May 8, 1990
STEPHEN RASTALL, ET AL., APPELLANTS
CSX TRANSPORTATION, INC., APPELLEE
Appeal from the Superior Court of the District of Columbia; Hon. Frederick H. Weisberg, Trial Judge
Before Rogers, Chief Judge, and Ferren and Farrell, Associate Judges.
The opinion of the court was delivered by: Farrell
This is an appeal from an order of the Superior Court granting summary judgment in favor of appellee, defendant below, CSX Transportation, Inc. (CSXT). *fn1 The action was brought by appellants Stephen Rastall and Timothy Cowdey, Canadian employees of CSXT, on behalf of themselves and all past, present and future Canadian employees, *fn2 and alleged a breach of provisions of a collective bargaining agreement between the company and its Canadian employees whereby CSXT purportedly had agreed to pay the wages, pensions and other benefits of the employees in United States dollars. *fn3
Shortly after the complaint was filed, CSXT removed the case to the United States District Court for the District of Columbia asserting federal question jurisdiction, 28 U.S.C. § 1331 (1982), *fn4 on the grounds that either the Railway Labor Act (RLA), 45 U.S.C. §§ 151-88 (1982), or the Labor Management Relations Act (LMRA), 29 U.S.C. §§ 185 et seq., applied to the dispute and required the parties to submit disputes such as this one to arbitration. *fn5 The district court, however, remanded the case to the Superior Court after concluding that neither the RLA nor the LMRA has extraterritorial effect so as to apply to CSXT's Canadian employees. Rastall v. CSX Corp., (supra) note 4, 696 F. Supp. at 684-85.
CSXT renewed its motion to dismiss in the Superior Court, again asserting that arbitration of this dispute is mandated by either the RLA or the LMRA, thus depriving the courts of jurisdiction to rule on the breach of contract claim. *fn6 CSXT also contended that if United States labor law did not apply to Canadian employees, then the Canadian Labour Code applied and similarly required arbitration. The trial court declined to rule on the application of federal or Canadian law to the dispute, but instead concluded that the dispute resolution provisions of the labor contracts themselves required the parties to submit to binding arbitration. He therefore granted CSXT's motion for summary judgment. *fn7
On appeal, the employees contend that the trial court erred in failing to heed the plain language of the collective bargaining agreements which, they assert, expressly gives Canadian employees the choice of submitting their grievances to arbitration or bringing an action in court. CSXT, on the other hand, while defending the trial court's contract interpretation, urges that the court lacked jurisdiction to rule on the matter to begin with because the RLA deprives the courts of jurisdiction oven "minor disputes" such as this one in favor of mandatory arbitration. In the alternative, CSXT contends that either the LMRA, federal common labor law, or the Canadian Labour Code applies to the present dispute and equally compels arbitration.
For the reasons set forth below, we reverse the grant of summary judgment in CSXT's favor and remand the case for further proceedings.
Before dealing with the interpretation of the dispute resolution provisions, we must address CSXT's argument that the Superior Court lacked jurisdiction to reach the contractual issues. Any such action, it contends, is preempted by the requirement of arbitration imposed by the RLA, the LMRA, or Canadian labor law. We are unpersuaded.
With regard to the RLA, we agree with United States District Judge Gesell that it does not apply to foreign employees performing services entirely outside the United States. 696 F. Supp. at 684. Indeed, the United States Court of Appeals for the District of Columbia Circuit expressly so held in Air Line Dispatchers Ass'n v. National Mediation Bd., 89 U.S. App. D.C. 24, 29, 189 F.2d 685, 690 (1951), a holding that would appear to bind us. See M.A.P. v. Ryan, 285 A.2d 310, 312 (D.C. 1979). Even if we were not bound by Air Line Dispatchers, our own reading of the statute is in accord with its holding. *fn8 We are confirmed in that reading by the consistent body of federal law elsewhere holding that the RLA has no extraterritorial effect. See Air Line Stewards & Stewardesses Ass'n v. Northwest Airlines, 267 F.2d 170, 175 (8th Cir.), cert. denied, 361 U.S. 901, 4 L. Ed. 2d 156, 80 S. Ct. 208 (1959); Vollmar v. CSX Transp., Inc., (supra) note 8, 705 F. Supp. at 1164-65; General Comm. on Adjustment v. United States, 102 L.R.R.M. 2869, 2871 (D. Minn. 1979), aff'd, 620 F.2d 161 (8th Cir.), cert. denied, 449 U.S. 826, 66 L. Ed. 2d 29, 101 S. Ct. 88 (1980); Air Line Stewards & Stewardesses Ass'n v. Transworld Airlines, 173 F. Supp. 369, 374-78 (S.D.N.Y.), aff'd, 273 F.2d 69 (2d Cir. 1959), cert. denied, 362 U.S. 988, 4 L. Ed. 2d 1021, 80 S. Ct. 1075 (1960).
With regard to the LMRA, its application to foreign employees is doubtful, Windward Shipping Ltd. v. American Radio Ass'n, 415 U.S. 104, 110, 39 L. Ed. 2d 195, 94 S. Ct. 959 (1974); Benz v. Compania Naviera Hidalgo, 353 U.S. 138, 144, 1 L. Ed. 2d 709, 77 S. Ct. 699 (1957).
We need not stop to consider that issue, however, because even if applicable in the present context, the LMRA contains no language requiring arbitration in the face of an agreement providing otherwise, nor does CSXT so contend. It merely asserts that, "under the LMRA, the Appellants would certainly be required to arbitrate under any agreement which called for arbitration . . ." Since, as we demonstrate later, the present agreement does not require Canadian employees to submit their disputes to arbitration, the argument that arbitration is mandated by the LMRA is without merit. *fn9
Lastly, we reject CSXT's argument that the Canadian Labour Code, R.S.C. 1970, c. L-1, requires the parties to submit to binding arbitration. It is unnecessary to consider the employees' contention that, under choice of law principles, it is not Canadian law but the law of Maryland, Michigan, and the District of Columbia that governs whether this dispute was required to be arbitrated. Assuming arguendo that Canadian law applies, it too does not require arbitration in the face of an agreement providing otherwise.
Section 155 (1) of the Canadian Labour Cede provides:
Every collective agreement shall contain a provision for final settlement without stoppage of work, by arbitration or otherwise, of all differences between the parties to or employees bound by the collective agreement, concerning its interpretation, application, administration or alleged violation. [Emphasis added.]
In St. Anne Nackawic Pulp & Paper Co. Ltd. v. Canadian Paper Workers Union Local 219,  S.C.R. 704, 723, the Canadian Supreme Court, interpreting the identical phrase in section 55 (1) of the New Brunswick Labour Relations Act, N.B. REV. STAT. 1973, c. 1-4, stated:
What the statute does is to establish a preference for arbitration of a particular sort over other means of dispute settlement, by establishing a procedure to be followed where the parties do not expressly provide for any other method of resolving their differences. Where the parties [have chosen otherwise], however, the New Brunswick Act, in common with most of the other Canadian labour relations statutes, does not actually require the parties to resort to arbitration. It requires a provision in the collective bargaining agreement for "final and binding settlement by arbitration or otherwise, without stoppage of work". The emphasized words indicate that, if they so choose, the parties may validly provide for a variety of other sorts of settlement mechanisms, including recourse to the courts. [Emphasis in original.]
As this language makes clear, Canadian labor law expresses a preference for arbitration but does not mandate it where the collective bargaining agreement negotiated by the parties specifically permits an alternative form of dispute resolution, including recourse to the courts. *fn10
We thus turn to the question of whether appellants are contractually bound to arbitrate the present dispute. At issue are twelve collective bargaining agreements governing relations between the Canadian employees and CSXT, which became effective around 1955. The crafts represented in the dispute include the Carmen, Clerks, Dispatchers, Locomotive Engineers, Locomotive Firemen, Oilers, Mechanical Employees, Maintenance of Way Employees, Signalmen, Supervisors, Trainmen and Yardmen. The bargaining agreements contain two types of dispute resolution provisions. The most common, found in seven of the agreements, is exemplified by Rule 32 of the agreement with the Brotherhood of Railway Carmen. Rule 32(1)(c) provides, in relevant part:
All claims or grievances involved in a decision by the highest designated officer shall be barred unless within 9 months from the date of said officer's decision proceedings are instituted by the employee or his duly authorized representative before the appropriate division of the National Railroad Adjustment Board or a system, group or regional board of adjustment that has been agreed to by the parties hereto provided in Section 3 Second of the Railway Labor Act.
Rule 32 (4), however, provides:
This Rule is not intended to deny the right of the employees to use any other lawful action for the settlement of claims or grievances provided such action is instituted within 9 months of the date of the decision of the highest designated officer of the Carrier. [Emphasis added.]
The other five agreements contain language exemplified by Rule 98 (c) of the agreement with the Brotherhood of Locomotive Engineers, which provides in part:
Decisions by the highest officer designated to handle claims and grievances shall be final and binding unless within sixty days after written notice of the decision of said officer he is notified in writing that his decision is not accepted. All claims or grievances involved in a decision of the highest officer shall be barred unless within six months from the date of said officer's decision proceedings are instituted by the employee or his duly authorized representative before a tribunal having jurisdiction pursuant to law or agreement of the claim or grievance involved. [Emphasis added.]
In his order granting summary judgment, *fn11 Judge Weisberg concluded that "these contracts are not ambiguous. Plaintiffs are required to arbitrate this minor dispute. . . because the collective bargaining agreements between their unions and the company require arbitration." In reaching this Conclusion, the Judge was unpersuaded by the agreements reservation to the employees of the right to institute "any other lawful action within 9 months" (Carmen's agreement) or "proceedings . . . before a tribunal having jurisdiction pursuant to law" (Engineers' agreement). He reasoned:
To accept plaintiffs' position, the court would have to find that these parties bargained for a dispute resolution process in which the Railroad's 32,000 American employees, who are covered by the Railway Labor Act, are forced to arbitrate contract disputes such as this, but its 200 Canadian employees can either arbitrate or go to court, whichever they prefer. If the parties expressly wrote such an unusual dichotomy into their contract, they would of course be held to the benefits and burdens of their agreement, and the court would be obligated to uphold it; but the language relied on by plaintiffs, which differs from agreement to agreement, certainly does not compel that result.
The court made the same point later:
It is implausible, to say the least, that these unions could have bargained with the Railroad for a dispute resolution provision that would require the Railroad's 32,000 American employees to submit minor disputes such as this one to final and binding arbitration, but would permit the 200 Canadian employees to bypass arbitration and opt for court litigation. Moreover, even if the unions would have had some unknown reason for favoring a tiny minority of their members over the majority, it is hard to imagine why the Railroad would have agreed to such a system. Where, as here, plaintiffs' interpretation of those contracts ignores the realities of the marketplace of collective bargaining and goes against the Railway Labor Act and the strong policy favoring arbitration embedded in both American and Canadian labor law, it is not unreasonable for the court to demand some evidence in the contract itself or in the circumstances surrounding the making of the contract that this interpretation was intended by the contracting parties. Plaintiffs have offered nothing, except to argue that the right of the Canadian employees to bypass arbitration is hidden in the folds of the contracts in language which, in context, can not mean what they say it means.
The court concluded:
To create a right to litigate this dispute in court out of the obscure language relied on by plaintiffs would amount to nothing less than rewriting the contracts, when the agreements themselves say, in language that could not be much clearer, that arbitration is the exclusive method for resolving disputes arising under the contracts.
There is no dispute that the RLA applies to American employees of CSXT and to CSXT itself, *fn12 and requires that "minor disputes," *fn13 such as the one involved in this case, be resolved through arbitration. It is also true, as the trial court remarked, that the employees can point to nothing in the negotiations surrounding these agreements confirming an intent to treat the Canadian employees differently from their American counterparts. There is simply no history one way or the other. *fn14 We can further agree with the trial court and CSXT that the agreements were drafted against the background of a long-standing "congressional policy in favor of settlement of dispute's by the parties through the machinery of arbitration," United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960), a policy embodied in the LMRA and -- as to minor disputes -- even more strongly in the RLA. Andrews v. Louisville & Nashville R.R., 406 U.S. 320, 323, 32 L. Ed. 2d 95, 92 S. Ct. 1562 (1972). See 1901 Wyoming Ave. Coop. Ass'n v. Lee, 345 A.2d 456, 461-62 (D.C. 1975) ("there is a presumption that the reasonable person knows all the circumstances surrounding the making of the contract"). We can also agree with CSXT that " collective bargaining agreement is more than a contract; it is a generalized cede to govern a myriad of causes which the draftsmen cannot wholly anticipate," United Steelworkers, supra, 363 U.S. at 578, and that one eventuality the parties likely did not anticipate -- to quote CSXT -- "was that Canadian employees might seek to avoid the arbitral mechanisms of the contracts."
Having conceded all of this, however, we cannot agree with the trial Judge that these agreements limit the methods of formally resolving minor dispute's to arbitration. Notwithstanding federal labor policy generally and "the realities of the marketplace of collective bargaining," we conclude that the agreements are unambiguous in leaving the employees the choice of submitting their grievances to arbitration or resolving them in court.
It is apparent at the outset that it is not the agreements themselves that create the dichotomy between American and Canadian employees which the trial court found anomalous; rather it is the RLA, which courts at least since 1951 have interpreted not to apply to non-United States citizens performing work outside the United States. See part I, supra. Thus the fact that the agreements, if applied to American employees, would contravene the RLA is not grounds on which to disregard the plain meaning of their language. When an agreement is "facially unambiguous, its language should be relied upon as providing the best objective manifestation of the parties' intent." 1010 Potomac Assoc. v. Grocery Mfrs. of Am., 485 A.2d 199, 205 (D.C. 1984). Rule 32 of the Carmen's agreement, while requiring resort to arbitration by either the employee or his representative (the union), expressly reserves to the employee the right to pursue any other lawful action for the settlement of a claim or grievance. Rule 98(c) of the Engineers' agreement, while not mentioning arbitration at all, similarly allows the employee or his representative to institute proceedings before a tribunal having jurisdiction pursuant to law over the claim or grievance. There is nothing arcane or obscure about these phrases, *fn15 nor are they "hidden in the folds of the contracts" as the trial Judge believed. They are an express reservation of non-arbitration remedies to the employees, and as such they qualify the earlier, seemingly mandatory provision of the Carmen's agreement for arbitration.
A similar issue was presented in Independent Oil Workers v. Mobil Oil Corp., 441 F.2d 651 (3d Cir. 1971), in which the court interpreted a dispute resolution provision containing both a mandatory arbitration clause and a clause stating that "nothing in this agreement shall prevent either Company or Union . . . from applying. . . to a court of competent jurisdiction for the relief to which such party may be entitled . . . ." Id. at 652 n.3. The court, while acknowledging the preference for arbitration under federal labor law, held that this "qualification. . . takes away the mandatory aspect of the contractual grievance procedures" and creates "an escape' clause which nullifies the mandatory terms of the earlier language and makes arbitration optional." Id. at 653, 654. We read the pivotal language of the instant agreements in the same way. The federal policy favoring arbitration "would not . . . preclude . . . [an employee's] court suit if the parties to the collective bargaining agreement expressly agreed that arbitration was not the exclusive remedy," Republic Steel Corp. v. Maddox, 379 U.S. 650, 657-58, 13 L. Ed. 2d 580, 85 S. Ct. 614 (1965); see Vollmar v. CSX Transp., (supra) note 8, 705 F. Supp. at 1170, and we conclude that that is what transpired here.
The alternative readings of the relevant language offered by the trial court and CSXT are not persuasive. The trial court found it "much more reasonable . . . to interpret Rule 32 (4) simply as a contractual recognition of the employee's right under the to pursue a grievance even in cases where his union declines to pursue it" (emphasis added). But as the district court recognized in Vollmar v. CSX Transp., (supra) note 8, this reading makes Rule 32 (4) of the principal agreement superfluous because Rule 32 (1)(c) already allows an "employee or his duly authorized representative" (emphasis added) to file a claim or grievance. 705 F. Supp. at 1170 n.54; see RESTATEMENT (SECOND) OF CONTRACTS § 203(a) (1981) (interpretation giving effect to all terms is preferred over one leaving one part of no effect). Nor can we give proper effect to the language by reading it -- as CSXT urged below -- as preserving the employee's right to go to court in the rare situations where courts have recognized exceptions to mandatory arbitration provisions. That too would make the language essentially redundant. Finally, CSXT argues that Rule 32 (4) is only "intended to enable an individual employee to settle grievances" (emphasis by CSXT), i.e., with the employer, "even if the union would prefer to pursue them," and that the term "lawful action" does not mean "lawsuit" but rather "some deed which accords with the law" in the sense that it is not an unfair labor practice. The provision, however, refers to the "settlement of claims" by means of "instituting" an "action", which cannot plausibly mean simply reaching an agreement with the employer.
The fact that "in retrospect agreements do not seem favorable [to CSXT] does not give . . . this court the right to reinterpret clear and unambiguous contractual language." E.P. Hinkel & Co. v. The Manhattan Co., 165 U.S. App. D.C. 140, 144, 506 F.2d 201, 205 (1974). We hold that the agreements reserve to the employees the right to bypass arbitration in favor of resolving dispute's in court. Accordingly, we reverse the order of the Superior Court and remand the case for further proceedings.