CSX Transp., Inc. v. United Transp. Union

• Decision Date: 16 December 1991
• Docket Number: No. 488,D,488
• Citation: 950 F.2d 872
• Parties: 139 L.R.R.M. (BNA) 2061, 60 USLW 2464, 120 Lab.Cas. P 11,048 CSX TRANSPORTATION, INC., Appellant, v. UNITED TRANSPORTATION UNION, et al., Appellees. ocket 91-7675.
• Court: U.S. Court of Appeals — Second Circuit

Page 872

950 F.2d 872

139 L.R.R.M. (BNA) 2061, 60 USLW 2464,

120 Lab.Cas. P 11,048

CSX TRANSPORTATION, INC., Appellant, v. UNITED TRANSPORTATION UNION, et al., Appellees.

No. 488, Docket 91-7675.

United States Court of Appeals, Second Circuit.

Argued Nov. 7, 1991.

Decided Dec. 16, 1991.

Ronald M. Johnson, Washington, D.C. (Charles L. Warren, Akin, Gump, Hauer & Feld, of counsel), Nicholas S. Yovanovic, Jacksonville, Fla., (CSX Transp., Inc., of counsel), for appellant.

L. Pat Wynns, Washington, D.C. (John O'B. Clarke, Jr., Highsaw, Mahoney & Clarke, P.C., of counsel), for appellees.

Before KAUFMAN, CARDAMONE, MINER, Circuit Judges.

IRVING R. KAUFMAN, Circuit Judge:

Congress enacted the Railway Labor Act (the "RLA") in 1926 to bring stability to the fractious world of labor-management relations in the railroad industry. That stability has largely been achieved because of procedures that replace unilateral actions by management and crippling strikes by labor with mandatory bargaining in cases where relations between the parties change. It is not always clear, however, what sorts of changes in carrier-union relations require appropriate bargaining. Today, we are asked to decide whether a sale by a railroad of some of its tracks to another carrier is a change in the "rates of pay, rules, or working conditions" of union workers employed on those tracks according to Section 6 of the RLA, 45 U.S.C. § 156 (1982) ("s 6"). If it is, then a railroad like appellant CSX Transportation ("CSX") cannot sell its track until it has agreed with unions like appellee United Transportation Union ("UTU") on new arrangements for employees affected by the sale. If it is not, then the railroad may sell without bargaining beforehand. We join all other circuits to have considered the question in holding that such sales are not changes in salaries, rules or job conditions, but rather are matters of management prerogative that may proceed without previous § 6 bargaining.

BACKGROUND

We are no strangers to the dispute between CSX and UTU, having decided an earlier question between the parties in CSX Transportation, Inc. v. United Transportation Union, 879 F.2d 990 (2d Cir.1989), cert. denied, 493 U.S. 1020, 110 S.Ct. 720, 107 L.Ed.2d 740 (1990) ("CSX I "). As that decision so thoroughly explicated the factual background underlying this on-going controversy, a brief review will suffice here.

Appellant CSX owns and operates over 21,000 miles of railroad tracks in the U.S. and Canada. As such, it is subject to the RLA. Likewise, appellees are labor organizations and their officers who are "representatives" under that statute. See 45 U.S.C. § 151 First, Sixth (1982). During the late summer of 1987, CSX sought to sell 369 miles of its railroad lines between Buffalo, New York and Eidenau, Pennsylvania to the Buffalo and Pittsburgh Railroad ("B & P") because decreased traffic on the route had shrunk CSX's profits.

                The proposed sale agreement obligated B & P to retain 160 of the 226 CSX employees on the line, but B & P was free to reach new labor agreements with retained employees.   Several unions representing CSX workers responded to the proposed sale by serving notices on the railroad pursuant to § 6, hoping to change their "agreements affecting rates of pay, rules or working conditions."   After a union or a carrier gives § 6 notice of an intended change in their agreement to the other, that provision, as noted above, commands that "rates of pay, rules or working conditions shall not be altered by the carrier until the controversy has finally been acted upon."   The union cannot strike during this period, either.  Detroit & Toledo Shore Line Railroad Co. v. Transportation Union 396 U.S. 142, 149-150, 90 S.Ct. 294, 299, 24 L.Ed.2d 325 (1969) ("Shore Line ")  Hence, what has been called the "status quo" between labor and management is preserved while negotiations over the proposed change take place.   This process "provides time for tempers to cool, helps create an atmosphere in which rational bargaining can occur, and permits the forces of public opinion to be mobilized in favor of a settlement."  Id. at 150, 90 S.Ct. at 299
                

By the end of October, 1987, the dispute between CSX and UTU was before the United States District Court for the Western District of New York, after removal from New York State Supreme Court and certain actions by the Interstate Commerce Commission. See CSX I, 879 F.2d at 993. CSX sought a declaratory judgment that it need not engage in pre-sale § 6 bargaining with the unions, and an injunction prohibiting strikes to impede the sale. UTU sought an injunction proscribing the sale pending the outcome of § 6 negotiations and maintaining the status quo in the meantime.

On May 26, 1988, the district court ruled. Decker v. CSX Transportation, Inc., 688 F.Supp. 98 (W.D.N.Y.1988), aff'd sub nom., CSX I, 879 F.2d 990 (2d Cir.1989). It first considered whether the CSX-UTU dispute was "major" or "minor" under the RLA. ¹ Major disputes are controversies over the formation of, or the addition of new terms to, a collective bargaining agreement. They are governed by § 2, Seventh, and § 6 of the RLA. Elgin, Joliet & Eastern Railway Co. v. Burley, 325 U.S. 711, 723, 65 S.Ct. 1282, 1290, 89 L.Ed. 1886 (1945). Minor disputes are disagreements over the meaning of terms already present in existent collective bargaining agreements, and are governed by RLA § 2, Sixth and § 3 First(i) (1982). Id. Put another way, "major disputes seek to create contractual rights, minor disputes to enforce" ones that already exist, though they may be in dispute. Consolidated Rail Corp. v. RLEA, 491 U.S. 299, 302, 109 S.Ct. 2477, 2480, 105 L.Ed.2d 250 (1989). Applying the Supreme Court's rule of Consolidated Rail that a carrier need only proffer an "arguable" contractual justification for its proposed action in order to classify the dispute as minor, id. at 307, 109 S.Ct. at 2482-83, the court held that CSX had offered a plausible interpretation of their agreement with UTU that would authorize line sales without pre-sale bargaining to protect lost jobs. Decker, 688 F.Supp. at 112. ² The case was therefore sent to the RLA-mandated repository of all minor disputes: binding arbitration before a National Railroad Adjustment Board or a special adjustment board established by the parties. RLA § 3, 45 U.S.C. 153, First and Second (1982). The arbitrators would determine UTU appealed the court's decision in Decker. While that appeal was pending, the parties established Special Board of Adjustment No. 1018 (the "board") to decide their minor dispute. The board found on December 15, 1988 that, because the agreement between CSX and the unions and past practice were silent on the question, CSX was not contractually authorized to sell lines without first bargaining over additional protections for displaced workers. Award dated December 15, 1988 at 18-20. But since the agreement did not forbid CSX's actions either, the board could conclude only that the unions had not contractually waived whatever rights to pre-sale bargaining they might have had under the RLA. Award at 21. The question then became: what are those RLA rights? As that statutory issue is beyond arbitral, contractual jurisdiction, the "award" contained no remedy.

                whether CSX's contractual justification is more than just plausible, i.e. whether the agreement actually allows the sale and force reduction.   On the court's order, the sale was allowed to proceed, but was stayed pending expedited appeal.   We lifted that stay after oral argument in CSX I, and the sale was completed on July 19, 1988
                

On June 7, 1989, we issued CSX I, our opinion in UTU's appeal of Decker. There we affirmed Decker's finding that the CSX-UTU dispute was a minor one, and denied UTU's motion, argued on grounds that the board's decision somehow vitiated the court's preceding decision that the dispute was minor, to vacate Decker. We found no "conflict between the district court's conclusion that CSX's position was 'plausible,' and the Board's conclusion that CSX should nonetheless not prevail." CSX I, 879 F.2d at 1003.

Following CSX I, this dispute--"minor" for RLA purposes but by now enormous in terms of the time and procedural maneuvering expended on it--continued back in district court, where UTU asked for a remand to arbitration instructing the board to fashion a remedy, and CSX sought to vacate the board's decision on grounds that its jurisdiction was exceeded. The court first held that arbitral jurisdiction had not been transgressed. CSX Transportation Inc. v. United Transportation Union, 765 F.Supp. 797, 803-809 (W.D.N.Y.1991) ("CSX II "). It then considered the underlying question of law: whether CSX, which had no contractual justification for selling the line without first bargaining, was required to bargain by RLA § 6, the status quo provision. The court decided that a line sale does constitute a change in "rates of pay, rules, or working conditions." Thus, it held, once the unions filed their notices to amend the agreement in response to the news that CSX was planning a line sale, CSX was obligated by § 6 to maintain the status quo by forgoing the line sale and its attendant job losses until negotiations over those proposals were complete. Id. at 814. The court remanded the matter to the board to consider whether to, and how to "make union members whole, i.e., put them in the position they would have been in had they been entitled to maintain the status quo under § 6." Id. at 811. Because we disagree with the conclusion that a line sale represents an alteration of salaries, rules or job conditions for § 6 purposes, we reverse.

DISCUSSION

I. Jurisdiction

Appellees argue that we lack jurisdiction to hear this appeal, since it comes to us from an order by the district court remanding their dispute with CSX to arbitration to consider what remedy is due workers displaced by the sale. They rightly point out that,...