RAILWAY LABOR EXECUTIVES' v. Wheeling Acquisition

• Citation: 736 F. Supp. 1397
• Decision Date: 15 May 1990
• Docket Number: Civ. A. No. 90-597-A.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: RAILWAY LABOR EXECUTIVES' ASSOCIATION, et al., Plaintiffs, v. WHEELING ACQUISITION CORP., Defendant, Norfolk and Western Railway Co., Intervenor.

736 F. Supp. 1397

RAILWAY LABOR EXECUTIVES' ASSOCIATION, et al., Plaintiffs, v. WHEELING ACQUISITION CORP., Defendant Norfolk and Western Railway Co., Intervenor.

Civ. A. No. 90-597-A.

United States District Court, E.D. Virginia, Alexandria Division.

May 15, 1990.

John O'B Clarke, Jr. and David J. Strom, Highsaw, Mahoney & Clarke, P.C., Washington, D.C., for plaintiffs.

Timothy A. Harr and Robert H. Wheeler, Oppenheimer Wolff & Donnelly, Washington, D.C., for Wheeling Acquisition Corp.

Jeffrey S. Berlin and Mark E. Martin, Richardson, Berlin & Morvillo, Washington, D.C., for Norfolk and Western Ry. Co.

MEMORANDUM OPINION

ELLIS, District Judge.

Introduction

This unusual labor dispute¹ comes before the Court on plaintiffs' Application for a Temporary Restraining Order ("TRO") and defendant's Motion to Dismiss Count I of the Complaint. The novel and central question presented is whether a company is a "carrier" under the Railway Labor Act ("RLA" or "the Act"), 45 U.S.C. § 151 et seq., where it has contracted to purchase several hundred miles of rail lines and facilities, but does not currently own any rail lines or provide any rail services. A related question is whether persons hired by this company qualify as "employees" under the RLA. If these questions are answered in the affirmative, then defendant is subject to the full panoply of the RLA's bargaining duties and obligations, which, in turn, are the bases of plaintiffs' TRO Application. If such a company is not a "carrier," then the fundamental premise of plaintiffs' TRO Application fails and the Application, together with Count I of the Complaint, must be dismissed.

Facts

Plaintiffs are ten rail labor unions and the Railway Labor Executives' Association ("RLEA"), an unincorporated association of seventeen union chief executive officers. Defendant, Wheeling Acquisition Corporation ("Wheeling"), is a Delaware corporation that has contracted to purchase certain rail lines from the intervenor, Norfolk and Western Railway Company ("N & W"). All N & W employees, except those represented by Brotherhood of Locomotive Engineers ("BLE") and United Transportation Union ("UTU")², are represented for collective bargaining by the ten plaintiff unions in this matter.

Wheeling currently owns no rail lines, nor does it provide any railroad transportation services. This will soon change. As a result of a December 22, 1989 asset purchase agreement, Wheeling will shortly acquire approximately 575 miles of rail lines. The transaction includes Wheeling's acquisition from N & W of all the lines of the former Akron, Canton & Youngstown Railroad and Pittsburgh & West Virginia Railway, and most of the lines of the former Wheeling & Lake Erie Railroad. Under the agreement, Wheeling will also obtain trackage rights to an additional 264 miles of rail lines. At present, it appears that the transaction may be consummated as early as Thursday, May 17, 1990.

At the heart of this dispute is plaintiffs' demand that Wheeling bargain with plaintiff unions over the manner and method of hiring employees for the new railroad. It is important, therefore, to set out the facts relating to Wheeling's hiring activities. The proper starting point here is the purchase agreement. Section 16.1 of that agreement provides, in essence, that Wheeling will be solely and exclusively responsible for hiring its new employees and setting the terms and conditions of employment, and that nothing in the purchase agreement binds Wheeling to any existing N & W collective bargaining agreement.³ Although not bound to do so, Wheeling went on in Section 16.1 to express its intention to give preference in hiring to the approximately 400 employees currently active on the lines being acquired.⁴

In hiring new employees, Buyer Wheeling intends to offer employment opportunities first to current employees of Seller or its affiliated or subsidiary carriers who are active in rail operations being conducted with the Assets to be transferred. Offers will be based on qualifications of the said current employees, as solely determined by buyer, for the positions available.

Section 16.1 also states that Wheeling is permitted to recruit the N & W employees.⁵

In its first year of operation, Wheeling expects to employ a total work force of over 380 people, including approximately 50 management and supervisory personnel and approximately 330 nonmanagement employees. Thus, Wheeling began its implementation of Section 16.1 in early March 1990 by inviting the N & W employees to apply for jobs with Wheeling. These N & W employees were also invited to attend informational meetings in various convenient venues to learn more about the plans and objectives of the new company, the hiring process and career opportunities. Interested persons not employed by N & W were also invited to attend. Wheeling estimates that about 300 people attended the meetings in four locations. In early April, Wheeling sent a second letter to eligible N & W employees who had not yet applied for jobs. In that letter Wheeling stated:

Before filling the roster i.e., hiring employees, we wish to make one last attempt to provide the opportunity for first consideration to those currently working on the lines, including yourself. If you are interested in applying, we would like to talk with you. If we do not hear from you by April 19, we will conclude that you are not interested in employment, and we will seek to fill any remaining vacancies with others who have applied for employment. Your opportunity to receive first consideration in hiring will expire after April 19.

As a result of its recruiting efforts, Wheeling has received over 500 job applications or expressions of interest. Of that number, 239 N & W employees ultimately participated in the interview and testing process at Wheeling. This process included certain job related tests. For example, candidates for maintenance-of-way positions were asked to carry, with the assistance of a second candidate, a standard 175-pound railway cross tie a distance of 75 feet. Candidates for train and engine were asked to carry a 75-pound "knuckle" the same distance. All N & W employees who took these tests passed. But not all candidates who were asked to demonstrate other job-related skills were as successful. For example, some secretarial applicants had to demonstrate typing proficiency of 40 words per minute. Some candidates did not pass this and other job-related tests. Those who failed were given an opportunity to improve their skills and retake the tests. Subsequent to the interviews and skills evaluations, candidates underwent physical examinations at Wheeling's expense. Less than 5% of the candidates failed the physical examination. To date, it appears that Wheeling has offered jobs to approximately 192⁶ N & W employees. Wheeling, however, does not require that N & W employees resign from N & W as a condition of employment with Wheeling. Thus, employees may retain the option of being recalled to employment by N & W at any time, despite their employment with Wheeling.

Although Wheeling is giving hiring preference to N & W employees, it has not agreed to hire existing N & W employees in seniority order by craft. According to Wheeling, this decision stems from the differences between N & W's rail operations and Wheeling's planned operations. N & W operates the lines to be acquired as spur lines. Wheeling, by contrast, will operate the lines as a wholly separate rail system. Accordingly, Wheeling will have different operating patterns, service standards, crews, and seniority systems. Job categories will be different, reflecting the different needs and structure of the new Wheeling system. As a result, Wheeling will utilize its personnel differently from N & W's practice. In many cases, positions on the Wheeling line will be functionally different from existing positions on the N & W line. Also, Wheeling's current plans for restoration of the Canton-Cleveland line will require the employment of more personnel than N & W currently uses.

Plaintiffs' two count Complaint seeks declaratory and injunctive relief. In Count I, plaintiffs request the Court to declare that (i) defendant Wheeling must bargain with each union whose members will be affected by the proposed transfers, and that (ii) defendant Wheeling violated Section 2 First of the RLA by refusing to negotiate with rail labor unions over the manner in which N & W employees will be selected and assigned. Further, plaintiffs request that the Court enjoin defendant Wheeling from hiring any N & W employees until it has reached an agreement with rail labor unions over the manner in which Wheeling will select, hire and assign its employees.

Count II is in the alternative. Should the Court rule that the RLA does not impose on Wheeling any obligation to bargain and confer with plaintiffs, Count II requests that the Court declare that plaintiffs are not prohibited by any law of the United States from "ceasing or refusing to perform any work or to remain in any relation of employment; ... giving publicity to the existence of ... any labor dispute, whether by advertising, speaking, patrolling ... or urging" as provided in Sections 4(a), (e), and (i) of the Norris LaGuardia Act, 29 U.S.C. § 104(a), (e), and (i). As plaintiffs' application for a TRO and defendant's Motion to Dismiss Count I are the only matters presently before the Court, the Court need only consider Count I.

Simply stated, Wheeling's position⁷ is that it is not yet a "carrier" under the RLA, and therefore, not yet subject to its bargaining scheme. Moreover, Wheeling argues that the RLA confers no rights on plaintiff unions with respect to Wheeling, because the statute guarantees to Wheeling's future employees the right to select their own representatives and, therefore, these unions cannot claim to represent the future employees. According to Wheeling, the right to represent these employees must be won...