Railway Labor Executives' Ass'n v. I.C.C.

• Decision Date: 16 April 1991
• Docket Number: No. 90-3621,90-3621
• Citation: 930 F.2d 511
• Parties: 137 L.R.R.M. (BNA) 2074, 119 Lab.Cas. P 10,789 RAILWAY LABOR EXECUTIVES' ASSOCIATION, and United Transportation Union, Petitioners, v. INTERSTATE COMMERCE COMMISSION, and United States of America, Respondents, CSX Transportation, Inc., and Wilmington Terminal Railroad, Inc., Intervenors.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 511

930 F.2d 511

137 L.R.R.M. (BNA) 2074, 119 Lab.Cas. P 10,789

RAILWAY LABOR EXECUTIVES' ASSOCIATION, and United Transportation Union, Petitioners, v. INTERSTATE COMMERCE COMMISSION, and United States of America, Respondents CSX Transportation, Inc., and Wilmington Terminal Railroad Inc., Intervenors.

No. 90-3621.

United States Court of Appeals Sixth Circuit.

Argued March 21, 1991.

Decided April 16, 1991.

L. Pat Wynns, John O'B. Clarke, Jr. (argued), Highsaw, Mahoney & Clarke, Washington, D.C., for petitioners.

Robert S. Burk, Louis Mackall (argued), I.C.C., Office of the Gen. Counsel, Washington, D.C., for I.C.C.

Robert J. Wiggers, U.S. Dept. of Justice, Antitrust Div., Cathrine G. O'Sullivan, U.S. Dept. of Justice, Anti-Trust Div., Appellate Section, Washington, D.C., for U.S.

Donald G. Avery, Kelvin J. Dowd, Slover & Loftus, Washington, D.C., for Wilmington Terminal R.R., Inc.

Ronald M. Johnson (argued), Akin, Gump, Strauss, Hauer & Feld, Washington, D.C., Nicholas S. Yovanovic, CSXT Transp., Inc., Law Dept., Jacksonville, Fla., Lawrence H. Richmond, CSX Transp., Inc., Baltimore, Md., for CSX Transp., Inc.

Before MILBURN and BOGGS, Circuit Judges, and GILMORE, District Judge ^*.

MILBURN, Circuit Judge.

Petitioners Railway Labor Executives' Association and United Transportation Union ("Rail Labor") seek review of an Interstate Commerce Commission ("ICC") decision which approved the sale and lease of a line of track and certain railroad equipment by one railroad to another without requiring the buyer, as a condition of its purchase, to negotiate with and hire the seller's employees who worked that line of track. For the reasons that follow, the petition for review is denied and the decision of the ICC is affirmed.

I.

CSX Transportation, Inc. ("CSXT") is a large Class I railroad which operates over 19,000 miles of rail lines. It decided to sell and lease approximately 224 miles of track and certain railroad equipment to Wilmington Terminal Railroad, Inc. ("WTR"), a tiny Class III short line carrier which operates approximately four miles of track and has only four employees. CSXT's 30,000 employees are unionized, but WTR's employees are not unionized. As a result of this sale, CSXT expects to terminate fifty-three employees and WTR expects to add forty-four to its work force.

Under the Interstate Commerce Act, particularly 49 U.S.C. Secs. 11343 and 11347, the ICC must approve any such transaction between railroads, and in so doing it must require each railroad "to provide a fair arrangement ... protective of the interest of employees who are affected by the transaction...." 49 U.S.C. Sec. 11347. The ICC normally meets this obligation to protect employee interests by predicating its approval of the transaction on certain "conditions." These vary according to the kind of transaction under consideration, but in line sale cases the statutory "fair arrangement" standard is usually met by the imposition, with certain exceptions, of the ICC's so-called New York Dock conditions, a set of labor protective conditions established in New York Dock Railway--Control--Brooklyn Eastern District Terminal, 360 I.C.C. 60, aff'd sub nom. New York Dock Railway v. United States, 609 F.2d 83 (2d Cir.1979). Substantially similar conditions for the protection of labor are imposed by the ICC as a condition precedent to lease transactions. Mendocino Coast Ry.--Lease and Operate--California W.R.R., 354 I.C.C. 732 (1978), modified, 360 I.C.C. 653 (1980), aff'd sub nom. Railway Labor Executives' Ass'n v. United States, 675 F.2d 1248 (D.C.Cir.1982).

The New York Dock and Mendocino conditions, with certain exceptions, were imposed by the ICC in this case. Rail Labor challenges the particular application of those conditions and argues that they fall short of the "fair arrangement" specified in 49 U.S.C. Sec. 11347.

In imposing the New York Dock and Mendocino conditions ¹ with certain exceptions, the ICC required CSXT and WTR to negotiate with and protect their own employees but not their counterpart's employees. Rail Labor objected and argued that the New York Dock conditions should be construed in line sale cases to require negotiations between both railroads and their employees to work out an "umbrella" implementing agreement under which CSXT employees could "follow the work" to WTR and become its employees. Under Rail Labor's conception of the transaction, WTR should have been required to hire dismissed CSXT employees on a preferential basis and take them subject to all of the rights, privileges and protections they had acquired under their collective bargaining agreements ("CBAs") with CSXT.

However, to Rail Labor's dismay, the ICC began its discussion in this case by specifically overruling Brandywine Valley Railroad Co.--Purchase--CSX Transportation, Inc., 5 I.C.C. 2d 764 (1989), appeal pending, No. 89-1503 (D.C.Cir. filed Aug. 21, 1989), the only precedent the ICC had ever set for the proposition that an "umbrella" implementing agreement--one reached by all the railroads and their employees--was required in line sale cases. In overruling Brandywine, the ICC rejected Rail Labor's interpretation of section 11347 and held that WTR need not negotiate with CSXT's employees, need not hire them on a preferential basis, and, as to any actually hired, need not recognize their unions or their collective bargaining agreements with CSXT.

The result was to leave all of CSXT's employees fully possessed of their rights and privileges under their CBAs with CSXT. Any of the CSXT employees affected by the sale or lease could exercise their seniority and "bumping" rights under their agreements. Additionally, any CSXT employee on the bottom rung of the ladder who was displaced or dismissed would be eligible to receive New York Dock and Mendocino financial benefits from CSXT, benefits which protect 100 percent of the employee's earnings for up to six years. Since none of WTR's employees would lose his or her job as a result of WTR's line purchase and lease transaction, the transaction would have no impact on them or their relationship with WTR.

The issues in this case are whether the ICC exceeded its statutory authority (1) in declining to require WTR to hire CSXT's employees on a preferential basis, (2) in declining to require WTR to recognize and adhere to whatever contractual and collective bargaining rights the former CSXT employees had negotiated with CSXT, and (3) in declining to impose a requirement that WTR negotiate with CSXT's affected employees concerning their employment on WTR's lines.

II.

A.

The Administrative Procedure Act provides that "the reviewing court shall decide all relevant questions of law" and shall set aside any agency action found to be "short of statutory right." 5 U.S.C. Sec. 706. Rail Labor insists that the ICC failed to accord CSXT's employees their rights under 49 U.S.C. Sec. 11347.

When reviewing an agency's interpretation of a statute which the agency has primary responsibility for administering, we follow the guidelines set out in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984):

When a court reviews an agency's construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

Id. (footnotes omitted). We also recognize that a special deference is due the administrative interpretation of a statute "when an interpretation of a statute involves the reconciliation of conflicting policies." Wayside Farm, Inc. v. United States Dept. of Health & Human Servs., 863 F.2d 447, 451 (6th Cir.1988). Therefore, we will accept an agency's construction of its own statute unless that construction is plainly "unreasonable." Id. at 452.

B.

The ICC determined that WTR need not give hiring priority to former CSXT employees when WTR increased its work force as the result of its new acquisition. Rail Labor argues that this decision left CSXT employees short of the protections required in 49 U.S.C. Sec. 11347, which in relevant part provides:

When a rail carrier is involved in a transaction for which approval is sought ..., the Interstate Commerce Commission shall require the carrier to provide a fair arrangement at least as protective of the interest of employees who are affected by the transaction as the terms imposed under this section before February 5, 1976, and the terms established under section 405 of the Rail Passenger Service Act (45 U.S.C. 565).

Thus, it is clear that the protective provisions of section 11347 come from two sources; viz., (1) the protections imposed by the ICC under section 11347 before February 5, 1976, and (2) the protections established by section 405 of the Rail Passenger Service Act, 45 U.S.C. Sec. 565. In New York Dock Railway v. United States, 609 F.2d 83, 94 (2d Cir.1979), the court agreed with the ICC's interpretation that the phrase "terms imposed under this section before February 5, 1976" refers to section 11347's predecessor statute, 49 U.S.C. Sec. 5(2)(f). Section 5(2)(f), like section 11347, imposed on the ICC the duty to condition its approval of certain transactions on the arrangements made to protect affected employees:

As a condition of its approval,...