Court Rejects Union's Attempt to Block Unilateral Pay Raise

​The critical issue in determining whether courts can become involved in a labor dispute, including one over an employer's pay raise made unilaterally after negotiations broke down, is whether the parties have made every reasonable effort to resolve the dispute without judicial involvement.

In a procedurally complex labor-related litigation, the 8th U.S. Circuit Court of Appeals was able to distill two Section 6 notices, one "self-help" action, a motion for preliminary injunction and an interlocutory appeal into one concise point: Before seeking the court's assistance, parties to a labor agreement must make every reasonable effort to settle their dispute by all available means.

A railroad employer and union were parties to a collective bargaining agreement (CBA). In August 2019, because the railroad was having trouble attracting and retaining employees at a daily rate of $271 under the CBA, it offered to increase the daily rate to $300. In October 2019, union members rejected that proposal.

Procedural History

On April 1, 2020, the union served a notice on the railroad under Section 6 of the Railway Labor Act (RLA), ostensibly seeking to bargain about certain provisions under the CBA. The effect of that notice was to prolong the existing terms of the CBA, regardless of the CBA's termination date.

The parties did not meet for an initial conference on the Section 6 notice until Jan. 15, 2021. The parties did not meet again until March 24-25, 2021, at which point the union left the bargaining session, saying it did not want to schedule any further conference.

On May 3, 2021, the railroad reached out to the union suggesting continued negotiations, but the union did not respond.

On May 4, 2021, the railroad served a Section 6 notice on the union, proposing certain specific changes to the CBA, including its previously proposed amendment to the daily pay rate. The union failed to respond to that notice within the time allotted under the RLA.

The railroad gave notice to the union on June 5, 2021, that because of that failure, the railroad planned to resort to "self-help" and would increase the daily pay to $300, effective June 16, 2021.

On June 14, 2021, the union filed a legal action for a preliminary injunction, asking the court to order a return to the status quo and to preclude the pay increase. The district court denied the preliminary injunction on July 19, 2021.

The union appealed the district court's denial to the 8th Circuit on Jan. 12, 2022. On June 24, 2022, the 8th Circuit upheld the lower court's decision.

Rationale

The 8th Circuit found that:

• The railroad's Section 6 notice was a valid effort to settle the dispute between the parties.
• The union's failure to respond to the notice in a timely manner was a failure of its duty to reasonably engage in bargaining.
• The railroad's self-help efforts were done with appropriate notice to the union.
• The union failed to take advantage of other available remedies available under the RLA—such as the use of the Federal Mediation Board's services.

The court underscored the fact that the RLA imposes a "judicially enforceable legal obligation on railroads and employee unions to bargain in good faith." It also pointed out that under another federal labor law statute, the Norris-LaGuardia Act, courts are precluded from imposing an injunction, other than under circumstances strictly outlined under that act.

Further, the Norris-LaGuardia Act contains an additional provision cited by the court: "No … injunctive relief shall be granted to any complainant who has failed to comply with any obligation imposed by law which is involved in the labor dispute in question, or who has failed to make every reasonable effort to settle such dispute either by negotiation or with the aid of any available governmental machinery of mediation or voluntary arbitration." 29 U.S.C. §108 (emphasis added by the court).

Therefore, after extensive analysis of the applicable labor law—including the seeming disparity between the RLA's reference to "judicial enforcement" and the Norris-LaGuardia's prohibition on court injunctions for maintaining the status quo—the 8th Circuit found that a party seeking an injunction to enforce the status quo must first satisfy the Norris-LaGuardia Act's "every reasonable effort to settle" requirement. Based on that analysis, the 8th Circuit upheld the lower court's denial of the injunction sought by the union.

Internat'l Assn of Sheet Metal, Air, Rail, and Transportation Workers v. Iowa Northern Railway Co., 8th Cir. No. 21-2608 (June 24, 2022).

Maria Greco Danaher is an attorney with Ogletree Deakins in Pittsburgh.