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Brotherhood of Maintenance of Way Employes Division/Ibt v. Consolidated Rail Corporation

June 6, 2011


The opinion of the court was delivered by: Bumb, United States District Judge:

FOR PUBLICATION [Dkt. Ents. 28, 34]

Member cases: : 10-926 ;10-931; 10-932: 10-934


This case comes before the Court for review of several arbitration awards issued by the National Railroad Adjustment Board ("NRAB" or the "Board"), involving disputes between plaintiff Brotherhood of Maintenance of Way Employes Division/IBT ("BMWED" or the "Union") and defendant Consolidated Rail Corporation ("Conrail"). The disputes arise from Conrail's use of non-Union contractors to perform maintenance of way work at various railroad yard locations in Michigan, Pennsylvania, and New Jersey. The NRAB dismissed the Union's claims for lack of jurisdiction, finding that their resolution required interpretation of an implementing agreement, which had been mandated by the Surface Transportation Board ("STB") as part of a prior merger.

BMWED appealed the Board's decisions to this Court and now moves for summary judgment, arguing that the Board had jurisdiction over these claims and improperly refused to adjudicate them. It seeks an order from this Court, vacating and remanding the awards to the NRAB for decision on their merits. Conrail opposes this motion and filed a cross-motion for summary judgment, arguing that the STB has exclusive jurisdiction over these claims, and therefore, the NRAB properly dismissed them. For the following reasons, the Court denies the Union's motion and grants Conrail's cross-motion.


Defendant Conrail is a "carrier" as that term is defined in the Railway Labor Act, 45 U.S.C. § 151 (2011). (Def.'s Resp. to Pl.'s Statement of Undisputed Material Facts ("SUMF") 8, Dkt. Ent. 34-4.) It conducts rail operations in New Jersey, Pennsylvania, and Michigan. (Id.) Conrail's maintenance of way employees are represented by BMWED. They inspect, construct, maintain, and repair certain track and other structures operated by Conrail. (Id. 7.) The rates of pay, rules and working conditions of these employees are governed by the terms of a collective bargaining agreement ("CBA") between Conrail and the Union. (See Pl.'s SUMF 9.) The CBA also includes what is known as a "Scope Rule," which defines certain work as maintenance of way work and places limitations on Conrail's ability to contract out such work. (See id. 10.)

On July 23, 1998, the STB approved the acquisition of control of Conrail Inc. and Consolidated Rail Corporation by CSX Corporation and CSX Transportation, Inc. ("CSX"), and Norfolk Southern Corporation and Norfolk Southern Railway Company ("NS") (the "Conrail Transaction").*fn1 (Pl.'s Ex. 6; Def.'s Ex. A.) In approving the Conrail Transaction, the STB imposed labor- protective conditions as prescribed by New York Dock Railway -Control - Brooklyn Eastern District Terminal, 360 I.C.C. 60 (1979), aff'd, New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 1979) ("New York Dock"). These conditions, commonly called the "New York Dock conditions," provide for, inter alia, financial benefits for employees who suffer a loss of compensation or employment as a result of an STB-approved transaction. Any disputes over claims for employee protective displacement and dismissal benefits arising from such transactions are resolved by STB arbitrators under the New York Dock arbitration procedures set forth in § 4 of the New York Dock conditions. See also CSX Transp. v. Transp. Comm. Int'l Union, 480 F.3d 678, 680 (4th Cir. 2007).

Subsequent to approval of the Conrail Transaction, disputes arose between BMWED and Conrail relating to employee pay and benefits, including the extent to which Conrail would be permitted to use outside contractors for maintenance of way work. (Def.'s SUMF 5.) Thus, pursuant to Article I, § 4 of New York Dock, the parties submitted their disputes to a New York Dock arbitrator acting under the authority of the STB. (Pl.'s SUMF 15-16.)

On January 14, 1999, the New York Dock arbitrator issued his ruling. (See Pl.'s Exs. 7-8.) The arbitrator ruled in relevant part:

Restriction on contracting out, either through the scope clause of a CBA or a specific prohibition therein, is a common provision in railroad CBAs. . . . However, the application of such restrictions in the instant case would cause serious delay to implementation of the transaction insofar as capital improvements are concerned and would unduly burden C[onrail] with an employee compliment it could not keep working efficiently. Accordingly, elimination of those restrictions meets the necessity test set forth by the STB . . . . (Pl.'s Ex. 7, at 14.) The arbitrator concomitantly issued an implementing agreement between Conrail, CSX, Norfolk Southern and BMWED (the "Implementing Agreement"). (See Pl.'s Ex. 8.) For projects required for the initial construction and maintenance of the newly formed rail system, Conrail was given the right to contract out such work to non-Union employees without notice to BMWED. Specifically, the Implementing Agreement states:

Contractors may be used without notice to augment CSXT, NSR, or [Conrail] forces as needed to perform construction and rehabilitation projects such as initial new construction of connection tracks, sidings, mainline, yard tracks, new or expanded terminals and crossing improvements[] initially required for implementing the Operating Plan and to achieve the benefits of the transaction as approved by the STB . . . . (Implementing Agreement art. I § 1(h), Pl.'s Ex. 8.) The Implementing Agreement also provided that since Conrail would no longer have the "system support" it had had prior to the Conrail Transaction, work that exceeded "routine maintenance" at certain sites would be performed by CSXT or NSR in accordance with their respective collective bargaining agreements. (Implementing Agreement art. I § 1(i)(5).)*fn2

Subsequent to the Implementing Agreement, at various times between 2000 and 2004, Conrail contracted out maintenance of way work at the SAA's. (See Def.'s Ex. A at 228; Def.'s SUMF 11; Pl.'s Ex. 6 at 31.) Conrail contended that the Implementing Agreement permitted it to contract out such work. BMWED, however, challenged Conrail's decision to assign non-Union contractors and filed grievances under the CBA. In the grievances, the Union challenged:

(1) Conrail's use of outside forces to perform new track construction in the South Philadelphia SAA from October 30, 2000, through February 9, 2001 (Pl.'s Ex. 1, Award No. 38988);

(2) Conrail's contracting out of various components of a major project at the Detroit SAA, Livernois Yard, from April to June 2004 (Pl.'s Exs. 2, 3, 5, Award Nos. 39877, 39878, 39880; Def.'s SUMF 17); and

(3) Conrail's contracting out of track relocation work at the South Jersey SAA in December 2001 (Pl.'s Ex. 4, Award No. 39879).

BMWED argued that this work was reserved for Conrail maintenance of way employees, not outside forces, and that even if the work could be contracted out, Conrail had failed to give the required notice and to meet and negotiate in good faith. (Pl.'s SUMF 19.) Conrail responded that it had not violated the CBA. Itargued that the terms of the Implementing Agreement permitted it to contract out the work and to do so without notice, because these projects were beyond routine maintenance and were initially required to achieve the efficiencies of the Conrail Transaction. (Def.'s SUMF 13-19.)

BMWED's claims (five in total) were referred to the Third Division of the NRAB.*fn3 The NRAB issued five separate awards, dismissing BMWED's claims and concluding that the Board lacked jurisdiction to consider disputes involving the interpretation of the Implementing Agreement. (Pl.'s Exs. 1-5.) BMWED filed petitions for review of each of these awards under the Railway Labor Act, 45 U.S.C. § 153 First (q),*fn4 which resulted in five civil actions consolidated before this Court:

Award No. 38988, issued on March 27, 2008, involving the South Philadelphia SAA (Pl.'s Ex. 1); petition for review filed in Civil Action No. 10-925 (RMB);

Award No. 39877, issued on July 31, 2009, involving Detroit's Livernois Yard (Pl.'s Ex. 2); petition for review filed ...

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