United Transp v. SC Public Railway ( 1997 )


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  • PUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    UNITED TRANSPORTATION UNION,
    Plaintiff-Appellee,
    v.
    No. 97-1418
    SOUTH CAROLINA PUBLIC RAILWAY
    COMMISSION,
    Defendant-Appellant.
    Appeal from the United States District Court
    for the District of South Carolina, at Charleston.
    Patrick Michael Duffy, District Judge.
    (CA-96-2501-2-23)
    Argued: October 3, 1997
    Decided: December 4, 1997
    Before NIEMEYER and HAMILTON, Circuit Judges, and
    BOYLE, Chief United States District Judge for the
    Eastern District of North Carolina, sitting by designation.
    _________________________________________________________________
    Vacated and remanded by published opinion. Judge Hamilton wrote
    the opinion, in which Judge Niemeyer and Chief Judge Boyle joined.
    _________________________________________________________________
    COUNSEL
    ARGUED: Clinton Joseph Miller, III, General Counsel, UNITED
    TRANSPORTATION UNION, Cleveland, Ohio, for Appellee. ON
    BRIEF: Keating Lewis Simons, III, Derek Farrell Dean, LAW
    OFFICES OF KEATING L. SIMONS, III, Charleston, South Caro-
    lina, for Appellant.
    OPINION
    HAMILTON, Circuit Judge:
    Under the Railway Labor Act (RLA), 
    45 U.S.C. §§ 151-188
    , fed-
    eral district courts have subject-matter jurisdiction over "major dis-
    putes" in railway labor relations, but lack jurisdiction over "minor
    disputes." See Consolidated Rail Corp. v. Railway Labor Executives'
    Ass'n, 
    491 U.S. 299
    , 303-04 (1989). Instead, minor disputes are sub-
    ject to mandatory arbitration before the National Railroad Adjustment
    Board. See 
    id.
     See also 
    45 U.S.C. § 153
    . Generally, when a party to
    a labor dispute is seeking to create contractual rights, the dispute is
    a major dispute; however, if the parties are merely seeking to enforce
    contractual rights, the dispute is minor. See Consolidated Rail, 
    491 U.S. at 302
    .
    In this case, the South Carolina Public Railway Commission (Rail-
    way Commission) asserts that the district court lacked subject-matter
    jurisdiction to issue a preliminary injunction requiring the Railway
    Commission to pay rate-of-pay increases, lump sum payments, and
    health and welfare adjustments contained in a national collective bar-
    gaining agreement, because its dispute with the United Transportation
    Union (the Union) is a minor one. We agree with the Railway Com-
    mission that its dispute with the Union is fundamentally a dispute
    seeking to enforce contractual rights and is, therefore, a minor dispute
    under the RLA. Consequently, we vacate the preliminary injunction
    and remand the case with instructions to dismiss for lack of subject-
    matter jurisdiction.
    I.
    A.
    Collective bargaining in the railroad industry is conducted on both
    the national and local levels. Local collective bargaining involves
    negotiations between a single employer and an individual union,
    whereas national collective bargaining (commonly referred to as "na-
    tional handling") involves multiple employers and multiple unions.
    Unions and employers typically participate in national bargaining by
    2
    conferring their bargaining authority to multi-union and multi-carrier
    bargaining agents. These agents then negotiate a single national
    agreement which is binding on all the parties. See United Transp.
    Union v. Illinois Cent. R.R. Co., 
    731 F. Supp. 1332
    , 1333 (N.D. Ill.
    1990).
    Collective bargaining in the railroad industry, on both the national
    and local levels, is covered by the RLA, 45 U.S.C.§ 151-188. In
    Detroit & Toledo Shore Line R.R. v. United Transp. Union, 
    396 U.S. 142
     (1969), the Supreme Court explained the objectives of the RLA:
    The Railway Labor Act was passed in 1926 to encourage
    collective bargaining by railroads and their employees in
    order to prevent, if possible, wasteful strikes and interrup-
    tions of interstate commerce. The problem of strikes was
    considered to be particularly acute in the area of"major dis-
    putes," those disputes involving the formation of collective
    agreements and efforts to change them. Rather than rely
    upon compulsory arbitration, to which both sides were bit-
    terly opposed, the railroad and union representatives who
    drafted the Act chose to leave the settlement of major dis-
    putes entirely to the processes of noncompulsory adjust-
    ment. To this end, the Act established rather elaborate
    machinery for negotiation, mediation, voluntary arbitration,
    and conciliation. It imposed upon the parties an obligation
    to make every reasonable effort to negotiate a settlement
    and to refrain from altering the status quo by resorting to
    self-help while the Act's remedies were being exhausted.
    
    Id. at 148-49
     (internal quotations and citations omitted).
    Another railroad-industry practice that influenced the RLA was
    that of negotiating open-ended agreements. Railroad collective bar-
    gaining agreements do not expire on a given date but remain in effect
    until one party proposes modifications of the agreement, whereupon
    a new round of negotiations takes place. When the parties conclude
    an agreement on those issues, the contract is modified accordingly.
    See Trans World Airlines v. Independent Fed'n of Flight Attendants,
    
    640 F. Supp. 1108
    , 1113 (W.D. Mo. 1986), aff'd , 
    809 F.2d 483
     (8th
    Cir. 1987), aff'd, 
    485 U.S. 175
     (1988) (quoting Beatrice M. Burgoon,
    3
    "Mediation Under the Railway Labor Act," in The Railway Labor Act
    at Fifty, 71, 92 (1977)). This procedure of proposing and negotiating
    contract modifications is incorporated into Section 6 of the RLA, 
    45 U.S.C. § 156
    .
    Section 6 requires employers and unions to give the other party a
    30-day notice of proposed changes in agreements affecting rates of
    pay, rules, or working conditions. See 
    id.
     The filing of a Section 6
    notice commences a period of mandatory negotiation, during which
    the existing rates of pay, rules and working conditions generally may
    not be altered until the controversy is resolved. See 
    id.
     If the parties
    cannot agree between themselves, the negotiations then go to media-
    tion, usually under the auspices of the National Mediation Board. See
    
    45 U.S.C. § 155
    . Sometimes, it becomes necessary for the President
    to appoint an Emergency Board to make a report and recommenda-
    tions to resolve the dispute. See 45 U.S.C.§ 160. See also Detroit &
    Toledo Shore Line, 
    396 U.S. at 145, 150-51
    .
    In summary, neither party may change the status quo with respect
    to existing agreements without first filing a Section 6 notice, and must
    maintain the status quo until the collective bargaining process is com-
    plete. See Detroit & Toledo Shore Line, 
    396 U.S. at 150
    . The goal of
    this scheme is to prevent the unilateral imposition of new contractual
    terms. See Consolidated Rail, 
    491 U.S. at 306
    . It "delay[s] the time
    when the parties can resort to self-help[,] provides time for tempers
    to cool, helps create an atmosphere in which rational bargaining can
    occur, and permits the forces of public opinion to be mobilized in
    favor of a settlement without a strike or lockout." Detroit & Toledo
    Shore Line, 
    396 U.S. at 150
    .
    B.
    The Railway Commission is an agency of the State of South Caro-
    lina which operates a railroad that transports goods in interstate com-
    merce. The Railway Commission is therefore a rail"carrier" as
    defined by the RLA. See 
    45 U.S.C. § 151
     First. The Union is an unin-
    corporated labor organization which represents railroad employees
    throughout the United States and Canada. Consequently, the Union is
    a "representative" under the RLA. See 
    45 U.S.C. § 151
     Sixth. The
    Union represents employees of the Railway Commission.
    4
    On July 2, 1973, the Union and Railway Commission completed
    a round of local collective bargaining and signed into effect an
    "Agreement Between The South Carolina Public Railways [sic] Com-
    mission and its Yard Employees Represented by United Transporta-
    tion Union" (the 1973 Agreement). (J.A. 24). Article 42 provides that
    the agreement would "become effective as of July 2, 1973 and remain
    in effect until changed in accordance with the provisions of the Rail-
    way Labor Act, amended." (J.A. 27). Two other provisions of that
    agreement are in dispute in this case:
    Article 1. Rates of pay:
    (a) Rates of pay will be governed by those agreed upon by
    the national agreement.
    ....
    Article 34. Health and welfare:
    (a) The national Health and Welfare Agreement consum-
    mated between the Carriers Conference Committee and the
    United Transportation Union, subject to any extensions or
    modifications by constituted authority of the United Trans-
    portation Union, is part of this agreement.
    (J.A. 25-26).
    The two national agreements which Articles 1(a) and 34(a) incor-
    porate had been previously negotiated and were in force at the time
    the 1973 Agreement was enacted. However, in January 1977, August
    1977, February 1981, and July 1988, the Union triggered new rounds
    of national handling by serving Section 6 notices on"practically all
    railroads in the United States," which notices expressed a desire to
    change existing agreements. (See J.A. 28-31). In each instance, the
    Railway Commission chose not to participate in the national handling.
    Instead, the Railway Commission and the Union enacted local
    "standby agreements" that adopted the terms of the national agree-
    ments when they were finalized.1 All these standby agreements are
    essentially identical in wording, and provide in their entirety:
    _________________________________________________________________
    1 In 1988, the Railway Commission first declined to enter into a
    standby agreement with the Union, wishing instead to negotiate locally
    5
    In accordance with provisions of the Railway Labor Act, as
    amended, a notice was served under date of [date differed
    for each standby agreement], on practically all rail-roads in
    the United States, including [the South Carolina Public Rail-
    way Commission], by the accredited representative of
    employees of such railroads who are represented by the
    United Transportation Union, of a desire to change existing
    agreements as set forth in an attachment made part of the
    aforesaid notice.
    The management of [the South Carolina Public Railway
    Commission] has not authorized and will not authorize any
    of the conference committees selected by the railroads to
    represent it in the handling of these matters. Therefore, it is
    hereby agreed between the SC Public Railways Comm. Rail-
    road and the accredited representative of the employees
    involved, signatories hereto, that any settlement or disposi-
    tion of these matters reached through national handling
    shall be adopted and applied by the said SC Public Rail-
    ways Comm. Railroad and the employees involved in the
    same manner and made effective as of the same date as it
    is adopted and applied on the railroads, parties to such
    national handling.
    (J.A. 31) (emphasis added). In each case, when the Union served its
    Section 6 notices on the Railway Commission regarding the national
    handling, the Union enclosed a proposed standby agreement.
    When the contract moratorium covered by the 1988 Standby
    Agreement expired in 1995, the Union and the Railway Commission
    served Section 6 notices on each other, requesting changes in various
    aspects of compensation and working conditions. In its notice, the
    Railway Commission stated it would not enter into another standby
    _________________________________________________________________
    rather than accept the national agreement. The Railway Commission later
    changed its mind and entered into a standby agreement on August 9,
    1988. The 1988 Standby Agreement incorporated the national agreement
    that was finally completed in 1991.
    6
    agreement as it had previously. Instead, the Railway Commission pre-
    ferred to negotiate wage and benefits locally.
    On May 8, 1996, a new national agreement was finalized. As in the
    case of all previous national handling, the Railway Commission was
    not a party to the national agreement. In a letter dated May 22, 1996,
    the Union requested that, pursuant to Articles 1(a) and 34(a) of the
    1973 Agreement, the Railway Commission implement the rates of
    pay, lump-sum payments and health and welfare benefits contained in
    the 1996 national agreement. On June 11, 1996, the Railway Com-
    mission responded that the existing rates of pay would remain
    unchanged. The Railway Commission stated that its 1995 Section 6
    notice served notice upon the Union that the compensation elements
    were to be negotiated, and that the Railway Commission had not
    agreed to be bound by the national agreement. After an additional
    exchange of correspondence between the parties, the Union brought
    this action seeking declaratory and injunctive relief under the RLA to
    force the Railway Commission to apply the pay, health and welfare
    provisions of the 1996 national agreement.
    In the district court, the Union moved for a preliminary status quo
    injunction against the Railway Commission, and the Railway Com-
    mission moved to dismiss. The Railway Commission argued that the
    dispute was a "minor dispute" under the RLA and subject to manda-
    tory arbitration. Accordingly, the Railway Commission argued that
    the district court lacked subject-matter jurisdiction to hear the dispute.
    See Consolidated Rail, 
    491 U.S. at 303-04
    .
    In considering the parties' motions, the district court assessed
    whether the dispute was a "major dispute" or"minor dispute" under
    the RLA. The district court rejected the Railway Commission's sug-
    gestion that the parties' "past practice" of entering into standby agree-
    ments was evidence that the 1973 Agreement was not intended to
    incorporate the terms of all future national agreements. Instead, the
    district court found the 1973 Agreement to unambiguously adopt the
    terms of all national agreements. The district court concluded that the
    Railway Commission's position was "not arguable" and, therefore,
    the dispute was a "major dispute." See 
    id. at 305-07
    . The district court
    therefore granted the Union's motion to preliminarily enjoin the Rail-
    way Commission from refusing to pay the rate of pay increases and
    7
    other adjustments contained in the 1996 national agreement. The Rail-
    way Commission appealed that order to this court. 2
    II.
    A.
    We review the grant of a preliminary injunction for abuse of dis-
    cretion. See Manning v. Hunt, 
    119 F.3d 254
    , 263 (4th Cir. 1997).
    However, a district court's action that is based on an error of law is
    a per se abuse of discretion. See United States v. McHan, 
    101 F.3d 1027
    , 1040 (4th Cir. 1996) (citing Koon v. United States, 
    116 S. Ct. 2035
    , 2047 (1996)), cert. denied, 
    117 S. Ct. 2468
     (1997). Whether a
    dispute is "major" or "minor" under the RLA is a question of law
    which we review de novo. See CSX Transp., Inc. v. United Transp.
    Union, 
    879 F.2d 990
    , 995 (2d Cir. 1989); International Ass'n of
    Machinists v. Soo Line R.R., 
    850 F.2d 368
    , 374 (8th Cir. 1988) (en
    banc). Moreover, we review the exercise of subject matter jurisdiction
    de novo. See Ahmed v. United States, 
    30 F.3d 514
    , 516 (4th Cir.
    1994).
    B.
    The key question at issue in this appeal is whether the parties' dis-
    pute is "major" or "minor" under the RLA. The answer to this ques-
    tion determines whether the district court had subject-matter
    jurisdiction to hear the case. See Consolidated Rail, 
    491 U.S. at
    303-
    04 (stating that the National Railroad Adjustment Board has exclusive
    jurisdiction to review minor disputes) (citing 
    45 U.S.C. § 153
     First).
    Because we conclude that the dispute is a minor one under the RLA,
    we hold that the district court lacked subject-matter jurisdiction to
    issue the preliminary injunction.
    The RLA does not explicitly use the terms "major dispute" or
    "minor dispute." Rather, these are terms adopted by the courts from
    the vocabulary of railroad management and labor as a shorthand
    _________________________________________________________________
    2 At oral argument, we granted the Railway Commission's motion for
    a stay of the district court's injunction pending the outcome of this
    appeal.
    8
    method of describing two classes of controversies Congress had dis-
    tinguished in the RLA. As we will explain more fully below, "major
    disputes" seek to create contractual rights, while "minor disputes"
    seek to enforce those rights. See 
    id. at 302
    .
    The statutory basis of the major dispute category is found in § 2
    Seventh and § 6 of the RLA, 
    45 U.S.C. § 152
     Seventh and § 156. The
    former states that "No carrier, its officers or agents shall change the
    rates of pay, rules, or working conditions of its employees, as a class
    as embodied in agreements except in the manner prescribed in such
    agreements" or through the mediation procedures established in RLA
    § 6. See Consolidated Rail, 
    491 U.S. at 302
    . When a major dispute
    arises, the RLA requires the parties to undergo a lengthy process of
    bargaining and mediation. 
    45 U.S.C. §§ 155
     and 156. Until they have
    exhausted those procedures, the parties are obligated to maintain the
    status quo, and the district courts have subject-matter jurisdiction to
    enjoin a violation of the status quo pending the outcome of the proce-
    dures. See Consolidated Rail, 
    491 U.S. at 302-03
    .
    Minor disputes, on the other hand, are based on RLA§ 2 Sixth and
    § 3 First (i), 
    45 U.S.C. §§ 152
     Sixth and 153 First (i). These sections
    establish conference and compulsory arbitration procedures for dis-
    putes arising out of "grievances or out of the interpretation or applica-
    tion of agreements concerning rates of pay, rules, or working
    conditions." 
    Id.
     § 152 Sixth. See Consolidated Rail, 
    491 U.S. at 303
    .
    See also Hawaiian Airlines, Inc. v. Norris, 
    512 U.S. 246
    , 254-55
    (1994) (holding that "grievances" is merely a synonym for disputes
    involving the interpretation or application of collective bargaining
    agreements). When a minor dispute arises, it is subject to compulsory
    and binding arbitration, and the jurisdiction of the National Railroad
    Adjustment Board is exclusive. See 45 U.S.C.§ 153. See also
    Consolidated Rail, 
    491 U.S. at 303-04
    . As a consequence, district
    courts lack subject-matter jurisdiction over minor disputes. See 
    id.
    The difficulty is, of course, determining whether any given dispute
    is a major or minor one. In Consolidated Rail , the Supreme Court
    addressed the standard for differentiating between the two, see 
    id. at 300
    , explaining that major disputes are
    disputes over the formation of collective agreements or
    efforts to secure them. They arise where there is no such
    9
    agreement or where it is sought to change the terms of one,
    and therefore the issue is not whether an existing agreement
    controls the controversy. They look to the acquisition of
    rights for the future, not to assertion of rights claimed to
    have vested in the past.
    
    Id. at 302
     (quoting Elgin, Joliet & E. Ry. Co. v. Burley, 
    325 U.S. 711
    ,
    723 (1945)) (emphasis added). Minor disputes, on the other hand,
    contemplate[ ] the existence of a collective agreement
    already concluded or, at any rate, a situation in which no
    effort is made to bring about a formal change in terms or to
    create a new one. The dispute relates either to the meaning
    or proper application of a particular provision . . . or to an
    omitted case. . . . In either case the claim is to rights
    accrued, not merely to have new ones created for the future.
    Id. at 303 (quoting Burley, 
    325 U.S. at 723
    ) (emphasis added).
    The Supreme Court concluded that the demarcation between major
    and minor disputes is, therefore, neither the importance of the issue
    nor the likelihood one party would resort to self-help. Instead, the line
    drawn is whether one of the parties asserts that the terms of an exist-
    ing agreement either establishes or refutes the presence of a right to
    take the disputed action. "The distinguishing feature of such a case is
    that the dispute may be conclusively resolved by interpreting the exist-
    ing agreement." Id. at 305 (emphasis added). In other words, "major
    disputes seek to create contractual rights, [while] minor disputes
    [seek] to enforce them." Id. at 302.
    The test the Supreme Court therefore creates in Consolidated Rail
    is that "[w]here [a party] asserts a contractual right to take the con-
    tested action, the ensuing dispute is minor . . . ." Id. at 307. However,
    to prevent that party's characterization of the dispute from undercut-
    ting the RLA's prohibition against unilateral imposition of contractual
    terms, the Supreme Court added that the party's action must be "argu-
    ably justified by the terms of the parties' collective-bargaining agree-
    ment. Where, in contrast, the employer's claims are frivolous or
    obviously insubstantial, the dispute is major." Id. at 305-07.
    10
    The Supreme Court stated that the railroad has the burden of estab-
    lishing the exclusive arbitral jurisdiction under the RLA (and, conse-
    quently, the lack of jurisdiction in the district court), but added that
    the railroad's burden is "relatively light." Id. at 307. Relying on this
    light burden and the language of the test, this court has concluded that
    the Consolidated Rail test is "deliberately tilted toward finding a dis-
    pute minor." Railway Labor Executives Ass'n v. Chesapeake W. Ry.,
    
    915 F.2d 116
    , 119 (4th Cir. 1990). Moreover,
    [a] district court need not, indeed should not, assess the rela-
    tive merits of the parties' competing interpretations of the
    contract in order to find the dispute "minor." If the railroad's
    assertion that the collective bargaining agreement controls
    the dispute rises above the "frivolous or obviously insub-
    stantial," then the court must dismiss the action for lack of
    subject matter jurisdiction.
    
    Id.
     Finally, as the Supreme Court noted in Consolidated Rail,
    although the union's interpretation could conceivably carry the day in
    arbitration, that does not mean that the railroad's contractual interpre-
    tation is frivolous or insubstantial. See Consolidated Rail, 
    491 U.S. at 317
    .
    C.
    Applying the above rules to the facts of this case, we must decide
    whether the Railway Commission's position is "arguably justified by
    the terms of the parties' collective-bargaining agreement" or, rather,
    "frivolous or obviously insubstantial." See Consolidated Rail, 
    491 U.S. at 305-07
    . The Railway Commission is, of course, trying to char-
    acterize the dispute as minor, to avoid the imposition of the injunc-
    tion. The Railway Commission asserts that the dispute turns on the
    interpretation of the 1973 Agreement, particularly in light of the par-
    ties' "past practice" of enacting standby agreements. The Union, on
    the other hand, is trying to characterize the dispute as major, by
    asserting it is about adding new terms (those of the new national
    agreement) to the 1973 Agreement. At first blush, the Union's charac-
    terization appears to have merit: if the Union's interpretation of the
    1973 Agreement prevails, the terms of the 1996 national agreement
    would be added to the parties' 1973 Agreement. Thus, the dispute
    11
    may appear to be about the creation of contractual rights and, there-
    fore, may appear to be major. However, on more careful examination,
    it becomes clear that such a result is necessarily founded on the inter-
    pretation of the 1973 Agreement. Indeed, the crux of the Union's
    position is that the 1973 Agreement incorporates the compensation,
    health and welfare benefits of all future national agreements. Thus,
    the Union is, in reality, seeking to enforce the 1973 Agreement.3
    The Consolidated Rail Court held that "[t]he distinguishing feature
    of [a minor dispute] is that the dispute may be conclusively resolved
    by interpreting the existing agreement." 
    Id. at 305
    . Such is the case
    here. The obligations and benefits of the parties cannot be determined
    without first determining whether the parties incorporated all national
    agreements into the 1973 Agreement. Incidentally, this determination
    would also determine what the status quo currently is. If the 1973
    Agreement is interpreted for the Railway Commission, then the Rail-
    way Commission has no duty to provide the new wage and health
    benefits. If, however, the 1973 Agreement is interpreted for the
    Union, the benefits from the 1996 national agreement would already
    be a part of the 1973 Agreement. In either case, no formal changes
    in the existing 1973 Agreement would be required. See 
    id. at 303
    (stating that minor disputes involve no efforts to bring about a formal
    change in an agreement or to create a new one).
    _________________________________________________________________
    3 Counsel for the Union admitted at oral argument they are seeking to
    enforce the existing contract, not to form a new agreement. However,
    counsel still characterized the case as a major dispute because the Union
    was seeking to maintain the status quo. In so arguing, counsel cited to
    the Supreme Court's decision in Detroit & Toledo Shore Line, 
    396 U.S. 142
    .
    The Union's argument merely begs the question. If the dispute is a
    major dispute, then the parties are obligated to"preserve and maintain
    unchanged those actual, objective working conditions and practices,
    broadly conceived, which were in effect prior to the time the pending
    dispute arose and which are involved in or related to that dispute." See
    
    id. at 153
    . However, the Supreme Court has never recognized the obliga-
    tion to maintain the status quo during a minor dispute. See Consolidated
    Rail, 
    491 U.S. at 304
    . Thus, "maintaining the status quo" has no meaning
    until the dispute has been classified as major or minor.
    12
    In reality, the district court's decision turned entirely on the inter-
    pretation of the 1973 Agreement and standby agreements. The district
    court examined the provisions of all these local agreements and the
    parties' alleged past practices, and found that the Railway Commis-
    sion's interpretation was not arguable. Consequently, the district court
    concluded that the Railway Commission was attempting to unilater-
    ally alter the terms of the 1973 Agreement, constituting a major dis-
    pute. This demonstrates that even the district court implicitly
    recognized that this dispute was fundamentally about contract inter-
    pretation. However, we believe the district court erred in concluding
    the Railway Commission's interpretation was not arguable.
    Examining the facts of this case, we believe the Railway Commis-
    sion's position is "arguably justifiable" in light of the 1973 Agree-
    ment and the standby agreements and, therefore, the Railway
    Commission has met its light burden of establishing exclusive arbitral
    jurisdiction. See 
    id. at 307
    . First, the 1973 Agreement was entered
    into at a time when a national agreement was already in existence,
    and the 1973 Agreement refers to "the national agreement." (J.A. 25).
    Moreover, every standby agreement was entered into at a time when
    a national agreement was being negotiated, and each states that "any
    settlement . . . reached through national handling shall be adopted [by
    the Railway Commission and Union]." (J.A. 28-31). It is reasonable
    to assume the parties to these local agreements knew that the national
    agreement under consideration at the time would not be the last;
    future rounds of national handling would be inevitable. Therefore, the
    natural inclination, if the parties meant to incorporate all future
    national agreements in the 1973 Agreement, would have been to refer
    to "national agreements."4 Likewise, in the standby agreements, the
    parties would have been naturally inclined to state that "all
    settlements . . . reached through national handling will be adopted" by
    the parties. (Compare J.A. 28-31). Instead, because there was a partic-
    _________________________________________________________________
    4 In other words, we believe the parties would have more naturally
    stated in Article 1(a) of 1973 Agreement words to the effect that "Rates
    of pay will be governed by those agreed upon by national agreements."
    (Compare J.A. 25). Furthermore, in Article 34(a) the parties would have
    naturally stated that "National Health and Welfare Agreements to be con-
    summated between the [parties] . . . are a part of this agreement."
    (Compare J.A. 26).
    13
    ular national agreement in contemplation by the parties, their natural
    inclination was to state "the national agreement" and imply that par-
    ticular agreement. See Consolidated Rail, 
    491 U.S. at 311
     (stating that
    collective-bargaining agreements may include implied, as well as
    express, terms). The district court should have considered the implied
    meaning of "the national agreement" in context with the history of the
    1973 Agreement and the standby agreements.
    However, in response to questions at oral argument, counsel for the
    Union maintained it was entirely proper for the 1973 Agreement to
    refer to the national agreement. Counsel argued that, since collective
    bargaining agreements under the RLA never expire but are modified
    only after Section 6 notice and negotiations, there is in reality only
    one national agreement. Although this argument could conceivably
    carry the day in arbitration, it only serves to further emphasize that
    the parties dispute the meaning of the 1973 Agreement. It does not,
    however, do anything to convince us that it is "frivolous or obviously
    insubstantial" for the Railway Commission to interpret "the national
    agreement" as being a particular agreement in effect or under consid-
    eration at the time. See 
    id. at 317
     (stating that although the union's
    interpretation could conceivably carry the day in arbitration, that does
    not mean that the railroad's contractual interpretation is frivolous or
    insubstantial).
    Moreover, the record clearly shows that the parties used standby
    agreements for every subsequent round of national handling. If the
    1973 Agreement truly incorporates all future national agreements,
    each of these standby agreements would be superfluous. If, on the
    other hand, the 1973 Agreement only incorporated the national agree-
    ment in effect at the time, each subsequent standby agreement would
    have been necessary in order to adopt subsequent national agree-
    ments. The record clearly shows it was the Union that instigated
    adoption of each standby agreement. Although not determinative,
    these facts are evidence that the parties' past practice was to incorpo-
    rate new national agreements only through standby agreements, rather
    than automatic incorporation into the 1973 Agreement. See generally,
    
    id. at 311-20
     (permitting, in appropriate instances, past practices of
    the parties to be used as implied terms of their agreement).
    14
    Next, the first paragraph and the first sentence of the second para-
    graph of each standby agreement explains the purpose of the standby
    agreement:
    In accordance with provisions of the Railway Labor Act, as
    amended, a notice was served under date of [date differed
    for each Standby agreement], on practically all rail-roads in
    the United States, including [the South Carolina Public Rail-
    way Commission], by the accredited representative of
    employees of such railroads who are represented by the
    United Transportation Union, of a desire to change existing
    agreements as set forth in an attachment made part of the
    aforesaid notice.
    The management of [the South Carolina Public Railway
    Commission] has not authorized and will not authorize any
    of the conference committees selected by the railroads to
    represent it in the handling of these matters. Therefore, it is
    hereby agreed [that the national agreement will be adopted
    by the parties].
    (J.A. 28-31). These provisions, contained in every standby agreement
    (and entirely ignored by the district court in its order), clearly explain
    that: (1) the Railway Commission was not a party to the national han-
    dling; and (2) the Railway Commission did not merely acquiesce to
    the results of the national handling, but specifically agreed to adopt
    that particular national agreement. This is additional evidence of the
    parties' past practice which the district court should have considered
    in interpreting the terms of the parties' agreement. See Consolidated
    Rail, 
    491 U.S. at 311-20
    .
    Finally, the record shows that the Union has admitted the standby
    agreements were the parties' usual practice. When the Union initiated
    the process leading up to the 1988 Standby Agreement, the Union's
    General Chairperson, John W. Coulter, stated in a letter to the Rail-
    way Commission that "[t]he standby agreement has always been the
    norm concerning our seniority, work rules and rates of pay." (J.A.
    32). He went on to explain why that was the case:"This agreement
    is in alignment with South Carolina State Law 54-3-210 which pro-
    vides for our work rules and rates of pay to be``in force relative to
    15
    like employees of interstate railroads operating in the same territory
    with the terminal railroads authorized hereby.'" (J.A. 32) (emphasis
    added). In other words, instead of merely accepting the national
    agreement, the parties left open the possibility of agreeing locally to
    more regional rates and rules.
    The district court, relying on United Transp. Union v. Gateway W.
    Ry., No. 95-0908-CV-W-1, 
    1995 WL 842729
     (W.D. Mo. Nov. 14,
    1995), discounted the Union's admission in this letter by holding that
    the Railway Commission could not establish past practice with a sin-
    gle letter. However, the district court failed to consider the other evi-
    dence of past practice mentioned above, the implied and express
    terms and meaning of the parties' various local agreements, and the
    circumstances surrounding the enactment of these agreements. In
    light of the above, we believe the Railway Commission has an "argu-
    ably justifiable" right under the 1973 Agreement not to adopt the
    1996 national agreement, because the 1973 Agreement arguably does
    not automatically incorporate the new national agreement. However,
    it is ultimately the arbitrator's role to decide that question. We merely
    hold that the Railway Commission has met its "relatively light bur-
    den" of establishing exclusive arbitral jurisdiction, see Consolidated
    Rail, 
    491 U.S. at 307
    , given that the Consolidated Rail test is "delib-
    erately tilted toward finding a dispute minor." Railway Labor
    Executives, 
    915 F.2d at 119
    .
    This conclusion may well result in a delay of the bargaining pro-
    cess between the Railway Commission and the Union until the arbi-
    tration process has interpreted the 1973 Agreement and the standby
    agreements. Nevertheless, the Supreme Court has explicitly allowed
    such a consequence to occur. The Consolidated Rail Court stated:
    The effect of this ruling, of course, will be to delay collec-
    tive bargaining in some cases until the arbitration process is
    exhausted. But we see no inconsistency between that result
    and the policies of the RLA. In most cases where the Board
    determines that the employer's conduct was not justified by
    the contract, the Board will be able to fashion an appropriate
    compensatory remedy which takes account of the delay.
    16
    Consolidated Rail, 
    491 U.S. at
    310 and n.8. In the meantime, the Rail-
    way Commission need not pay the increased wage and health benefits
    pending resolution of this minor dispute. See 
    id. at 304
     (stating that
    the Supreme Court has never recognized in a minor-dispute situation
    a statutory obligation on the part of an employer to maintain the
    alleged status quo pending the arbitration board's decision).5
    III.
    Because we conclude that the present dispute is a"minor dispute"
    under the RLA, we hold that the district court abused its discretion in
    issuing the preliminary injunction against the Railway Commission.
    See McHan, 
    101 F.3d at 1040
    ; Manning, 
    119 F.3d at 263
    . We there-
    fore vacate the preliminary injunction and remand with instructions
    to dismiss the Union's action for lack of subject-matter jurisdiction.
    See Railway Labor Executives, 
    915 F.2d at 119
     (stating that if the rail-
    road's assertion rises above the "frivolous or obviously insubstantial,"
    then the court must dismiss the action for lack of subject matter juris-
    diction).
    VACATED AND REMANDED
    _________________________________________________________________
    5 Because of our disposition of the case on this issue, we need not reach
    the other issue the Railway Commission raises in its appeal, namely
    whether the district court's injunction deprives the Railway Commission
    of selecting its own bargaining representatives.
    17