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Legal Update

Railway Labor Act - Prerequisites to Arbitration - Scope of Judicial Review

8 December 2009
Mayer Brown Legal Update

Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers and Trainmen, No. 08-604

Today, in Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers and Trainmen, No. 08-604, the Supreme Court held that the requirement that parties to railroad labor disputes conference before seeking arbitration before the National Railroad Adjustment Board is not jurisdictional. In reaching this decision, the Court declined to resolve a split among federal courts of appeals concerning whether the Railroad Labor Act (“RLA”) permits judicial review of alleged due process violations by the Board. 

In order to promote the peaceful and efficient resolution of labor disputes, the Railway Labor Act mandates the arbitration of “minor disputes” before five-member panels drawn from the 34 members of the National Railroad Adjustment Board (“Board”), which is composed of equal numbers of labor and industry representatives. The panels are composed of two members from each group, and an additional neutral arbitrator that is chosen either by the panel members or by the National Mediation Board. The RLA requires employees and carriers to make two attempts to resolve their disputes before resorting to arbitration. First, parties must exhaust the grievance procedures specified in their collective-bargaining agreement. 45 U.S.C. § 153 First (i). If those so-called “on-property” proceedings fail to resolve the dispute, the RLA directs the parties to then attempt to settle the dispute through a “conference” between their respective designated representatives. Id. § 152 Second, Sixth. 

This case arose when a union, the Brotherhood of Locomotive Engineers and Trainmen, initiated grievance proceedings on behalf of five members who had been disciplined by their employer, the Union Pacific Railroad Co. When the parties failed to resolve the dispute through the on-property grievance proceedings, the union sought arbitration before the Board. After the parties had made their submissions to the Board and just prior to the hearing before a five-member panel, one of the industry arbitrators objected that, in violation of Board regulations, the submissions did not contain any proof that the parties had conferenced. The railroad then adopted this objection. Refusing to accept the union’s subsequently proffered evidence that the parties had in fact conferenced, the panel concluded that the failure to prove conferencing deprived the Board of jurisdiction and required dismissal of the employees’ claims.

After a federal district court upheld the Board’s decision, the union appealed to the Seventh Circuit on two alternative grounds. First, the union argued that the failure to prove conferencing does not deprive the Board of jurisdiction under either the RLA itself or the Board’s implementing regulations. Second, the union argued that the Board violated due process when it entertained the railroad’s untimely failure-to-prove-conferencing objection. Concluding that conferencing is not a prerequisite to arbitration before the Board, the Seventh Circuit reversed, basing its decision on due process rather than statutory grounds. 522 F.3d 746, 750 (2008).

The Supreme Court affirmed the Seventh Circuit’s decision, but based its ruling on statutory rather than due process grounds. The Court explained that the RLA’s conferencing requirement and the Board’s regulation requiring proof of conferencing are “claims-processing, not jurisdictional, rules.” Slip op. 16. Accordingly, the Court held, the Board improperly dismissed the employees’ claims.
By basing its decision on the text of the RLA, the Court avoided a question that has divided courts of appeals—namely, whether the narrow grounds of judicial review specified in the RLA, 45 U.S.C. § 153(q), preclude federal courts from reviewing Board decisions for failure to comply with due process. Moreover, because the Court’s decision rests on statutory grounds, it is not likely have a significant impact on arbitration outside the railway labor arena.

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