Illinois Central Railroad Company v. Brotherhood of Maintenance of Way Employees, Division of International Brotherhood of Teamsters

Filing 34

MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 2/5/2015:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHER DISTRICT OF ILLINOIS
EASTERN DIVISION

ILLINOIS CENTRAL RAILROAD
COMPANY,
Plaintiff,
Case No. 14 C 3989
v.
Judge Harry D. Leinenweber
BROTHERHOOD OF MAINTENANCE
OF WAY EMPLOYEES, DIVISION
OF INTERNATIONAL BROTHERHOOD
OF TEAMSTERS,
Defendant.

MEMORANDUM OPINION AND ORDER
I. BACKGROUND
This

case

application
successive
Railway

of

arises
certain

collective

Labor

out

Act

of

cost

a
of

bargaining

(the

“RLA”).

labor

dispute

living

concerning

adjustments

under

the
two

agreements

governed

by

the

Plaintiff

Illinois

Central

Railroad Company (“Illinois Central”) is a major rail carrier
that operates across the central United States, and Defendant
Brotherhood

of

Maintenance

of

Way

Employees,

Division

of

International Brotherhood of Teamsters (the “Union”) is a labor
organization that represents maintenance-of-way workers employed
by Illinois Central.

In 1991, Illinois Central and the Union

became parties to a national labor agreement that was imposed

pursuant

to

congressional

legislation.

To

protect

employees

against wage erosion during the often lengthy RLA bargaining
process, the imposed agreement provided for automatic cost of
living

adjustments

intervals

one

year

(“COLA”)

that

after

the

would

kick

original

in

contract

continue until a new labor agreement was reached.

at

scheduled

lapsed

and

This type of

provision is better known in the railway industry as a “Harris
COLA” – a moniker derived from the name of the Chairman of the
Presidential Emergency Board that had been convened at that time
for the purpose of resolving the parties’ labor disputes.
In
continued

following
to

years,

incorporate

Illinois
revised

Central
and

and

updated

provisions into their successor agreements.

the

Union

Harris

COLA

Thus, in 2007, when

the parties entered into a collective bargaining agreement that
was

effective

retroactively

from

July

1,

2005,

through

to

July 1, 2009 (the “2005-2009 CBA”), they included a Harris COLA
entitling Union employees to wage adjustments every six months
beginning in July 2010.

As in previous agreements, the 2005-

2009 CBA also provided for annual general percentage increases
to employees’ hourly rates of pay for all years for which the
agreement was effective.

Any back pay owed for prior years now

covered under the contract was to be paid to employees in a lump
sum “less any COLA amounts previously received” under the Harris

- 2 -

COLA

as

set

forth

in

the

parties’

preceding

bargaining

agreement.
When the parties failed to adopt a new agreement following
the

expiration

of

the

2005-2009

CBA,

Union

employees

receiving Harris COLA increases as scheduled.

began

Eventually, a

successor agreement was negotiated in February 2014 (the “2014
CBA”), which provided for retroactive pay increases commencing
in

July

2010,

the

month

when

the

first

of

the

Harris

COLA

payments had come due under the 2005-2009 CBA.
Unlike

prior

agreements,

however,

the

2014

CBA

did

not

expressly eliminate or modify the Harris COLA in place under the
2005-2009

CBA

or

contain

provision for a new one.

any

language

substituting

that

Similarly, in contrast to previous

agreements, which had authorized Illinois Central to reduce its
retroactive

wage

payments

by

amounts

already

remitted

to

employees pursuant to the Harris COLA, the 2014 CBA was silent
on the issue of how back pay sums would be calculated.
Despite the absence of those provisions, Illinois Central
proceeded as it had in the past by calculating employees’ wages
as though the previous Harris COLA increases no longer applied
and instead referring only to the new negotiated percentage wage
increases.

Illinois Central also continued with its previous

practice of deducting the amounts employees had received under

- 3 -

the Harris COLA from what it determined was owed in overall back
pay under the 2014 CBA.
The

Union

contending
provision

objected

that,
had

because

been

left

to

Illinois

the

2005-2009

unmodified

Central’s

by

CBA’s
the

approach,

Harris

2014

CBA,

COLA
the

employees were entitled to receive not only the percentage wage
increases called for by the parties’ new agreement, but also the
accumulated value of the previous Harris COLA increases.

So,

for example, when a general 3.8% raise established under the
2014 CBA went into effect on July 1, 2014, it was the Union’s
position that employees’ wages at that time also should have
been upped by an additional 4.1% – the accumulated value of
prior COLA increases – on top of the 3.8% increase.

The Union

further took issue with Illinois Central’s attempts to offset
from its back pay calculation the payments that it had made
previously under the Harris COLA.
The

Union

threatened

to

strike

over

this

disagreement,

which prompted Illinois Central to seek intervention in this
Court by requesting that the Union be enjoined from striking and
the matter be referred to arbitration in a manner consistent
with the requirements of the RLA.
testimony
Hearing”).

on

the

issue

on

The Court heard argument and

January

8,

2015

(the

“January

8

The parties also submitted documentary evidence and

several declarations, as well as detailed pre-hearing and post- 4 -

hearing

memoranda,

all

of

which

the

Court

has

reviewed

upon

how

the

and

considered fully.
II.
Resolution

of

this

DISCUSSION

case

depends

dispute is classified under the RLA.

parties’

Disagreements relating to

bargaining agreements governed by the RLA are divided into two
types:

(1) “major” disputes, which are those that “relate to

the formation of collective [bargaining] agreements or efforts
to

secure

them,”

controversies

and

over

(2)

the

“minor”

meaning

of

disputes,
an

which

existing

“involve

collective

bargaining agreement in a particular fact situation.”

Hawaiian

Airlines, Inc. v. Norris, 512 U.S. 246, 252-53 (1994).

This

distinction is important because unions do not have a right to
strike or even litigate in federal court over minor disputes,
which instead must be submitted to binding arbitration before
either the National Railroad Adjustment Board or an adjustment
board

established

by

the

parties.

Bd.

of

Maint.

of

Way

Employees v. Atchison, Topeka & Santa Fe Ry. Co., 138 F.3d 635,
638 (7th Cir. 1997); see also, 45 U.S.C. § 184.
major

disputes

are

settled

through

the

In contrast,

lengthy

bargaining

process outlined in the RLA, after which, if no agreement has
been reached, “the parties may resort to the use of economic
force.”

Consol.

Rail

Corp.

v.

Ry.

(“Conrail”), 491 U.S. 299, 303 (1989).
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Labor

Executives’

Ass’n

Although their definitions are relatively straightforward,
distinguishing between major and minor disputes is not always
easy.

See, Nat. Ry. Labor Conf. v. Int’l Ass’n of Machinists,

830 F.2d 741, 748 (7th Cir. 1987).

The key difference is that

major disputes relate to disagreement over the creation of new
contractual rights, while minor disputes concern the enforcement
of existing ones.
723 (1945).
been

made

Elgin, J. & E.R. Co. v. Burley, 325 U.S. 711,

Thus, courts must “look[] to whether a claim has
that

the

terms

of

an

existing

agreement

either

establish or refute the presence of a right to take the disputed
action.”

Conrail,

491

U.S.

at

302.

If

the

parties’

disagreement “may be conclusively resolved by interpreting the
existing agreement,” it is a minor dispute.

Id.

An employer’s reliance on a contractual right ordinarily is
enough to confirm the existence of a minor dispute unless it is
clear that the employer’s claim in that regard is “insincere” or
founded upon “insubstantial grounds.”

Conrail, 491 U.S. at 306.

So long as the employer’s position is “arguably justified” by
the terms of the existing agreement, however, the dispute is
classified as minor and is sent to mandatory arbitration.

Id.

at 308.
Illinois

Central

“classic”

minor

reasonably

can

contends

dispute
be

read

that

because
to

support
- 6 -

this
the
both

case
existing
its

presents

a

agreement

position

that

employees are not entitled to continue to receive COLA increases
on top of the pay raises negotiated under the 2014 CBA, as well
as its decision to subtract from its back pay calculation any
amounts previously paid to employees under the 2005-2009 CBA’s
Harris COLA.

With regard to the interplay between the Harris

COLA and the prospective wage increases set forth in the 2014
CBA,

Illinois

first,

it

Central

contends

advances

that

the

two

2005-2009

alternative
CBA’s

arguments:

Harris

COLA

was

superseded entirely by the revisions contained within the 2014
CBA; second, it argues that, even if the previous Harris COLA
survives under the 2014 CBA, it should be understood only to
take effect one year after the date of the last percentage wage
increase negotiated under the 2014 CBA.

As for the issue of

back

Central

pay

under

the

2014

CBA,

Illinois

argues

that

deducting amounts paid out under the 2005-2009 CBA’s Harris COLA
not only makes common sense but also is consistent with the
parties’

practice

under

previous

agreements

and

established

practice in the railway industry.
All of these assertions are at least “arguably justified”
under

the

terms

of

the

parties’

existing

agreement.

See,

Conrail, 491 U.S. at 308.

Turning to the first of Illinois

Central’s

is

arguments,

there

substantial

support

for

the

contention that the 2014 CBA superseded all prior agreements
and,

thus,

invalidated

the

2005-2009

- 7 -

CBA’s

Harris

COLA

provision.

While railway labor bargaining is unique in that

contractual terms in previous RLA agreements ordinarily do not
expire, but rather remain in effect until modified, see, In re
Northwest Airlines Corp., 483 F.3d 160, 167 (2d Cir. 2007), it
is entirely plausible that the 2014 CBA did away with the 20052009 CBA’s Harris COLA provision notwithstanding the fact that
the

2014

CBA

Evidencing

the

independent

did

not

parties’

agreement

compensation,

address

the

intent

with

2014

the
to

regard

CBA

COLA

issue

implement
to

the

contained

a

specifically.

a

complete

terms

of

“zipper

and

employee
clause,”

explaining that the purpose of the agreement was to “fix the
general level of compensation” through to December 31, 2014 (the
end of the contract term).

Having left out any mention of a

COLA from the 2014 CBA, it is reasonable to conclude that the
parties’

present

agreement

does

not

authorize

further

COLA

increases.
The soundness of that interpretation is bolstered by the
fact that the 2014 CBA was modeled after a national agreement
between

the

Union

and

several

contain a COLA provision.

other

carriers,

which

did

not

Moreover, in a letter to Illinois

Central dated November 5, 2012, the Union’s chief negotiator,
Donald F. Griffin, complained that a recently ratified agreement
between

Illinois

Central

and

a

different

labor

organization

contained certain “enhancements” that Illinois Central had been
- 8 -

unwilling to offer the Union in its bargaining proposals.
Pl.’s Trial Ex. 11 at 3).
identified

specifically

(See,

Among those enhancements, Mr. Griffin
a

“post-moratorium

cost

of

living

allowance,” i.e., a Harris COLA, which plainly suggests that the
Union was aware that COLA payments would not be a part of the
compensation package provided under the 2014 CBA.

Perhaps most

significant, however, is a side letter dated August 16, 2014,
which

clarified

January

1,

resolution

that

2015,
of

year 2015.”

the

the

“was

3%

general

intended

compensation

wage

to

increase

constitute

adjustment

complete

for

issue

a

calendar

(Decl. of Cathy K. Cortez, sworn to on Nov. 14,

2014 (“Cortez Decl.”), Ex. 1 at 6, ECF No. 19-1).
this

effective

evidence,

it

obviously

is

a

defensible

In view of

position

that

employees are not entitled to receive COLA increases on top of
the negotiated pay raises for 2015.

Indeed, to find otherwise

would be to award the employees a substantial and unexplained
boon, the likes of which they have never seen under any previous
agreement.
Despite
previous

this

proof,

agreements

the

all

Union

contends

contained

that,

language

because
expressly

substituting the existing Harris COLA for a revised and updated
one, the absence of any such modifying provision in the 2014 CBA
implies that the parties intended for the increases under the
2005-2009

CBA’s

Harris

COLA

to
- 9 -

remain

in

effect.

Perhaps.

However,

as

one

Special

Board

of

Adjustment

(“SBA”)

has

explained in a related context,
it is not unusual in collective bargaining
for
parties
to
state
a
right
(or
responsibility) in contract language even
though the same right (or responsibility)
has previously been expressed elsewhere in
the contract or can be reasonably inferred
from other language. Surplusage does happen.
(Decision dated Aug. 24, 2000, SBA No. 1123, at 12 (Mittenthal,
Neutral)).

The

2014

CBA’s

lack

of

any

explicit

provision

abandoning the previous Harris COLA thus is not as significant
as the Union may think.

And, in any event, the possibility of

an alternative reading of the contract is not inconsistent with
the existence of a minor dispute.

The only question is whether

there is a plausible interpretation of the existing agreement
that

supports

Illinois

Central’s

position.

For

the

reasons

stated above, there is.
Illinois Central’s related argument – that, even if the
2005-2009 CBA’s Harris COLA does remain in effect, increases
pursuant to that provision should not be applied until one year
after

the

traction.
windfall

parties’

last

negotiated

pay

raise

–

also

has

Such an interpretation not only avoids the dubious
that

would

be

conferred

upon

employees

from

the

simultaneous payout of negotiated pay raises and increases under
the Harris COLA; it also is consistent with the very purpose of
a Harris COLA, which, as the Union’s own chairman acknowledged
- 10 -

at

the

January

8

Hearing,

is

to

guard

against

wage

erosion

during the time between when an existing bargaining agreement
expires

and

a

new

one

is

reached.

The

parties’

continued

practice of scheduling Harris COLA increases to go into effect
one year after their last negotiated raise confirms this basic
purpose and it is at least arguable that the Harris COLA in this
case should be implemented in a similar manner.
Finally, with respect to Illinois Central’s argument that
it

is

entitled

amounts

to

employees

reduce
already

its

retroactive

received

under

pay
the

obligations
2005-2009

by

CBA’s

Harris COLA, that position clearly finds support in the way the
parties treated Harris COLA payments in the past, as well the
manner in which Harris COLAs generally are administered in the
railway industry.

The Seventh Circuit has explained that RLA

bargaining agreements must be construed with reference to the
parties’
labor

“practice,

and

even

agreements,

usage

those

Atchison, 138 F.3d at 641.
parties’

bargaining

custom,”

as

involving

well

as

other

“parallel
parties.”

In every prior instance in the

history,

the

Union

permitted

Illinois

Central to deduct from its back pay calculation any payments
that had been made to employees pursuant to the then-existing
Harris

COLA.

As

Mr.

Griffin,

the

Union’s

chief

negotiator,

acknowledged in a letter to various Union higher-ups, Illinois
Central’s approach was justified because:
- 11 -

COLA payments are, in effect, a down payment
made by the Railroads against the actual
retroactive pay increases provided in the
[new] agreement. Therefore, the calculation
of the backpay will involve, in very general
terms, a calculation of the gross backpay
provided in the agreement from which is
subtracted
the
‘down
payment’
in
COLA
increases already computed under the [prior]
agreement.
(Cortez Decl., Ex. 7 at 2) (emphasis added).
Subtracting
employer’s

COLA

overall

amounts

received

retroactive

pay

by

employees

the

also

calculation

from

is

consistent with standard practice in the railway industry.

In a

2007 Report to President George W. Bush, an Emergency Board that
had

been

convened

to

resolve

a

dispute

between

Amtrak

and

several of its unions explained that Harris COLAs had
become customary in the industry to mitigate
the
effects
of
extended
post-moratorium
periods without negotiated increases and,
following agreement on terms of a successor
agreement, offsets are typically provided
for Harris COLA payments made during the
post-moratorium period.
(Rep. to the President dated Dec. 30, 2007, PEB No. 242, at 26
n.4).

With past practice and industry custom both auguring in

favor of Illinois Central’s proposed back pay calculation, it
would be frivolous to suggest that its position on the matter is
not

at

least

arguably

justifiable

parties’ existing agreement.

- 12 -

under

the

terms

of

the

The foregoing demonstrates that the parties’ disagreement
is

a

minor

dispute;

the

only

remaining

question

is

whether

Illinois Central has satisfied the requirements for the issuance
of an injunction.

Notwithstanding the Norris-LaGuardia Act’s

general

against

prohibition

the

entry

of

injunctions

against

labor unions in cases arising out of labor disputes, federal
courts

have

authority

to

enforce

the

provisions

of

the

RLA.

United Airlines, Inc. v. Int’l Ass’n of Machinist and Aerospace
Workers, 243 F.3d 349, 362 (7th Cir. 2001).

This includes the

power to enjoin a union from striking over a minor dispute.

Bd.

of R.R. Trainmen v. Chicago R. & I.R. Co., 353 U.S. 30, 42
(1957).

The Norris-LaGuardia Act’s procedural provisions still

must be observed, however, which means that the carrier “must
put

on

live

testimony

with

the

opportunity

for

cross-

examination . . . or there must be some equivalent guarantee of
the reliability of the evidence presented.”

United Airlines,

243 F.3d at 363 n.9 (citations omitted).
There is some uncertainty over whether an injunction must
meet the requirements of Section 107 of the Norris-LaGuardia Act
or the more familiar general federal standard for injunctive
relief.

See, Bd. of Maint. of Way Employees v. Burlington N.

and Sante Fe R.R. Co., No. 03 C 6247, 2003 WL 22844242, at *5
(N.D. Ill. Nov. 26, 2003).

There is no need to resolve that

question in this case, however, since it is clear that Illinois
- 13 -

Central has made a showing sufficient to warrant the requested
injunction under either standard.
Under Section 107 of the Norris-LaGuardia Act, the Court
must make findings of fact to the effect that (1) unlawful acts
have been threatened and will be committed unless the union is
restrained,

(2)

substantial

and

irreparable

injury

to

the

employer’s property will result from the union’s unlawful acts,
(3) greater injury will be inflicted upon the employer by the
denial of the injunction than will be inflicted on the union by
the granting of the injunction, (4) the employer has no adequate
remedy at law, and (5) the public officers charged with the duty
to protect the employer’s property are unable or unwilling to
provide

adequate

protection

inapplicable to this case).
The

general

(this

element

appears

to

be

29 U.S.C. § 107.

federal

injunction

substantially with those requirements.

standard

overlaps

In establishing that an

injunction is appropriate under that framework, the movant must
demonstrate

(1)

success

on

the

merits

(in

the

case

of

a

preliminary injunction, “likelihood of success” is enough), (2)
that

it

will

suffer

irreparable

harm

if

the

injunction

is

denied, (3) the absence of any adequate remedy at law, (4) that
the harm that it will suffer without injunctive relief outweighs
the harm the opposing party will suffer if the injunction is
granted, and (5) that the public interest will not be harmed by
- 14 -

the relief requested.

See, e.g., Kiel v. City of Kenosha, 236

F.3d 814, 815-16 (7th Cir. 2000); Collins v. Hamilton, 349 F.3d
371, 374 (7th Cir. 2003).
Because

this

is

a

minor

dispute

and

the

RLA

prohibits

striking over such disagreements, Illinois Central has achieved
success on the merits of its claim that the Union’s planned
course

of

action

violates

the

mandatory

procedures set forth in the RLA.

dispute

resolution

Illinois Central thereby also

has demonstrated a need to restrain the Union from engaging in
the unlawful action threatened in this case.
At the January 8 Hearing, the Union conceded that a strike
would cause irreparable harm to Illinois Central.

The parties

further appear to agree that no adequate remedy at law exists
that would compensate Illinois Central for the damage caused by
a strike.

Nonetheless, Illinois Central presented evidence as

to the devastating impact a strike would have on its operations
across the central United States.

(See, Decl. of Brett Jury,

sworn to on Nov. 19, 2014, ECF No. 20).

Essentially, Illinois

Central would be forced to shut down entirely, extreme backups
would

ensue,

and

much

of

the

region would grind to a halt.
to

maintain

or

use

its

important

rail

traffic

in

the

Illinois Central would be unable

tracks

or

equipment

and

countless

communities, businesses, and utilities that rely heavily on rail
traffic, such as power stations and automobile plants, would be
- 15 -

affected as well.

Even a temporary shutdown would have lasting

effects and any disruption in service would result in permanent
and irreparable loss of goodwill and the future business upon
which Illinois Central relies.
Given these dire consequences, it is clear that the harm
that Illinois Central and the public at large would suffer if
the Union were allowed to strike outweighs the inconvenience to
the

Union

of

strike.

being

Moreover,

without recourse.

enjoined
an

from

conducting

injunction

such

does

leave

not

an

illegal

the

Union

If the Union wishes to challenge Illinois

Central’s interpretation of the 2014 CBA, it may do so lawfully
by following the appropriate dispute resolution procedures set
forth in the RLA.
Finally,

there

is

nothing

to

suggest

that

the

public

interest would be harmed by the issuance of an injunction in
this case.
peaceful

To the contrary, the public has an interest in the

resolution

of

labor

disputes

operation of essential rail traffic.

and

the

uninterrupted

Entry of an injunction

directing the Union to abide by the RLA serves that interest.
III.
For

the

reasons

CONCLUSION

stated

herein,

Illinois

Central’s

Application for Preliminary and Permanent Injunctive Relief [ECF
No. 18] is granted.

Summary judgment is also granted in favor

of Illinois Central and against the Union on all counts set
- 16 -

forth in Illinois Central’s Verified Complaint, as well as in
the Union’s Counterclaim.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated:2/5/2015

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