Chicago & North Western Ry. Co. v. Order of Rail. Tel.

• Decision Date: 13 March 1959
• Docket Number: 12455.,No. 12435,12435
• Citation: 264 F.2d 254
• Parties: CHICAGO & NORTH WESTERN RAILWAY COMPANY, a corporation, Plaintiff-Appellee, v. ORDER OF RAILROAD TELEGRAPHERS, a voluntary association, et al., Defendants-Appellants. CHICAGO & NORTH WESTERN RAILWAY COMPANY, a corporation, Plaintiff-Appellant, v. ORDER OF RAILROAD TELEGRAPHERS, a voluntary association, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

264 F.2d 254 (1959)

CHICAGO & NORTH WESTERN RAILWAY COMPANY, a corporation, Plaintiff-Appellee, v. ORDER OF RAILROAD TELEGRAPHERS, a voluntary association, et al., Defendants-Appellants.

CHICAGO & NORTH WESTERN RAILWAY COMPANY, a corporation, Plaintiff-Appellant, v. ORDER OF RAILROAD TELEGRAPHERS, a voluntary association, et al., Defendants-Appellees.

Nos. 12435, 12455.

United States Court of Appeals Seventh Circuit.

March 13, 1959.

Alex Elson, Chicago, Ill., Lester P. Schoene, Washington, D. C., Aaron S. Wolff, Chicago, Ill., Schoene & Kramer, Washington, D. C., of counsel, for Order of Railroad Telegraphers.

Carl McGowan, Edgar Vanneman, Jr., Jordan Jay Hillman, Chicago, Ill., Roland D. Whitman, Ross, McGowan & O'Keefe, Chicago, Ill., of counsel, for Chicago & N. W. R. Co.

Charles H. Weston, Department of Justice, Washington, D. C., Victor R. Hansen, Asst. Atty. Gen., Kenneth F. Burgess, Chicago, Ill., Herman L. Bode, Asst. Atty. Gen., Pierre, S. D., Howard Neitzert, Walter J. Cummings, Jr., Robert Diller, William K. Bachelder, Sidley, Austin, Burgess & Smith, Chicago, Ill., of counsel, amici curiæ.

Before DUFFY, Chief Judge, and PARKINSON and KNOCH, Circuit Judges.

KNOCH, Circuit Judge.

These two appeals arise out of the same proceeding below, and, by agreement of the parties, were heard together by this Court. In No. 12435, the defendants-appellants, hereinafter referred to as the "Union", have appealed from an order of the District Court entered on August 20, 1958, restraining the Union from striking; the orders of August 22 and 27, 1958, extending the restraining order of August 20, 1958; that portion of the decree entered September 8, 1958, restraining the defendants from striking until midnight, September 19, 1958; and the order of September 16, 1958, entered pursuant to Rule 62(c) of the Federal Rules of Civil Procedure, 28 U.S.C.A., restraining any strike pending appeal. In No. 12455, the plaintiff-appellant, hereinafter referred to as "North Western", has appealed from that portion of the September 8, 1958 decree denying any injunctive relief beyond September 19, 1958, and dismissing its complaint.

The contested issues are set forth with many variations by the parties. However, our decision that North Western is entitled to a permanent injunction is dispositive of the entire matter. The controlling issue may be stated simply as follows:

May the employees of North Western, represented by the Union, lawfully strike to enforce a demand that positions held by such employees on December 3, 1957, shall be abolished only by agreement between North Western and the Union?

The facts are that North Western's stations, laid out a short distance apart many years ago to accommodate the horse-drawn vehicles of that day, have been so affected by the changes in transportation, including the hard roads, telephone and automobile, that many station agents were receiving a full day's pay for twelve to thirty minutes' work, although North Western was in serious need of funds to raise its service and equipment to a level at which it could compete not only with other railroads but with all other modern forms of transportation.

As a part of a modernization program to meet competition, North Western formulated its "Central Agency Plan", under which the service area of certain station agents was extended to include a neighboring station or stations without any curtailment of service to shippers.

North Western filed petitions for authority to effectuate the Central Agency Plan with the public utilities commissions of South Dakota, Iowa, Minnesota and Wisconsin. In South Dakota, the Public Utilities Commission held hearings at various points throughout the State over a period of about two months. The Union appeared in the proceedings to protest the granting of the authority sought; presented evidence; participated in filing briefs with, and in oral argument before, the Commission. The Commission found that the Central Agency Plan was required in the public interest, granted North Western the authority sought, and directed the Plan be made effective forthwith. The same procedure was followed in Iowa with a similar authorization granted by the Iowa State Commerce Commission. Hearings have been held before the Minnesota and Wisconsin Commissions, but determinations are still awaited.

In the Commission proceedings, the Union took the position that the Central Agency Plan could not be put into effect without agreement of the Union under the existing collective bargaining contracts. However, a few weeks after North Western filed its first petition in South Dakota, the Union sent North Western letters under Section 6 of the Railway Labor Act (45 U.S.C.A. § 151 et seq.) requesting that the existing collective bargaining agreements be amended by adding the following provision:

"No position in existence on December 3, 1957, will be abolished or discontinued except by agreement between the Carrier and the Organization."

North Western informed the Union that it did not consider this proposal for a change in the contracts to be legally within the scope of Sec. 6 of the Railway Labor Act. Thereafter the Union invoked mediation under the Act. The National Mediation Board began mediation proceedings. The Board, on May 27, 1958, requested the parties to arbitrate. On May 28, 1958, the Union declined, and, on June 12, 1958, North Western declined. On June 16, 1958, the Board closed its files.

The Board Chairman and Chief Executive Officer of North Western indicated a willingness to discuss means of cushioning the economic impact of abolition of positions, as had been undertaken in a supplemental Unemployment Benefits Agreement with most of the other non-operating railroad unions who had been affected by reductions in force. North Western's Chairman expressed a continuing willingness to discuss that type of agreement, including such matters as severance pay, transition of employees from non-productive to productive employment and the like. The Union's President expressed an opinion that the Agreement was inadequate, but offered no proposals for alteration in its terms. The Union offered no modification or reduction in its proposed change to the existing contract.

North Western received notice, on August 14, 1958, of a threatened strike by the Union from the National Mediation Board. The Board offered its mediation services in the dispute. Both parties accepted and the case was docketed.

On August 18, 1958, the Union issued a strike call to its members for 6 o'clock A.M. on August 21, 1958, which read in part:

"The Issues.

"On July 10, 1957, we submitted to the membership on the Chicago & North Western System a strike ballot seeking the views of the membership as to whether a strike should be authorized if necessary to secure a satisfactory settlement of the dispute arising from our proposal to add to existing agreements the following rule:

"`No position in existence on December 3, 1957, will be abolished or discontinued except by agreement between the Carrier and the Organization.\'

"In the circular we summarized the circumstances giving rise to the urgent need for such a rule. We pointed out the general onslaught of this Carrier on the employment of the people we represent, and particularly the system-wide, wholesale elimination of agency positions and enlargement of assignments of the remaining agents. We recited the brutal conduct of the carrier in South Dakota in abolishing 53 positions and enlarging the assignments of 16 others, all in one day, before we even had notice of the Order of the South Dakota Commission under which the Carrier purported to act. We also told you of our strenuous, patient, but futile efforts to correct the situation under the Railway Labor Act and in the Courts.

"The need for the proposed rule has again been tragically demonstrated in the last few days. What happened in South Dakota was repeated in Iowa, except that this time 70 positions were abolished and 27 assignments enlarged.

"The vote on the strike ballot was almost unanimous in favor of a strike. The time has come to act in accordance with that vote."

On August 19, 1958, Mediator Wallace Rupp came to North Western. He talked with North Western's Director of Personnel. The latter suggested that, without prejudice to North Western's position regarding the illegality of the proposed contract change, "* * * there was a possibility of settling the entire question involving the proposed rule on the railroad by working out an arrangement for limiting the number of lay-offs per year to an agreed upon percentage of the total number of jobs of the Union, over and above the reduction in the number of such employees by attrition." Rupp left to talk with representatives of the Union with the understanding that if they were interested in the Director's proposal, he would call him the following morning. Rupp did not call. The Board closed its file on August 20, 1958, stating its services continued available if desired.

North Western then filed this action in injunction. The District Court issued a temporary restraining order which was continued through the hearing on the merits. On September 8, 1958, after hearing the evidence and arguments of counsel, the District Court filed findings of fact and conclusions of law, and entered a decree enjoining the Union from striking...