Harris v. Union Pacific Railroad

952 F. Supp. 598, 3 Wage & Hour Cas.2d (BNA) 1333, 1997 U.S. Dist. LEXIS 1428, 73 Fair Empl. Prac. Cas. (BNA) 97, 1997 WL 55470
CourtDistrict Court, N.D. Illinois
DecidedFebruary 7, 1997
DocketNo. 96 C 3442
StatusPublished
Cited by1 cases

This text of 952 F. Supp. 598 (Harris v. Union Pacific Railroad) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Harris v. Union Pacific Railroad, 952 F. Supp. 598, 3 Wage & Hour Cas.2d (BNA) 1333, 1997 U.S. Dist. LEXIS 1428, 73 Fair Empl. Prac. Cas. (BNA) 97, 1997 WL 55470 (N.D. Ill. 1997).

Opinion

MEMORANDUM OPINION AND ORDER

ALESIA, District Judge.

This matter is before the court on defendant’s motion to dismiss plaintiffs complaint for lack of jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). For the reasons discussed hereafter, defendant’s motion is granted.

L BACKGROUND

Plaintiffs Paula Harris and Kim Walton are employed by defendant Union Pacific Railroad (“Union Pacific”) as customer service representatives. Prior to their employment with Union Pacific, plaintiffs were employed by the Chicago and Northwestern Railway Company (“CNW”). CNW recently merged with Union Pacific; Union Pacific was the surviving company. The merger was approved by the Interstate Commerce Commission (“ICC”).1

As a result of the merger, Union Pacific offered a “separation program” to eligible clerical employees who did not want to relocate to other locations. The separation program was limited to a maximum of 300 employees — preference determined by seniority dates. The separation program was part of the “implementing agreement” negotiated between Union Pacific, CNW, and the Transportation Communications International Union.2 Pursuant to the terms of the separation program, in exchange for their resignation, eligible employees could elect a lump sum payment of $60,000.

Several conditions, however, had to be met before one could qualify as an eligible employee and thus take advantage of the sepa[600]*600ration program. One of the conditions is that the employee must be an “active employee,” ie., an employee not on leave of absence. If the employee was on leave of absence, he could become “active” by returning to work within, twenty days of the posting of the separation program.

At the time the notice was posted, plaintiffs' were on maternity leave. Nevertheless, plaintiffs submitted application forms for the separation program. Because they were on maternity leave, they did not qualify as “active employees,” thus, their applications were denied.

Plaintiffs filed a four-count complaint alleging that Union Pacific’s act of denying their applications for the separation program because they were on maternity leave violated: Count I — the Family and Medical Leave Act (“FMLA”). 29 U.S.C. § 2601, et seq.; Count II-the Pregnancy Discrimination Act (“PDA”), 42 U.S.C. § 2000e(k); and Count III-the Employee Retirement Income Security Act (“ERISA”). 29 U.S.C. § 1001, et seq. In Count IV, Harris brings a breach of contract action against Union Pacific.

II. DISCUSSION

Union Pacific seeks dismissal of Counts I through IV on the ground that the court lacks jurisdiction to hear the counts. The court will analyze the dispute in two parts: the first part will be concerned with Counts I through III (the FMLA, the PDA, and the ERISA claims); the second part will be concerned with Count IV (Harris’ breach of contract claim).

A. The FMLA, the PDA, and the ERISA (Counts I, II, and III)

Because the merger was of the type approved by the ICC, Union Pacific argues, citing 49 U.S.C. § 11341(a),3 that all questions relating to the merger rest in the exclusive jurisdiction of the ICC. Further, Union Pacific argues that the separation program was incident and necessary to the ICC approved merger; accordingly, any questions regarding the program should be brought pursuant to the arbitration procedures (outlined in the “Master Merger Implementing Agreement”) before the ICC.

Plaintiffs, relying on the plain language of § 11341(a), argue that the ICC has jurisdiction only over questions that are “necessary to let [the] person carry out the [approved merger] transaction.” Since the applicability of the FMLA, the PDA, and the ERISA in the instant situation is not necessary to carry out the approved merger transaction, plaintiffs argue that § 11341(a) is inapplicable and thus the ICC does not have jurisdiction over the dispute.

The court agrees with Union Pacific.

Pursuant to § 11341(a):

The authority of the Interstate Commerce Commission under this subehapter is exclusive. A carrier or corporation participating in or resulting from a transaction approved by or exempted by the Commission ... is exempt from the antitrust laws and from all other law, including State and municipal law, as necessary to let that person carry out the transaction....

As noted recently by the Supreme Court, “the immunity provision in § 11341 means what it says: A carrier is exempt from all laws as necessary to carry out an ICC-approved transaction.” Norfolk & Western Rw. Co. v. Am. Train Dispatchers’ Ass’n, 499 U.S. 117, 129, 111 S.Ct. 1156, 1163-64, 113 L.Ed.2d 95 (1991). Indeed, the language exempting carriers from “all other law” is clear, broad, unqualified, and indicates no limitation. Id. at 128-29, 111 S.Ct. at 1163-64. In short, the reason for the broad exemption is to ensure-that the efficiencies of merger or consolidation are maintained and not defeated by delays resulting from potential legal disputes. See id. at 133, 111 S.Ct. at 1165.

Thus, it follows that the ICC-approved merger and separation agreement between Union Pacific and CNW were exempt from the provisions of the FMLA, the PDA, and the ERISA. However, “the exemption [601]*601applies only when necessary to carry out an approved transaction.” Id. at 127, 111 S.Ct. at 1162-63. Accordingly, if the condition precedent of active employment — which prevented plaintiffs from taking advantage of the lump-sum payment — was not necessary to carry out the approved merger, the exemption does not apply.

Thus, assuming Union Pacific’s denial of plaintiffs’ application for the separation program violated the FMLA, the PDA, and/or the ERISA because they were on maternity leave and thus failed to meet the condition precedent of active employment to qualify for the lump sum payment, the issue is whether such condition was necessary to carry out the approved transaction.

Plaintiffs want the court to decide the issue. Union Pacific says the court has no jurisdiction to decide the matter; rather, the issue of what was necessary to carry out the approved merger resides in the exclusive jurisdiction of the ICC — now the Surface Transportation Board. Neither party cites any case law directly supporting their respective positions.

The court, however, located an analogous opinion from the Ninth Circuit. In Ry. Labor Executives’ Ass’n v. Southern Pacific Transp. Co., 7 F.3d 902

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952 F. Supp. 598, 3 Wage & Hour Cas.2d (BNA) 1333, 1997 U.S. Dist. LEXIS 1428, 73 Fair Empl. Prac. Cas. (BNA) 97, 1997 WL 55470, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harris-v-union-pacific-railroad-ilnd-1997.