay, rules and conditions of employment sought by the Long Island Rail Road, to be effective on or after January 1, 2003." (See Affidavit of Robert M. Evers In Opposition to Plaintiff's Order to Show Cause for a Temporary Restraining Order and Preliminary Injunction, sworn to Feb. 3, 2005, Ex. B.) Included in the Section 6 Notice was a provision that stated, "[w]here restricted, the Carrier will have the unlimited right to contract out work presently performed by its employees." (Id. at 2.) According to defendants, LIRR's service of the Section 6 Notice triggered the RLA's major dispute provisions, as LIRR was attempting, through the notice, to create a new right not defined in existing agreements between the parties. (Defs.' Mem. at 14.) They further argue that LIRR's agreement with Bombardier constitutes "contracting out," and therefore falls within the Section 6 Notice. (Id.) In the event of a major dispute, each party must maintain the status quo until the dispute is resolved through mediation or other non-binding dispute resolution procedures. (Id. at 14-15.) Defendants maintain that the status quo requirement prevents it from striking, while LIRR is prevented from making unilateral changes in wages, hours or working conditions with regard to BLET members. (Id.) Defendants have cross-moved for an injunction that would preserve the status quo and prevent LIRR from leasing the Arch Shop facility to Bombardier until the procedures for resolving a major dispute are exhausted. (Id.)
DISCUSSION
A. Statutory Framework
Congress enacted the RLA in 1926 to bring stability to the fractious world of labor-management relations in the railroad industry; that is, to "avoid any interruption to commerce or to the operation of any carrier engaged therein" and "provide for the prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions." 45 U.S.C. § 151a (1), (4). Pursuant to the Supreme Court's decision in Elgin, J. E.R. Co. v. Burley, 325 U.S. 711, 725 (1945), disputes subject to the RLA take the form of either a "major" dispute or a "minor" dispute, each with its own resolution procedure. Under the RLA, district courts do not have jurisdiction to rule on the merits of the labor dispute; rather, the court may only decide which resolution procedure is appropriate. Id. at 722-23. See also Brotherhood of Locomotive Engineers v. Springfield Terminal Ry. Co., 210 F.3d 18, 23-24 (1st Cir. 2000). Minor disputes are subject to binding arbitration, while major disputes are subject to the RLA's requirement of non-binding mediation procedures.Springfield Terminal, 210 F.3d at 24. In major disputes — unlike minor disputes — the RLA bars the carrier from implementing the contested change until mediation efforts are exhausted. Id. According to the RLA, "[i]n every case where . . . the services of the Mediation Board have been requested by either party . . . rates of pay, rules, or working conditions shall not be altered by the carrier until the controversy has been finally acted upon . . . by the Mediation Board. . . ." 45 U.S.C. § 156.
Courts may enjoin strikes arising out of minor disputes.Consolidated Rail Corp. v. Railway Labor Executives' Ass'n., 491 U.S. 299, 304 (1989) ("Conrail"). If the current dispute is deemed "minor," LIRR may continue to apply its interpretation of the CBA pending the arbitrator's decision, while BLET is prohibited from striking pending and following the arbitration before the National Railroad Adjustment Board. See Burlington N.R. Co. v. United Transp. Union, 862 F.2d 1266, 1272 (7th Cir. 1988). The "Union has no right to strike while [the] minor dispute is under [Adjustment] Board consideration. It is well established that courts may enjoin threatened strikes arising out of minor disputes to protect the Board's exclusive jurisdiction, notwithstanding that the Norris-La Guardia Act (NLGA), 29 U.S.C.A. §§ 101-115, normally prohibits federal courts from issuing injunctions against strikes in labor disputes."General Committee of Adjustment, United Transp. Union v. CSX Railroad Corp., 893 F.2d 584, 594-95 (3d Cir. 1990). See also Brotherhood of R.R. Trainmen v. Chicago River Ind. R.R. Co., 353 U.S. 30, 42 (1957).
To determine whether a dispute is "major" or "minor," the court must look to the standard described in Hawaiian Airlines v. Norris, 512 U.S. 246 (1994). According to the Supreme Court:
[T]he RLA establishes a mandatory arbitral mechanism for the prompt and orderly settlement of two classes of disputes. The first class, those concerning rates of pay, rules or working conditions, are deemed major disputes. Major disputes relate to the formation of collective [bargaining] agreements or efforts to secure them. The second class of disputes, known as minor disputes, grow out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions. Minor disputes involve controversies over the meaning of an existing collective bargaining agreement in a particular fact situation. Thus, major disputes seek to create contractual rights, minor disputes to enforce them.Id. at 252-53 (internal citations and quotations omitted). Moreover, as the Supreme Court explained in Conrail, "[i]f the disputed action of one of the parties can arguably be justified by the existing agreement or . . . if the contention that the labor contract sanctions the disputed action is not obviously insubstantial, the controversy is a [minor dispute] within the exclusive province of the National Railroad Adjustment Board." 491 U.S. at 305-06 (internal citations and quotations omitted) (emphasis added). The Court further held that, "[w]here . . . the employer's claims [that its conduct is justified] are frivolous or obviously insubstantial, the dispute is major." Id. at 307. This test exemplifies the "relatively light burden" a railroad must bear "in establishing exclusive arbitral jurisdiction under the RLA."Id. In summarizing the "arguably justified" test, the Second Circuit explained that "an employer need demonstrate only that a reasonable trier of fact could adopt the employer's view of the contract" for a dispute to be deemed minor. Association of Flight Attendants v. United Airlines, 976 F.2d 102, 105 (2d Cir. 1992) (emphasis added).
The line between interpreting and changing an agreement is often fuzzy. Brotherhood of Locomotive Engineers v. Atchison, 768 F.2d 914, 920 (7th Cir. 1985). When in doubt, courts generally construe disputes as minor in order to prevent calamitous strikes. Id.
The status quo requirements applicable in major disputes are contained in Section 6 of the RLA, 45 U.S.C. § 156 (1976), which provides in pertinent part:
Carriers and representatives of the employees shall give at least thirty days' written notice of an intended change in agreement affecting rates of pay, rules or working conditions [also known as Section 6 Notices]. . . . In every case where such notice of intended change has been given . . . rates of pay, rules, or working conditions shall not be altered by the carrier until the controversy has been finally acted upon . . . by the [National] Mediation Board, unless a period of ten days has elapsed after termination of conferences without request for or proffer of the services of the Mediation Board.
Because major disputes concern the creation of contractual rights, as opposed to the enforcement of established rights, they pose the greatest threat to the goals of the RLA, viz., avoiding interruptions to commerce and labor strife. Burlington N.R. Co., 862 F.2d at 1272. Thus, major disputes are designed to be settled by the parties themselves through negotiation and mediation under the auspices of the National Mediation Board.Id. "If that fails, then the procedure allows for acceptance or rejection of binding arbitration as well as cooling-off periods." Id. During this time, the status quo prevails. 45 U.S.C. §§ 155, 156, 160. "The Act's status quo requirement is central to its design. Its immediate effect is to prevent the union from striking and management from doing anything that would justify a strike." Detroit Toledo Shoreline R. Co. v. United Transp. Union, 396 U.S. 142, 150 (1969).
Once a party has served a Section 6 Notice during a major dispute, the status quo must be maintained until the negotiation, mediation and cooling off periods have expired. Id. at 150-53.See also International Bh'd of Teamsters, Local 19 v. Southwest Airlines Co., 875 F.2d 1129, 1133 (5th Cir. 1989) ("During these [dispute resolution] steps parties must abide by the existing agreement; only if these steps fail may the parties resort to strikes or other self-help or, in the case of management, unilateral action."). During this process, the employer may not impose unilateral changes in working conditions. If the dispute is major, the carrier can be enjoined from changing prior working conditions and practices pending mediation. Burlington N.R. Co., 862 F.2d at 1272. When all else fails, strikes and lockouts may occur. See Railway Labor Execs. Ass'n v. Chesapeake W. Ry., 915 F.2d 116, 119 (4th Cir. 1990). "Although strikes are never permissible over minor disputes and generally are permissible over major disputes only if the RLA's conciliation steps have been exhausted, it has been held that the union may strike over a major dispute immediately if the railroad violates the status quo first and has not restored the status quo before the strike." CSX Transp., Inc. v. Marquar, 980 F.2d 359, 374 (6th Cir. 1992).
In Burlington N.R. Co, 862 F.2d 1266, the court found there was "an attempt by a carrier to evade unilaterally the statutory and contractual rights vested in the Unions through the use of a trackage rights agreement destined to convey rights over its Northern Line, approximately 1,800 miles of track, to a wholly owned, five-employee subsidiary" and that the carrier had "failed to show that the Unions have established a pattern of mutual assent, understanding or acquiescence as to a trackage rights agreement." Id. at 1273. The court found a major dispute because the carrier was attempting to avoid its responsibilities under the RLA and its contract with the union.Id. at 1282. It concluded that "[t]he deprivation of a work opportunity involving the type of work traditionally performed by the Union is a change in working conditions, even where the work is new." Id. at 1276.
In commenting on Burlington, the court in Brotherhood of Locomotive Engineers v. Springfield Terminal Ry. Co., Civ. No. 98-284-P-H, 1999 U.S. Dist LEXIS 21717, at *12-13 (D. Me. Feb. 5, 1999), found that:
Burlington stands for the proposition that a court can look beyond the surface of purportedly similar transactions to see whether the disputed practice before it is in reality an attempt to evade the collective bargaining agreement; where the disputed transaction allows a corporate relative not bound by the collective bargaining agreement to perform work covered by the collective bargaining agreement, and that transaction follows closely on the railroad's failed attempt to negotiate new terms for the work in question, such facts — though not conclusive — bear directly on the plausibility of the railroad's claim that the collective bargaining agreement arguably permits the transaction in question.Id. In Burlington, the court found that the unions had shown "both indicia of anti-union animus and that business [was to] be diverted to Burlington's wholly owned subsidiary due to its anticipated lower labor costs." 862 F.2d at 1274.
While the working conditions on the date of the agreement's expiration normally constitute the status quo, that is not always the case. Air Cargo Inc. v. Local Union 851, Int'l Bhd of Teamsters, 733 F.2d 241, 246 (2d Cir. 1984). The status quo requirements in Section 6 apply to carriers and employee representatives alike. "If the parties have agreed to practices different than those specified in the collective bargaining agreement, or if actual behavior has been acquiesced to by the other party, the actual practices may constitute the status quo."Id. at 246 (internal quotation omitted). "Past practices rise to the level of an implied agreement when they have ripened into an established and recognized custom between the parties."Brotherhood Ry. Carmen, Div. Of Transp. Communications Union v. Missouri Pac. R.R. Co., 944 F.2d 1422, 1429 (8th Cir. 1991) (internal citations and quotations omitted).
In Brotherhood Ry. Carmen, the union brought suit when the railroad leased tracks to a third party to permit the third party's employees to make minor repairs to freight cars that were owned by the third party and operated by the railroad. The Eighth Circuit found the dispute minor after considering the carrier's claim of numerous instances of past practice involving leases of track to third parties at various locations. Id.
In addition, in CSX Transp., Inc. v. United Transp. Union, 879 F.2d 990 (2d Cir. 1989), the Second Circuit found a minor dispute where the carrier sold a portion of its railway line without negotiating with the union. It upheld the decision of the district court, which had found that a "plausible interpretation of the collective bargaining agreements in effect between [CSX] and the defendant unions would provide a substantial contractual justification for the sale of the [rail] line without additional bargaining." Id. at 998 (internal citations and quotations omitted). The district court cited a typical reduction-in-force ("RIF") clause in CSX's union agreements, which provided in relevant part:
(a) When it becomes necessary to reduce expenses, the forces at any point or in any department or subdivision thereof shall be reduced, seniority to govern; and employees affected to take the rate of the job to which they are assigned.
(b)(1) Five working days advance notice will be given to employees affected before the abolishment of positions or reduction in force, and list of employees affected will be furnished to the local committee. . . .Id. Also, "the district court found persuasive the fact that CSX had in the past accomplished ten separate sales of line segments, involving job abolishments and employee furloughs, without objection by appellants that these sales violated the Agreements or the RLA." Id. at 1000. See also CSX Transp., Inc. v. United Transp. Union, 950 F.2d 872, 880 (2d Cir. 1991) ("CSX II") (holding that a line sale was a matter of management prerogative regarding the use of business assets and, thus, appellant had no obligation to await the outcome of bargaining over proposals to amend its agreements with appellee before it completed the sale).
B. Statutory Application
The current case involves warranty work that Bombardier, a manufacturer, is required to perform on passenger cars as part of a Purchase Agreement with LIRR. To effectuate this work, LIRR leased the Arch Shop facility and adjacent tracks to Bombardier for a 30-month period for the purpose of retrofitting, maintenance, commissioning and testing of M-7 cars. (See Reply Affidavit of Stephen N. Papandon, Esq., sworn to Feb. 11, 2005, Ex. B at 13.)
The dispute centers on the leased tracks adjacent to the Arch Shop facility. Under the lease agreement, M-7 cars are to be removed from passenger service and brought to the Arch Shop facility for warranty work. (See Drayzen Aff., Ex. A.) The agreement provides that Bombardier employees are responsible for moving all cars on the leased tracks adjacent to the Arch Shop facility and within the shop building itself. (Id.) LIRR contends that the CBA permits the use of Bombardier employees on leased tracks and insists that this is a "minor dispute" involving interpretation of the CBA. BLET insists that this work must be assigned to its members and considers the disagreement a "major dispute" under the RLA.
In evaluating the parties' arguments, the court notes the "relatively light burden" the railroad bears in "establishing exclusive arbitral jurisdiction under the RLA." Conrail, 491 U.S. at 307. If LIRR's contention that the CBA sanctions the disputed action is not "obviously insubstantial," the dispute is minor and must be decided by Adjustment Board arbitration. Id.
The scope of work performed by BLET is set forth in Article 24(c) of the CBA, which provides:
[a]ll engines and/or trains operated by the Long Island Rail Road over its right-of-way shall be manned by an engine service employee taken from the seniority roster of engine service employees. (Emphasis added.)
Any resolution of the instant dispute will require an interpretation of this "scope of work" clause to determine whether the work in question, that is, moving cars on leased tracks adjacent to the repair facility, is work BLET "owns." As LIRR explains, the Arch Shop is a new facility, and the work has not yet been assigned to a particular union. (Pl.'s Mem. at 3-5, 22.) Arbitrators have repeatedly construed the "right-of-way" language as not applying to work performed in shop areas. (See id. at 20, Exs. B1 at 5-8, B2 at 5-11.) According to plaintiff, the movement of cars in and around shop and yard areas is work normally performed by Electrician Car Movers represented by the International Brotherhood of Electrical Workers ("IBEW"). (See Pl.'s Mem. at 5, 13, 20; see also Affidavit of David J. Elliot, sworn to Feb. 10, 2005, at 3.) Defendants concede that BLET does not have an exclusive claim to the disputed work. (See Defs.' Mem. at 11) ("the work could be assigned to the BLET. . . ."). Additionally, Bombardier, a manufacturer, is performing warranty work on a temporary basis pursuant to its Purchase Agreement with LIRR. (See Drayzen Aff., Ex. A.) At a minimum, LIRR's argument that the movement of cars into and out of the repair facility does not constitute movement on the right-of-way, and consequently does not infringe on BLET's jurisdiction, is not "obviously insubstantial." This is therefore a minor dispute.
BLET argues that there is no provision in the CBA that permits LIRR to lease the Arch Shop facility to Bombardier, and as such, LIRR is violating the status quo provisions of the RLA. (See Defs.' Mem. at 4.) Defendants urge the court to follow the Seventh Circuit decision in Burlington v. United Transp. Union, 862 F.2d 1266, which found a major dispute after the carrier transferred union work to a subsidiary. In Burlington, however, there was no ambiguity as to the scope of the union's work. Instead, there was a clear attempt on the carrier's part to evade contractual duties by directing business to an entity within the same corporate family. See Burlington N.R. Co. v. United Transp. Union Int'l, 688 F. Supp. 1261, 1266-67 (N.D. Ill. 1988). Unlike Burlington, the instant case does not involve granting trackage rights to a wholly owned subsidiary in an attempt to evade the terms of the collective bargaining agreement and permanently and unilaterally alter the union members' working conditions. 862 F.2d at 1276-77. In Burlington, the court found a major dispute because "[t]he prospect of having work shifted to a replacement subsidiary is . . . a change in working conditions and practices subject to the status quo and mandatory bargaining practices of the RLA." Id. at 1276. Here, the work in question is temporary. It is limited to the movement of cars along a short length of track adjacent to a repair facility for the sole purpose of enabling an outside vendor to complete warranty work required under a Purchase Agreement.
According to defendants, LIRR's service of the Section 6 Notice, concerning LIRR's right to "contract out," triggered the RLA's major dispute provisions, which require each party to maintain the status quo until the dispute is resolved through mediation or other nonbinding dispute resolution procedures. (Defs.' Mem. at 14.) Included in the Section 6 Notice was a provision that stated, "[w]here restricted, the Carrier will have the unlimited right to contract out work presently performed by its employees." (Id. at 2.) However, BLET's argument overlooks the vast number of cases that have held that the service of a Section 6 Notice by the carrier does not transform a minor dispute into a major one. See Brotherhood Ry. Carmen, 944 F.2d at 1429; see also CSX, 879 F.2d at 1000. In addition, the Section 6 Notice expressly relates to work that is currently "restricted" and "presently performed by [LIRR] employees." Plaintiff argues that the Notice was not meant to address temporary work performed on leased LIRR property by a manufacturer who is simply honoring the terms of its warranty agreement with LIRR. (See Pl.'s Mem at 6.) In any event, this dispute concerns the scope-of-work clause of Article 24(c) of the CBA, as any resolution would require an interpretation of the term "right-of-way." If LIRR is correct that this warranty work is not on the right-of-way, then it is not work reserved to BLET and not within the scope of the Section 6 Notice. Put another way, if the work does not belong to LIRR employees, then plaintiff cannot be said to have contracted it out. LIRR carries a light burden. Because LIRR's argument of contractual entitlement is "not frivolous" or "obviously insubstantial," this dispute is a minor one.
The court takes no position as to whether LIRR is ultimately entitled to prevail before the National Railroad Adjustment Board, nor does it address the persuasive force of its arguments.
C. Preliminary Injunction Standard
Preliminary injunctive relief in this Circuit requires a showing of (a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief. Local 553, Transport Workers Union v. Eastern Air Lines, Inc., 695 F.2d 668, 675 (2d Cir. 1982). In evaluating whether there is irreparable harm, the court may consider harm to the parties and to the public. Long Island Railroad Co. v. International Ass'n of Machinists, 874 F.2d 901, 910 (2d Cir. 1989). Here, a strike would make the minor dispute resolution procedures under the RLA ineffective and frustrate the statute's purpose of avoiding strikes and resolving minor disputes through binding arbitration.
According to plaintiffs, a strike will cause serious disruption of the Long Island rail system and leave a large portion of its approximately 274,000 daily commuters without essential public transportation. (See Pl.'s Mem. At 25.) LIRR would lose substantial revenue and incur substantial costs. I find that a preliminary injunction is necessary to preserve the status quo and protect the moving party from irreparable harm during the pendency of the action. Accordingly, I respectfully recommend that plaintiff's application for a preliminary injunction be granted. Additionally, because this is a minor dispute as outlined above, I respectfully recommend that defendants' motion for a preliminary injunction be denied.
CONCLUSION
For the reasons stated above, I respectfully recommend that plaintiff's motion for a preliminary injunction be granted, and that defendants' cross-motion for a preliminary injunction be denied. Objections to this Report and Recommendation must be filed with the Clerk of Court, with courtesy copies to Judge Ross and to my chambers, within ten (10) business days. Failure to file objections within the specified time period waives the right to appeal the district court's order. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72, 6(a), 6(e).