United Transp. Union v. BNSF Railway Company

An order, and not just an award, stemming from a Railway Labor Act arbitration panel is reviewable by a District Court and an allegation of corruption within an arbitration panel is a proper complaint pursuant to the National Railroad Adjustment Board 45 U.S.C. § 153.

BNSF Railway Co. (“the Company”) discharged Richard Kite, represented by United Transportation Union (“the Union”), for an alleged violation of the company’s alcohol use policy. Kite had failed a randomly administered alcohol breathalyzer test. The Company alleged this was Kite’s second violation in less than 10 years and therefore the discharge was warranted. The Union and the Company failed to reach an agreement over the discharge. The discharge, under the Railway Labor Act, constituted a “minor dispute” and therefore was subject to mandatory arbitration before a 3-party “Public Law Board” governed by The National Railroad Adjustment Board. During the arbitration the Union alleged that Boldra, a railway representative party to the arbitration panel, threatened Zimmerman, a neutral arbitrator, to reverse her opinion ordering employee reinstatement. Zimmerman ultimately recused herself. Petersen, a replacement arbitrator as part of a second panel, ruled in favor of the Company. The Union appealed the decision alleging that Boldra’s threat was an act of corruption and the original order of reinstatement should be upheld. The district court dismissed under Fed. R. Civ. P. 12(b)(1) because the court read 45 U.S.C. § 153(q) as to provide a right of review only for awards and not orders. Additionally, the district court dismissed the complaint under Fed. R. Civ. P. 12(b)(6) because they analyzed the complaint under a fraud analysis instead of a corruption analysis and found that the second panel provided a curative effect that would have ameliorated any fraud or corruption stemming from the first panel. The Ninth Circuit found that the district court misunderstood 45 U.S.C. § 153(q) because both the statute and legislative intent permitted review of orders and not just awards and therefore the district court had subject matter jurisdiction. Additionally, the panel found that the district court misapplied the fraud analysis. Had the district court viewed the complaint in light of a corruption analysis, the facts as presented by the Union would have satisfied the 12(b)(6) requirement. The panel neither ruled on the merits of the corruption allegation nor specified the specific remedial action; merely that the district court does have subject matter jurisdiction and that the complaint as submitted states a claim. REVERSED and REMANDED.