REA Express, Inc. v. BROTHERHOOD OF RAILWAY, ETC.

• Decision Date: 11 April 1973
• Docket Number: No. 72 Civ. 4492.,72 Civ. 4492.
• Parties: REA EXPRESS, INC., Plaintiff, v. BROTHERHOOD OF RAILWAY, AIRLINE AND STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS AND STATION EMPLOYEES, AFL-CIO, Defendant.
• Court: U.S. District Court — Southern District of New York

358 F. Supp. 760

REA EXPRESS, INC., Plaintiff, v. BROTHERHOOD OF RAILWAY, AIRLINE AND STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS AND STATION EMPLOYEES, AFL-CIO, Defendant.

No. 72 Civ. 4492.

United States District Court, S. D. New York.

April 11, 1973.

James L. Highsaw, Highsaw & Mahoney, Washington, D. C., David J. Fleming, Reilly, Fleming & Reilly, New York City, for defendant; William J. Donlon, Gen. Counsel, Brotherhood of Railway and Airline Clerks, Rosemont, Ill., of counsel.

Arthur M. Wisehart, New York City, for plaintiff; Anderson, Allegaert & Russell, New York City, Eugene Anderson, Jerold Oshinsky, New York City, of Counsel.

EDWARD WEINFELD, District Judge.

Plaintiff, REA Express, Inc. (REA), a carrier engaged in the express transportation of property by railroad, air and truck, and subject to the provisions of the Railway Labor Act,¹ and the Interstate Commerce Act,² commenced this action against the Brotherhood of Railway, Airline and Steamship Clerks, Freight Handlers, Express and Station Employees, AFL-CIO (BRAC), the collective bargaining representative of its employees,³ upon two causes of action. The first charges that BRAC called a nationwide strike against REA to coerce the resignation of REA's management, the continuation of certain payments believed to be illegal and for other unlawful purposes. The complaint further alleges that BRAC's activities constitute a continuing pattern of conduct in resorting to illegal strike action in violation of the no strike requirements of its agreement with REA and the Railway Labor Act. The second cause of action alleges that since April 29, 1971, BRAC has refused to bargain in good faith in that it insisted upon demands which are improper under the Railway Labor Act, including demands (a) for the abolition of the Special Board of Adjustment; (b) for preferential and discriminatory treatment of employees located in the New York area; (c) that REA's president resign; (d) that certain payments be made which are believed to be illegal; and (e) for benefits that would violate the Economic Stabilization Act.

Thereafter, plaintiff served an amended complaint setting forth a third cause of action, alleging in substance that it made its final and best offer of settlement upon BRAC's representation that this would be submitted to its membership for final acceptance or rejection by a vote; that plaintiff, in reliance upon such representation, changed its position to its detriment and to the defendant's benefit; that contrary to its representation, BRAC failed to submit the offer to its membership; that an independent vote taken of the membership indicated that a majority desired to accept REA's final proposal; that BRAC's action in ordering the strike in the light of the expressed views of a majority of its employees to the contrary constituted, not only a violation of the agreement to submit the final proposal to BRAC's membership for a determinative vote, but also a failure to exert every reasonable effort to make an agreement and to avoid a strike and the attendant interruption of commerce. Plaintiff seeks a judgment enjoining BRAC's alleged unlawful strike; it also seeks punitive damages, attorneys' fees and damages claimed to have been sustained as a result of alleged illegal or unauthorized work stoppages; also a declaratory judgment as to the propriety of BRAC's demands in collective bargaining; and finally an order directing BRAC to submit to its membership REA's final offer for acceptance or rejection.

THE TEMPORARY RESTRAINING ORDER

After negotiations between the plaintiff's and defendant's representatives, which had been carried on intermittently over an eighteen-month period, had failed to achieve an agreement, BRAC's International President called a nationwide strike of its 16,000 members, effective on October 20, 1972. Plaintiff commenced this suit and applied for a temporary restraining order, which, after a hearing on notice to the defendant and its attorneys, was granted on October 23. In a brief memorandum, accompanying the temporary restraining order, this Court found that although plaintiff's showing of probable success was limited, its claims raised substantial and difficult issues which merited further inquiry, and that pending such inquiry the harm to plaintiff and to others warranted the temporary injunction.⁴ The Court found, among other matters, that if the injunction were not granted, a strike would most likely force plaintiff into bankruptcy; also it would result in the permanent loss of jobs to thousands of its employees, the impairment of pension and other payments to many retired former employees, and inconvenience to shippers and the public at large.

THE PRELIMINARY INJUNCTION HEARING

Thereafter, extensive testimony was received in support of and in opposition to plaintiff's application for a preliminary injunction. During the course of the hearings an issue arose as to a strike ballot of defendant's membership previously taken by plaintiff on its own initiative. The Court suggested and the parties agreed that a poll be taken of BRAC's members to ascertain their views as to whether they preferred to accept REA's last offer or to resume the strike, merely for informational purposes and without prejudice to the rights of the parties. Pending the balloting, during which there may have been unexpressed hopes that differences might be composed, the temporary restraining order was continued by consent. The poll, conducted under the auspices of the National Mediation Board (the Board) was not completed until February 1973, and the returns indicated that 56.4% of those voting opted for rejection of the company's offer and in favor of a strike.⁵ Thereafter, the hearing on the motion for a preliminary injunction was resumed on March 22, 1973. The Court, in view of the extensive record which probed into all issues, ordered, pursuant to Rule 65(a)(2) of the Federal Rules of Civil Procedure, that the trial of the action on the merits be advanced and consolidated with the hearing on the application for the preliminary injunction.⁶ Additional testimony was received on March 30, when the matter was submitted for final decision.

THE PERIOD FROM APRIL 1, 1971 TO APRIL 6, 1972

The written agreement between the parties as to hours, wages and working conditions by its terms was to continue in effect until June 30, 1971, and thereafter until changed or modified in accordance with the provisions of the Railway Labor Act. On April 1, 1971, BRAC, under a provision of the agreement, served two notices on REA pursuant to section 6 of the Railway Labor Act;⁷ the first proposed a broad range of modifications in the existing contracts as to rates of pay, hours and working conditions, and the second proposed revisions in health and welfare benefits. All changes were to become effective July 1, 1971 for a period of three years. The wage increases proposed by BRAC were 20%, effective July 1, 1971; 15%, effective July 1, 1972; and 15%, effective July 1, 1973. The notices brought into play the machinery under the Railway Labor Act, intended, among other purposes, to achieve the "prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions"⁸ between the carrier and the Union. That purpose has not been realized to date, more than two years after BRAC served its section 6 notices, and in the light of the contentions advanced by the parties a detailed chronology of events is required to set the matter in proper focus.

On April 8, 1971, REA acknowledged receipt of BRAC's section 6 notices, suggested a conference on April 29, and advised that it would at a future date serve notice of its counterproposals to be considered concurrently with those of BRAC. The parties met on April 29, at which time the ground rules were discussed, and some time was spent on BRAC's first notice. On May 28 REA served its section 6 notice of proposed revisions in the existing agreements, which were "general in nature"; on June 15 it submitted specific proposals.

Prior to the exchange of the section 6 notices, the parties were involved in a dispute as to REA's claim that it had the right unilaterally to make changes in its Over-The-Road (OTR) Operations in northeastern United States. BRAC invoked the services of the National Mediation Board, but mediation was interrupted by litigation between the parties relative to that dispute.⁹ As a consequence of a Board mediator's report on the OTR mediation, on June 14, 1971 the Board docketed BRAC's section 6 notices and notified the parties that a mediator would be assigned to the dispute; each party was requested to furnish a brief statement as to the status of each item in the section 6 notices.¹⁰ REA protested to the Board that the docketing was premature and prejudicial to REA's interest; that the dispute involving the northeast OTR runs was unrelated to the April 1, 1971 section 6 notices; in general, REA urged that the parties had not had an opportunity, as required by section 2 First of the Railway Labor Act "to exert every reasonable effort to make and maintain agreements" and settle their disputes.¹¹ Consequently, it requested the Board to rescind its decision to docket the case at that time. BRAC, to the contrary, urged the Board to commence immediate mediation activity.

The Board instructed the parties to appear at a conference on July 1, 1971. On July 1 and 2 meetings were held, participated in by representatives of BRAC, REA and two Board mediators. Subsequently, as agreed, private meetings were held on July 7, 8, 12 and 13, attended only by BRAC and REA representatives, at which various proposals contained in the section 6 notices were considered after being broken down into categories of (a) major economic proposals; (b) minor economic proposals; and (c) non-economic proposals. While some progress was made as to non-economic proposals, an impasse was reached with the wage...