Railway Labor Executives' Ass'n v. CSX Transp., Inc.

• Decision Date: 19 September 1991
• Docket Number: No. 90-7079,90-7079
• Citation: 938 F.2d 224
• Parties: 137 L.R.R.M. (BNA) 2833, 290 U.S.App.D.C. 405, 119 Lab.Cas. P 10,818 RAILWAY LABOR EXECUTIVES' ASSOCIATION, et al., Appellants, v. CSX TRANSPORTATION, INC.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 224

938 F.2d 224

137 L.R.R.M. (BNA) 2833, 290 U.S.App.D.C. 405,

119 Lab.Cas. P 10,818

RAILWAY LABOR EXECUTIVES' ASSOCIATION, et al., Appellants, v. CSX TRANSPORTATION, INC.

No. 90-7079.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 5, 1991.

Decided July 5, 1991.

Rehearing and Rehearing En Banc

Denied Sept. 19, 1991.

John O'B. Clarke, Jr., with whom L. Pat Wynns was on the brief, Washington, D.C., for appellants.

Ronald M. Johnson, with whom T. Jay Thompson was on the brief, Washington, D.C., for appellee.

Before WALD, BUCKLEY, and SENTELLE, Circuit Judges.

Opinion for the court filed by Circuit Judge BUCKLEY.

BUCKLEY, Circuit Judge:

The Railway Labor Executives' Association and thirteen unions representing employees of CSX Transportation, Inc. ("CSXT"), one of the nation's largest railroads, brought an action claiming that the railroad's sale of rail lines prior to the completion of collective bargaining violated the Railway Labor Act, 45 U.S.C. Secs. 151-163 (1988) ("RLA"). The district court (Lamberth, J.) dismissed the unions' complaint. On the authority of Pittsburgh & Lake Erie Railroad v. RLEA, 491 U.S. 490, 109 S.Ct. 2584, 105 L.Ed.2d 415 (1989) ("P & LE "), the court ruled that "the mere ownership and operation of rail lines is not a working condition preserved by the Railway Labor Act status quo" obligation. Transcript of Hearing, May 9, 1990, at 2, reprinted at Joint Appendix ("J.A.") 861. We affirm.

I. BACKGROUND

In 1988, the major rail unions served bargaining notices on most Class I carriers, including CSXT, pursuant to section 6 of the RLA, 45 U.S.C. Sec. 156. The notices called for negotiations over changes that the unions proposed to make to existing collective bargaining agreements. The proposals included successorship clauses--clauses providing that if the carrier sells or otherwise transfers any rail lines, it must require the purchaser or transferee to hire the affected employees and assume their collective bargaining contracts. The notices also sought labor protections and compensation, including penalty pay, for workers adversely affected by the sale, transfer, or abandonment of a line. CSXT's existing contracts did not contain any such provisions.

Along with other Class I carriers, CSXT entered into national bargaining over the section 6 notices. The railroads and unions invoked the services of the National Mediation Board, as provided in section 5 First of the RLA, 45 U.S.C. Sec. 155 First, but to no avail. In April 1990, the parties declined the Mediation Board's offer of arbitration, and on May 3, 1990, the President created an emergency board pursuant to section 10 of the RLA, 45 U.S.C. Sec. 160, to recommend a resolution of the dispute. That was the bargaining posture at the time of the district court's May 9, 1990, ruling. The presidential emergency board issued its report on January 15, 1991. The emergency board's recommendations did not produce a settlement of all issues, and Congress ultimately intervened to avoid a national rail strike. See Pub.L. No. 102-29, 105 Stat. 169 (1991). The results of this lengthy bargaining process are not at issue in the present case.

Our focus is on line sales that CSXT entered into after the unions served their bargaining notices but before the mediation process required by the RLA had been exhausted. In that period, CSXT agreed to sell six marginal lines, amounting to approximately two percent of its rail system, to small, short-line carriers. At least two of the relevant sales agreements required the purchasing carriers to accord hiring rights to certain affected workers, but none obligated the purchaser to assume CSXT's collective bargaining contracts.

Because these transactions involved the purchase of railroad property by other carriers, they could only be consummated with the approval and authorization of the Interstate Commerce Commission ("ICC") pursuant to sections 11343 and 11344 of the Interstate Commerce Act ("ICA"). See 49 U.S.C. Secs. 11343, 11344 (1988). As a condition of such approval, the ICC must ensure that the railroads "provide a fair arrangement ... protective of the interests of employees who are affected by the transaction." Id. Sec. 11347. To satisfy section 11347, the ICC imposes a set of labor protections commonly known as the New York Dock conditions, after 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). See RLEA v. ICC, 930 F.2d 511, 512 (6th Cir.1991).

The ICC eventually approved each of the sales transactions involved here, subject to the New York Dock conditions. See, e.g., Wilmington Terminal R.R.--Purchase & Lease--CSXT, 6 I.C.C.2d 799 (1990), aff'd sub nom. RLEA v. ICC, 930 F.2d 511 (6th Cir.1991); Brandywine Valley R.R.--Purchase--CSXT, 5 I.C.C.2d 765 (1989), pet. for review dismissed, No. 89-1503 (D.C.Cir. Mar. 27, 1991). To implement the labor protections imposed by the ICC, CSXT and the purchasing carriers were required to negotiate agreements with their respective employees that would supplement the seniority rights provided under existing collective bargaining contracts. In line with New York Dock, the implementing agreements had to guarantee, among other things, that any employee displaced or dismissed as a result of the transaction would continue to receive full pay and benefits for up to six years. See, e.g., RLEA v. ICC, 930 F.2d at 513.

The ICC, however, rejected the unions' construction of section 11347 and refused to require the purchasing carriers to hire CSXT's employees or, as to any employees they did hire, to recognize the employees' unions or their collective bargaining agreements with CSXT. See, e.g., Wilmington Terminal, 6 I.C.C.2d at 819-26. The Sixth Circuit has affirmed the ICC's interpretation of section 11347. RLEA v. ICC, 930 F.2d at 514-20.

Appellants (collectively, "RLEA") filed the present action for declaratory and injunctive relief on September 22, 1989, before CSXT had consummated the sales. RLEA claimed that if CSXT sold its rail lines before exhausting the mediation process, it would violate sections 2 First, 5 First, and 6 of the RLA, which impose twin obligations on the railroad: an obligation to bargain over section 6 proposals, and an obligation to maintain existing working conditions while bargaining proceeds. See 45 U.S.C. Secs. 152 First, 155 First, 156.

In dismissing RLEA's status quo claim, District Judge Lamberth applied the Supreme Court's opinion in P & LE, which held that the status quo obligation cannot be used to prevent a railroad from implementing an agreement to sell all of its assets. See 491 U.S. at 504-11, 109 S.Ct. at 2593-97. He ruled that the rationale of P & LE "does not make a distinction between partial and total sales." J.A. 861-62 (relying on RLEA v. Chicago & N.W. Transp. Co., 890 F.2d 1024 (8th Cir.1989) ("RLEA v. C & NW "), cert. denied, --- U.S. ----, 110 S.Ct. 3237, 111 L.Ed.2d 748 (1990)). The transactions could go forward, in his opinion, because nothing in CSXT's existing collective bargaining agreements prevented such line sales or the resulting force reductions and furloughs.

Judge Lamberth also concluded that there was no present case or controversy concerning CSXT's bargaining obligation, as RLEA had conceded that CSXT was in fact participating in the ongoing mediation. RLEA does not challenge this aspect of the ruling on appeal. We therefore have no occasion to address whether and, if so, to what extent CSXT had a duty to bargain, even after ICC approval, over the effects of the line sales on its employees. See P & LE, 491 U.S. at 512 & n. 19, 109 S.Ct. at 2597 & n. 19; RLEA v. C & NW, 890 F.2d at 1025-26.

Following the judge's ruling, New York Dock implementing agreements were put in place for all six transactions. As of oral argument before this court, five of the six sales had been consummated.

II. DISCUSSION

The RLA mandates multistaged procedures for resolving disputes over proposed changes in labor agreements. See Brotherhood of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 378, 89 S.Ct. 1109, 1115, 22 L.Ed.2d 344 (1969). The procedures "are purposely long and drawn out," P & LE, 491 U.S. at 504, 109 S.Ct. at 2593 (quoting Brotherhood of Ry. & Steamship Clerks v. Florida E.C. Ry., 384 U.S. 238, 246, 86 S.Ct. 1420, 1424, 16 L.Ed.2d 501 (1966)), and until the waltz is over, "neither party may unilaterally alter the status quo." Jacksonville Terminal, 394 U.S. at 378, 89 S.Ct. at 1115.

Section 2 Seventh forbids the carrier from making any change in "the rates of pay, rules, or working conditions of its employees," as embodied in collective bargaining agreements, except by way of section 6. 45 U.S.C. Sec. 152 Seventh. Section 6 provides in relevant part that both the railroad and the union must give at least thirty days' written notice of any proposed change in an agreement, and once notice is given, "rates of pay, rules, or working conditions shall not be altered by the carrier until the controversy has been finally acted upon ... by the Mediation Board." Id. Sec. 156.

Where an offer of arbitration from the Mediation Board has been refused, section 5 First provides that for thirty days after the Board notifies both parties that its efforts have failed, "no change shall be made in the rates of pay, rules, or working conditions or established practices in effect prior to the time the dispute arose." Id. Sec. 155 First. And if, as here, a presidential emergency board is created during this cooling-off period, under section 10 "no change, except by agreement, shall be made by the parties to the controversy in the conditions out of which the dispute arose" until thirty days after the emergency board has reported to the President. Id. Sec. 160.

In P & LE, the Supreme Court ruled that where, as in the present case, existing labor agreements do not...