A run-of-the-mill employment dispute could become a major embarrassment for railroad giant BNSF over an allegation that a senior executive threatened to blackball an arbitrator from the industry if she ruled against the company.
In a federal court case set to go to trial next week in Tacoma, Wash., a fired BNSF Railway Co. employee accuses the company of legal corruption. The suit claims that the BNSF executive pressured the arbitrator to reverse a proposed ruling that initially was in the worker’s favor.
The arbitrator at the middle of the dispute, Jacalyn Zimmerman, was the neutral party on a three-member arbitration panel that also included Roger Boldra, then BNSF’s labor relations director, and Jay Schollmeyer, a railroad union leader.
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Two months after a February 2009 phone conference among the three – when the alleged threat was made by Boldra – Zimmerman backed away from her proposed decision to reinstate the fired worker, Richard Kite, and dismissed the case without prejudice. A new arbitrator later upheld Kite’s firing.
The case shines a light on a downside of the growing use of arbitration in consumer and workplace disputes in recent years: the pressure on arbitrators to issue rulings that please the corporate entities that retain them, or risk falling out of favor and losing lucrative repeat business.
Unlike judges who are assigned cases randomly – and who, in the federal courts, have lifetime tenure – arbitrators are private business people dependent on their next case. They know there is always an implied threat that if they issue unfavorable or unpopular rulings they may not be used again. What makes the BNSF case unusual is that the threat of losing business allegedly was raised so explicitly.
Company denies wrongdoing
A spokeswoman for Forth Worth, Texas,-based BNSF, one of the nation’s two biggest railroads and a unit of investor Warren Buffett’s Berkshire Hathaway Inc., declined comment about the arbitration dispute. In court papers, however, the company strongly denied any wrongdoing. Boldra, 64, who retired from BNSF in January, declined to comment for this story. However, he acknowledged in a written statement entered into court records that he told Zimmerman about potential fallout “if you make decisions like that.”
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Zimmerman declined comment, but said in court papers she did not perceive his remarks to constitute a threat. On the other hand, Schollmeyer, general chairman of the United Transportation Union, considered Boldra’s comment “improper” and a “threat,” according to court documents.
Carmen Parcelli, a Washington, D.C., labor lawyer who represents workers in railroad cases but who is not involved in the Kite case, said, “No one should ever say those words. It is just outrageous.” In part because of the controversy over Boldra’s remarks, she said, the case has dragged on for a decade. “That is not good for anybody who cares about making this system work,” Parcelli said.
Growing concern about the fairness of arbitration awards has courts more willing to scrutinize them in recent years, experts say. Alex Colvin, professor of conflict resolution at Cornell University, said there appears to have been a “breakdown” of confidence in the arbitration process. “There are a lot of really good arbitrators out there but I don’t think it is as universally accepted as it used to be,” he said.
Arbitration groups, which say arbitration can be quicker and far less costly than courts, have expressed alarm at aspects of the Kite case. The National Association of Railroad Referees, a group of railroad industry arbitrators, said in a letter to the district court that the case could have a “chilling effect” on the deliberative process by requiring arbitrators to answer questions about their decisions under oath.
Kite, a conductor and 27-year BNSF employee from southwestern Washington, was fired by BNSF in 2005 after failing a random blood alcohol test. Company policy mandated dismissal of employees with two positive tests within 10 years; the company claimed Kite had previously tested positive in 1997.
Union fought discharge
His case was assigned to mandatory arbitration under federal law after the United Transportation Union unsuccessfully fought his discharge within the BNSF internal dispute resolution system.
Zimmerman, an experienced public employee labor negotiator from Illinois who operated a private arbitration practice, was appointed by the federal National Mediation Board to hear the case. Schollmeyer and Boldra presented evidence to her in writing and in oral argument.
Her conclusion: Kite reported for work under the influence in 2005, but the purported 1997 violation was not fully documented. In a November 2008 draft decision, she proposed treating Kite as a first-time offender, reinstating him without back pay. She circulated the draft and invited Boldra and Schollmeyer to convene in a phone conference before she made it final.
At the February 2009 telephone conference, Boldra strongly objected to Kite’s proposed reinstatement. According to Boldra’s written statement, Zimmerman stuck to her guns and indicated she was inclined to finalize her draft.
Boldra, according to his statement for the district court, then said this:
“I then reminded her of what I said at the oral argument: allowing a second-violation employee back to work would create an emotional response from the carrier, and that I didn’t know how I could have made that point any clearer unless I’d said, ‘you won’t be able to work in the industry if you make decisions like that.’”
Arbitrator bows out
In April 2009, Zimmerman stepped aside, clearing the way for the case to be assigned to another arbitrator, who sided with BNSF. Later in 2009, Zimmerman resigned from serving as a neutral arbitrator through the mediation board, and accepted a job as head of the Illinois Labor Relations Board, where she had worked many years as general counsel earlier in her career. She has since returned to private practice.
Kite and the union filed suit in November 2010 in U.S. district court claiming that BNSF had corrupted the system. The court threw out the lawsuit saying it had no power to review Zimmerman’s arbitration award because it had not been finalized. A federal appeals court disagreed.
“If Boldra as a high ranking railway official … made such a statement and intended it as an economic threat against Zimmerman if she did not change the outcome … then Boldra committed an act of attempted extortion and impaired the integrity of the arbitral process,” a panel of the 9th U.S. Circuit Court of Appeals held in 2013. The case was sent back to the district court to allow the union the chance to prove corruption.
Kite’s attorneys have characterized the remark as “an extortionate threat from an angry partisan,” and accused Zimmerman of “a failure of nerve” for not upholding the draft award.
“The only conflict of interest Ms. Zimmerman had was her own secret one —her interest in receiving continued appointments on BNSF grievance matters versus deciding Kite’s case on merit,” attorney Stephen Thompson asserted in a court filing.
Zimmerman said in her deposition this April that she resigned because she had been put in an untenable position. She said she originally believed there was enough evidence to support Kite’s dismissal but that she drafted the award to reflect a compromise she believed the railroad and union had reached to resolve the case. She indicated that she felt BNSF was trying to disavow that agreement, while the union was pushing her to enforce it, leaving her with no choice but to resign from the case.
“The two parties were so entrenched in their positions that they were not going to accept any award I wrote on my own as fair and impartial,” she said in the deposition.
“I felt that the cleanest, best, most ethical thing in this case would be for the case to be heard by somebody with no prior knowledge of any of this, to just get the record and make a decision,” she said.
Zimmerman said she did not consider Boldra’s comment to be a threat but rather “a statement of common knowledge within the industry” that “an employee who blows his second chance is going to be subject to dismissal.”
“Obviously Mr. Boldra’s statement was not quite as tactful as it might have been,” she said. “I’m sure if he were sitting here today he would phrase it a little differently.”
There are few arbitration forums and usually they are the choice of the business that prepares the contract. The individual, consumer or investor is often left at the mercy, and the arbitrators may feel that it is better business to side with the party who chose the arbitrator forum and is likely to bring more cases to the forum. While the finra arbitration forums are designated in the case of industry disputes in my practice, it is still an ongoing process to make the arbitration process as fair as it can be. For more info about my thoughts, fee free to reach out.
What is for the birds is the attendance policy! The company officials get every other weekend off and work set hours but yet the policy doesn’t apply to them but we are agreement employees not company employees our agreement says one day in 30 to protect or job but that’s no good they force a policy that there employees don’t even follow we can only get 6 days or two weekends in 3months we are on call 24/7 with 10 hours off between work times no days off that not even fair I guess we aren’t allowed to get sick or have doctor appointments or God forbid we spend time with our kids this is bs not to even mention about them not paying us the money we are due with valid time claim I argued with time keeping over a claim he told me yes it’s a valid claim but I am not gonna pay it I will never see that money since we can’t strike there is nothing we can do they do what they want with no repercussions this shit has to stop seriously
i know what the person is talting about . i went to the law board in chicogo il and there was eight guys trying to get are jobs back . 7 got their jobs i did not the utu feed me to the lions to bring back the other seaven. then the vice locol chariman for utu 1846 trund me in to the union pacific railroad now i can not get a job any where. the up has destoryed my life.i was only helping my mom with doc. appotments. the up did give me fmla no med leav and when i used my vaction they said no you can not do that and fried me for not protecting my job.this was after they had maid me get weight loss sergery are they where going to fire meand the up did it any ways. the up said all i had to do was lose a go amout of weight and everything would be ok i got down to 170 and im 6foot 2 i weigh as much as most og the oficers.
As a general chairman for the Machinists union for several years I presented nearly 100 cases before an arbitrator, not once was I consulted prior to the Arbirtators issuance of an award. Once the Awrd is issued with the Arbitrator’s signature it becomes final with one more signature, that of the union rep or the labor relations representative. The process described above is highly unusual in my experience.
I am a former Trainmaster/Conductor that was fired from BNSF recently. I am a 100% disabled combat veteran and did not ask for concessions to provide me with specific accommodations but they fired me nonetheless. I filed a complaint with EEOC and state HR agency for resolution but I’ve seen the way the railroad operates and know what they are capable of……so fingers crossed.
In 2012 I was terminated from the railroad. This was retaliation for not providing the carrier with information on a fellow coworker. They could not fire him so then they dug into my Facebook account until they found an on duty time that correlated with a Facebook time stamp. I repeatedly expressed my innocence and the case was arbitrated in Fl and I lost. 8 years with BNSF of blood sweat and tears. They used me then abused me and it was wrong. No further actions was available for me. General chairman expressed his apolgies and that was it.
I went through a similar case with said railway. Corruption is deep in the ranks in Ft. Worth. They would rather lie then tell, the truth. And have been caught more times then I can count, lying in court, and under oath. Dirty business, and in a Railroad town, like Ft. Worth you can not win in court.
What I was told 3 years ago before I retired. Was that they no longer care about your family, your health. All they want to do is fight with every employees
I have fought BNSF (and BN) for 38 years. The RR has sunk to “New Lows” in its mistreatment and hostility towards its workers ever since Warren Buffett’s henchmen took over BNSF.
The RR’s own discipline manual for officers instructs them to DESTROY all notes that document company disciplinary investigation of employees. Computer policies automatically destroy email evidence after 46 days.
It is impossible to stop the abuses of this RR unless some Court is willing to listen.
A federal court in Seattle DID listen two months ago, assessing $1.66 million against BNSF for wrongfully firing Curtis Rookaird, a conductor who took time to inspect hazmat tank cars.
BNSF officials should be prosecuted for their testimony in that case; the jury did all it could awarding punitive damages; but even punitive damages won’t stop the Evil Empire Builder from continuing its abusive tactics.
Bill Jungbauer
My job is going through arbitration now even though it was clean cut case where I ask my forman to go home in a text message after quiting hours and he text back yes my roadmaster still fired me because he didn’t like me I have 24 years he had 8 at the time I been out of work for 2 years and I’m worried I might not get back ….
Railroads classically have not been about integrity. The system needs to be changed to stop this from happening again. A classic case to show the unfairness. Arbitration just is not fair and this is only one such case how many more exist. The raillway labor act is outdated and needs to be amended to protect today’s railroaders from unfairness. These workers too should be protected from whistleblower. That way the railway labor act is written the company just uses it to say they simply don’t have to follow any whistleblower provisions. Several people have been denied their jobs back by rail arbitrators and later OSHA overturns that, yet the railroad simply does not follow OSHA provisions cause their not mentioned in the railway labor act.
It seems to me that Zimmerman was testing the waters with her proposal ruling. She should have had the fortitude to go with a final ruling and let the cards fall. The system is flawed as carriers are able to influence arbitrators. There needs to be changes in the system to prevent this.
After working for Kcs 16 yrs 3 strikes in 3 years I was out….. 1 switch ( both our faults) , 1st time late (schedule change after 3 years) , derailment that was not my fault…. Level of discipline is not equal to everyone….
This is all to common in the rail industry as I was involved in this process for more than 15 years.
The SCOTUS should overturn case law that makes everything a minor dispute and let Courts hear arbitration cases as to the merits.
The Carriers have destroyed the “major dispute process” at the Courthouse and for the past 20 years have been attempting to destroy the “minor dispute process” in arbitration.
While I was General Chairman, I had cases originally filed in 2001 and they still have not been resolved.
If the law was changed to the effect that if a minor dispute was not resolved in 3-6 months, it automatically, as a matter of law, it becomes a major dispute.
This shouldn’t shock anyone. BNSF has a history of doing this to employees. If they don’t like you and you have character and integrity they will find a way to push you out to include trumped up complaints and accusations. EEOC take notice.
I too was fired from the railroad and the arbitrator sided with the carrier after being told by my union local chairman that I would get my job back. My case was clear threat and retaliation due to me not giving up information to help them fire a fellow union brother. I worked at BNSF for 8 years and lost my job Aug 3rd 2012. No where to turn and no one to help.