Labor & Employment Law Daily Wrap Up, PENSION AND BENEFIT PLANS—8th Cir.: District court has jurisdiction to review agency ruling allowing union participation in proceedings, (Dec 17, 2025)

By Ronald Miller, J.D.

May a party who will not be responsible for any benefits contributions and does not represent the workers at issue be a fully participating party in a preliminary proceeding wholly collateral to a future benefits determination?

The Eighth Circuit reversed a district court’s dismissal of a railroad’s lawsuit challenging an order of the U.S. Railroad Retirement Board, which designated a union as a party entitled to participate in a hearing regarding whether a contractor’s employees were covered by the Railroad Retirement Act and the Railroad Unemployment Insurance Act. The appeals court ruled that a preliminary determination of who will participate in a Board hearing is not the kind of terminal event that marks the end of the Board’s decision-making process on a claim for benefits. Accordingly, the district court had subject matter jurisdiction to review the employer’s complaint (Union Pacific Railroad Co. v. U.S. Railroad Retirement Board, No. 24-2547 (8th Cir. Dec. 16, 2025)).

Retirement benefits. The Railroad Retirement Act (RRA) provides long-term retirement, disability, and survivor benefits to covered railroad employees and, in some cases, their spouses and survivors. It is funded by a payroll tax on the railroads and their employees. The Railroad Unemployment Insurance Act (RUIA) provides benefits for short-term periods of unemployment and sickness, and is funded by employer contributions. The U.S. Railroad Retirement Board, an independent executive branch agency, administers benefits under both statutes. Pursuant to its statutory authority to determine claims for benefits and make awards, the Board initiates investigative hearings and makes initial determinations whether a person or entity is a covered employer or employee.

Covered carrier. The Union Pacific Railroad (UP) is a covered railroad carrier. Its operations include “flagging,” a rail industry term for providing protection for those working on or close to railroad tracks from the hazard of being struck by a train or other on-track equipment. RailPros Field Services is an independent company that employs or contracts with workers who perform “flagging” services for third parties that require access to UP’s right of way for projects that do not concern UP’s own work or operations.

Employee coverage. A union represents the some of the employees employed by UP but does not represent RailPro’s employees. In November 2017, the union submitted a request to the Board for a determination whether RailPros flagging workers are covered under the RRA and the RUIA. The union alleged that UP and RailPros were replacing union-represented employees with RailPros contract workers to perform flagging services for third parties having access to UP facilities, which “created a business model... that essentially uses the payment of age and service annuities under the [RRA] to subsidize the use of workers to displace employees who otherwise would be paying into the Railroad Retirement system.” The Board’s Office of General Counsel investigated.

Union party status. On April 14, 2023, the Board entered an order initiating a hearing to determine whether RailPros contract workers performing flagging services are covered employees and designating the union as a party entitled to participate in the hearing (in addition to UP and RailPros). UP objected to the designation of the union as a party because the union would gain access to confidential business information that UP places in an administrative record that is accessible to the public. The hearing examiner agreed to consider UP’s proposed protective order preventing the union from accessing the railroad’s confidential business information, including a nondisclosure agreement (NDA). UP refused to sign the NDA, stating it would not accept an outcome entitling the union to participate as a party.

Confidential business operations. UP brought this action seeking judicial review of the Board’s April 2023 order granting the union party status. UP alleged that the details of its business arrangements with RailPros and with third parties who access UP’s right of way to perform their own work, and how RailPros workers performing flagging services are utilized by third parties performing their own work on UP property, are “maintained as private and confidential in the normal course of its business operations.”

Adversarial relationship. UP alleged that the union has taken adversarial positions regarding contracted flagging services with UP and other railroads and has filed over 1,500 grievances on this topic. It further alleged that granting the union party status to the hearing guaranteed that the union will gain access to UP’s confidential business information. Moreover, it asserted that nothing in the Board’s governing statutes grants it authority to give party status to the union. Finally, it asserted that the April 23 Order is a final agency action for purposes of judicial review under the APA, and that the order’s grant of party status to the union was unlawful, arbitrary and capricious and an abuse of discretion under the APA.

Without deciding whether the April 23 Order is a final action under the APA, the district court dismissed the complaint for lack of subject matter jurisdiction. Applying the three Thunder Basin factors, the district court concluded that it lacked jurisdiction because the statutory judicial review provisions in the RRA and the RUIA extended to the April 2023 Order and provided for exclusive judicial review in an appropriate court of appeals. This appeal followed.

Final agency action. Chapter 7 of the APA makes judicial review available for “final agency action for which there is no other adequate remedy in a court.” “[U]nless Congress expressly says otherwise, APA review takes place first in the federal district courts, not the courts of appeals.” “The APA ‘evinces Congress’ intention and understanding that judicial review should be widely available to challenge the actions of federal administrative officials.’”

Special statutory review. Congress may substitute an alternative review procedure—what is commonly called a special statutory review scheme—such as exclusive review in one or more designated courts of appeals. In both the RUIA and the RRA, Congress created a special statutory review scheme: judicial review of final Board decisions in the courts of appeals rather than in the district courts. But does that special statutory review scheme apply to the Board’s April 23 order.?

April 23 order. UP argued on appeal that the April 2023 order entered prior to the Board’s investigative hearing was not a “final decision” of the Board on a claim for benefits that must be reviewed in an appropriate court of appeals. Rather, it is an interim agency order that is a “final agency action for which there is no other adequate remedy in a court” that can be reviewed by an appropriate district court under Section 704 of the APA.

The Board argued there is no relevant distinction in applying Thunder Basin to pre-enforcement challenges to agency enforcement actions and to challenges to interim agency orders unrelated to enforcement.

Benefits decisions. To determine the scope of the RRA and the RUIA special statutory review provisions, the Eighth Circuit looked to the text of both statutes, taking into account “both the specific context in which language is used and the broader context of the statute as a whole.” The context of the special statutory review scheme reflects a focus on the Board’s ultimate benefits decisions.

Collateral determination. Here, the issue is whether a party who will not be responsible for any benefits contributions and does not represent the allegedly covered workers at issue may be a fully participating party in a preliminary proceeding that is wholly collateral to a future benefits determination. Accordingly, the appeals court concluded that the text of the RRA and the RUIA special statutory review provisions, read in context, does not answer the question whether the particular claims at issue were “of the type Congress intended to be reviewed within this statutory structure.”

Thunder Basin factors. Agreeing with the district court that the three Thunder Basin factors are highly relevant considerations, the appeals court noted that the first factor is whether delaying review of the April 23 order until the Board decides the merits of the flagging workers’ coverage will result in the “foreclosure of meaningful judicial review.” UP argued irreparable injury to its business interests if the union has unrestricted access to confidential information UP places in a hearing record, and the Board refused to limit the union’s access or sufficiently restrict its use of the information. That is clearly a cognizable APA claim in a district court action to review an agency order if it is a final agency action under the APA, even if it is an interim agency order.

The second factor is whether UP’s claim is “wholly collateral” to the special statutory review provisions. Whether the union’s participation as a party in an initial hearing that may end in a coverage decision is collateral to the ultimate benefits decisions that the special statutory review scheme controls. Because the Board had ample authority to gather relevant evidence by means other than granting the union unlimited access to confidential information UP placed in the hearing record, this factor supported UP’s position.

The third factor is whether UP’s claim is “outside the agency’s expertise.” The Board argued that UP’s claim is directed at matters where the Board is an expert. But the appeals court observed that this is an APA claim that has nothing to do with the purpose of the special statutory review provisions at issue.

APA final agency action. It is well established that the party seeking APA review must satisfy two conditions for the challenged agency action to be considered “final.” First, the action must mark the consummation of the agency’s decision-making process and not be merely tentative or interlocutory in nature. “Second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.” To satisfy this second condition, the agency action “must inflict some legal injury upon the party seeking judicial review.”

Here, the appeals court concluded both conditions were satisfied. First, the April 2023 Order marks the consummation of the Board’s decision-making process on the threshold issue of who will participate as parties in the hearing. The Board conceded finality for purposes of its motion to dismiss.

If immediate judicial review is not available, UP will be in a situation where it participates in the hearing process and places its confidential business information in the record, giving the union unrestricted access. The April 2023 order determined legal rights and obligations. The union’s designation as a party means it will have unrestricted access to confidential business information that UP is required to place in the record.

As the April 2023 order is not immediately reviewable in a court of appeals under the special judicial review provisions of the RRA or the RUIA, it is a “final agency action for which there is no other adequate remedy in a court” that is subject to immediate judicial review by an APA action filed in the district court.

Accordingly, the judgment of the district court dismissing this case for lack of subject matter jurisdiction was reversed.

The case is No. 24-2547.

Judge: Loken, J.

Attorneys: Thomas P. Gies (Crowell & Moring) for Union Pacific Railroad Co. Daniel Aguilar, U.S. Department of Justice, for U.S. Railroad Retirement Board.

Companies: Union Pacific Railroad Co.

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