In the
United States Court of Appeals
For the Seventh Circuit

No. 01-3204

T.V. Ryan, et al.,

Plaintiffs-Appellants,

v.

Union Pacific Railroad Company and
UNITED TRANSPORTATION Union,

Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 00 C 7549--Ronald A. Guzman, Judge.

Argued February 25, 2002--Decided April 11, 2002


  Before Posner, Easterbrook, and Williams,
Circuit Judges.

  Posner, Circuit Judge. Five members of
the Brotherhood of Locomotive Engineers
who are employed by the Union Pacific
Railroad as trainmen brought suit against
the Union Pacific and the trainmen’s
union, United Transportation Union. They
sought a declaration that they are
entitled to be represented in grievance
proceedings by their union, the BLE,
rather than by the UTU, even though the
collective bargaining agreement between
the Union Pacific and the UTU appoints
the latter as the trainmen’s exclusive
representative in grievance proceedings.
The district court dismissed the suit for
want of subject-matter jurisdiction.

  The Railway Labor Act establishes a
system of compulsory arbitration of
disputes arising out of collective
bargaining agreements in the railroad
industry. The first stage of dispute
resolution consists of grievance
proceedings "on the property," that is,
within the railroad itself, before
committees composed of union and
management representatives. 45 U.S.C.
sec. 153 First (i); International Ass’n
of Machinists, AFL-CIO v. Central
Airlines, Inc., 372 U.S. 682, 688-89
(1963); Kulavic v. Chicago & Illinois
Midland Ry., 1 F.3d 507, 515 (7th Cir.
1993). If the dispute cannot be resolved
at that level, the case proceeds to
formal arbitration, either before a
Public Law Board or a National Adjustment
Board, but it is only the first stage
that concerns us here. The Act provides
that at this stage the dispute "shall be
handled in the usual manner." 45 U.S.C.
sec. 153 First (i). The meaning of the
quoted language is the only issue in this
appeal.

  We need to paint in some background. It
used to be that engineers were
represented by the BLE and other railroad
workers (collectively, trainmen) by the
UTU. But as the industry shrank, jobs
were consolidated and engineers often
found themselves working as trainmen, and
vice versa. Nevertheless the unions did
not merge. Instead workers were allowed
to elect which union to join. So even
though the BLE was the engineers’ union
and the UTU the trainmen’s union, an
engineer assigned as a trainman
couldcontinue to belong to the BLE; and
by virtue of a 1951 amendment to the Act,
he didn’t have to pay dues to the UTU
even though the UTU was his collective
bargaining representative while he was
doing trainman’s work. And likewise a
trainman assigned as an engineer could
continue to belong to the UTU and did not
have to pay dues to the BLE. Landers v.
National R.R. Passenger Corp., 485 U.S.
652, 657-58 (1988); Pennsylvania R.R. v.
Rychlik, 352 U.S. 480, 489-92 (1957);
Corzine v. Brotherhood of Locomotive
Engineers, 147 F.3d 651, 653-54 (7th Cir.
1998); Brotherhood of Locomotive
Engineers v. Kansas City Southern Ry., 26
F.3d 787, 790 (8th Cir. 1994). This
structure remains in effect, and so both
unions have collective bargaining
agreements with the Union Pacific.

  A provision added to the UTU’s
collective bargaining agreement with the
Union Pacific in 1978 designated that
union the exclusive representative of all
Union Pacific trainmen in grievance
proceedings "on the property" even though
some of these trainmen, such as our five
plaintiffs, belong to the BLE. We do not
know whether the BLE’s collective
bargaining agreement with the railroad
contains a parallel provision with
respect to engineers who may happen to
belong to the UTU.
  Despite the exclusivity provision, there
were occasions between 1989 and 2000 on
which, apparently without objection by
the UTU or the railroad, the BLE was
permitted to represent its trainmen
members in the first-stage ("on the
property") grievance proceedings against
the railroad. But in the latter year the
UTU announced that this would no longer
be permitted--that it was standing on the
terms of the collective bargaining
agreement. That announcement precipitated
this suit, in which the plaintiffs argue
that their representation by the BLE is
"the usual manner" in which first-stage
grievances are handled and so cannot be
changed by the UTU and the railroad.

  The most natural and sensible reading of
the statutory term "in the usual manner"
contrasts it with the provision governing
the second, the arbitral, stage of
resolving disputes over the meaning or
interpretation of the collective
bargaining agreement. The procedures for
that stage are set forth in the statute;
the anterior proceeding, the proceeding
on the property, is to be conducted in
the usual manner, that is, in the manner
agreed upon by the railroad and the
union. That stage is for them to design
as well as to administer. So read, in
accordance with such decisions as
Pawlowski v. Northeast Illinois Regional
Commuter R.R., 186 F.3d 997, 1000 (7th
Cir. 1999); Kulavic v. Chicago & Illinois
Midland Ry., supra, 1 F.3d at 515, and
Landers v. National R.R. Passenger Corp.,
814 F.2d 41, 46-47 (1st Cir. 1987),
aff’d, 485 U.S. 652 (1988), the "usual
manner" provision allows the railroad and
the union to prescribe in the collective
bargaining agreement the manner in which
grievance proceedings shall be conducted
on the property, as the Union Pacific and
the UTU did in 1978. For in a unionized
workplace it is in the collective
bargaining agreement that one finds the
provisions creating the grievance
procedures.

  The plaintiffs argue that "usual manner"
should be read to grandfather any
practice that has emerged in the conduct
of grievance proceedings on the property.
If between 1989 and 2000 it was usual to
give a trainman who belonged to the BLE a
choice between a BLE griever and a UTU
griever, that practice is now cemented in
and can never be changed. No reason is
given for such a weird result, which
would give an arbitrary subset of the
railroad’s employees a choice between two
unions’ grievers--and could the employee
insist on both? (At argument the
plaintiffs’ lawyer was reluctant to
commit himself on that question.) Even
the benefit to the BLE is obscure, since
the handling of its trainman members’
grievances by the UTU is at the UTU’s
expense. But probably the BLE is worried
that members pleased with the UTU’s
handling of their grievances might be
minded to jump ship and join the UTU.

  The plaintiffs rest their argument on a
Supreme Court footnote that reads in its
entirety as follows: "Of course, an
employee may be entitled to be heard
through the representative of his choice
at company-level grievance and
disciplinary proceedings if that has
become the ’usual manner’ of handling
disputes at his workplace." Landers v.
National R.R. Passenger Corp., 485 U.S.
652, 657 n. 4 (1988). That just repeats
what the statute says; it does not tell
us how to decide what is the "usual
manner." The issue in Landers was whether
the Railway Labor Act entitled a member
of a railroad union that was not the
member’s bargaining representative
nevertheless to represent him in
grievance proceedings on the property,
and the Court held that there was no such
statutory right. This is entirely
consistent with the proposition, nowhere
questioned in the opinion, that a
collective bargaining agreement
designating a railroad union as the
exclusive representative in grievance
proceedings takes precedence over an
informal custom inconsistent with that
designation. The decision the Supreme
Court was affirming had asserted that
very proposition: "Where, as here, a
collective bargaining agreement is in
place, representation rights must be
based upon, and may be limited by, that
pact." 814 F.2d at 47.

  We did, it is true, many years ago flirt
with the position urged by the plaintiffs
here. See McElroy v. Terminal R.R. Ass’n,
392 F.2d 966, 971 (7th Cir. 1968). That
decision long predated both the First
Circuit’s decision in Landers and the
Supreme Court’s decision in that case.
And in Pawlowski v. Northeast Illinois
Regional Commuter R.R., supra, 186 F.3d
at 1101 n. 4, we remarked that "the
continued validity of the precise holding
of McElroy is in doubt after the Supreme
Court’s decision in Landers." That is an
understatement; the holding cannot
survive Landers.

  Should it make a difference that the
railroad and the UTU did not enforce the
exclusivity provision for some years
after it was inserted into their
collective bargaining agreement? We
cannot see why. The failure to enforce a
contractual term does not abrogate the
term unless the conditions for a waiver
or estoppel are established, and the
plaintiffs have made no effort to do
that. Anyway they are not arguing that
the agreement was modified or that it
should be interpreted to authorize a
practice that had become customary though
it was contrary to the language of the
agreement; they can’t argue that to us,
as we’re about to see.

  It remains only to decide whether the
district judge was right to dismiss the
suit on jurisdictional grounds rather
than on the merits. His reasoning was
that since the plaintiffs have no
statutory ground for using BLE grievers,
they must be seeking an interpretation of
the collective bargaining agreement as
permitting them to use those grievers.
Not so. They may be, in fact they are,
suing for a declaration that the statute
overrides the agreement and entitles them
to use BLE grievers. Their interpretation
of the statute is wrong; the statute
confers no such right on them. But that
conclusion is a determination of the
merits of their claim. It has nothing to
do with jurisdiction. The federal courts
have jurisdiction to interpret the
Railway Labor Act, Pawlowski v. Northeast
Illinois Regional Commuter R.R., supra,
186 F.3d at 1000 n. 1; Taylor v. Missouri
Pacific R.R., 794 F.2d 1082, 1085 (5th
Cir. 1986), abrogated on other grounds,
Landers v. National R.R. Passenger Corp.,
485 U.S. 652 (1988); they lack
jurisdiction only to interpret collective
bargaining agreements made under the
authority of the Act. Pawlowski v.
Northeast Illinois Regional Commuter
R.R., supra, 186 F.3d at 1000 n. 1;
Roberts v. Lehigh & New England Ry., 323
F.2d 219, 222 (3d Cir. 1963). It was not,
to repeat, an interpretation of the
collective bargaining agreement, but an
interpretation of the Railway Labor Act,
that these plaintiffs were seeking from
the district court.

  We add for completeness that if there
were no collective bargaining agreement
in force, or no provision in the
agreement relating to grievance
proceedings on the property, the
plaintiffs would be free to argue to the
district court that the "usual manner" of
handling such grievances was whatever
practice the parties had followed. Or if
the plaintiffs thought the collective
bargaining agreement properly interpreted
made that practice the "usual manner,"
they could argue that in the arbitral
process. What they cannot do is appeal to
the statute to supersede the "usual
manner" as determined by the collective
bargaining agreement.

  The judgment of the district court is
modified to place decision on the merits,
and as thus modified is

Affirmed.
