Howe v. Pacific Elec. Ry. Co.

• Decision Date: 25 April 1966
• Citation: 50 Cal.Rptr. 666,64 Cal.2d 464,413 P.2d 442
• Court: California Supreme Court
• Parties: , 413 P.2d 442 Frank B. HOWE et al., Plaintiffs and Appellants, v. PACIFIC ELECTRIC RAILWAY COMPANY, Defendant and Respondent. L.A. 28063.

Page 666

50 Cal.Rptr. 666

64 Cal.2d 464, 413 P.2d 442

Frank B. HOWE et al., Plaintiffs and Appellants, v. PACIFIC ELECTRIC RAILWAY COMPANY, Defendant and Respondent.

L.A. 28063.

Supreme Court of California In Bank.

April 25, 1966.

Rehearing Denied May 25, 1966.

Kenneth Sperry and John L. Kaesman, Long Beach, for plaintiffs and appellants.

H. A. Waterman, San Francisco, E. D. Yeomans, Los Angeles, and William R. Denton, San Francisco, for defendant and respondent.

BURKE, Justice.

Plaintiffs are more than 300 retired former employees of defendant railway company. They appeal from the judgment of the trial court dismissing 'for want of jurisdiction' their action for declaratory relief and to recover pension benefits to which they claim to be entitled under the private pension plan maintained by defendant prior to enactment of the Railroad Retirement Act of 1937, hereinafter sometimes called 'the Retirement Act.' (45 U.S.C.A. §§ 228a--228z--1.) We have concluded that the trial court correctly viewed plaintiffs' claims as falling within the exclusive jurisdiction of the National Railroad Adjustment Board, and that the judgment should be affirmed.

In substance plaintiffs allege in their complaint (first amended) that (1) they were employed by defendant prior to adoption of the Retirement Act; (2) they had established rights under the private pension plan by reason of defendant's representations made in connection therewith at the time plaintiffs accepted such employment; (3) plaintiffs are entitled to receive pension benefits under the private plan (in amounts detailed in the complaint) in addition to those paid them under the Retirement Act but defendant claims it has no obligation to pay any plaintiff any pension benefits except to the extent that benefits under the private plan would exceed those payable under the Retirement Act; ¹ and (4) by reason of false and misleading statements of defendant, relied upon by plaintiffs, their action is not barred by laches or by any applicable statute of limitations.

Defendant moved for summary judgment on the ground, among others, that under provisions of the Railway Labor Act (45 U.S.C.A. § 151 et seq.) ² the National Railroad Adjustment Board (the board) has exclusive jurisdiction of plaintiffs' claims. The trial court concurred in this view and dismissed the action.

In Moore v. Illinois Central R. Co. (1941) 312 U.S. 630, 635--636, 61 S.Ct. 754, 85 L.Ed. 1089, the United States Supreme Court held that a railroad employee who claimed that under the terms of a collective bargaining agreement he had been wrongfully discharged, could resort to a court action against his employer for damages without first seeking adjustment of his controversy by the board under the Railway Labor Act. Thereafter, in Slocum v. Delaware, L. & W.R. Co. (1950) 339 U.S. 239, 70 S.Ct. 577, 94 L.Ed. 794, the court found occasion to comment on Moore. Slocum held that a railroad faced with jurisdictional disputes over certain jobs between two unions, with both of which it had collective bargaining agreements, could not properly seek declaratory relief in court, as the jurisdiction of the board to interpret the agreements and 'to adjust grievances and disputes of the type here involved is exclusive.' Further, said the court, 'Our holding here is not inconsistent with our holding in Moore * * *. Moore was discharged by the railroad. He could have challenged the validity of his discharge before the Board, seeking reinstatement and back pay. Instead he chose to accept the railroad's action in discharging him as final, thereby ceasing to be an employee, and brought suit claiming damages for breach of contract. As we there held, the Railway Labor Act does not bar courts from adjudicating such cases. * * *' (P. 244 of 339 U.S., p. 580 of 70 S.Ct.)

On the same day, in Order of Railway Conductors v. So. R. Co. (1950) 339 U.S. 255, 70 S.Ct. 585, 94 L.Ed. 811, it was held that the board has exclusive primary jurisdiction over claims by railroad employees that under the terms of their collective bargaining agreement they were entitled to extra pay. (See also Gainey v. Brotherhood of Railway & Steamship Clerks (1960) 3 Cir.; 275 F.2d 342, 343--344.) ³

Again in Pennsylvania R. Co. v. Day (1959) 360 U.S. 548, 79 S.Ct. 1322, 3 L.Ed.2d 1422, the court considered its holding in Moore. In the Day case a retired locomotive engineer sued the railroad in the federal district court for extra compensation for services allegedly rendered before retirement. He claimed under a collective bargaining agreement. The opinion points out (p. 551, 79 S.Ct. 1322) that 'here, as was not the case in Order of Railway Conductors (Order of Railway Conductors v. So. R. Co. (1950) supra, 339 U.S. 255, 70 S.Ct. 585, 94 L.Ed. 811), the claimant has retired from railroad service. The immediate question is whether that factual difference makes a legal difference' in determining the jurisdictional issue. In holding that it did not, the court stated as follows (360 U.S. pp. 551--552, 79 S.Ct. p. 1324): 'The Act grants jurisdiction to the Board of 'disputes between an employee * * * and a carrier * * *.' It defines 'employee' as including: '* * * every person in the service of a carrier (subject to its continuing authority to supervise and direct the manner of rendition of his service) who performs any work defined as that of an employee or subordinate official in the orders of the Interstate Commerce Commission * * *.' The National Railroad Adjustment Board was established * * * to settle disputes arising out of the relationship between carrier and employee. All the considerations which led Congress to entrust an expert administrative board with the interpretation of collective bargaining agreements are equally applicable when, as here, the employee has retired from service after initiating a claim for compensation for work performed while on active duty. The nature of the problem and the need for experience and expert knowledge remain the same. The same collective bargaining agreement must be construed with the same need for uniformity of interpretation and orderly adjustment of differences. There is nothing in the Act which requires that the employment relationship subsist throughout the entire process of administrative settlement. The purpose of the Act is fulfilled if the claim itself arises out of the employment relationship which Congress regulated. The Board itself has accepted this construction and adjudicates the claims of retired employees. ⁴ This uniform administrative interpretation is of great importance, reflecting, as it does, the needs and fair expectations of the railroad industry for which Congress has provided what might be termed a charter for its internal government. Moreover, the discharged employee may challenge the validity of his discharge before the Board, seeking reinstatement and back pay. See Union Pacific R. Co. v. Price, post (360 U.S. 601, 79 S.Ct. 1351, 3 L.Ed.2d 1460). Thus it is plain both from a reading of the Act in light of its purpose and the needs of its administration and from the settled administrative interpretation that the Board has jurisdiction over respondent's claim for compensation.

'Since the Board has jurisdiction, it must have exclusive primary jurisdiction. All the considerations of legislative meaning and policy which have compelled the conclusion that an active employee must submit his claims to the Board, and may not resort to the courts in the first instance, are the same when the employee has retired and seeks compensation for work performed while he remained on active service. A contrary conclusion would create a not insubstantial class of preferred claimants. ⁵ Retired employees would be allowed to bypass the Board specially constituted for hearing railroad disputes whenever they deemed it advantageous to do so, whereas all other employees would be required to present their claims to the Board. * * *

'(Pp. 553--554.) Our decision in Moore * * * does not stand in the way of this. The decision in that case has been given its proper, limited scope in Slocum v. Delaware, L. & W.R. Co. (supra), 339 U.S. 239. (70 S.Ct. 577, 94 L.Ed. 795). Moore carved out from the controlling doctrine of primary jurisdiction the unusual and special situation of wrongful discharge where the aggrieved employee had been expelled from the employment relationship. Moreover, since the discharge had been accepted as final by the employee, it is probable that the damages accrued primarily after the employment relationship had terminated.

'Our consistent regard for the importance of having disputes between railroad employees and carriers settled by the administrative Board which Congress established for that purpose requires respondent to resort to the (board) for adjudication of his claim.'

Union Pacific R. Co. v. Price (1959) supra, 360 U.S. 601, 79 S.Ct. 1351, 3 L.Ed.2d 1460, referred to by the court in Day, holds that a discharged employee who chose to challenge the validity of his discharge before the board, and lost, may not thereafter pursue a common law remedy in court for damages for the allegedly wrongful dismissal. Said the court about the Moore case (p. 609, fn. 8, of 360 U.S., P. 1356 of 79 S.Ct.): '(T)he holding in Moore was simply that a common-law remedy for damages might be pursued by a discharged employee who did not resort to the statutory remedy before the Board to challenge the validity of his dismissal. * * *'

In Brotherhood of Locomotive Engrs. v. Louisville & N.R. Co. (1963) 373 U.S. 33, 83 S.Ct. 1059, 10 L.Ed.2d 172, the court was again concerned with a controversy over discharge of a railroad employee and with a resultant union threat to strike. Once more it was pointed out that 'The several decisions of this Court interpreting § 3 First (of the Railway Labor Act, 45 U.S.C.A. § 153, establishing the board and its jurisdiction) have made it clear that this statutory...