Augspurger v. Brotherhood of Locomotive Engineers, 74--1363

Citation510 F.2d 853
Decision Date04 February 1975
Docket NumberNo. 74--1363,74--1363
Parties88 L.R.R.M. (BNA) 2609, 76 Lab.Cas. P 10,643 Merrild AUGSPURGER et al., Appellants, v. BROTHERHOOD OF LOCOMOTIVE ENGINEERS, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

James T. Hansing, Thiel, Sorenson & Hansing, Minneapolis, Minn., for appellant.

Harold A. Ross, Ross & Kraushaar, Cleveland, Ohio, for appellee.

Before VAN OOSTERHOUT, Senior Circuit Judge, HEANEY, Circuit Judge, and MEREDITH, Chief District Judge. *

HEANEY, Circuit Judge.

The plaintiffs, Division 746 of the Brotherhood of Locomotive Engineers (Union) and seventeen members of that division, brought this action in federal District Court, alleging that the Union had breached its duty of fair representation under the Railway Labor Act, 45 U.S.C. § 151 et seq., in the process of compiling a consolidated seniority roster following the merger of several railway carriers. The District Court dismissed the complaint on jurisdictional grounds, deferring to the primary jurisdiction of the Interstate Commerce Commission (ICC), which had supervised and approved the merger. The court held that the conduct complained of had 'its roots in the merger,' and that the fair representation doctrine does not apply to disputes arising out of mergers. We hold that the complaint does not state a claim of unfair representation, and that the dismissal was, therefore, proper under the primary jurisdiction doctrine.

In 1967, the ICC approved the merger of the Great Northern Railway, the Northern Pacific Railway, and three of their subsidiaries. Great Northern & Burlington Lines, Inc., Merger, 331 I.C.C. 228 (1967). 1 As a condition of approving any merger, the ICC must 'require a fair and equitable arrangement to protect the interests of the railroad employees affected.' 49 U.S.C. § 5(2) (f). Accordingly, the ICC ordered that an 'employee protective agreement,' previously entered into between the railroads and the Union, should be followed. That agreement provided for the consolidation of seniority rosters on an 'equitable basis.' The power to compile the consolidated roster was given to the Union, subject to acceptance by the new railroad. Existing seniority districts on the various railroads were to be combined into five new seniority districts. The new seniority district involved in this litigation is the Montana-Dakota District, embracing three former districts: the Northern Pacific Fargo West and Yellowstone Districts, and the Great Northern Minot Sixth District.

By late 1967, the Union had prepared four proposals whereby the seniority rosters could be consolidated, and those proposals were offered to the local chairmen for their consideration. In an effort to minimize employee dissatisfaction with the method ultimately selected, the local chairmen circulated the four proposals to the members, asking each member to express his preference. The members were advised that the ballot did not constitute a referendum, but was for the purpose of permitting their local chairmen to have the benefit of their thinking when advising and consulting with the general chairman.

Proposals Nos. 1 and 2 provided for consolidation of the rosters on a date-of-hire basis; those employees with the greatest longevity would have the highest seniority in the new company. Proposals Nos. 3 and 4 were variations of a more complicated system of 'percentage block' or 'work equity' allocation. 2 For our purposes, ti is enough to understand that, under these proposals, a consolidated roster would be constructed using percentage blocks based on the work brought into the consolidated district by each former district. To Proposal No. 3 was attached a 'prior right hold-down' restriction, under which an employee could not exercise seniority outside of his former district until he could no longer hold any position therein. On the other hand, Proposal No. 4 embodied an unrestricted application of the percentage blocking allociation method.

The members of the districts which were to become the new Montana-Dakota District expressed a preference for Proposal No. 4, and that method of consolidation was adopted by the Union, agreed to by the Burlington-Northern, and given effect in 1970.

The individual plaintiffs are engineers who were previously in the Northern Pacific Fargo West seniority district. They, too, voted for Proposal No. 4. However, that method turned out to be an unwise choice from their perspective, since the Yellowstone and Minot Sixth Districts had been far more heavily traveled than their own district. 3 As a result, the plaintiffs were given a lower ranking on the consolidated seniority roster than they might have had on a strict date-of-hire basis.

In their complaint against the Union, filed four years after the roster consolidation, the plaintiffs alleged:

* * * (W)hen the * * * plaintiffs * * * voted upon and accepted proposal No. 4, defendant B.L.E. failed and neglected to properly advise the plaintiffs of the meaning and effect of said proposal, and further misrepresented and deceived plaintiffs as to the meaning, effect and application of proposal No. 4, and defendant B.L.E. therefore, has acted in an unfair, invidious, unequal and arbitrary manner toward the individual plaintiffs herein, and has therefore breached its duty of fair representation in the negotiation, administration and enforcement of the collective bargaining contract * * *.

They further alleged that the Union had misrepresented the meaning and effect of the proposal, because an explanation of the proposal circulated to the members contained the following sentence:

* * * This method measures the worth of individual seniority as opposed to other methods recognizing only the equity of the seniority district.

The plaintiffs sought damages in the amount of $500,000 and a declaratory judgment to the effect that the consolidated seniority roster was null and void.

The Union denied that there was anything misleading about the ballot information, insisted that the vote was not a binding one in any event, contended that it had not breached its duty of fair representation, and urged that the complaint failed to state a claim for which relief may be granted. Furthermore, it argued that, even if it had breached its duty of fair representation, such conduct would constitue a violation of the ICC's order and, consequently, the plaintiffs' remedy must lie, if at all, before the ICC. In support of its primary jurisdiction argument, the Union cited 49 U.S.C. § 5(11), which provides that 'the authority conferred (upon the ICC) by this section shall be exclusive and plenary.' 4 The District Court accepted this latter argument, and held that--even if the plaintiffs stated a claim under the fair representation doctrine--it lacked jurisdiction over the dispute.

The arguments in favor of invoking the doctrine of primary jurisdiction, 5 thereby requiring the plaintiffs to submit their contentions first to the agency, are strong ones. They have been set out in closely analogous cases involving mergers supervised by the Civil Aeronautics Board. See, e.g., Carey v. O'Donnell, 506 F.2d 97 (D.C. Cir. 1974), cert. denied, 419 U.S. 1110, 95 S.Ct. 783, 42 L.Ed.2d 806 (1975); Kesinger v. Universal Airlines, Inc., 474 F.2d 1127 (6th Cir. 1973); Oling v. Airline Pilots Association, 346 F.2d 270 (7th Cir.), cert. denied, 382 U.S. 926, 86 S.Ct. 313, 15 L.Ed.2d 339 (1965); Hyland v. United Air Lines, Inc., 254 F.Supp. 367 (N.D.Ill.1966). The process whereby the CAB and the ICC supervise the merger of carriers is a difficult and lengthy one which would be greatly impeded were disgruntled employees, consumers, and other affected parties permitted to bring lawsuits in other forums. Cf. Brotherhood of Locomotive Engineers v. Chicago & North Western Ry. Co., 314 F.2d 424, 431--432 (8th Cir. 1963).

The problem of seniority consolidation is always an obstacle to merger, and the agency must be given a free hand in performing its duty to include labor protective conditions in its merger order:

Control over seniority list integration is basic to the regulatory scheme administered by the CAB * * *; the success of the merger may be at stake. Uncoordinate, unsupervised attempts to resolve this particularly troublesome problem may result not only in industrial strife, but also in an inefficient or uneconomic operation; the merger, its purposes, and the public interest against which it is tested may be threatened. * * *

This important area of the total complex of merger considerations cannot be subject to independent scrutiny and interference by the courts pursuant to a separate statutory scheme. The parties affected by the CAB merger order cannot be required to answer in different forums at different times on different charges for actions taken under the CAB merger umbrella. * * *

Hyland v. United Air Lines, Inc., supra, 254 F.Supp. at 372.

For these reasons, absent a showing of unfair representation, we agree with the Sixth, Seventh, and District of Columbia Circuits, that the courts should defer to the primary jurisdiction of the agency when employees only object to the manner in which seniority rosters are consolidated pursuant to a protective condition in a merger approval order. 6 See Carey v. O'Donnell, supra; Kesinger v. Universal Airlines, Inc., supra, 474 F.2d at 1131; Oling v. Airline Pilots Association, supra, 346 F.2d at 278.

However, we cannot agree with the District Court that the fair representation doctrine never applies to disputes arising out of mergers, for where that doctrine is properly invoked by a plaintiff, important competing policy considerations come into play. The right to fair representation by the bargaining agent is a right which the judiciary has created by implication from federal statutes. Steele v. Louisville & Nashville R.R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944). It is a right primarily and jealously...

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