Brotherhood of Ry. and S. S. Clerks, Freight Handlers, Exp. and Station Emp., Lodge 364 v. State by Balfour

• Decision Date: 28 February 1975
• Docket Number: Nos. 44750,44760,s. 44750
• Citation: 303 Minn. 178,229 N.W.2d 3
• Parties: , 16 Fair Empl.Prac.Cas. (BNA) 1541, 9 Empl. Prac. Dec. P 10,011 BROTHERHOOD OF RAILWAY AND STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS AND STATION EMPLOYEES, LODGE 364, Appellant, Burlington Northern, Inc., Appellant, v. STATE of Minnesota, By Conrad BALFOUR, Commissioner, and His Successor, SamuelL. Richardson, Commissioner, Department of Human Rights, Respondents.
• Court: Minnesota Supreme Court

Page 3

229 N.W.2d 3

303 Minn. 178, 16 Fair Empl.Prac.Cas. (BNA) 1541,

9 Empl. Prac. Dec. P 10,011

BROTHERHOOD OF RAILWAY AND STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS AND STATION EMPLOYEES, LODGE 364, Appellant Burlington Northern, Inc., Appellant, v. STATE of Minnesota, By Conrad BALFOUR, Commissioner, and His Successor, SamuelL. Richardson, Commissioner Department of Human Rights, Respondents.

Nos. 44750, 44760.

Supreme Court of Minnesota.

Feb. 28, 1975.

Rehearing Denied May 1, 1975.

Syllabus by the Court

1. The scope of review by the district court of the findings of fact and conclusions of law of a Department of Human Rights hearing examiner is defined by Minn.St. 15.0425.

2. Settlement agreements negotiated between union and railroad representatives which provided for the admittance into the union of two black railroad employees were discriminatory in that an unfair seniority date and a lower pay rate were established.

3. The type of discrimination contained within the settlement agreements was continuing in nature, having a past and present effect upon the employees involved.

4. The Department of Human Rights is not estopped from reexamining and reopening the 1958 and 1960 settlement agreements as its predecessor agency, the Fair Employment Practices Commission, did not consider the discriminatory impact of those agreements. Neither the union nor the railroad has shown any prejudice resulting from the present scrutiny of the past agreements and the equitable elements required for invoking an estoppel are lacking.

5. Since the acts of discrimination were continuing in nature, the present proceeding is not barred by the 6-month statute of limitations contained in Minn.St. 363.06, subd. 3.

6. The broad powers granted hearing examiners by Minn.St.1965, § 363.07, subd. 4, to order affirmative action includes the power to award backpay.

7. By application of our statute of limitations for wage claims, Minn.St. 541.07(5), the award of backpay is limited to 2 years prior to the filing of the 1966 charges.

8. The hearing examiner's conclusion regarding the contribution obligation of the railroad is supported by substantial evidence and is not arbitrary or capricious. The district court erred in setting aside this determination. Therefore, we hold that the order of the hearing examiner limiting contribution by the railroad to backpay wages due within 6 months of the filing of the petition should be reinstated.

Hvass, Weisman & King, Si Weisman, and Richard A. Williams, Jr., Minneapolis, for Broth. of Railway and Steamship Clks., etc.

Frank S. Farrell and Reginald Ames, St. Paul, for Burlington Northern, Inc.

Warren Spannaus, Atty. Gen., Peter Sipkins, Solicitor Gen., Bruce W. Okney, Sp. Asst. Atty. Gen., Minneapolis, for respondents.

Heard before SHERAN, C.J., and KELLY and TODD, JJ., and considered and decided by the court en banc.

TODD, Justice.

Petitioners, Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees, Lodge 364 (union), and Burlington Northern, Inc. (railroad), appeal from an order of the district court denying their motions for amended findings of fact, conclusions of law, and order for judgment. The lower court affirmed the conclusion of the hearing examiner, duly appointed by the commissioner of human rights, that the petitioners engaged in unfair discriminatory practices. The lower court also affirmed the granting of remedial relief, consisting of an equalization of seniority rights and the award of backpay to the employees affected by the discrimination, and the hearing examiner's order that petitioners desist from engaging in unfair discriminatory practices against employees of the railroad and members of the union. The lower court modified the hearing examiner's order with respect to the union's right to seek contribution from the railroad, ordering the railroad to contribute 50 percent of the damages awarded. Only the railroad challenges the modification of the order regarding allocation of damages. We affirm as to the establishment of seniority rights and the right to backpay, modify the lower court's backpay These proceedings involve alleged discrimination against two black employees of the railroad, Thomas Shelby and James Walker. With respect to Thomas Shelby, the hearing examiner found that he commenced work with the railroad on January 21, 1953, as a building porter and remained in the employ of the railroad until March 20, 1969, performing work as, among other things, a building porter, a car cleaner, and a news clerk. While working as a building porter, Shelby performed work which was the same as that of a janitor within the scope of the collective bargaining agreement entered into between the railroad and the union in 1946. As a janitor, Shelby was entitled to membership in the union 60 days after he commenced work with the railroad and he should have been required to join the union pursuant to the union shop rule which governed membership in said union. His work as a car cleaner was that of a cleaner within the scope of the collective bargaining agreement.

order by limiting the award of backpay to the 2-year period preceding the date of the filing of the petition, and reinstate the hearing examiner's finding with reference to contribution by the railroad.

In February 1954, Shelby, then a car cleaner, applied for membership in the union. However, the union refused to admit him on the ground that his work was outside the scope of the 1946 agreement. The hearing examiner rejected this argument and found the refusal to be a direct result of racial discrimination. The job classifications as drawn and maintained by the railroad and union were the product of a system designed to perpetuate the racial membership policies of the union. On February 1, 1957, Shelby filed a complaint against the union with the Fair Employment Practices Commission (FEPC) of the State of Minnesota.

On January 15, 1958, the railroad and the union entered into an agreement regarding the inclusion of Shelby within the collective bargaining unit. ¹ The hearing examiner found that the representatives of the union and railroad who negotiated this agreement, as well as the 1946 agreement and one made in 1960 relating to the admission of Walker to membership in the union, were skillful, experienced negotiators who drafted said agreements with full knowledge of the job classfication system utilized by the railroad and the membership policies governing the union. He found that the specific agreements with which this proceeding is concerned were the product of a concerted effort by these negotiators, who knew that the 1958 and 1960 agreements curtailed valuable rights of Shelby and Walker, rights enjoyed by Caucasian members of the union.

Shelby testified that he took no part in negotiating the settlement agreement and that the substance of the agreement was never described to him. He never consented to the terms of the settlement agreement. The hearing examiner found that the FEPC was not acting as an agent for Shelby in negotiating the settlement and could not bind him to the terms of the settlement. The PEPC was apparently satisfied with the agreement and closed its file, marking the case 'satisfactorily adjusted.' The FEPC in 1958 was not empowered to approve the settlement agreement, either by statute or by Shelby. Its functions included hearing Shelby's complaint, but it could only attempt to eliminate discriminatory practices 'by means of education, conference, conciliation, and persuasion.' L.1955, c. 516, § 7, subd. 1(10), Minn.St.1957, § 363.05, subd. 1(10).

The only complaint then before the FEPC was that the union was denying Shelby membership because of his race. Thus, the single goal of the agency was achieved by the inclusion of Shelby within the collective bargaining relationship. The FEPC gave little consideration to other terms of the agreement and failed to examine them for their discriminatory effect.

As a result of the agreement, Shelby found his pay reduced, since the hourly rate negotiated by the railroad and the union was 28 cents per hour less than Shelby was being paid at the time. It is true that Shelby received some fringe benefits, but their value did not equal the amount he lost by the decrease in his compensation. Further, Shelby was granted job seniority as of the date of the agreement, not as of the date of his employment. Moreover, he was 'ringed in' by the provision that if he ever left his job as a cleaner, he would lose his seniority. The examiner found the reduced wage rate and the failure to grant Shelby seniority from the day he was hired to be discriminatory. Shelby, upon being advised of the terms of the agreement, began complaining to union officials about its discriminatory effects. He was later joined in these complaints by James Walker. The record is clear that both employees vigorously asserted their objections to numerous union officials and raised them at open meetings of the union. ² The examiner found that the failure of the union to act upon these complaints was an aspect of racial discrimination.

The situation with respect to James Walker is similar. He commenced work with the railroad in the fall of 1954 and began working as a building porter in the commissary building on February 25, 1955, continuing to work as a building porter until the position was abolished in 1967. The examiner found that be performed the same work as a janitor and that the failure of the union to admit Walker into membership within 60 days of his employment was a result of racial discrimination. On October 3, 1960, Walker was permitted to join the union following intervention by the FEPC. An agreement was reached between the union and the railroad, patterned after the Shelby agreement. As a result of the agreement, Walker's wages were reduced by approximately 25 cents per hour, his seniority was established as of the...