Labor & Employment Law Daily Wrap Up, LABOR—ARBITRATION—D. Mass.: Court lacked jurisdiction to determine meaning of ‘economic value’ as term used in arbitration award, (Apr 24, 2025)

By Ronald Miller, J.D.

The First Circuit has been consistent in recognizing that a dispute over the interpretation of an undefined term in an award is a minor dispute and therefore requires remand to the SBA.

On cross-motions for summary judgment in a dispute regarding whether an employer complied with contractual requirements that it match economic provisions offered to other unions, a federal district court in Massachusetts concluded that it lacked jurisdiction because the dispute involved a “minor dispute.” The union filed a petition seeking to enforce an arbitration agreement and to compel the employer to provide it with sufficient information to determine the true “economic value.” Nothing in a memorandum of agreement or arbitration agreement offered guidance as to whether “economic value” includes both “current value” and “terminal value” and any determination to that effect must be made by a Special Board of Adjustment (SBA) (Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters v. Keolis Commuter Services, LLC, No. 23-10587-NMG (D. Mass. Apr. 22, 2025)).

“Me-too” provision. In 2016, the union and the railroad company entered into a collective bargaining agreement covering certain terms of employment. Three years later, the parties amended their agreement by executing a memorandum of agreement (MOA). The MOA contained a “me-too” provision whereby, if the railway entered into an agreement with another union that offered more favorable wages or benefits, the railway would confer the same benefits or their economic equivalents, to the union.

Between December 2019 and March 2020, the employer entered into agreements with three other unions. A dispute arose over whether the wages and benefits conferred by those agreements were more favorable than the existing agreement between the parties, and therefore, whether the employer was required to confer additional benefits to the union.

Arbitration. Subsequently, the parties took their dispute to a Special Board of Adjustment (SBA). In October 2021, the SBA issued an arbitration award requiring the employer to match or exceed any provision of its agreements with the other unions that are “greater in economic value.” The SBA further held that the MOA required the employer to present evidence of the “economic value” of any wage increase in a subsequent agreement with other unions to determine whether the “me-too” provision in the MOA, in fact, applies.

Employer proposals. The employer later submitted proposals to the union that purportedly gave it the opportunity to accept the general wage adjustment “as it related to the economic value of the MOA.” However, the union claimed that the proposals failed to compare to “the economic value of the other unions’ agreements” and that the term “economic value” includes both the “current value” and the “terminal value” of the agreements with other unions. For its part, the employer argued the “economic value” refers only to the “current value.”

The union filed a petition seeking to enforce the arbitration agreement and to compel the employer to provide it with sufficient information to determine the true “economic value.” Both parties filed cross-motions for summary judgment. The employer argued that the court lacked subject matter jurisdiction over the parties’ dispute.

Jurisdiction. First, the court addressed the employer’s contention that it lacked subject matter jurisdiction. Generally, a federal district court has jurisdiction under the Railway Labor Act to review labor disputes. The RLA recognizes two iterations of such disputes: “major disputes” and “minor disputes.” If a dispute is “minor,” the SBA has exclusive jurisdiction to adjudicate its merits through mandatory arbitration. However, if a dispute “major” it is not subject to mandatory arbitration before an SBA and can be heard on a petition to a federal district court.

The proper inquiry requires the court to determine whether the parties’ dispute relates to an already-existing agreement. If the dispute concerns “the meaning or proper application of a particular provision” in an already-existing agreement, the dispute is minor and should be resolved at the SBA.

Here, the employer asserts that its dispute with the union is minor and that therefore this case should be resolved at the SBA because the parties disagree over the meaning of “economic value” as that term is used by the SBA in construing the MOA. According to the union, economic value includes both the “current value” and “terminal value” of subsequent agreements with other unions, while the employer argued that economic value includes only the “current value.” However, the arbitration award by the SBA did not define economic value or indicate whether it includes current and terminal value.

The First Circuit has been consistent in recognizing that a dispute over the interpretation of an undefined term in an award is a minor dispute and therefore requires remand to the SBA. Likewise, other federal courts have reached the same conclusion and remanded cases for further proceedings.

Minor dispute. Because the parties’ dispute was not about the application of the MOA and the award, but rather as to the meaning of a term within it, it is a minor dispute. Nothing in the MOA or arbitration award offers guidance as to the meaning of “economic value.” In the absence of such guidance, the court cannot determine whether “economic value” encompasses both current and terminal value. Instead, “the proper approach is to resubmit the arbitration award” for further proceedings. Therefore, the matter should be resolved at the SBA.

The case is No. 23-10587-NMG.

Judge: Gorton, N.

Attorneys: Anthony A. Orlandi (Herzfeld, Suetholz, Gastel, Leniski & Wall) for Brotherhood of Maintenance of Way Employees Division of The International Brotherhood of Teamsters. Thomas E. Lent (Barrow Lent) for Keolis Commuter Services, LLC.

Companies: Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters; Keolis Commuter Services, LLC

Cases: Labor Arbitration ContractClaims Bargaining Procedure MassachusettsNews