Stepanischen v. Merchants Despatch Transp. Corp., 83-1355

Decision Date06 December 1983
Docket NumberNo. 83-1355,83-1355
Parties114 L.R.R.M. (BNA) 3641, 99 Lab.Cas. P 10,609, 1 Indiv.Empl.Rts.Cas. 309 Simion STEPANISCHEN, Plaintiff, Appellant, v. MERCHANTS DESPATCH TRANSPORTATION CORPORATION, Defendant, Appellee.
CourtU.S. Court of Appeals — First Circuit

James F. Freeley, Jr., Boston, Mass., with whom John E. Sheehy, Boston, Mass., was on brief, for plaintiff, appellant.

Melvin A. Schwarz, Washington, D.C., with whom Dechert, Price & Rhoads, Washington, D.C., Martha Coakley, and Goodwin, Procter & Hoar, Boston, Mass., were on brief, for defendant, appellee.

Before COFFIN, Circuit Judge, FAIRCHILD *, Senior Circuit Judge, and BREYER, Circuit Judge.

COFFIN, Circuit Judge.

Simion Stepanischen appeals from a district court award of summary judgment to defendant Merchants Despatch Transportation Corporation (MDT). Following his discharge by MDT, Stepanischen brought claims for: (1) illegal discharge for union-organizing activities under the Railway Labor Act (RLA) Section 2 Fourth, 45 U.S.C. Sec. 152 Fourth; (2) bad faith termination of an employee at will; and (3) defamation.

On September 1, 1976, Stepanischen commenced work as an assistant inspector, working the midnight to 8:00 a.m. shift at MDT's office in Everett, Massachusetts. MDT is a wholly owned subsidiary of Conrail. MDT employees inspected railroad refrigeration cars at rail yards in Everett and Chelsea, Massachusetts. MDT performed similar operations at the rail yard in Selkirk, New York. MDT was responsible for inspection of railroad refrigeration cars once every twenty-four hours. At all times relevant to this suit, the MDT inspectors employed at both the Everett-Chelsea and Selkirk yards were non-unionized.

During his first two years at MDT, Stepanischen received commendations for his work performance and concomitant increases in pay. Near the end of his second year at work for MDT, Stepanischen's work habits apparently came under critical scrutiny. In July 1978, Ralph Schmidt, a Conrail supervisor, notified Ray Allen, Stepanischen's immediate supervisor, that Schmidt could not locate Stepanischen at the rail yard at the start of Stepanischen's shift. Schmidt informed Allen that Schmidt would recommend termination of Stepanischen if he continued to be unaccountable during working hours.

In the summer of 1978, Stepanischen decided to seek the unionization of MDT inspectors at the Everett-Chelsea and Selkirk yards. On September 9, 1978, certain MDT employees attended a union organizing meeting in Selkirk. Stepanischen was in Selkirk that day along with MDT's Vice President, Frank Underwood, and District Manager, Fred Langrehr.

On October 10, 1978, MDT re-evaluated Stepanischen's work performance and denied him a merit increase in salary. In the succeeding months, Allen allegedly encountered repeated deficiencies in the thoroughness and timeliness of Stepanischen's work habits. On February 16, 1979, however, Allen observed marked improvement and wrote a letter to his supervisor, J.A. Rizzo, notifying him of this progress.

On June 11, 1979, Allen entered the Everett-Chelsea yard at about 1 a.m. with the intent of accompanying Stepanischen during his inspections. Allen alleged that soon after his arrival at the Everett-Chelsea yard, he found inside Stepanischen's truck a set of falsified inspection cards. Allen stated that at 1:20 a.m. the cards indicated inspection times ranging from 12:30 to 2:30 a.m. Allen could not find Stepanischen until approximately 3:50 a.m. He asked Stepanischen where he had been, and Stepanischen replied that he had been at breakfast.

Allen reported this incident to Rizzo who, later on June 11, suspended Stepanischen without pay, based on charges of falsifications of records and theft of company time. Stepanischen denied the accusations. On June 12, Allen drafted a memorandum outlining the June 11 incident. On June 22, MDT held a hearing to give Stepanischen an opportunity to rebut the charges. Stepanischen offered the names of three witnesses who would testify to his whereabouts during the first half of his June 11 shift. None of the witnesses rendered what MDT officials considered to be a satisfactory explanation of Stepanischen's location during his shift. MDT permanently terminated Stepanischen on June 25, 1979.

Stepanischen filed this action on August 7, 1981. On April 13, 1983, the court granted MDT's motion for summary judgment on all counts of the complaint.

I. RLA Section 2 Fourth
A. Private Right of Action

Appellee MDT challenges that part of the district court's order which found that plaintiff could maintain a private right of action under Section 2 Fourth of the Railway Labor Act. We note initially that every appellate court and every district court but one that has addressed the issue has found that a implied private right of action exists under Section 2 Fourth. See International Association of Machinists & Aerospace Workers v. Northwest Airlines, 673 F.2d 700, 707 (3d Cir.1982); United States v. Winston, 558 F.2d 105, 108 & n. 3 (2d Cir.1977) (noting paucity of criminal proceedings under Sec. 2 and active pursuit of civil relief thereunder); Adams v. Federal Express Corp., 547 F.2d 319, 321 (6th Cir.1976), cert. denied, 431 U.S. 915, 97 S.Ct. 2177, 53 L.Ed.2d 225 (1977); Conrad v. Delta Air Lines, Inc., 494 F.2d 914, 918 (7th Cir.1974); Brady v. Trans World Airlines, Inc., 401 F.2d 87, 95-96 (3d Cir.1968), cert. denied, 393 U.S. 1048, 89 S.Ct. 680, 21 L.Ed.2d 691 (1969); Scott v. American Airlines, Inc., 488 F.Supp. 415, 419-20 (E.D.N.Y.1980); International Association of Machinists & Aerospace Workers v. Altair Airlines, Inc., 481 F.Supp. 1359, 1360 (E.D.Pa.1979); Kent v. Fugere, 438 F.Supp. 560, 563-65 (D.Conn.1977); Lum v. China Airlines Co., 413 F.Supp. 613, 614-16 (D.Hawaii 1976) (distinguishing the sole case, International Association of Machinists & Aerospace Workers v. Air Indies Corp., 86 L.R.R.M. 2076 (D.P.R.1973), that has held to the contrary); Griffin v. Piedmont Aviation, Inc., 384 F.Supp. 1070, 1072 (N.D.Ga.1974).

Despite these cases, MDT contends that the district court erred in finding an implied private right of action, because Congress intended the substantive provisions of Section 2 Fourth to be enforceable only in criminal actions brought by the Attorney General under Section 2 Tenth. MDT argues that the district court (as well as many of the courts listed above) incorrectly relied on Burke v. Compania Mexicana de Aviacion, S.A., 433 F.2d 1031 (9th Cir.1970), which had found that an implied private right of action existed under Section 2 Fourth. The Ninth Circuit decided Burke before Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), in which the Supreme Court set out a four-step analysis for deciding whether to infer a private right of action under a federal statute. MDT asserts that Cort v. Ash and its progeny have explicitly rejected the reasoning in Burke.

MDT also claims that the Ninth Circuit itself has disavowed Burke. In Le Vick v. Skaggs Companies, 701 F.2d 777 (9th Cir.1983), the Ninth Circuit overruled its decision in Stewart v. Travelers Corp., 503 F.2d 108 (9th Cir.1974), in which the court had implied a cause of action under 15 U.S.C. Sec. 1674(a) for wrongful discharge resulting from garnishment of an employee's wages. See also McCabe v. City of Eureka, 664 F.2d 680 (8th Cir.1981). Both Le Vick and McCabe disapproved of the proposition advanced in Stewart that "[i]n the absence of a clear congressional intent to the contrary, the courts are free to fashion appropriate civil remedies based on the violation of a penal statute where necessary to ensure the full effectiveness of the congressional purpose." Stewart, 503 F.2d at 110 (quoting Burke ).

MDT's arguments have some merit, but cannot prevail in light of both the legislative history of section 2 Fourth and Tenth and recent Supreme Court precedent regarding implied private rights of action. Accordingly, while some of the reasoning of Burke may no longer be valid, its holding nonetheless remains correct. 1

Many of the cases listed above relied on Burke without undertaking an independent analysis of the propriety of an implied private right of action under RLA Section 2 Fourth. Given that the Supreme Court has, subsequent to Burke, altered and refined the standard for determining whether a statute confers an implied right of action, a fresh examination of the issue is in order.

In determining whether the statute in question implies a private right of action, we are guided by the Supreme Court's refinement of the Cort v. Ash test in Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979), in which the Court held that a private right of action may be inferred from Sec. 901(a) of Title IX of the Education Amendments of 1972. The Court employed the Cort v. Ash four-factor test, id. at 689-709, 99 S.Ct. at 1953-1964, but focused on the ultimate issue of legislative intent, using the Cort factors only as indicia of intent.

The threshold question under Cort and Cannon is whether Congress enacted the statute for the benefit of a special class of which the plaintiff is a member. The language of Section 2 Fourth specifically protects the organizing activities of employees of carriers by railroad, as defined in Section 1 First. 45 U.S.C. Sec. 151 First. Section 2 Fourth states:

".... No carrier, its officers, or agents shall deny or in any way question the right of its employees to join, organize, or assist in organizing the labor organization of their choice, and it shall be unlawful for any carrier to interfere in any way with the organization of its employees ..."

Similar language in an 1893 statute providing specific protections for a specific class of persons made "irresistible" the Court's earliest inference of a private right of action. Cannon, 441 U.S. at 689, 99 S.Ct. at 1953 (citing Texas & Pacific...

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