International Association of Machinists v. Central Airlines, Inc, AFL-CIO

• Decision Date: 15 April 1963
• Docket Number: No. 61,AFL-CIO,61
• Citation: 10 L.Ed.2d 67,83 S.Ct. 956,372 U.S. 682
• Parties: INTERNATIONAL ASSOCIATION OF MACHINISTS,, et al., Petitioners, v. CENTRAL AIRLINES, INC
• Court: U.S. Supreme Court

372 U.S. 682

83 S.Ct. 956

10 L.Ed.2d 67

INTERNATIONAL ASSOCIATION OF MACHINISTS, AFL-CIO, et al., Petitioners,

v CENTRAL AIRLINES, INC.

No. 61.

Argued Feb. 19 and 20, 1963.

Decided April 15, 1963.

Rehearing Denied May 27, 1963.

See 373 U.S. 947, 83 S.Ct. 1533.

Charles J. Morris, Dallas, Tex., and Bernard Dunau, Washington, D.C., for petitioners.

Luther Hudson, Fort Worth, for respondent.

Mr. Justice WHITE delivered the opinion of the Court.

The respondent airline discharged the six individual petitioners in April 1958 after they refused to attend disciplinary hearings without having a union representative present. The petitioning union and the employees ini- tiated grievances over these discharges, which were not settled between the parties and which were presented to the system board of adjustment, established by agreement between the union and the airline according to the Railway Labor Act, 44 Stat. 577, as amended, 45 U.S.C. §§ 151—188. The four-man board of adjustment deadlocked, a neutral referee was appointed by the National Mediation Board, and an award was then rendered ordering the individual petitioners reinstated without loss of seniority and with back pay. Central refused to comply and petitioners filed this suit in the United States District Court for the Northern District of Texas for enforcement of the award.

The complaint recited the certification of the union as the collective bargaining agent by the National Mediation Board pursuant to an election held under the Railway Labor Act, disclosed the execution of a collective bargaining contract with the company, and attached as an exhibit a copy of another contract with Central establishing a system board of adjustment. This contract stated, 'In compliance with Section 204, Title II of the Railway Labor Act, as amended, there is hereby established a system board of adjustment for the purpose of adjusting and deciding disputes * * *.' Under the express terms of the contract, 'decisions of the Board in all cases properly referable to it shall be final and binding upon the parties' and, when a neutral referee is sitting with the board, 'a majority vote of the Board shall be final, binding, and conclusive between the Company and the Association and anyone they may represent having an interest in the dispute.' The complaint set out in some detail the action and decision of the system board and a copy of its award was attached. Alleging that Central had refused to comply with the terms of the award and that the suit 'arises under the laws of the United States, specifically under the Railway Labor Act as set out more particularly hereinabove,' petitioners requested the 'enforcement of the aforesaid System Board Award * * * and that judgment to entered ordering defendant to comply with said award * * *.'

Although the gist of the complaint was that Central was obliged to comply with the award by reason of the Railway Labor Act, the District Court granted Central's motion to dismiss for lack of jurisdiction, concluding that there was no diversity of citizenship (which was not disputed) and that the case did not arise under the laws of the United States as required by 28 U.S.C. § 1331. ¹ The Court of Appeals for the Fifth Circuit affirmed on the authority of its previous decision in Metcalf v. National Airlines, 271 F.2d 817, ruling that the complaint did not disclose 'affirmatively a federally-created cause of action' and that 'this suit is nothing more than a state-created action to construe a contract.' 295 F.2d 209. Certiorari was granted to consider the important question of whether a suit to enforce an award of an airline system board of adjustment is a suit arising under the laws of the United States under 28 U.S.C. § 1331 or a suit arising under a law regulating commerce under 28 U.S.C. s 1337.² 369 U.S. 802, 82 S.Ct. 642, 7 L.Ed.2d 549. We have concluded that this question must be answered in the affirmative and that the District Court has jurisdiction to proceed with the suit.

I.

In 1936, Congress extended the Railway Labor Act to cover the then small-but-growing air transportation industry. 49 Stat. 1189, 45 U.S.C. §§ 181—188. Its general aim was to extend to air carriers and their employees the same benefits and obligations available and applicable in the railroad industry.³ But there was to be a significant variation. The 1936 amendments made applicable to the airlines all of the provisions of the Railway Labor Act, excepting § 3, 45 U.S.C. § 153, dealing with the National Railroad Adjustment Board; but including § 1, 45 U.S.C. § 151, containing definitions; § 2, 45 U.S.C. § 151a, the Act's statement of purposes; §§ 4 and 5, 45 U.S.C. §§ 154—155, relative to the National Mediation Board and its functions; and §§ 7, 8 and 9, 45 U.S.C. §§ 157—159, relating to voluntary arbitration and emergency boards. § 202, 45 U.S.C. § 182. In the place of § 3, Congress provided in § 205, 45 U.S.C. § 185, that the creation of a National Air Transport Board would be postponed until 'in the judgment of the National Mediation Board, it shall be necessary to have a permanent national board of adjustment * * *.' Until the establishment of the national board for the airlines industry, § 204, 45 U.S.C. § 184, required the formation of system, group, or regional boards of adjustment:

'It shall be the duty of every carrier and of its employees, acting through their representatives, selected in accordance with the provisions of sections 181—188 of this title, to establish a board of adjustment of jurisdiction not exceeding the jurisdiction which may be lawfully exercised by system, group, or regional boards of adjustment, under the authority of section 153 of this title.'

The duty imposed upon the parties to create adjustment boards to settle grievances was more than a causal suggestion to the air industry. The original version of S. 2496, which, as amended, became law, provided for voluntary boards of adjustment as in the case of the railroads and extended the jurisdiction of the National Mediation Board to minor as well as major disputes.⁴ But upon the suggestion of the National Mediation Board, its jurisdiction was not expanded, and the law as finally passed made compulsory the establishment of the adjustment boards.⁵ Until and unless the National Mediation Board determined to create a national board, the parties were placed under the statutory duty of establishing and utilizing system, group, or regional boards of adjustment for the purpose of adjusting and deciding disputes arising under existing contracts.

The obligation which § 204 fastened upon the carriers and their employees cannot be read in isolation. Its true significance must be drawn from its context as part of the Railway Labor Act which itself draws meaning from its history.⁶ See Romero v. International Term. Co., 358 U.S. 354, 360, 79 S.Ct. 468, 473, 3 L.Ed.2d 368.

Congress has long concerned itself⁷ with minimizing interruptions in the Nation's transportation services by strikes and labor disputes and has made successive attempts to establish effective machinery to resolve disputes not only as to wages, hours, and working conditions, the so-called major disputes connected with a negotiation of contracts or alterations in them, but also as to the interpretation and application of existing contracts, the minor disputes of the type involved in this case. In 1920,⁸ the latter category was dealt with by providing that the parties 'may' create boards of adjustment to handle these grievances which, however, if unresolved by these boards were to be referred to the Railway Labor Board whose decisions were not legally enforceable.⁹ The results were highly unsatisfactory,¹⁰ and in 1926 Congress required that 'Boards of adjustment shall be created by agreement.' ¹¹ The boards were to be composed of an equal number of employee and employer representatives and their decisions were to 'be final and binding on both parties to the dispute; and it shall be the duty of both to abide by such decisions.'¹²

In spite of the mandate of the 1926 Act, creation of adjustment boards did not automatically follow. Furthermore, there was no provision in the Act for breaking deadlocks of the board, which were frequent and which resulted in a myriad of minor disputes going unresolved. As a result, see Elgin, J. & E.R. Co. v. Burley, 325 U.S. 711, 725—726, 65 S.Ct. 1282, 1291, 89 L.Ed. 1886, in 1934 the Act was amended to create the National Railroad Adjustment Board, the divisions of which were to hear disputes referred by either party and 'growing out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions.' § 3, 45 U.S.C. § 153, First (i). In the event of deadlocks in a division, the National Mediation Board was required to name a neutral referee to sit with the appropriate division of the Board to determine the case. § 3, First (l). It was provided in § 3, First (m) that 'the awards of the several divisions of the Adjustment Board shall be stated in writing * * * and the awards shall be final and binding upon both parties to the dispute, except insofar as they shall contain a money award. * * *' Section 3, First (p) provided for a suit in the United States District Courts to enforce certain awards.

While thus establishing a National Adjustment Board with power to make final awards with the help of neutral persons where necessary, Congress also provided in § 3, Second for voluntary system boards:

'Nothing in this section shall be construed to prevent any individual carrier, system, or group of carriers and any class or classes of its or their employees all acting through their representatives, selected in accordance with the provisions of this chapter, from mutually agreeing to the establishment of system, group, or regional boards of adjustment for the purpose of adjusting and deciding disputes of the character specified in this section. In...