Railway Labor Executives' Ass'n v. U.S.

• Decision Date: 09 April 1982
• Docket Number: Nos. 78-2157,80-1274 and 80-1295,s. 78-2157
• Citation: 675 F.2d 1248,219 U.S.App.D.C. 23
• Parties: 110 L.R.R.M. (BNA) 2136, 219 U.S.App.D.C. 23 RAILWAY LABOR EXECUTIVES' ASSOCIATION, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission, Respondents, Norfolk and Western Railway Company, Burlington Northern Inc., Association of American Railroads, Mendocino Coast Railway, Inc., et al., Baltimore and Ohio Railroad Company, et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1248

675 F.2d 1248

110 L.R.R.M. (BNA) 2136, 219 U.S.App.D.C. 23

RAILWAY LABOR EXECUTIVES' ASSOCIATION, Petitioner, v. UNITED STATES of America and Interstate Commerce Commission,

Respondents, Norfolk and Western Railway Company, Burlington

Northern Inc., Association of American Railroads, Mendocino

Coast Railway, Inc., et al., Baltimore and Ohio Railroad

Company, et al., Intervenors.

Nos. 78-2157, 80-1274 and 80-1295.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 23, 1981.

Decided April 9, 1982.

Petition for Review of an Order of the Interstate Commerce commission.

John O'B. Clarke, Jr., Washington, D.C., with whom William G. Mahoney, Washington, D.C., was on the brief for petitioner.

Richard T. Conway, Washington, D.C., with whom Harry J. Breithaupt, Jr., Washington, D.C., Ass'n of American Railroads, Peter J. Shudtz, Baltimore, Md., Baltimore and Ohio Railroad Co., et al., Barry McGrath and John D. Boelter, St. Paul, Minn., Burlington Northern, Inc., and Peter J. Hunter, Roanoke, Va., Norfolk and Western Ry. Co., were on the joint brief for intervenors.

Albert W. Laisy, Baltimore, Md., also entered an appearance for intervenors Baltimore and Ohio Railroad Co., et al., in No. 80-1295.

James M. Nicholson, also entered an appearance for intervenor, Mendocino Coast Ry., Inc., et al., in No. 80-1274.

John J. McCarthy, Jr., Atty., Interstate Commerce Commission, Washington, D.C., with whom Richard A. Allen, Gen. Counsel, Henri F. Rush, Associate Gen. Counsel, Interstate Commerce Commission, Sanford M. Litvack, Asst. Atty. Gen., John J. Powers, III and Kenneth P. Kolson, Attys., Dept. of Justice, Washington, D.C., were on the brief for respondents. James P. Tuite and Frederick W. Read, III, Attys. Interstate Commerce Commission, and Peter L. de la Cruz, Atty. Dept. of Justice, Washington, D.C., also entered an appearance for respondents.

Before GINSBURG, Circuit Judge, McGOWAN, Senior Circuit Judge and NICHOLS, ^* Associate Judge, United States Court of Claims.

Opinion for the Court filed by Senior Circuit Judge McGOWAN.

Separate statement filed by Judge NICHOLS, concurring in the result.

McGOWAN, Senior Circuit Judge:

Railway Labor Executives' Association ("RLEA") ¹ challenges, in three petitions consolidated before us, ² the Interstate Commerce Commission's interpretation of the minimum job protective conditions required by section 5(2)(f) of the Interstate Commerce Act, as amended by section 402(a) of the Railroad Revitalization and Regulatory Reform Act of 1976 ("4R Act"), recently recodified in 49 U.S.C. § 11347 (Supp. III 1979), in rail transactions involving trackage rights or leases. Prior to the 1976 amendment, section 5(2) (f) required the Commission to impose, as a condition to its approval of any transaction involving a rail carrier or carriers, a "fair and equitable arrangement" to protect the interests of affected employees. 49 U.S.C.A. § 5(2)(f) (West 1959). When it applied this mandate in trackage rights and lease cases, the Commission typically imposed a set of protections known as the "Oklahoma" conditions. Section 5(2)(f) was amended in 1976, however, to require additionally that the arrangement be "no less protective of the interests of employees than those heretofore imposed pursuant to this subdivision (section 5(2)(f) ) and those established pursuant to section 405 of the Rail Passenger Service Act (45 U.S.C. 565)." 4R Act, § 402(a), Pub.L.No. 94-210, 90 Stat. 62 (1976). ³

In the proceedings on review, the Commission concluded that, in the ordinary trackage rights or lease case, the Oklahoma provisions represent conditions "no less protective ... than those heretofore imposed pursuant to (section 5(2)(f) )," and that a set of provisions known as "Appendix C-1" represents conditions "no less protective" than those "established pursuant to section 405 of the Rail Passenger Service Act." The Commission therefore held that the Oklahoma conditions as supplemented with the applicable Appendix C-1 protections satisfy the minimum requirements of amended section 5(2)(f) in the ordinary trackage rights or lease case.

RLEA argues that the reference to conditions "heretofore imposed pursuant to (section 5(2)(f) )" mandates a more protective set of conditions, known as the "New Orleans" conditions, which prior to the 1976 amendment constituted the section 5(2)(f) protection imposed by the Commission in cases involving mergers, consolidations, and acquisitions of control. Therefore, RLEA argues, amended section 5(2)(f) requires the Commission to impose the New Orleans conditions supplemented with the applicable Appendix C-1 provisions. We find the Commission's interpretation of the 1976 amendment persuasive. Consequently, we affirm the orders under review.

I

The lengthy history of job protective arrangements ⁴ began in 1936, when railroad representatives and workers signed the Washington Job Protection Agreement ("WJPA"), which provided certain bargaining and compensation protections to employees affected by any "coordination" ⁵ between rail carriers. The heart of the WJPA was sections 4 and 5, which required the carriers to give advance notice to all employees at least ninety days prior to the proposed coordination, and which provided that no coordination could be effective until the carrier and its employees had reached an implementing agreement providing for employee selection and assignment. Other sections of the WJPA required certain post-transaction, compensatory protections. For example, any employee displaced into a lower paying position was entitled to an equalizing allowance for up to five years after the coordination.

Protective conditions received statutory foundation when Congress, in the Transportation Act of 1940, added section 5(2)(f) to the Interstate Commerce Act directing the Commission to require a fair and equitable arrangement to protect employees affected by rail "transactions." Ch. 722, § 7, 54 Stat. 906. The "transactions" covered by the provision included mergers, consolidations, leases, acquisitions of control, and acquisitions of trackage rights. Id.

The Commission and the courts eventually developed a set of conditions representing the general standard of employee protection under section 5(2) (f). This set, the New Orleans conditions, ⁶ consisted of the protections of the WJPA, including the prior notice and implementing agreement requirements of sections 4 and 5.

The Commission, however, did not apply the New Orleans conditions in all rail transactions. Instead, it customarily imposed them in cases of mergers, consolidations, and acquisitions of control, and applied a different set, the Oklahoma conditions, ⁷ in trackage rights and lease cases. The central difference between the Oklahoma conditions and the New Orleans conditions is that the former do not include the equivalent of sections 4 and 5 of the WJPA. In addition, the Oklahoma conditions prescribe a maximum protective period of only four years from the Commission's order of approval; the New Orleans set allows a period of up to five years from the transaction.

Another statutory source of job protection is also relevant to the issue before us. In section 405 of the Rail Passenger Service Act of 1970, 45 U.S.C. § 565 (1976) (hereinafter referred to as section 565), Congress mandated protective arrangements for employees affected by a discontinuance of intercity rail passenger service. The Secretary of Labor in 1971 certified the Appendix C-1 arrangement as satisfying the requirements of section 565, and that certification was upheld. Congress of Railway Unions v. Hodgson, 326 F.Supp. 68 (D.D.C.1971). See pages 1255-1256 infra. Appendix C-1 does not include the protections of sections 4 and 5 of the WJPA; it requires only twenty days prior notice and expressly authorizes the transaction to proceed even if no implementing agreement has been reached. In some respects, however, Appendix C-1 provides greater post-transaction protection than the New Orleans or Oklahoma conditions. For example, the protective period is increased to six years from the date of an employee's dismissal.

These various packages of protection are relevant to the 1976 amendment to section 5(2)(f) because that amendment requires conditions "no less protective" than two sets of provisions: those "heretofore imposed" under section 5(2)(f) and those "established pursuant to" section 565. Because there is no dispute that Appendix C-1 satisfies the second phrase, ⁸ interpretation of the amendment turns on which set-Oklahoma or New Orleans-fulfills the mandate of the first phrase. This is the central question that the Commission faced in the proceedings on review, when it set forth the minimum level of protection required by amended section 5(2)(f) in ordinary trackage rights and lease cases. ⁹

II

A.

The proceedings in Norfolk and Western Railway began when Norfolk and Western ("N & W") applied to the Commission for trackage rights over approximately twenty-eight miles of track owned by Burlington Northern, Inc. N & W sought the new route in order to replace a section of deteriorated Burlington track that N & W had previously used. RLEA and one of its member organizations protested the application. A Commission review board issued an initial decision, Deferred Appendix ("App.") 23, approving the acquisition and imposing a set of protections, known as the "Oregon I" conditions, ¹⁰ consisting of the Oklahoma conditions as supplemented by the applicable portions of Appendix C-1. ¹¹ RLEA appealed the decision to the Commission, arguing that amended section 5(2)(f) required a combination of the New Orleans and Appendix C-1 provisions.

The Commission essentially affirmed the initial decision, modifying it only to take account of the Commission's intervening fashioning of the "Oregon II" conditions. ¹² Norfolk and Western Ry-Trackage Rights-Burlington Northern, Inc., 354 I.C.C. 605 (1978). After...