Baltimore & Ohio R. Co. v. Com., Dept. of Labor and Industry

• Citation: 461 Pa. 68,334 A.2d 636
• Parties: BALTIMORE & OHIO RAILROAD CO., and Western Maryland Railway Company, v. COMMONWEALTH of Pennsylvania, DEPARTMENT OF LABOR AND INDUSTRY, and United Transportation Union, Appellants.
• Decision Date: 18 March 1975
• Court: United States State Supreme Court of Pennsylvania

334 A.2d 636

461 Pa. 68

BALTIMORE & OHIO RAILROAD CO., and Western Maryland Railway Company, v. COMMONWEALTH of Pennsylvania, DEPARTMENT OF LABOR AND INDUSTRY, and United Transportation Union, Appellants.

Supreme Court of Pennsylvania.

March 18, 1975.

[Copyrighted Material Omitted]

Harold E. Stambaugh, Asst. Atty. Gen., Harrisburg, T P. Shearer, Pittsburgh, for appellants.

Jerome H. Gerber, Handler, Gerber & Weinstock, Harrisburg, for Pennsylvania AFL-CIO, amicus curiae.

Norman R. Bradley, Ross Van Denbergh, Saul, Ewing, Remick & Saul Philadelphia, for appellee.

Before JONES, C.J., and EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.

OPINION OF THE COURT

ROBERTS Justice.

As a result of an administrative proceeding commenced by appellant United Transportation Union, appellee railroads were directed to adopt weekly pay periods for certain of their employees, as required by Pennsylvania Act No. 43 of 1971. ^[1] The railroads appealed this order to the Commonwealth Court, urging that the Act was invalid under the Supremacy Clause of the United States Constitution because it conflicted with the federal Railway Labor Act ^[2] and because it invaded a field totally occupied and therefore preempted by the Railway Labor Act. ^[3] They also argued that Act No. 43 discriminated against railroads without any rational basis for distinction from other businesses, in violation of the Equal Protection Clause of the Fourteenth Amendment and article III, section 32 of the Pennsylvania Constitution, P.S. The Commonwealth Court, two judges dissenting, held that Act No. 43 conflicted with the Railway Labor Act and was therefore unconstitutional. ^[4] We granted leave to appeal in order to consider the important questions involved. ^[5] We reverse.

Prior to 1971, Pennsylvania law required railroads to pay their employees not less often than semi-monthly, ^[6] and appellees utilized bi-weekly pay periods. Despite the passage of Act No. 43, appellees continued to utilize bi-weekly pay periods ^[7] and appellant union filed administrative complaints with the Department of Labor and Industry, contending that, as to certain of appellees' employees, this practice was in violation of the Act. The Department held an administrative hearing and found that some of appellees' employees were covered by no 'contract of hiring or . . . applicable labor agreement' providing for other than weekly payment of wages. ^[8] Appellees were ordered to pay 'those employees . . . in accordance with (the) Act.' The appeal to the Commonwealth Court ensued.

Appellees' principal contention, and the basis of the Commonwealth Court's decision, is federal preemption. Clearly, state law which directly conflicts with federal legislation is invalid under the Supremacy Clause. Perez v. Campbell, 402 U.S. 637, 91 S.Ct. 1704, 29 L.Ed.2d 233 (1971). Furthermore, even if there is no direct conflict, the state law may be invalid if it infringes where Congress has undertaken such comprehensive regulation as to evidence an intent to exclude all state legislation. Pennsylvania v. Nelson, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640 (1956) (federal statute preempts state statute prohibiting sedition); Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1941) (federal alien registration statute occupies the field and precludes operation of state laws on same subject); Bessemer & L.E.R.R. v. Pennsylvania Public Utilities Commission, 430 Pa. 339, 243 A.2d 358, cert. denied, 393 U.S. 959, 89 S.Ct. 395, 21 L.Ed.2d 373 (1968) (federal regulation of railroad safety preempts state regulation requiring particular methods of preventing rear-end collisions). Appellees contend that Act No. 43 is defective in both respects.

The method for resolving the question of conflict is shown by Perez v. Campbell, supra:

'Deciding whether a state statute is in conflict with a federal statute and hence invalid under the Supremacy Clause is essentially a two-step process of first ascertaining the construction of the two statutes and then determining the constitutional question whether they are in conflict.'

Id. at 644, 91 S.Ct. at 1708.

The first step of this process presents no difficulty. The objectives and operation of the Railway Labor Act were summarized in Terminal Railroad Association v. Brotherhood of Railroad Trainmen, 318 U.S. 1, 63 S.Ct. 420, 87 L.Ed. 571 (1943), itself a preemption case:

'The purpose of this Act is declared to be to provide 'for the prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions'; and 'for the prompt and orderly settlement of all disputes growing out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions.' It places upon carriers and employees the duty of exerting every reasonable effort to settle these disputes by agreement, and prohibits the carrier from altering agreed rates of pay, rules or working conditions except in the manner provided by the agreement or by the Act itself. Machinery is set up for the adjustment, mediation, and arbitration of disputes which the parties do not succeed in settling among themselves.'

Id. at 5, 63 S.Ct. at 422 (footnotes omitted).

The purpose of Act No. 43 is apparent on its face. It seeks to insure prompt payment of the wages earned by railroad employees where no provision on the timing of payment is included in an applicable collective bargaining agreement or 'contract of hire.'

Passing to the second step of the conflict analysis, the test to be applied is clear. Act No. 43 is invalid if it stands 'as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941); Perez v. Campbell, 402 U.S. 637, 649, 91 S.Ct. 1704, 1711, 29 L.Ed.2d 233 (1971).

Clearly there is here no conflict between the purposes of the respective statutes. Compare Perez v. Campbell, supra; ^[9] California v. Taylor, 353 U.S. 553, 77 S.Ct. 1037, 1 L.Ed.2d 1034 (1957) (state law purporting to forbid collective bargaining by employees of publicly owned railroad engaged in interstate commerce held invalid). Further, Act No. 43 expressly defers to any 'applicable labor agreement,' so it can never 'be applied to prevent the contracting parties from carrying out their agreement upon a subject matter as to which federal law directs them to bargain.' Local 24, Teamsters v. Oliver, 358 U.S. 283, 295, 79 S.Ct. 297, 304, 3 L.Ed.2d 312 (1959); see California v. Taylor, supra, at 561, 77 S.Ct. at 1042 (dictum); Railway Employees Department v. Hanson, 351 U.S. 225, 232, 76 S.Ct. 714, 718, 100 L.Ed. 1112 (1956) (dictum).

The manner in which appellees construct the purported conflict is more complex. The Railway Labor Act 'imposes an obligation upon the parties to a railroad labor dispute to maintain the status quo while the 'purposely long and drawn out' procedures of the Act are exhausted.' Detroit & T.S.L.R.R. v. United Transportation Union, 396 U.S. 142, 143, 90 S.Ct. 294, 295, 24 L.Ed.2d 325 (1969) (footnote omitted). This not only requires compliance with any collective bargaining agreement between the parties, but the preservation of the 'actual, objective working conditions . . . which were in effect prior to the time the pending dispute arose and which are involved in or related to that dispute.' Id. at 153, 90 S.Ct. at 301 (footnote omitted). At the time Act No. 43 was enacted, there was an existing dispute between appellees and the union over the union's request to adopt weekly pay periods. Consequently, appellees argue, Act No. 43 commands them to alter the status quo which they are compelled by federal law to maintain.

While plausible, this argument cannot withstand analysis. To begin with, appellees are not subject to conflicting legal obligation (to maintain and to change the status quo). Appellees would not violate the Railway Labor Act by complying with Act No. 43 because that compliance is precisely what the union seeks.

Moreover, appellees' interpretation bears little relation to 'the Act's primary objective--the prevention of strikes.' Id. at 154, 90 S.Ct. at 301. The Railway Labor Act does not prohibit changes in the status quo as such, but only unilateral changes by one of the parties, which would provoke retaliation by the other. As the Supreme Court said in Detroit & T.S.L.R.R. v. United Transportation Union, supra:

'If the railroad is free at this stage to take advantage of the agreement's silence and resort to self-help, the union cannot be expected to hold back its own economic weapons, including the strike. Only if both sides are equally restrained can the Act's remedies work effectively.'

Id. at 155, 90 S.Ct. at 302 (footnote omitted).

This danger is not present where, as here, the change is mandated by state law rather than adopted unilaterally by one of the parties. There is no provocative exercise of self-help, and before any resort is made to self-help, the procedures of the Act must be exhausted. Consequently, we conclude that there is no direct conflict between Act No. 43 and the Railway Labor Act.

The question remains whether the Railway Labor Act has undertaken such a comprehensive regulation of the field of railway labor as to evidence an intent to exclude all state legislation, without regard to conflict. See Pennsylvania v. Nelson, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640 (1956); Hines v Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1941); Bessemer v. L.E.R.R. v. Pennsylvania Public Utilities Commission, 430 Pa. 339, 243 A.2d 358, cert. denied, 393 U.S. 959, 89 S.Ct. 395, 21 L.Ed.2d 373 (1968). 'The test of whether both federal and state regulations may operate, or the...