General Committee of Adjustment, United Transp. Union, Western Maryland Ry. Co. v. CSX R.R. Corp.

• Decision Date: 22 February 1990
• Docket Number: No. 89-5246,89-5246
• Citation: 893 F.2d 584
• Parties: 133 L.R.R.M. (BNA) 2203, 58 USLW 2448, 114 Lab.Cas. P 11,932 GENERAL COMMITTEE OF ADJUSTMENT, UNITED TRANSPORTATION UNION, WESTERN MARYLAND RAILWAY COMPANY, Appellant, v. CSX RAILROAD CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Third Circuit

Page 584

893 F.2d 584

133 L.R.R.M. (BNA) 2203, 58 USLW 2448,

114 Lab.Cas. P 11,932

GENERAL COMMITTEE OF ADJUSTMENT, UNITED TRANSPORTATION UNION, WESTERN MARYLAND RAILWAY COMPANY, Appellant, v. CSX RAILROAD CORPORATION, Appellee.

No. 89-5246.

United States Court of Appeals Third Circuit.

Argued Oct. 23, 1989.

Decided Jan. 5, 1990.

Rehearing and Rehearing In Banc Denied Feb. 22, 1990.

John O'B. Clarke, Jr. (argued), Richard S. Edelman, Highsaw & Mahoney, P.C., Washington, D.C., for appellant.

Ronald M. Johnson (argued), T. Jay Thompson, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C. and Nicholas S. Yovanovic, CSX Transp., Inc., Jacksonville, Fla., for appellee.

Before HUTCHINSON, NYGAARD and WEIS, Circuit Judges.

OPINION OF THE COURT

HUTCHINSON, Circuit Judge.

General Committee of Adjustment, United Transportation Union, Western Maryland Railway Company (the Union) appeals the district court's order dismissing its complaint against CSX Transportation, Inc. (CSX, or the Railroad) ¹ and the court's order granting summary judgment for CSX on the counterclaim. By separate order, the district court also enjoined the Union from striking over this dispute. The Union asserts that the Railroad's proposed sale of a rail line without bargaining with the Union in accordance with the Railway Labor Act (RLA, or the Act) violates the Railroad's obligation to maintain the status quo pending completion of negotiations, an obligation imposed by Sec. 2 Seventh and Sec. 6 of the Act, 45 U.S.C.A. Secs. 152 Seventh, 156 (West 1986). ²

According to the Union, the Railroad's actions in the face of a Sec. 6 notice the Union filed seeking to amend the existing collective bargaining agreements between the parties created a "major" dispute under the Act. Thus, it argues that the Railroad should be enjoined from selling the rail line until the Act's major dispute resolution procedures have been completed. The Railroad contends that the dispute should be characterized as minor and, in its counterclaim, sought a declaration that it need not bargain with the Union before selling the line.

We hold that the dispute between the Union and the Railroad was a "minor" dispute for purposes of the Act. It is a minor dispute because it is arguable that the existing agreements between the parties, when interpreted and applied within the context of their past practices, can conclusively resolve the dispute. It was proper for the district court to dismiss the Union's complaint since Sec. 3 of the Act requires that minor disputes be referred to the National Railroad Adjustment Board (Board), or an adjustment board established by the parties, for arbitration. See 45 U.S.C.A. Sec. 153 (West 1986). Moreover, established procedures under the Act allow each party to act on its own interpretation of the agreements until a decision has been reached through arbitration. The district court did not err in granting summary judgment to the Railroad on its counterclaim. In addition, since the dispute was minor, we also hold that the district court's order enjoining the Union from calling a strike over the disputed sale is proper. Accordingly, we will affirm the district court's order on both the original complaint and the counterclaim as well as its separate injunction against a strike.

I.

CSX owns and operates the rail lines of what was formerly the Western Maryland Railway Co. (Western Maryland). The rail lines are part of CSX's 21,000 mile rail system. The Union is the collective bargaining representative for CSX locomotive engineers and trainmen who work on the former Western Maryland lines. CSX has assumed the collective bargaining agreements between its predecessor, Western Maryland, and the Union that govern rates of pay, rules and working conditions.

CSX claims that both it and Western Maryland had a practice of abandoning or selling marginal rail lines that had experienced decreases in traffic volume. ³ The "York line" segment of CSX's Western Maryland holdings, a sixteen-mile stretch of track in Pennsylvania between York and Porters, was such a line. The traffic on it had decreased by about 65% between 1979 and 1986. Joint Appendix (App.) at 44. In November 1987, CSX entered into a contract to sell the York line to Yorkrail, Inc. (Yorkrail), a locally-based operator and subsidiary of Emons Holdings, Inc. (Emons).

Before the sale could be completed, Yorkrail had to get Interstate Commerce Commission (ICC) approval to acquire and operate the line. Since it was a newly created short line railroad company categorized as a "non-carrier," it was presumptively excused from the need to go through individual case proceedings before the ICC to establish generally that its purchase served the public convenience and necessity and specifically whether labor protective conditions should be imposed on the sale under the Interstate Commerce Act, 49 U.S.C.A. Sec. 10901 (West Supp.1989), by 49 U.S.C.A. Sec. 10505 (West Supp.1989). See Ex Parte No. 392 (Sub No. 1), Class Exemption for the Acquisition and Operation of Rail Lines Under 49 U.S.C. 10901, 1 I.C.C.2d 810 (1985), review denied sub nom., Illinois Commerce Comm'n v. ICC, 817 F.2d 145 (D.C.Cir.1987). See generally Pittsburgh & L. E. R.R. v. Railway Labor Executives' Ass'n, --- U.S. ----, 109 S.Ct. 2584, 2590-91 & n. 9, 105 L.Ed.2d 415 (1989) (explaining why the ICC made approval easier for new entities purchasing marginally profitable and unprofitable rail lines from existing carriers). Consequently, Yorkrail received automatic approval seven days after filing a notice of exemption, see 49 C.F.R. Sec. 1150.32(b) (1987), and its exemption became effective on December 2, 1987.

Emons also needed approval to own an additional line under the Interstate Commerce Act, 49 U.S.C.A. Sec. 11343 (West Supp.1989). However, the ICC granted Emons an exemption, under Sec. 10505, from the Sec. 11343 approval requirement. This exemption became effective on January 4, 1988. See Emons Holdings, Inc.--Continuance in Control Exemption--Yorkrail, Inc., Finance Docket No. 31170 (ICC Dec. Dec. 18, 1987), reprinted in Brief for Appellant, Addendum No. 3. Despite receiving these necessary approvals, CSX's sale of the York line to Yorkrail and Emons was not completed at this time.

Meanwhile, on December 7, 1987, the Union filed a complaint in the United States District Court for the Middle District of Pennsylvania asking the court to enjoin the proposed sale of the York line and to otherwise maintain the status quo until the Railroad had bargained with the Union over the sale and exhausted the RLA's dispute resolution requirements. The Union relied on a Sec. 6 notice it had served on the Railroad in August 1987. The Sec. 6 notice sought to amend the existing collective bargaining agreements to provide that if part of the Railroad's Western Maryland lines were sold or transferred, Union employees would have a right to continue to work on the property under the existing agreements. ⁴ The Railroad counterclaimed, seeking a declaration from the court that it had no duty to bargain with the Union before selling the York line. Later, it moved for dismissal of the Union's complaint and summary judgment on its counterclaim.

The district court referred the matter to a magistrate, who filed a report on November 9, 1988 recommending that the district court rule in favor of the Railroad on both its motion for dismissal and its request for summary judgment on the counterclaim. See Report of Magistrate, App. at 530. The magistrate noted that the parties agreed to certain facts concerning the existing collective bargaining agreements between the Railroad and the Union that supported his recommendations. First, with regard to the agreements' explicit reduction in force and furlough provisions, the parties agreed:

5. The reduction in force and furlough provisions in the agreements between [CSX] and the [Union] afford [CSX] the unilateral right to abolish train assignments and to reduce the number of engine and train positions. [CSX] must give eight hours notice of a yard assignment abolishment and three hours notice of a road assignment abolishment.

6. The collective bargaining agreements between the parties also address the effects of train assignment abolishments on employees. Pursuant to the agreements, a trainman or engineer whose train assignment has been abolished may bid on other assignments on the basis of seniority and, if a position is not available, be furloughed. Furloughed employees are entitled to certain benefits. While furloughed, an employee remains an employee of [CSX], continues to accrue seniority and is subject to being recalled to fill positions which may become available. Furloughed employees' health and welfare insurance premiums are paid by [CSX] for four months.

Id. at 538-39 (citations and footnote omitted).

In addition, the parties stipulated to facts concerning their past practices with respect to line sales and the abolishment of job assignments. They agreed that the Railroad "has abolished train assignments on numerous occasions resulting in a decrease of the [Union] represented workforce employed on the former [Western Maryland lines] of approximately 66%," id. at 540, and that segments of the Western Maryland lines have been sold on three occasions since 1983. Id. Over fifty Union employees were displaced as a result of these three sales, but no Sec. 6 notices were filed by the Union at the time. Id. at 540-41. ⁵ The magistrate concluded in his report that it was at least arguable that the dispute between the Union and the Railroad was addressed by the existing collective bargaining agreements. Because of that, he concluded that the dispute was a minor one and must be resolved by arbitration before the Board. Id. at 546.

While the Union filed exceptions to the magistrate's report with the district court, the Railroad announced its intention to complete the York line sale. Because the Railroad was...