George A. Schiltz v. Burlington Northern ( 1997 )

____________
No. 96-2810
____________
George A. Schiltz, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota
Burlington Northern Railroad; *
Transportation Communications *
Union, et al., *
*
Appellees. *
____________
Submitted: March 13, 1997
Filed: June 23, 1997
____________
Before WOLLMAN and BEAM, Circuit Judges, and REASONER,1 District Judge.
____________
REASONER, District Judge.
This is an appeal from the district court's2 granting summary
judgment in favor of Appellees Burlington Northern Railroad (BNR) and the
Transportation Communications International Union (TCU), and against
Appellant George Schiltz (Schiltz). Schiltz argues that the district court
erred in: (1) determining that BNR had not discriminated against Schiltz
on the basis of age when it failed to hire him for various jobs for which
Schiltz had applied; (2) determining that Schiltz's union seniority rights
were based in the Northeastern District, Number 5, as opposed to the St.
Paul District, Number 3; (3) determining that BNR's refusal to grant
1
The Honorable Stephen M. Reasoner, Chief Judge, United
States District Court for the Eastern District of Arkansas,
sitting by designation.
2
Schiltz appeals various portions of the Honorable David S.
Doty's Orders of March 3, 1994 and December 22, 1994, and the
Honorable John R. Tunheim's Order of June 5, 1996.
Schiltz's union seniority rights in the St. Paul District was not based
upon improper age discrimination; and (4) determining that TCU's refusal
to represent Schiltz in his grievance before the National Railroad
Adjustment Board (NRAB) was not a breach of its duty of fair representation
and was not discriminatory. We affirm.
I. Background
A. Factual Background
Schiltz began working for the Chicago, Burlington & Quincy Railroad
(CB&Q) at the age of eighteen in May of 1962; he was a clerical employee
for the railroad in Chicago, Illinois. In this position, Schiltz was a
union, or scheduled, employee and covered by the applicable collective
bargaining agreement (CBA) between CB&Q and the Brotherhood of Railway and
Airline Clerks (now TCU). In 1967, TCU and BNR entered into a CBA known
as the "Orange Book" which covered all union employees working for that
railroad. Subsequently, in 1970, the CB&Q, along with several other
railroads, merged with BNR. Therefore, in 1970, Schiltz, now a BNR
employee, fell under the ambit of the Orange Book.
In March of 1970, various union positions of BNR's Chicago office
were transferred to BNR's office in St. Paul, Minnesota. However, at about
this same time, Schiltz took an exempt, or non-union, position with BNR.
Schiltz did move to St. Paul in 1970, and he worked there as a non-union
employee for twenty-one years, that is, until he received a termination
notice on September 16, 1991, effective October 31, 1991. This notice,
sent by BNR's Senior Vice President for Human Resources, James Dagnon
(Dagnon), informed Schiltz that his exempt position would be eliminated and
-2-
that he would not be placed in another one.3 This notice also gave Schiltz
three options: (1) to sign a separation release which included severance
pay; (2) to elect to exercise his union seniority rights to a location
where he had union seniority; or (3) to terminate his employment without
severance and without signing a release.
In October of 1991, Schiltz opted to return to the union ranks;
however, he sought to exercise his seniority rights in the St. Paul
district. Schiltz sent both BNR's Dagnon and TCU's General Chairman
Richard A. Arndt (Arndt) letters to this effect. By letter dated October
29, 1991, Arndt informed Schiltz that his seniority was not in the St. Paul
district, but in the Northeastern district.4 On October 31, 1991, BNR also
informed Schiltz that his seniority rights had remained in the Northeastern
district, and he could not exercise his seniority rights in the St. Paul
district. Subsequently, Schiltz informed BNR that he would grieve the
location of his seniority rights; however, in November 1991,
3
In part, the notice states:
As has been communicated to you, Burlington Northern is
undergoing significant efforts to reduce its overall
expenses, including employee related expenses.
Regrettably, but out of necessity, we have reached the
conclusion that programs to reduce our exempt work
force in 1991 are both appropriate and timely.
As a result of careful study and consideration, your
position will be eliminated or you will be removed from
your position effective October 31, 1991. BN has
provided a separation package designed to assist you in
your pursuit of another career or other interests.
Sept. 16, 1991 Letter from Dagnon to Schiltz.
4
By agreement, BNR and TCU had restructured the seniority
districts during the time that Schiltz had been a non-union
employee in St. Paul. Originally, Schiltz was listed on the
Chicago district's seniority roster. Under the terms of the new
agreement, the Chicago district was reorganized and renamed the
Northeastern seniority district.
-3-
Schiltz also exercised, under protest, his seniority in the Northeastern
seniority district and accepted a union position in LaCrosse, Wisconsin,
a location within the Northeastern seniority district. Schiltz currently
holds the position he took there. Moreover, both before and after Schiltz
received his termination notice from Dagnon, Schiltz applied for various
exempt positions with BNR. He was never offered any of the positions for
which he applied.
Schiltz then grieved the location of his seniority rights through the
appropriate channels within BNR. On November 25, 1991, BNR declined
Schiltz's grievance. By letter dated December 6, 1991, Schiltz turned over
his grievance to TCU's local representative for appeal. Arndt advised
Schiltz in a letter dated December 30, 1991, that TCU would not progress
his grievance to arbitration due to its lack of merit. Schiltz
subsequently appealed Arndt's determination through proper channels within
the union, and Arndt's determination that Schiltz's claim was meritless was
affirmed at each stage in the process. Ultimately, Schiltz progressed his
seniority appeal to the NRAB. On May 10, 1995, the NRAB rendered its
decision regarding Schiltz's seniority status. The NRAB found that Schiltz
seniority was based in the Northeastern seniority district. The NRAB found
Schiltz had transferred to St. Paul in 1970 as an exempt employee;
therefore, his seniority remained in the Northeastern district.
Alternatively, the NRAB found that Schiltz's claim was barred under the
equitable doctrine of laches, as each year the seniority roster for the St.
Paul district had been posted in a conspicuous place, and Schiltz had never
contested his name's not appearing thereon until the instigation of this
suit.
B. Procedural Background
Schiltz originally filed this action against BNR and TCU on August
19, 1993. Schiltz's original Complaint included counts of
-4-
age discrimination under the Age Discrimination in Employment Act, 29
U.S.C. § 621 et seq., and age discrimination and retaliation under the
Minnesota Human Rights Act, Minn. Stat. § 363.01 et seq., against BNR and
TCU. The Complaint further alleged that BNR had violated the Employee
Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., and that
BNR had breached its contract with Schiltz. Finally, the Complaint alleged
TCU had breached its duty of fair representation that it owed Schiltz under
the Railway Labor Act, 45 U.S.C. § 151 et seq.
By its Order dated March 3, 1994, the district court found the breach
of contract claim against BNR to be arbitrable before the NRAB and
dismissed the claim due to its lack of jurisdiction over the matter. This
same Order separated the discrimination claims against BNR into three
parts, and it dismissed as arbitrable the claim that BNR had discriminated
against Schiltz on the basis of age in determining his seniority lay in the
Northeastern district. By Order of December 22, 1994, the court granted
summary judgment on the age discrimination claim based on BNR's refusal to
place Schiltz in another management position. Finally, based upon
stipulation of the parties in an Order dated November 3, 1995, the court
dismissed the claim concerning BNR's age discrimination based upon the
elimination of Schiltz's position. This same Order also dismissed the
ERISA claim based upon stipulation of the parties.
By its Order dated December 22, 1994, the district court granted the
motion of TCU and the other individually named defendants for summary
judgment on Schiltz's claims under the Minnesota Human Rights Act.
Moreover, the court denied TCU's motion for summary judgment on Schiltz's
ADEA claim and his claim that the union had breached its duty of fair
representation.
Schiltz's breach of contract claim then proceeded to arbitration
before the NRAB, and on May 10, 1995, that body handed
-5-
down its decision. The NRAB denied Schiltz's claim on the grounds listed
above. See supra p. 4.
Schiltz then sought reversal of the NRAB decision in district court.
By its Order dated June 5, 1996, the district court denied Schiltz's motion
to reverse the NRAB decision and granted TCU's motion for summary judgment
on Schiltz's ADEA claim and his claim for breach of duty of fair
representation. Schiltz raised four issues on appeal. See supra pp. 1-2.
II. Age Discrimination Claim Based on BNR's Failure to Hire
With regard to the summary judgment granted on Schiltz's age
discrimination, we review the district court's grant of summary judgment
de novo, applying the same standards as did the district court. Garner v.
Arvin Indus., Inc., 77 F.3d 255, 257 (8th Cir. 1996)(citations omitted).
Summary judgment is only appropriate when the record is viewed in the light
most favorable to the nonmoving party, when it reveals that no genuine
issue of material fact is present, and when the moving party is entitled
to judgment as a matter of law. Fed. R. Civ. Pro. 56 (c).
The ADEA makes it unlawful for an employer to fail to hire a
prospective employee due to his or her age. 29 U.S.C. § 623(a)(1). In
presenting a case based upon age discrimination, a plaintiff may either
present direct evidence of the claimed discrimination or he may make out
a case of discrimination under the burden-shifting analysis set forth in
McDonnell Douglas v. Green, 411 U.S. 792 (1973). Bashara v. Black Hills
Corp., 26 F.3d 820, 823 (8th Cir. 1994). In this case Schiltz attempted
to prosecute his case with both direct and circumstantial evidence.
A. Direct Evidence
-6-
Schiltz points to two pieces of "direct" evidence which he claims
illustrates BNR's discriminatory intent in not wanting to hire him for one
of the eight jobs for which he made application: Dagnon's letter to
5
Schiltz dated September 16, 1991 and Andres' use of factors such as grade
level and salary in making hiring decisions for filling open positions.
While the Dagnon letter may be unartfully written, when considered in light
of the clarification letter sent by Mr. Steven Klug, BNR's Manager of Human
Resources Planning, we find no error with the district court's
determination that this evidence was insufficient to constitute direct
evidence of discriminatory intent on the part of BNR.
As to the factors used by Andres in making his hiring decisions, such
as salary and grade level, the court finds that the Supreme Court's
decision in Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), is
dispositive. In Biggins, the Supreme Court stressed that the ADEA sought
to prohibit discrimination based upon age due to the stereotype that older
individuals were less productive or competent. Id. at 610. The Court held
that factors other than age, but which may be correlative with age, do not
implicate the prohibited stereotype, and are thus not prohibited
considerations. Id. at 611. See also Bialas v. Greyhound Lines, Inc., 59
F.3d 759, 763 (8th Cir. 1995); Anderson v. Baxter Healthcare Corp., 13 F.3d
1120, 1125-26 (7th Cir. 1994). The factors used by Andres are correlative
with age, but are not prohibited considerations. We find no error in the
district court's conclusion that Schiltz failed to establish discriminatory
intent by direct evidence.
B. Circumstantial Evidence/Prima Facie Case
As to the issue of discrimination based upon circumstantial evidence,
this court must employ the familiar burden-shifting
5
See supra note 2.
-7-
analysis established by the Supreme Court in McDonnell Douglas Corp. v.
Green, 411 U.S. 792 (1973). We have held this burden-shifting analysis to
be applicable in ADEA cases. Richmond v. Board of Regents of Univ. of
Minn., 957 F.2d 595, 598 (8th Cir. 1992)(citations omitted). However, in
applying the McDonnell Douglas analysis, a court should vary the elements
of the test in accordance with the facts of each individual case. Texas
Dep't. of Community Affairs v. Burdine, 450 U.S. 248, 253-54 n.6 (1981).
Therefore, for Schiltz's failure to hire claim, he may establish a prima
facie case of age discrimination by proving that (1) he belonged to the
protected class; (2) he was qualified for the positions for which he
applied; (3) he was not hired for the position applied for despite his
being sufficiently qualified; and, (4) the employer finally filled the
position with a person sufficiently younger to permit an inference of age
discrimination. See Kralman v. Illinois Dep't of Veterans' Affiars, 23
F.3d 150, 155 (7th Cir.), cert. denied, 513 U.S. 948 (1994). If Schiltz
makes a prima facie case, thus raising an inference of age discrimination,
the burden of production then shifts to BNR to articulate a legitimate,
nondiscriminatory reason for its decision not to hire him. McDonnell
Douglas, 411 U.S. at 802. If BNR meets that burden of production, then
Schiltz must prove that BNR's reason is merely a pretext for
discrimination. Id. at 804.
1. Six Jobs Filled by "Sufficiently Younger" Persons
As to six of the jobs for which Schiltz applied, the district court
concluded that Schiltz was unable to make out a prima facie case for these
positions as the jobs were ultimately filled with individuals not
"sufficiently younger" than Schiltz. Relying on Rinehart v. City of
Independence, Mo., 35 F.3d 1263 (8th Cir. 1994), cert. denied, 115 S. Ct.
1822 (1995), the district court granted summary judgment for BNR regarding
these positions.
-8-
As it did before the district court, BNR contends Schiltz fails to
meet the fourth element of the prima facie case as the positions for which
Schiltz applied were ultimately filled with individuals less than five
years younger than he.6 Schiltz argues the district court must be reversed
in light of the recent Supreme Court case of O'Connor v. Consolidated Coin
Caterers Corp., 116 S. Ct. 1307 (1996), which he maintains overturns the
Rinehart decision. We cannot agree with Schiltz that the O'Connor decision
demands the reversal of the district court on this point.
In the O'Connor case, plaintiff brought suit alleging his discharge
violated the ADEA. At the time of his discharge, plaintiff was 56 and his
replacement was 40. The Fourth Circuit upheld the district court's grant
of summary judgment and stated that plaintiff could only establish the
fourth element of a prima facie case of age discrimination if plaintiff's
replacement was someone outside the protected class. The Supreme Court
reversed the Fourth Circuit holding that a prima facie case in the ADEA
context is not made out simply because the ADEA plaintiff is or is not
replaced by someone outside the protected class. Instead, the Court
stated: "[T]he ADEA prohibits discrimination on the basis of age and not
class membership, the fact that a replacement is substantially younger than
the plaintiff is a far more reliable indicator of age discrimination than
is the fact that the plaintiff was replaced by someone outside the
protected class." Id. at 1310.
The district court essentially followed the reasoning in O'Connor in
granting summary judgment for BNR in this case. The district court did not
rely on an arbitrary above 40/below 40 rule
6
The positions Schiltz applied for were Manager-Accounting
Services, Assistant Paymaster-Legal, Assistant Manager
Administration, Manager-Tracing, Manager-Revenue Services, and
Assistant Paymaster. These positions were respectively filled
with individuals aged 43, 46, 51, 44, 48, and 47. At this same
time, Schiltz was aged 48.
-9-
as had the Fourth Circuit in its decision. Instead, the district court
determined that the individuals hired for the six positions at issue were
not "sufficiently younger" than Schiltz for him to make out the fourth
element of the prima facie case under the McDonnell Douglas analysis. We
agree. We conclude that the facts surrounding Schiltz's claim for a new
position do not raise an inference of discrimination. Two positions were
filled by individuals older than or the same age as Schiltz. Four
positions were filled with individuals younger than Schiltz. However, of
these four positions, the largest age disparity between Schiltz and the
individual hired for the job was five years. On these facts, the age
disparities do not raise an inference of discrimination as the individuals
hired for the position were not "substantially younger" than Schiltz. Id.
We find that the district court properly analyzed Schiltz's age
discrimination claim under the ADEA and granted summary judgment under the
appropriate standard.
2. Two Other Jobs For Which Schiltz Was Not Hired
As to the two other positions for which Schiltz was not hired, one
was never filled. Kralman 23 F.3d at 155. The other position was filled
by a person twenty-six years younger than Schiltz, Mr. Todd Marolt
("Marolt"). However, Marolt possessed a college degree in business
administration, an educational preference for the position.7 Schiltz could
not make out a prima facie case for a job that was never filled, and we
find that BNR articulated a legitimate, non-discriminatory reason for
hiring Marolt. Id.
III. Breach of Contract Regarding Place of Union Seniority Rights
7
The July 29, 1991, job posting for this particular position
indicated the following education and/or experience was required:
"College degree desirable; professional management courses and
railroad accounting experience preferred; or a minimum of four
years' railroad accounting experience, including supervisory
experience." (Supplemental Appendix, p. 7.)
-10-
With regard to the summary judgment granted on Schiltz's claim of
breach of contract surrounding the determination of the place of the
vesting of his seniority rights, we again review the district court's grant
of summary judgment de novo, applying the same standards as did the
district court. Garner, 77 F.3d at 257. Summary judgment is only
appropriate when the record is viewed in the light most favorable to the
nonmoving party, when it reveals that no genuine issue of material fact is
present, and when the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. Pro. 56 (c). We find no error in the district court's
analysis.
Schiltz claim is governed by the Railroad Labor Act ("RLA"), 45
U.S.C. § 151 et seq. Disputes between railroads and their employees are
classified as either major or minor disputes under the RLA. See
Consolidated Rail Corp. v. Railway Labor Executives' Assoc., 491 U.S. 299
(1989)("Conrail"). Major disputes are defined as those disputes that
create contractual rights between railroads and their employees; minor
disputes involve the enforcement of those contractual rights. Elgin, J.
& E. Ry. v. Burley, 325 U.S. 711, 723-24 (1945). A dispute is classified
as "minor" if it "relates either to the meaning or proper application of
a particular provision" in a CBA. Conrail, 491 U.S. at 303 (citation
omitted). Moreover, minor disputes are subject to compulsory and binding
arbitration before the NRAB Id. at 303-04.
BNR has the "relatively light burden" of establishing the exclusive
arbitral jurisdiction of the NRAB under the RLA. Id. at 307. In fact,
there is a presumption that disputes between railroads and their unionized
employees are minor, and thus, arbitrable. If doubts arise as to the type
of dispute at issue, a court should construe the dispute as minor.
International Assoc. of Machinists & Aerospace Workers, Dist. Lodge No. 19
v. Soo Line R.R., 850 F.2d 368, 377 (8th Cir. 1988)(en banc)(citation
omitted). The gravamen of Schiltz's argument revolves around the
-11-
interpretation of the contract language in the CBA known as the Orange Book
and the place of the vesting of Schiltz's seniority rights. Article VIII,
Section 4(c) of the Orange Book states: "When a Protected Employee
transfers to another seniority district as a result of changes of operation
or work transfer, his seniority shall be dovetailed into the roster to
which transferred and his name shall be removed from the roster from which
he transfers." Under the Orange Book, Schiltz argued his rights vested in
the St. Paul district, while BNR argued his rights vested in the
Northeastern district. If BNR's position regarding the interpretation of
contract language is "arguably justified," then the dispute is deemed
"minor," and it proceeds to arbitration. Conrail, 419 U.S. at 307. We
find no error with the district court's conclusion that BNR's
interpretation of the provisions at issue was "arguably justified," and
thus, the dispute between BNR and Schiltz was minor and should have
proceeded to arbitration before the NRAB as it did.
Turning now to the NRAB's arbitration award, this court's power of
review is "'among the narrowest known to the law.'" See International
Assoc. of Machinists and Aerospace Workers v. Northwest Airlines, 858 F.2d
427, 429 (8th Cir. 1988)(citations omitted). "Courts may set aside board
orders on three grounds: (1) the board's failure to comply with the
provisions of the Railway Labor Act; (2) failure of the order to confine
itself to matters within the scope of its jurisdiction; and (3) fraud or
corruption." Id. (citing 45 U.S.C. § 153, First (q)); Union Pacific R.R.
v. Sheehan, 439 U.S. 89, 99 (1978)(per curium); Brotherhood of Ry., Airline
and Steamship Clerks v. Kansas City Terminal Ry., 587 F.2d 903, 905-06 (8th
Cir. 1978), cert. denied, 441 U.S. 907 (1979). However, Schiltz does not
seek to overturn the NRAB's decision based upon one of these three grounds.
Instead, he seeks reversal of the decision upon the ground of "public
policy." See Union Pacific R.R. Co. v. United Trans. Union, 3 F.3d 255
(8th Cir. 1993), cert. denied, 510 U.S. 1072
-12-
(1994). Under narrow circumstances, the public policy ground disallows the
courts to lend their authority to a board decision which might harm the
public. Id. at 261-62 (concluding that a well-defined and dominant public
policy against a railroad's employment of a person who used drugs or
alcohol would be grounds for the overturning of an arbitration board's
decision to reinstate such an individual).
Schiltz argues for a reversal of the NRAB decision on the basis of
a "well-defined and dominant" public policy, that is the public policy of
protection of workers. Schiltz contends that the job security provisions
of the Orange Book aided BNR in receiving the Interstate Commerce
Commission's approval for its merger with other railroads back in 1967, and
he further argues that to allow the NRAB's decision to stand would violate
the general policy of protecting workers. The court finds Schiltz's
argument unpersuasive. The court simply cannot find that the private
benefit that would inure to Schiltz, that is, the placement into one
seniority district as opposed to another, is the type of "well-defined and
dominant" public policy which courts have had in mind in recognizing this
exception. Id. at 260-62.
IV. Age Discrimination Based Upon BNR's Refusal to Grant Seniority in the
St. Paul District
We again review the district court's grant of summary judgment on
this claim de novo. Garner, 77 F.3d at 257. And, we again have only
narrow powers to review the NRAB's decision. Northwest Airlines, 858 F.2d
at 429.
Schiltz argues that BNR violated the ADEA by refusing to allow him
to exercise his seniority rights in the St. Paul seniority district. He
contends that he should be allowed to pursue his statutory cause of action
under the ADEA outside any arbitration decision made by the NRAB. However,
the acceptance of this
-13-
argument would lead to the evisceration of the grievance and arbitration
procedures provided by the RLA. This court realizes that the scope of RLA
preemption has been narrowed by recent Supreme Court decision. Hawaiian
Airlines, Inc. v. Norris, 512 U.S. 246 (1994)(allowing an employee to
assert a statutory right under Hawaii's Whistleblower Act instead of
resolving the dispute under the terms of the CBA because of the RLA's
preemption). However, Schiltz's claim is distinguishable from that in
Hawaiian Airlines as Schiltz's claim is inextricably intertwined with the
language contained in the CBA. The issue of where Schiltz could assert his
seniority rights had to be determined by the CBA's language. Claims
arising out the interpretation of labor agreements should proceed to
arbitration for resolution. See Fry v. Airline Pilots Ass'n Inter., 88
F.3d 831, 835 (10th Cir. 1996).
V. Breach of Duty of Fair Representation
As already noted, the court has very limited power of review over
arbitration awards. Northwest Airlines, 858 F.2d at 429. To begin to make
a claim for breach of duty of fair representation arising out of a union's
handling of a grievance, a plaintiff must demonstrate both that the
underlying grievance has merit and that the union failed to fairly
represent him. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554 (1976).
Here the NRAB found against Schiltz on the merits of his contract claim.
Since Schiltz's underlying grievance regarding the interpretation of the
CBA lacked merit, TCU's duty to represent Schiltz was never breached. See
DeCostello v. Teamsters, 462 U.S. 151, 164-65 (1983).
VI. Conclusion
We conclude that summary judgment was properly entered for BNR and
TCU by the district court in this matter. Therefore, the judgment of the
district court is affirmed.
-14-
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT
-15-