Opposition Brief — Brotherhood of Railway Carmen, Division of Transportation, Communications International Union v. CSX Transportation, Inc.

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Text

No.

Iu The

Supreme Court of the Ani

@ctober Werm, 1988

BROTHERHOOD OF RAILWAY CARMEN,

DIVISION OF TRANSPORTATION

COMMUNICATIONS INTERNATIONAL UNION,

Petitioner,

Vv.

CSX TRANSPORTATION, INC.,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

RESPONDENT’S BRIEF IN OPPOSITION

JAMES S. WHITEHEAD

(Counsel of Record)

SIDLEY & AUSTIN

One First National Plaza

Chicago, IL 60603

(312) 853-7703

THomas L. SAMUEL

NIcHOLAS S. YOVANOVIC

James D. ToMOLA

CSX TRANSPORTATION, INC.

500 Water Street

Jacksonville, Florida 32202

(904) 359-3674

Attorneys for Respondent

Date: January 23, 1989

Pandick Technologies, Inc., Chicago © (312) 236-0200

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QUESTION PRESENTED

Whether a district court has jurisdiction to entertain

an action by a rail union seeking to enjoin implementa-

tion of an arbitration award to which the union is a party

rendered pursuant to labor protective conditions imposed

under the Interstate Commerce Act when such award is

initially reviewable by the Interstate Commerce Commis-

sion and thereafter is judicially reviewable exclusively in

the Court of Appeals.

LIST OF PARTIES

The names of all parties to the proceeding are con-

tained in the caption.

CSX Transportation, Inc. (hereinafter “CSXT”) is a

wholly-owned subsidiary of its parent company, CSX Cor-

poration (hereinafter “CSX”).

The subsidiaries and affiliates of CSXT or CSX, other

than those wholly owned by them, are as follows:

The Akron Union Passenger Railroad Company;

Allegheny and Western Railway Company;

Augusta and Summerville Railroad Company;

The Baltimore and Cumberland Valley RailRoad

Extension Company;

The Baltimore and Philadelphia Railroad Company;

Beaver Street Tower Company;

Central Transfer Railway and Storage Company;

Chatham Terminal Company;

Clearfield and Mahoning Railway Company;

The Cleveland Terminal & Valley Railroad Company;

CSX Services, Inc.;

Dayton and Michigan Railroad Company;

Dayton and Union Railroad Company;

The Home Avenue Railroad Company;

The Lakefront Dock and Railroad Terminal Company;

North Charleston Terminal Company;

Richmond-Washington Company, which has a sub-

sidiary, RF&P Corporation;

Winston-Salem Southbound Railway Company; and

Woodstock & Blockton Railway Company.

ili

TABLE OF CONTENTS

Page

GUESIION PRESENTED .................2... i

ee ons sxe ends es hs anaes ii

oo sy |, iv

ey aks 5 96a es ek ee ee eee 1

eg 6s oe ke wha %e-s oo 6 4 04 ws 2

STATUTORY PROVISIONS INVOLVED........... 2

Drmemeemrs OF tee, CASE..............205.-; 3

a ss 6k eo ke 6 6 4 os He a 10

THIS CASE DOES NOT PRESENT ANY ISSUES

APPROPRIATE FOR REVIEW BY THIS

et a 10

Ge a ae 21

TABLE OF AUTHORITIES

Cases: Pages)

Augspurger v. Brotherhood of Locomotive Engineers,

SAO F.2e GEO Ce Cor. 19TE) coc cece cei 12

Brotherhood of Locomotive Engineers v. Boston &

Maine Corp., 788 F.2d 794 (1st Cir.), cert. denied,

Gow Ws Dn ccs ccc pete nwesdes 12, 19

Brotherhood of Locomotive Engineers v. Chicago &

N.W. Ry, 314 F.2d 424 (8th Cir.), cert. denied, 375

ae EG ae eho ecu a ieee aes 17, 19

Brotherhood of Railway Carmen v. Interstate Com-

merce Commission, No. 88-1724 (D.C. Cir.) ... 10,15

Brotherhood of Railway Clerks v. Florida East Coast

pe ois ee ree 18

Burlington Northern, Inc. v. American Railway

Supervisors Ass’n, 503 F.2d 58 (7th Cir. 1974), cert.

GOREEE, GER. Se WW GRU ao tect cee ssness. 19

Burlington Northern R.R. Co. v. Brotherhood of Main-

tenance of Way Employees, 481 U.S. 429 (1987) ... 18

Burlington Northern R.R. Co. v. United Transporta-

tion Union, 218 F.2d 856 (8th Cir. 1988), cert.

denied sub nom. Interstate Commerce Commission

v. United Transportation Union, 57 U.S.L.W. 3376

Ry TRARY Ag ate am ee As i en 20

Carey v. O’Donnell, 506 F.2d 107 (D.C. Cir. 1974),

cert. denied, 419 U.S. 1110 (1975) ............. 12

City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320

Eg ek wen ao aca aa a area rane bea 11

Detroit & Toledo Shore Line R.R. vy. United Trans-

portation Union, 396 U.S. 142 (1969) ........... 18

Page(s)

Federal Communications Commission v. ITT World

Communications, Inc., 466 U.S. 463 (1984) ...... 11

International Brotherhood of Electrical Workers v.

Interstate Commerce Commission, 129 L.R.R.M.

ae Cs Ge SE aes na ce ee eee ek 14

Interstate Commerce Commission v. Brotherhood of

Locomotive Engineers, 482 U.S. 270 (1987) .... 17,19

Kesinger v. Universal Airlines, Inc., 474 F.2d 1127

oo 2 | Br er ere ater giuha a 12

Lambert Run Coal Co. v. Baltimore & Ohio R.R. Co.,

Bee Wa ee CO eo oe RSE eee 12

McLean Trucking Co. v. United States, 321 U.S. 67

COOGEE bone 0b ik bee ee eee 16, 17

Missouri Pacific R.R. Co. v. United Transportation

Union, 782 F.2d 107 (8th Cir. 1986), cert. denied,

SGT Be Gee Se CD oc a ok ke eae Owens 19

Nemitz v. Norfolk & Western Ry Co., 436 F.2d 841

(6th Cir.), affd on other grounds, 404 U.S. 37

CREE. Sasa eek Oe Re eee eas 19

Oling v. Air Line Pilots Ass’n, 346 F.2d 270 (7th Cir.),

cert. denied, 382 U.S. 926 (1965) .............. 12

Railway Labor Executives’ Ass’n v. Pittsburgh &

Lake Erie R.R., 845 F.2d 420 (3d Cir. 1988), cert.

granted, 57 U.S.L.W. 3376 (Nov. 28, 1988) .... 19, 20

Railway Labor Executives’ Ass’n v. United States, 339

a ee SD ob oc be ee ee ee ee ee 19

Schwabacher v. United States, 344 U.S. 182 (1948)... 16

| eee Pree eer rer rT ree eee ee Pe eee 16

Texas & N.O.R.R. Co. v. Brotherhood of Railroad

Trainmen, 307 F.2d 151 (5th Cir. 1962), cert. denied,

ek a ee CI: gc 0 ba 06 0 RV Re ee Oe es 17

United Transportation Union v. Norfolk & Western Ry

Co., 822 F.2d 1114 (D.C. Cir. 1987), cert. denied, 98

me F | gt PPT eee eee oe Cee 12, 16

Venner v. Michigan Central R.R. Co., 271 U.S. 127

errr ere Serres se rors Heer e 11,12

Whitney National Bank v. Bank of New Orleans &

seme Co., STO UB. 423 GGG) 6c ccecesaes 11

Interstate Commerce Commission Decisions:

Chicago and North Western Transportation Co.-- -

Abandonment--Near Dubuque and Oelwein, Ia., 3

I.C.C. 2d 729 (1987), affd. sub nom. International

Brotherhood of Electrical Workers v. Interstate Com-

merce Commission, 129 L.R.R.M. 3017

ee Ge EN 5 -e a pa wee a ae a ale oe eee 14

CSX Corportion--Control--Chessie System, Inc. and

Seaboard Coast Line Industries, Inc., 363

ot RO re er ee Passim

Denver and Rio Grande Western R.R. Co.--Trackage

Rights--Missouri Pacific R.R. Co.--Between Puebdlo,

CO and Kansas City, MO, 1.C.C. Finance Docket

No. 30,000 (Sub-No. 18) (served Oct. 25, 1983) .... 18

vii

Page(s)

Maine Central R.R. Co., et al.--Exemption from 49

U.S.C. 11342 and 11343, 1.C.C. Finance Docket No.

30532 (served Sept. 13, 1985), affd. sub. nom. Rail-

way Labor Executives’ Ass’n v. Interstate Commerce

Commission, 812 F.2d 1443 (D.C. Cir. 1987) ...... 19

New York Dock Ry--Control--Brooklyn Eastern Dist.

Term., 360 L.C.C. 60 (1979), affd sub nom. New

York Dock Ry v. United States, 609 F.2d 83 (2d Cir.

SR er ee Gare aren ere 3

Statutes:

on Ws ul a a nad 6 aaa bk be oe 8

ore eer re re ere rr ee 8

ee es ED 5.0 kw So wa Sce eb wa oe ee 2, 10, 15, 18

Eg 5k 0s ba ee 0 oe we ae 2, 10, 15, 18

fo eh ea iach ee eee ee ee eee 8

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No. 88-1014

In The

Supreme Court of the United States

@rctober Term, 15988

BROTHERHOOD OF RAILWAY CARMEN,

DIVISION OF TRANSPORTATION

COMMUNICATIONS INTERNATIONAL UNION,

Petitioner,

CSX TRANSPORTATION, INC.,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

RESPONDENT’S BRIEF IN OPPOSITION

Respondent CSX Transportation, Inc. (“CSXT”)

respectfully requests that this Court deny the petition for

a writ of certiorari, seeking review of the decision of the

United States Court of Appeals for the Eleventh Circuit

in this case.

OPINIONS BELOW

The September 19, 1988, opinion of the Court of

Appeals is reported at 855 F.2d 745 and appears in the

appendix to the petition (“Pet. App.”) at page la. The June

16, 1987, order of the United States District Court for the

Southern District of Georgia is reported at 662 F. Supp.

1409 and appears at Pet. App. 11a.

JURISDICTION

The judgment of the Court of Appeals was entered on

September 19, 1988. Pet. App. 47a. The petition for a writ

of certiorari was filed on December 19, 1988. Jurisdiction

is invoked under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

The statutory provisions pertinent to this case are 49

U.S.C. §§11343 and 11347, and 28 U.S.C. §§2321(a) and

2342(5). The sections from Title 49 are set forth at Pet.

App. 49a-52a.

28 U.S.C. § 2321(a) provides:

Except as otherwise provided by an Act of

Congress, a proceeding to enjoin or suspend, in

whole or in part, a rule, regulation, or order

~ of the Interstate Commerce Commission shall be

brought in the court of appeals as provided by and

in the manner prescribed in chapter 158 of this

title.

28 U.S.C. § 2342(5) provides:

The court of appeals (other than the United

States Court of Appeals for the Federal Circuit)

has exclusive jurisdiction to enjoin, set aside, sus-

pend (in whole or in part), or to determine the

validity of-

* * =

(5) all rules, regulations, or final orders made

reviewable by section 2321 of this title and all

final orders of such Commission made reviewable

under section 11091(j)(2) of title 49, United States

Code.

STATEMENT OF THE CASE

In early 1979, the Chessie System, Inc. (“Chessie”),

Seaboard Coast Line Industries, Inc. (“SCLI”), and CSX

Corporation, a newly formed holding company, petitioned

the Interstate Commerce Commission (“ICC”) pursuant to

Section 11343 of the Interstate Commerce Act (“ICA”), 49

U.S.C. § 11343, for authorization for CSX Corporation to

control the rail subsidiaries of Chessie and SCLI through

the merger of Chessie and SCLI into CSX in order to cre-

ate a single, consolidated rail system. The Chesapeake

and Ohio Railway Company (“C&O”) was one of the rail

subsidiaries of Chessie; the Seaboard Coast Line Railroad

Company (“SCL”), subsequently renamed CSX Transport-

ation, Inc. (“CSXT”), was one of the rail subsidiaries of

SCLI.

The ICC found the creation of this consolidated system

to be consistent with the public interest and approved the

petition.’ Pursuant to 49 U.S.C. § 11347, the ICC, as a con-

dition of its approval, imposed its New York Dock labor pro-

tective conditions.? Those conditions provide income pro-

tection to employees affected by the creation of this con-

solidated rail system and, second, provide a procedure cul-

minating in mandatory arbitration for selecting employees

and resolving labor disputes resulting from operational

1CSX Corporation -- Control -- Chessie System, Inc., and

Seaboard Coast Line Industries, Inc. (“CSX--Control”), 363 1.C.C.

521 (1980).

2 These so-called New York Dock Conditions had been developed

by the Commission in an earlier control proceeding involving the

New York Dock Railway Co. See New York Dock Ry—Control-

Brooklyn Eastern Dist. Term., 360 I.C.C. 60 (1979), aff’d sub

nom. New York Dock Ry v. United States, 609 F. 2d 83 (2d Cir.

1979). Under the New York Dock Conditions employees affected

by an ICC-approved transaction are entitled to receive up to six

years’ protection against a resulting loss of income. The New

York Dock Conditions are set forth in Respondent’s Appendix

(“CSXT App.”) at A-1.

changes by the carriers pursuant to the Commission’s con-

solidation authorization. 363 I.C.C. at 589.°

In their short-term operating plan presented to the

Commission as part of the application for control authority,

the applicants proposed certain operating coordinations

and facility consolidations that they planned to implement

immediately after receiving the Commission’s authority to

create the single, consolidated rail system. The consoli-

dation of the CSXT Waycross, Georgia, freight car heavy

repair shop and the C&O Raceland, Kentucky, shop was

not specifically mentioned. Nonetheless, representatives

of rail labor recognized that Commission approval of the

control application would allow the carriers to engage

in future consolidating activities beyond those specifically

contemplated at the time of the original ICC proceedings.

Accordingly, those representatives argued to the ICC that

such a prospective, long-term impact on rail employees

required labor protection more generous than that con-

tained in the New York Dock Conditions. 363 I.C.C. at

589.

3 Article I, Section 4 of the New York Dock Conditions pro-

vides an expedited collective bargaining/arbitration mechanism

for resolving labor disputes that arise when a carrier, pursuant

to the ICC’s consolidation authorization, undertakes restructur-

ing actions that may result in the dismissal or displacement

of employees. Under Section 4(a), the carrier must give the

employees and their unions at least 90 days written notice of

the intended transaction. The parties are to begin negotiations

within ten days thereafter in an attempt to reach agreement

on how the action will be carried out and how the affected

employees’ interests will be protected. If the parties are unable

to reach agreement after bargaining for 30 days, either party

may submit the dispute for a binding determination by a neutral

arbitrator. Under Section 4(b), the carrier cannot implement the

proposed changes until after the parties reach an agreement as a

result of their negotiations or the arbitrator’s decision resolving

the dispute has been rendered. CSXT App. A-3

The Commission agreed that its approval of the con-

trol application would empower the CSX system to engage

in future facility coordinations and consolidations beyond

those then identified. “It is certainly possible that as the

two systems mesh their operations, additional coordina-

tions may occur that could lead to further employee dis-

placements.” Jbid. However, the Commission ruled that its

standard New York Dock Conditions would adequately pro-

tect any employees who might be affected by such future

consolidations. “We believe that the standard conditions

will adequately protect those employees now identified as

affected by the consolidation as well as those who may be

affected in the future, but are not now identified specifical-

ly.” Ibid. (emphasis added).

On August 29, 1986, as required by the New York

Dock Conditions, CSXT and C&O served notice upon the

Brotherhood of Railway Carmen (“BRC”) and its affected

members that, as part of the continued consolidation of

the operations of the CSX system following CSX--Control,

the CSXT freight car heavy repair shop in Waycross, Geor-

gia, would be shut down on or about December 31, 1986,

and this work would be transferred to the C&O freight car

heavy repair shop at Raceland, Kentucky, for consolida-

tion with the work performed there under the C&O/BRC

collective bargaining agreement in effect at that location.

CSXT and C&O requested the commencement of negotia-

tions with BRC for the purpose of reaching an implement-

ing agreement to carry out the proposed consolidation, as

provided in the New York Dock Conditions.

No agreement could be reached with BRC in sub-

sequent bargaining sessions. On October 10, 1986,

BRC served a notice under the New York Dock Con-

ditions, as well as the arbitration clause of the

Orange Book Agreement, an existing labor protec-

tion agreement,‘ requesting arbitration of several issues,

“This so-called Orange Book Agreement, so named because of

(Footnote continued on the following page)

including whether Waycross carmen covered by the Orange

Book Agreement could be required to transfer to Raceland,

and whether the carriers could move work covered under

the SCL-BRC collective bargaining agreement and place

it under the C&O-BRC agreement. CSXT also invoked

arbitration under the New York Dock Conditions to resolve

the dispute over the implementation of the consolidation.

The parties subsequently established a three-member arbi-

tration committee and mutually scheduled the arbitration

hearing for December 18, 1986.5

On December 17, 1986, the day before the scheduled

arbitration hearing was to take place, BRC filed the instant

lawsuit in the United States District Court for the South-

ern District of Georgia, purportedly pursuant to the Rail-

way Labor Act (“RLA”), requesting that CSXT be enjoined

from applying or enforcing the award that would result

from the New York Dock arbitration proceedings. CSXT

App. A-79, A-90. The arbitration hearing was held as

scheduled the next day with BRC’s full participation.

On March 23, 1987, the arbitration committee issued

its Opinion and Award imposing an implementing agree-

ment to govern the consolidation of the Waycross and Race-

4 (Continued from previous page)

the color of its cover, was entered into effective August 1, 1966,-

between various rail unions, including BRC, and two predeces-

sors of SCL in connection with their then pending merger.

5 Petitioner’s description at page 5 of its petition of the events

that led up to the arbitration hearing on December 18, 1986,

is seriously erroneous and misleading in several respects. It

was BRC, not CSXT, that initially demanded arbitration under

Article I, Section 4 of the New York Dock Conditions, as well

as the Orange Book Agreement. See Pet. App. 68A. CSXT

and C&O did not insist on arbitration only under New York

Dock. Indeed, both New York Dock and Orange Book issues were

fully presented to the arbitration committee, which expressly

acknowledged in its award that it was serving in both capacities.

CSXT App. A-17. Finally, both BRC and the carriers jointly

selected the neutral member of the arbitration committee. He

was not obtained by CSXT from the National Mediation Board.

land facilities. CSXT App. A-14. The committee rejected

BRC’s claim that it lacked authority to provide an imple-

menting agreement for the transfer of work or employees

because such transfers allegedly would be in derogation

of existing collective bargaining agreements, merger pro-

tection agreements, and the Railway Labor Act. The com-

mittee recognized that it served as a “quasi-judicial exten-

sion” of the ICC because its underlying arbitral author-

ity derived from the ICC’s order in CSX--Control impos-

ing the New York Dock Conditions and that, as a result,

it should follow the ICC’s interpretation of its own power

and of its enabling statute, the Interstate Commerce Act.

Id. at A-41. The committee recognized that the ICC has

declared that ICC-authorized transactions are exempt from

the requirements of the Railway Labor Act, to the extent

the RLA bargaining procedures conflict with the expedited

bargaining/arbitration procedure established by the ICC in

its New York Dock Conditions. Jd. at A-41 to A-43. Thus,

the committee concluded that, as an agent for the ICC,

it possessed the requisite authority to formulate an imple-

menting agreement that would provide for the transfer of

both work and employees from Waycross to Raceland. Jd.

at A-43.°

Following the issuance of the arbitration award, both

the carriers and BRC commenced proceedings before the

ICC seeking administrative review of the award. On April

13, 1987, CSXT and C&O filed a Petition for Adminis-

trative Review with the Commission seeking review of

that portion of the award that prevented CSXT from mov-

®The committee interpreted the Orange Book Agreement

as not allowing CSXT to transfer either Orange Book-

protected employees or their work beyond the former SCL

property. CSXT App. A-43 to A-45. The commit-

tee recognized, however, that, as a result of ICA Section

11341(a), the limitation in the Orange Book on the trans-

fer of work “must be subordinated to the Carriers’ right

(Footnote continued on the following page)

ing Orange Book-protected employees from Waycross to

Raceland.

BRC prayed in its Cross-Complaint for Review of Opin-

ion and Award of Arbitration Committee that the Award

“should be set aside as exceeding this agency’s jurisdic-

tion.” In particular, BRC argued to the Commission that

the award had improperly superceded the RLA and collec-

tive bargaining agreement rights of the union’s members

because the exemption from “all other law” found in ICA

Section 11341(a) does not apply to the RLA or to collec-

tive bargaining obligations. In addition, BRC argued that

the arbitration committee had no jurisdiction to resolve

the bargaining dispute over the shop consolidation because

this consolidation had not been expressly referred to in the

proceedings before the Commission in CSX--Control.

While these arbitration review proceedings were pend-

ing before the ICC, the district court, on June 16, 1987,

dismissed BRC’s complaint. The court ruled that it had

jurisdiction over BRC’s Railway Labor Act claims under 28

U.S.C. § §1331 and 1337(a) as well as under 45 U.S.C.§§152

First and Seventh and 156 and under 49 U.S.C. § 11341.

The court did not expressly address CSXT’s argument

that BRC’s claims constituted an impermissible collateral

attack on the ongoing ICC arbitration review proceed-

6 (Continued from previous page)

to engage in the authorized New York Dock transaction. Other-

wise, the Carriers would be effectively thwarted from transfer-

ring all the Waycross freight car heavy repair work to Raceland.”

Id. at A-45. Nevertheless, the committee refused to relieve CSXT

from the perceived restrictions in the Orange Book on transfer-

ring employees off the SCL property because the committee found

that this limitation “will only slightly impair the transaction

while preserving the essence of the Orange Book pursuant to Sec-

tion 3 of the New York Dock Conditions.” Jd. at A-45. Thus, the

committee ruled that CSXT could transfer the work of Orange

Book-protected employees but could not compel Orange Book-

protected employees themselves to accept Raceland positions. Jd

at A-46.

eine

ings. The court nevertheless ruled that, under ICA Section

11341(a), the proposed Waycross/Raceland shop consolida-

tion was exempted from the application of the RLA and

any restraints in the relevant collective bargaining agree-

ments. Pet. App. 21a.

Following the entry of judgment dismissing BRC’s

complaint, CSXT and C&O implemented the shop consoli-

dation and transferred the freight car heavy repair work

and non-Orange Book-protected employees from Waycross

to Raceland in accordance with the terms of the Arbitrated

Implementing Agreement.’

BRC appealed the dismissal of its claims by the dis-

trict court to the Eleventh Circuit. While the appeal was

pending, on June 23, 1988, the ICC served its ruling on

the cross-applications filed by the parties with respect to

the arbitration award. Pet. App. 23a-46a. The Commis-

sion ruled that it had jurisdiction to review the award.

Pet. App. 26a. It then upheld the conclusion of the arbi-

tration committee that it had the authority to impose an

implementing agreement moving both work and employees

to Raceland, despite potentially conflicting provisions of

bargaining agreements, the RLA, or the New York Dock

Conditions themselves. Pet. App. 30a-3la, 35a.° BRC’s

petition seeking review of the Commission’s order is now

pending before the United States Court of Appeals for the

D.C. Circuit, sub nom. Brotherhood of Railway Carmen v.

Interstate Commerce Commission, No. 88-1724.

On September 19, 1988, the Eleventh Circuit rejected

BRC’s appeal in the purported Railway Labor Act action

7 The Commission on June 5, 1987, denied BRC’s request for an

emergency cease and desist order during the pendency of the ICC

review proceedings.

®The Commission reversed the arbitration award insofar as

it had prevented the carriers from transferring Orange Book-

protected employees to Raceland, explaining that, “Once it is

(Footnote continued on the following page)

seeking to enjoin implementation of the arbitration award

-and vacated and remanded the judgment of the district

court with orders that BRC’s claims be dismissed for lack

of subject matter jurisdiction. Pet. App. la-10a. The Court

of Appeals did not reach the issue of the interplay between

the ICA and the RLA, on which the district court had based

its ruling, but instead concluded that BRC’s lawsuit was,

in effect, an impermissible collateral attack on the ICC

arbitration proceedings and award, review of which was

ultimately committed to the Court of Appeals under 28

U.S.C. §§ 2321(a) and 2342(5). Pet. App. 8a.

ARGUMENT

THIS CASE DOES NOT PRESENT ANY ISSUES

APPROPRIATE FOR REVIEW BY THIS COURT

Contrary to Petitioner’s assertions, this case does not

present issues of importance to the rail industry or the pro-

cess of administrative law that need to be resolved by this

Court. The decision of the Court of Appeals was merely a

routine application of the settled principle of administra-

tive law proscribing collateral attacks on administrative

agency orders when Congress specifically has assigned the

jurisdiction to review such orders to another court, i.e.,

the Court of Appeals. Nor does the narrow decision of the

Court of Appeals below give rise to an issue as to the inter-

play between the Interstate Commerce Act and Railway

Labor Act as urged by Petitioner. The case below was dis-

missed for lack of jurisdiction, and no resolution of this

RLA-ICA issue was reached. That issue is more appropri-

8 (Continued from previous page)

determined that a proposed transaction is authorized by the

Commission ..., the carrier is permitted to carry out and fully

implement the transaction despite potential impediments in

existing agreements upon compliance with the provisions for the

protection of the rights of employees contained in New York Dock

or imposed by the Commission upon the involved transaction.”

Pet. App. 36a.

ately decided on the appeal of the arbitration award that

Petitioner has commenced and that is currently pending

in the D.C. Circuit. Moreover, Petitioner’s assertion of

confusion in the law concerning the interplay between the

ICA and the RLA is only achieved by a broad lumping

together of decisions arising under various diverse sections

of the ICA and by ignoring statutory distinctions that those

very decisions found relevant and controlling. The narrow

decision of the court below is consistent with this Court’s

prior decisions and does not present any issues of national

import or the opportunity to resolve a conflict between the

circuits.

1. The decision of the Court of Appeals was merely a

routine application of the settled principle of administra-

tive law proscribing collateral attacks on administrative

agency orders when Congress has assigned jurisdiction to

review agency orders to a particular court. That court’s

jurisdiction is exclusive and forecloses challenges to such

orders in a different forum. Petitioner has available to it

through its appeal from the arbitration award a full review

of all relevant issues. See, e.g., Whitney National Bank v.

Bank of New Orleans & Trust Co., 379 U.S. 411, 420 (1965);

City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320, 334-

37 (1958); Venner v. Michigan Central R.R. Co., 271 US.

127, 130-31 (1926).

As this Court explained in City of Tacoma, an agency’s

actions cannot be attacked in a court other than the statu-

tory review court even on the ground that its actions vio-

late another federal law. 357 U.S. at 334-37. Thus, where,

as here, Congress has designated the Court of Appeals to

review an agency’s actions, “all objections to the [agency’s]

order. ..must be made in the Court of Appeals or not at

all.” 357 U.S. at 336. This principle may not be avoided by

bringing a civil suit in the wrong forum under the guise

of an action to enjoin 2 party to the agency proceedings

from carrying out the actions approved by the agency. As

this Court recently held in Federal Communications Com-

mission v. ITT World Communications, Inc., 466 U.S. 463,

468 (1984), “Litigants may not evade this provision [for

exclusive Court of Appeals review] by requesting the Dis-

trict Court to enjoin action that is the outcome of the agen-

cy’s order.” See also Lambert Run Coal Co. v. Baltimore &

Ohio R.R. Co., 258 U.S. 377, 381-82 (1922); Venner, supra,

271 U.S. at 130 (Action assailing validity of ICC order and

praying that railroad be enjoined from implementing order

“is equivalent to asking that the order be adjudged invalid

and set aside.”).

BRC attempted just such an end run around the statu-

tory review procedures here. In asking the district court to

enjoin CSXT from implementing the ICC arbitration award

(CSXT App.A-90), BRC was in effect seeking to have the

award “adjudged invalid and set aside,” in derogation of the

exclusive administrative review mechanism established by

Congress for ICC orders.

Federal courts have routinely dismissed for lack of

jurisdiction collateral attacks on ICC and Civil Aeronau-

tics Board orders brought in the district courts notwith-

standing the fact that the plaintiffs have claimed that com-

pliance with such orders would violate the RLA or collec-

tive bargaining rights. See, e.g., Brotherhood of Locomotive

Engineers v. Boston & Maine Corp., 788 F. 2d 794, 799-802

(1st Cir.), cert. denied, 479 U.S. 829 (1986); Augspurger

v. Brotherhood of Locomotive Engineers, 510 F. 2d 853,

860 (8th Cir. 1975); Carey v. O’Donnell, 506 F. 2d 107,

110-ll (D.C. Cir. 1974), cert. denied, 419 U.S. 1110 (1975);

Kesinger v. Universal Airlines, Inc. , 474 F. 2d 1127, 1132

(6th Cir. 1973); Oling v. Air Line Pilots Ass’n, 346 F. 2d

270, 276-77 (7th Cir.), cert. denied, 382 U.S. 926 (1965).

Most recently, the D.C. Circuit rejected just such a

collateral attack, under circumstances nearly identical to

those here, in United Transportation Union v. Norfolk &

Western Ry Co., 822 F. 2d 1114 (D.C. Cir. 1987) (““UTU

v. N&W”), cert. denied, 98 L. Ed.2d 651 (1988). A rail

union filed suit against a railroad, seeking to enjoin the

carrier from implementing an arbitration award issued

by an arbitrator serving under labor protection conditions

imposed by the ICC, on the ground that compliance with

the award, which transferred employees from one collec-

tive bargaining agreement and carrier to another, would

violate the RLA. The D.C. Circuit affirmed the dismissal of

the union’s claims, based on its recognition that, because

the arbitrator derived his authority solely from the ICC

order imposing labor protection conditions on the railroad,

“[t]he Union’s challenge to the arbitral award is a chal-

lenge to the Commission’s authority, through its delegate,

to diminish rights said otherwise to be conferred by the

RLA.” 822 F. 2d at 1120. The D.C. Circuit held:

The conclusion that the arbitral award, like

the exemption award [ICC order] from which it

derives, was functionally an “order of the Commis-

sion” within the meaning of 28 U.S.C. § 2321(a)

is therefore inescapable. Accordingly, the district

court lacked subject matter jurisdiction to enter-

tain the challenge. The proper avenue of appeal is

prescribed by 28 U.S.C. §§ 2321(a) and 2342(5)....

822 F. 2d at 1120.° The court rejected the identical

RLA-based jurisdictional arguments made by BRC here,

explaining:

The Union’s argument for jurisdiction below

rests crucially on the proposition that it is assert-

ing violations of the RLA rather than defects in

an order of the Commission. For us to agree,

however, would enable a party, merely by draft-

ing an artfully worded complaint, to avoid the bar

of a clearly applicable jurisdictional statute. The

Union’s complaint is with the Commission and the

° BRC does not dispute that the arbitration committee here was

operating as a delegate of the ICC pursuant to Article I, Section

4(a) of the New York Dock Conditions.

arbitration it set up. Its theory is that neither the

Commission nor its arbitrator can lawfully issue

an order that derogates the Union’s rights under

the RLA, not that they have somehow “violated”

the RLA. To view the matter otherwise would be

to allow the complainant’s own description of its

theory to determine the forum with jurisdiction.

Ibid. J

Similarly here, BRC’s complaint is in reality with the

ICC’s interpretation of the ICA. BRC, in seeking to enjoin

CSXT from putting into effect the results of the arbitration

and from complying with the implementing agreement pre-

scribed by the arbitration committee, was in essence ask-

ing the district court to review and set aside the arbitration

award on the ground that the committee had erroneously

interpreted the scope of the authority of the ICC and its

delegated agents under the Interstate Commer¢e Act.

As the instant case demonstrates, the ICC will review

the decisions of arbitrators appointed under its prescribed

labor protection conditions. See also Chicago and North

Western Transportation Co.--Abandonment--Near Dubuque

and Oelwein, Ia., 3 I.C.C.2d 729 (1987), aff’d sub

nom. International Brotherhood of Electrical Workers v.

Interstate Commerce Commission (“IBEW v. ICC”), 129

L.R.R.M. 3017 (D.C. Cir. 1988). The appropriateness of ICC

review, in the first instance, has recently been confirmed

by the D.C. Circuit in JBEW v. ICC, supra.

It is particularly appropriate that issues such as those

raised in the district court by BRC here be considered first

by the ICC. BRC’s claim that the Waycross/Raceland shop

consolidation was not “authorized” by, or within the scope

of, the Commission’s decision in CSX--Control is peculiarly

within the expertise of the Commission, the decision’s

author. Similarly, the claim that the arbitration commit-

tee lacked the authority to move people and work from one

location and bargaining agreement to another is simply

an argument that the committee exceeded the authority

delegated to it by the ICC under, and misinterpreted, the

ICA. The Commission, with its expertise in interpreting

Congress’ statutory intent regarding the ICA, should have

the first opportunity to correct any such error, subject to

subsequent judicial review in the Court of Appeals. Final-

ly, Congress vested exclusive jurisdiction in the Commis-

sion to carry out the nation’s transportation policy while

at the same time determining the level of labor protection

necessary to protect the legitimate interests of affected rail

employees. When there are claims that this delicate bal-

ance has been disturbed, it is the Commission, and not a

district court, that should resolve them and decide what

relief, if any, is appropriate; judicial review is then avail-

able in the Court of Appeals. 28 U.S.C. §§2321(a), 2342(5).

BRC presented all of its RLA-based arguments chal-

lenging the legality of the Waycross/Raceland shop consol-

idation first to the arbitration committee and then to the

ICC, and now may present them to the D.C. Circuit.’° The

D.C. Circuit can grant BRC full relief in the event it deter-

mines the Commission and its delegate have erred.

The decision of the Eleventh Circuit prohibiting BRC’s

collateral attack on the established administrative review

process was both consistent with this Court’s prior deci-

sions and in keeping with Congress’ express directive

10BRC has included the following enumerated issues in its

brief to the D.C. Circuit in Brotherhood of Railway Carmen

v. Interstate Commerce Commission, No. 88-1724, filed on

January 5, 1989:

1. Whether the ICC’s and the arbitration committee’s

conclusion that the immunity provisions of 49 U.S.C.

§ 11341(a) applied to and relieved CSXT of its contrac-

tual and statutory obligations to employees under the

Railway Labor Act, 45 U.S.C. §151, et seqg., was in

excess of ICC statutory jurisdiction and otherwise not

in accordance with law?

2. Whether the ICC and the arbitration committee in

authorizing or approving the “transaction” violated 49

(Footnote continued on the following page)

granting exclusive jurisdiction to the Court of Appeals to

review ICC orders. In UTU v. N&W, supra, this Court just

last term denied a rail union’s petition for a writ of certio-

rari that presented essentially the same RLA-based juris-

dictional arguments made by BRC here. BRC’s petition is

no more worthy and should also be denied.

2. Petitioner’s suggestion that the Court of Appeals’

decision is contrary to the Interstate Commerce Act and

prior decisions of this Court and the Court of Appeals

is erroneous. As noted at page 12, supra, the federal

courts have consistently rejected collateral attacks on ongo-

ing ICC proceedings, such as the arbitration proceeding

here. Neither Schwabacher v. United States, 334 U.S. 182

. (1948), Seaboard Air Line R.R. Co. v. Daniel, 333 US.

118 (1948), nor McLean Trucking Co. v. United States, 321

U.S. 67 (1944), relied on by BRC, is in any way apposite.

Schwabacher and McLean were actions seeking to enjoin or

set aside ICC orders that were properly commenced before

a three-judge district court, as then required by Congress.

See 334 U.S. at 189; 321 U.S. at 68. No issue of jurisdic-

tion arose.'’ Seaboard was an action brought in state court

10 (Continued from previous page)

U.S.C. § 11347 by eliminating “rights, privileges, and

benefits. . . [of employees represented by petition-

er) under existing collective-bargaining agreements or

otherwise” which were required to be preserved by that

provision of the Interstate Commerce Act?

3. Assuming ICC authority to determine to what

extent § 11341(a) applied to this case, does the exemp-

tion conferred by § 11341(a) from restraining or pro-

hibitory laws apply to actions of a carrier which are not

subject to ICC approval under § 11343, or any other pro-

vision of the Interstate Commerce Act, and which were

not contemplated or brought to the attention of the ICC

at the time the control approval order was issued under

$§11343(a) and 11344 some six years earlier?

11 This Court in McLean did observe, as BRC notes, that Congress

did not charge the ICC with the duty or authority to execute laws

(Footnote continued on the following page)

by a rail carrier seeking to enjoin the State of South Car-

olina from enforcing its corporation laws with respect to

an ICC-approved railroad reorganization. This Court had

little difficulty in finding that such an action by the benefi-

ciary of an [CC order did not constitute a suit to enjoin, set

aside, annul, or suspend the Commission’s order; no such

relief was sought in the railroad’s complaint or the answer.

333 U.S. at 122-23. Thus, nore of these cases involved an

independent judicial action by a party to an ICC-imposed

arbitration proceeding seeking to enjoin another such party

from complying with the arbitration award, particularly

where the party seeking such relief was simultaneously

pursuing review of the award before the ICC and, ultimate-

ly, the Court of Appeals.

Nor does the statement in Justice Stevens’ concurring

opinion in Interstate Commerce Commission v. Brotherhood

of Locomotive Engineers, 482 U.S. 270, 96 L. Ed. 2d 222,

247 n.13 (1987), that the “necessity” for the supercession

11 (Continued from previous page)

other than the ICA. 321 U.S. at 79. But, this Court did not rule

that, as a result, parties seeking to challenge Commission orders

under such other statutes are free to do so in any forum. BRC

ignores the fact that in McLean this Court explained that, while

the policies of these other federal statutes, such as the Sherman

Act (or the RLA), are to be considered in varying degrees by the

Commission in determining whether the proposed transaction

is consistent with the public interest, once that determination

has been made, the Commission’s order supercedes these other

statutes as a result of the predecessor of ICA Section 11341(a).

321 U.S. at 80, 85-88.

12 Similarly, Brotherhood of Locomotive Engineers v. Chicago &

N.W. Ry Co., 314 F. 2d 424 (8th Cir.), cert. denied, 375 U.S. 819

(1963), and Tezas & N.O.R.R. Co. v. Brotherhood of Railroad

Trainmen, 307 F. 2d 151 (5th Cir. 1962), cert. denied, 371 U.S.

952 (1963), were both district court actions commenced by rail

carriers seeking to remove labor obstacles to the implementation

of ICC-approved rail transactions, not actions, such as BRC’s

here, to enjoin the implementation of a Commission order, which

can only be brought in the Court of Appeals.

of “other law” provided by ICA Section 11341(a) is to be

determined by the “tribunal that is faced with a claim that

a party is violating some ‘other law,’ ” condone the collat-

eral attack on the ICC arbitration proceeding mounted by

BRC here. Subject matter jurisdiction was never an issue

in that case, which arose from a petition for review of an

ICC order initially filed in the Court of Appeals under 28

U.S.C. §§2321(a) and 2342(5). The proper tribunal to deter-

mine whether the arbitration award here improperly over-

rode the bargaining agreement or RLA rights of BRC and

its members was also initially the Commission and, sub-

sequently, the Court of Appeais, as the Eleventh Circuit

properly recognized. Pet. App. 8a.

3. The bulk of BRC’s petition is simply an attack

on the ICC’s determination that the expedited bargain-

ing/arbitration procedure specified in its labor protective

conditions supercedes the endless bargaining procedures

of the Railway Labor Act” and that the ICC or its arbi-

trator-delegate has authority in imposing implementing

agreements to depart from asserted collective bargaining

agreement or RLA rights.’ BRC maintains that rail car-

riers may not implement transactions authorized by the

ICC until they have fully complied with the interminable

RLA bargaining process, with the ultimate threat of a

strike in the event agreement on the union’s terms is not

'* This Court has previously recognized that the RLA bargain-

ing process is “purposely long and drawn out,” Brotherhood of

Railway Clerks v. Florida East Coast Ry, 384 U.S. 238, 246

(1966), and has described it as “almost an interminable process”

and as “virtually endless.” Detroit & Toledo Shore Line R.R. v.

United Transportation Union, 396 U.S. 142, 149 (1969); Burling-

ton Northern R.R. Co. v. Brotherhood of Maintenance of Way

Employees, 481 U.S. 429, 95 L.Ed.2d 381, 397 (1987).

14 See, .g., Denver and Rio Grande Western R.R. Co. - Trackage

Rights -- Missouri Pacific R.R. Co. -- Between Pueblo, CO and

Kansas City, MO, ICC Finance Docket No. 30,000 (Sub-No. 18)

(Footnote continued on the following page)

reached, even though the carriers are simply implement-

ing the transaction in accordance with the terms of an

ICC-required arbitration award. In essence, BRC would

have this Court provide rail unions with the same veto

power over rail transactions expressly rejected by Congress

when it voted down the Harrington Amendment to the

Transportation Act of 1940. See Railway Labor Executives’

Ass’n v. United States, 339 U.S. 142, 151 (1950); Brother-

hood of Locomotive Engineers v. Chicago & N.W. Ry, 314

F. 2d 424, 430-32 (8th Cir.), cert. denied, 375 U.S. 819

(1963).'5 |

This case, in which the provisions of ICA Section

11341(a) expressly apply, in which labor protective con-

ditions have been imposed by the ICC, and in which

the carrier has simply implemented an arbitration award

expressly contemplated by those conditions, should not be

confused with the plethora of “short line” sale cases, such

as Railway Labor Executives’ Ass’n v. Pittsburgh & Lake

Erie R.R., 845 F. 2d 420 (3d Cir. 1988), Trainmencert.

14 (Continued from previous page)

(served Oct. 25, 1983); Maine Central R.R. Co., et al. --

Exemption from 49 U.S.C. 11842 and 11848, ICC Finance Docket

No. 30532 (served Sept. 13, 1985), aff’d sub nom. Railway

Labor Executives’ Ass’n v. Interstate Commerce Commis-

sion, 812 F. 2d 1443 (D.C. Cir. 1987).

15 The federal courts have long recognized that the RLA is among

the “other law” superceded when necessary by the ICA as a result

of ICA Section 11341(a). See, ¢.g., Brotherhood of Locomotive

Engineers v. Boston & Maine Corp., supra, 788 F. 2d at 800-

01; Missouri Pacific R.R. Co. v. United Transportation Union,

782 F. 2d 107, 111-12 (8th Cir. 1986), cert. denied, 107 S. Ct.

3209 (1987); Burlington Northern, Inc. v. American Railway

Supervisors Ass’n, 503 F. 2d 58, 62-63 (7th Cir. 1974), cert.

denied, 421 U.S. 975 (1975); Brotherhood of Locomotive Engineers

v. Chicago & N.W. Ry, supra, 314 F. 2d at 430-32; Nemitz v.

Norfolk & Western Ry Co., 436 F. 2d 841, 845 (6th Cir.), aff’d

on other grounds, 404 U.S. 37 (1971). Cf. Interstate Commerce

Commission v. Brotherhood of Locomotive Engineers, supra, 96

L. Ed. 2d at 244-49 (Stevens, J., concurring).

granted, 57 U.S.L.W. 3376 (Nov. 28, 1988), where the sales

transactions at issue were not expressly covered by Section

11341(a)’® and where the ICC in its discretion declined to

impose labor protection conditions. Indeed, Petitioner has

not cited a single case in which a federal court has ruled

that a rail carrier must comply with the RLA bargain-

ing procedures prior to implementing an ICC-authorized

transaction to which Section 11341(a) applies. In contrast,

see Burlington Northern R.R. Co. v. United Transportation

Union, 848 F. 2d 856, 863 (8th Cir. 1988), cert. denied sub

nom. Interstate Commerce Commission v. United Trans-

portation Union, 57 U.S.L.W. 3376 (Nov. 17, 1988) (“When

the ICA provides a specific exemption from all other law

and mandates inescapable employee protective conditions

under provisions such as 49 U.S.C. §§11341(a), or 11347, it

effectively supersedes... the RLA...”).

However, this case is not the proper vehicle to address

these issues, which were not even reached by the Court

of Appeals below. BRC currently has the opportunity to

argue and is presenting these arguments to the D.C. Cir-

cuit in its review of the ICC order that itself reviewed

the Waycross/Raceland arbitration award. If BRC is not

satisfied with the decision that court will ultimately issue,

it can, and presumably will, present this Court with a peti-

tion seeking review of that decision.

18 Indeed, the Third Circuit in Pittsburgh & Lake Erie expressly

noted that ICA Section 11341(a) was not applicable to the rail

transaction involved in that case and, accordingly, it was not

required to determine the effect of that section on RLA bargain-

ing obligations. 845 F. 2d at 445-46 & n.45.

| a

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted,

JAMES S. WHITEHEAD

(Counsel of Record)

SIDLEY & AUSTIN

One First National Plaza

Chicago, IL 60603

(312) 853-7703

THOMAS L. SAMUEL

NICHOLAS S. YOVANOVIC

JAMES D. TOMOLA

CSX TRANSPORTATION, INC.

500 Water Street

Jacksonville, Florida 32202

(904) 359-3674

Attorneys for Respondent

January 23, 1989

APPENDIX

Chile a

a Se ee Te

A-1

RESPONDENT’S APPENDIX

A. New York Dock Conditions, from New York Dock

Ry—Control—Brooklyn Eastern Dist. Term., 360

Bip ic We CN oe br ee A-1

B. Opinion and Award, In the Matter of the Arbi-

tration Between Brotherhood Railway Carmen-

Division of BRAC, Organization, and CSX Trans-

portation, Inc. and the Chesapeake and Ohio Rail-

way Company, Carriers, March 23, 1988..... A-14

C. Verified Complaint for Declaratory Judgment

and Injunctive Relief, Brotherhood Railway, Air-

line and Steamship Clerks, et al. v. CSX Trans-

portation, Inc., No. CV 286-243 (S.D. Ga.), filed

gt y Me erg eee eee A-79

NEW YORK DOCK CONDITIONS

Labor protective conditions to be imposed in railroad

transactions pursuant to 49 U.S.C. 11343 et seq. [formerly

sections 5(2) and 5(3) of the Interstate Commerce Act],

except for trackage rights and lease proposals which are

being considered elsewhere, are as follows:

1. Definitions. - (a) “Transaction” means any action

taken pursuant to authorizations of this Commission on

which these provisions have been imposed.

(b) “Displaced employee” means an employee of the

railroad who, as a result of a transaction is placed in a

worse position with respect to his compensation and rules

governing his working conditions.

railroad who, as a result of a transaction is deprived of

employment with the railroad because of the abolition of

his position or the loss thereof as the result of the exercise

of seniority rights by an employee whose position is abol-

ished as a result of a transaction.

A-2

(d) “Protective period” means the period of time during

which a displaced or dismissed employee is to be provided

protection hereunder and extends from the date on which

an employee is displaced or dismissed to the expiration of

6 years therefrom, provided, however, that the protective

period for any particular employee shall not continue for

a longer period following the date he was displaced or dis-

missed than the period during which such employee was in

the employ of the railroad prior to the date of his displace-

ment or his dismissal. For purposes of this appendix, an

employee’s length of service shall be determined in accor-

dance with the provisions of section 7(b) of the Washington

Job Protection Agreement of May 1936.

2. The rates of pay, rules, working conditions and

all collective bargaining and other rights, privileges and

benefits (including continuation of pension rights and

benefits) of the railroad’s employees under applicable laws

and/or existing collective bargaining agreements or other-

wise shall be preserved unless changed by future collective

bargaining agreements or applicable statutes.

3. Nothing in this Appendix shall be construed as

depriving any employee of any rights or benefits or elim-

inating any obligations which such employee may have

under any existing job security or other protective condi-

tions or arrangements; provided, that if an employee oth-

erwise is eligible for protection under both this Appen-

dix and some other job security or other protective condi-

tions or arrangements, he shall elect between the benefits

under this Appendix and similar benefits under such other

arrangement and, for so long as he continues to receive

such benefits under the provisions which he so elects, he

shall not be entitled to the same type of benefit under the

provisions which he does not so elect; provided further, that

the benefits under this Appendix, or any other arrange-

ment, shall be construed to include the conditions, respon-

sibilities and obligations accompanying such benefits; and,

eee

a dioten AaPaatate s ;

A-3

provided further, that after expiration of the period for

which such employee is entitled to protection under the

arrangement which he so elects, he may then be entitled to

protection under the other arrangement for the remainder,

if any, of this protective period under that arrangement.

4. Notice and Agreement or Decision - (a) Each

railroad contemplating a transaction which is subject to

these conditions and may cause the dismissal or displace-

ment of any employees, or rearrangement of forces, shall

give at least ninety (90) days written notice of such

intended transaction by posting a notice on bulletin boards

convenient to the interested employees of the railroad and

by sending registered mail notice to the representatives

of such interested employees. Such notice shall contain a

full and adequate statement of the proposed changes to be

affected by such transaction, including an estimate of the

number of employees of each class affected by the intended

changes. Prior to consummation the parties shall negotiate

in the following manner.

Within five (5) days from the date of receipt of notice,

at the request of either the railroad or representatives

of such interested employees, a place shall be selected to

hold negotiations for the purpose of reaching agreement

with respect to application of the terms and conditions

of this appendix, and these negotiations shall commence

immediately thereafter and continue for at least thirty (30)

days, Each transaction which may result in a dismissal

or displacement of employees or rearrangement of forces,

shall provide for the selection of forces from all employees

involved on a basis accepted as appropriate for application

in the particular case and any assignment of employees

made necessary by the transaction shall be made on the

basis of an agreement or decision under this section 4. If

at the end of thirty (30) days there is a failure to agree,

either party to the dispute may submit it for adjustment in

accordance with the following procedures:

A-4

(1) Within five (5) days from the request for arbitration

the parties shall select a neutral referee and in the event

they are unable to agree within said five (5) days upon the

selection of said referee then the National Mediation Board

shall immediately appoint a referee.

(2) No later than twenty (20) days after a referee has

been designated a hearing on the dispute shall commence.

(3) The decision of the referee shall be final, binding

and conclusive and shall be rendered within thirty (30)

days from the commencement of the hearing of the dispute.

(4) The salary and expenses of the referee shall be

borne equally by the parties to the proceeding; all other

expenses shall! be paid by the party incurring them.

(b) No change in operations, services, facilities, or

equipment shall occur until after an agreement is reached

or the decision of a referee has been rendered.

5. Displacement allowances - (a) So long after a dis-

placed employee’s displacerrent as he is unable, in the nor-

mal exercise of his seniority rights under existing agree-

ments, rules and practices, to obtain a position producing

compensation equal to or exceeding the compensation he

received in the position from which he was displaced, he

shall, during his protective period, be paid a monthly dis-

placement allowance equal to the difference between the

monthly compensation received by him in the position in

which he is retained and the average monthly compensa-

tion received by him in the position from which he was

displaced.

Each displaced employee’s displacement allowance

shall be determined by dividing separately by 12 the total

compensation received by the employee and the total time

for which he was paid during the last 12 months in which

he performed services immediately preceding the date of

his displacement as a result of the transaction (thereby

producing average monthly compensation and average

A-5

monthly time paid for in the test period), and provided fur-

ther, that such allowance shall also be adjusted to reflect

subsequent general wage increases.

If a displaced employee’s compensation in his retained

position in any month is less in any month in which he

performs work than the aforesaid average compensation

(adjusted to reflect subsequent general wage increases) to

which he would have been entitled, he shall be paid the

difference, less compensation for time lost on account of his

voluntary absences to the extent that he is not available

for service equivalent to his average monthly time during

the test period, but if in his retained position he works

in any month in excess of the aforesaid average monthly

time paid for during the test period he shall be additionally

compensated for such excess time at the rate of pay of the

retained position.

(b) If a displaced employee fails to exercise his senior-

ity rights to secure another position available to him which

does not require a change in his place of residence, to which

he is entitled under the working agreement and which car-

ries a rate of pay and compensation exceeding those of the

position which he elects to retain, he shall thereafter be

treated for the purposes of this section as occupying the

position he elects to decline.

expiration of the protective period in the event of the dis-

placed employee’s resignation, death, retirement. or dis-

missal for justifiable cause.

6. Dismissal allowances. - (a) A dismissed employee

shall be paid a monthly dismissal allowance, from the date

he is deprived of employment and continuing during his

protective period, equivalent to one-twelfth of the compen-

sation received by him in the last 12 months of his employ-

ment in which he earned compensation prior to the date he

is first deprived of employment as a result of the transac-

A-6

tion. Such allowance shall also be adjusted to reflect sub-

sequent general wage increases.

(b) The dismissal allowance of any dismissed employee

who returns to service with the railroad shall cease while

he is so reemployed. During the time of such reemploy-

ment, he shall be entitled to protection in accordance with

the provisions of section 5.

who is otherwise employed shall be reduced to the extent

that his combined monthly earnings in such other employ-

ment, any benefits received under any unemployment

insurance law, and his dismissal allowance exceed the

amount upon which his dismissal allowance is based. Such

employee, or his representative, and the railroad shall

agree upon a procedure by which the railroad shall be

currently informed of the earnings of such employee in

employment other than with the railroad, and the benefits

received.

(d) The dismissal allowance shall cease prior to the

expiration of the protective period in the event of the

employee’s resignation, death, retirement, dismissal for

justifiable cause under existing agreements, failure to

return to service after being notified in accordance with the

working agreement, failure without good cause to accept

a comparable position which does not require a change in

his place of residence for which he is qualified and eligi-

ble after appropriate notification, if his return does not

infringe upon the employment rights of other employees

under a working agreement.

7. Separation allowance. - A dismissed employee

entitled to protection under this appendix, may, at his

option within 7 days of his dismissal, resign and (in lieu of

all other benefits and protections provided in this appendix)

accept a lump sum payment computed in accordance with

section 9 of the Washington Job Protection Agreement of

May 1936.

A-7

8. Fringe benefits. - No employee of the railroad

who is affected by a transaction shall be deprived, dur-

ing his protection period, of benefits attached to his pre-

vious employment, such as free transportation, hospital-

ization, pensions, reliefs, et cetera, under the same condi-

tions and so long as such benefits continue to be accorded

to other employees of the railroad, in active or on furlough

as the case may be, to the extent that such benefits can

be so maintained under present authority of law or corpo-

rate action or through future authorization which may be

obtained.

9. Moving expenses. - Any employee retained in the

service of the railroad or who is later restored to service

after being entitled to receive a dismissal allowance, and

who is required to change the point of his employment as

a result of the transaction,and who within his protective

period is required to meve his place of residence, shall be

reimbursed for all expenses of moving his household and

other personal effects for the traveling expenses of him-

self and members of his family, including living expenses

for himself and his family and for his own actual wage

loss, not to exceed 3 working days, the exact extent of the

responsibility of the railroad during the time necessary for

such transfer and for reasonable time thereafter and the

ways and means of transportation to be agreed upon in

advance by the railroad and the affected employee or his

representatives; provided however, that changes in place of

residence which are not a result of the transaction, shall

not be considered to be within the purview of this section;

provided further, that the railroad shall, to the same extent

provided above, assume the expenses, et cetera, for any

employee furloughed with three (3) years after changing

his point of employment as a result of a transaction, who

elects to move his place of residence back to his original

point of employment. No claim for reimbursement shall be

paid under the provision of this section unless such claim is

A-8

presented to railroad with 90 days after the date on which

the expenses were incurred.

10. Should the railroad rearrange or adjust its forces

in anticipation of a transaction with the purpose or effect

of depriving an employee of benefits to which he other-

wise would have become entitled under this appendix, this

appendix will apply to such employee.

11. Arbitration of disputes. - (a) In the event

the railroad and its employees or their authorized repre-

sentatives cannot settle any dispute or controversy with

respect to the interpretation, application or enforcement of

any provision of this appendix, except section 4 and 12 of

this article I, within 20 days after the dispute arises, it

may be referred by either party to an arbitration commit-

tee. Upon notice in writing served by one party on the

other of intent by that party to refer a dispute or contro-

versy to an arbitration committée, each party shall, within

10 days, select one member of the vommittee and the mem-

bers thus chosen shall select a neutral member who shall

serve as chairman. If any party fails to select its member of

the arbitration committee within the prescribed time lim-

it, the general chairman of the involved labor organization

or the highest officer designated by the railroads, as the

case may be, shall be deemed the selected member and the

committee shall then function and its decision shall have

the same force and effect as though all parties had selected

their members. Should the members be unable to agree

upon the appointment of the neutral member within 10

days, the parties shall then within an additional 10 days

endeavor to agree to a method by which a neutral mem-

ber shall be appointed, and, failing such agreement, either

party may request the National Mediation Board to desig-

nate within 10 days the neutral member whose designation

will be binding, upon the parties.

(b) In the event a dispute involves more than one labor

organization, each will be entitled to a representative on

A-9

the arbitration committee, in which even the railroad will

be entitled to appoint additional representatives so as to

equal the number of labor organization representatives.

committee shall be final, binding, and conclusive and shall

be rendered within 45 days after the hearing of the dispute

or controversy has been concluded and the record closed.

(d) The salaries and expenses of the neutral member

shall be borne equally by the parties to the proceeding and

all other expenses shall be paid by the party incurring

them.

(e) In the event of any dispute as to whether or not a

particular employee was affected by a transaction, it shall

be his obligation to identify the transaction and specify the

pertinent facts of that transaction relied upon. It shall then

be the railroad’s burden to prove that factors other than a

transaction affected the employee.

12. Losses from home removal. - (a) The following

conditions shall apply to the extent they are applicable

in each instance to any employee who is retained in the

service of the railroad (or who is later restored to service

after being entitled to receive a dismissal allowance) who

is required to change the point of his employment within

his protective period as a result of the transaction and is

therefore required to move his place of residence:

(i) If the employee owns his own home in the locality

from which he is required to move, he shall at his option

be reimbursed by the railroad for any loss suffered in the

sale of his home for less than its fair value. In each case

the fair value of the home in question shall be determined

as of a date sufficiently prior to the date of the transaction

so as to be unaffected thereby. The railroad shall in each

instance be afforded an opportunity to purchase the home

at such fair value before it is sold by the employee to any

other person.

~ A-10

(ii) If the employee is under a contract to purchase

his home, the railroad shall protect him against loss to

the extent of the fair value of equity he may have in the

home and in addition shall relieve him from any further

obligation under his contract.

(iii) If the employee holds an unexpired lease of a

dwelling occupied by him as his home, the railroad shall

protect him from all loss and cost in securing the cancella-

tion of said lease.

(b) Changes in place of residence which are not the

result of a transaction shall not be considered to be within

the purview of this section.

of this Section unless such claim is presented to the railroad

within 1 year after the date the employee is required to

move.

(d) Should a controversy arise in respect to the value

of the home, the loss sustained in its sale, the loss under

a contract for purchase, loss and cost in securing termina-

tion of a lease, or any other question in connection with

these matter, it shall be decided through joint conference

between the employee, or their representatives and the

railroad. In the event they are unable to agree, the dispute

or controversy may be referred by either party to a board

of competent real estate appraisers, selected in the follow-

ing manner. One to be selected by the representatives of

the employees and one by the railroad, and these two, if

unable to agree within 30 days upon a valuation, shall

endeavor by agreement within 10 days thereafter to select

a third appraiser, or to agree to a method by which a third

appraiser shall be selected, and failing such agreement,

either party may request the National Mediation Board

to designate within 10 days a third appraiser whose desig-

nation will be binding upon the parties. A decision of a

majority of the appraisers shall be required and said deci-

sion shall be final and conclusive. The salary and expenses

A-11

of the third or neutral appraiser, including the expenses of

the appraisal board, shall be borne equally by the parties

to the proceedings. All other expenses shall be paid by the

party incurring them, including the compensation of the

appraiser selected by such party.

ARTICLE II

1. Any employee who is terminated or furloughed as

a result of a transaction shall, if he so requests, be granted

priority of employment or reemployment to fill a position

comparable to that which he held when his employment

was terminated or he was furloughed, even though in a

different craft or class, on the railroad which he is, or by

training or retraining physically and mentally can become,

qualified, not, however, in contravention of collective bar-

gaining agreements relating thereto.

2. In the event such training or retraining is

requested by such employee, the railroad shall provide for

such training or retraining at no cost to the employee.

3. If such a terminated or furloughed employee who

had made a request under section 1 or 2 of the article I

fails without good cause within 10 calendar days to accept

an offer of a position comparable to that which he held

when terminated or furloughed for which he is qualified,

or for which he has satisfactorily completed such training,

he shall, effective at the expiration of such 10-day period,

forfeit all rights and benefits under this appendix.

ARTICLE III

Subject to this appendix, as if employees of railroad,

shall be employees, if affected by a transaction, of sepa-

rately incorporated terminal companies which are owned

(in whole or in part) or used by railroad and employees

of any other enterprise within the definition of common

carrier by railroad in section 1(3) of part I of the Inter-

state Commerce Act, as amended, in which railroad has an

interest, to which railroad provides facilities, or with which

A-12

railroad contracts for use of facilities, or the facilities of

which railroad otherwise uses; except that the provisions

of this appendix shall be suspended with respect to each

such employee until and unless he applies for employment

with each owning carrier and each using carrier; provided

that said carriers shall establish one convenient central

location for each terminal or other enterprise for receipt of

one such application which will be effective as to all said

carriers and railroad shall notify such employees of this

requirement and of the location for receipt of the applica-

tion. Such employees shall not be entitled to any of the

benefits of this appendix in the case of failure, without

good cause, to accept comparable employment, which does

not require a change in place of residence, under the same

conditions as apply to other employees under this appen-

dix, with any carrier for which application for employment

has been made in accordance with this section.

ARTICLE IV

Employees of the railroad who are not represented by a

labor organization shall be afforded substantially the same

levels of protection as are afforded to members of labor

organizations under these terms and conditions.

In the event any dispute or controversy arises between

the railroad and an employee not represented by a labor

organization with respect to the interpretation, application

or enforcement of any provision hereof which cannot be set-

tled by the parties within 30 days after the dispute arises,

either party may refer the dispute to arbitration.

ARTICLE V

1. It is the intent of this appendix to provide

employee protections which which are not less than the

benefits established under 49 USC 11347 before February

5, 1976, and under section 565 of title 45. In so doing,

changes in wording and organization from arrangements

earlier developed under those sections have been necessary

A-13

to make such benefits applicable to transactions as defined

in article 1 of this appendix. In making such changes, it is

not the intent of this appendix to diminish such benefits.

Thus, the terms of this appendix are to be resolved in favor

of this intent to provide employee protections and benefits

no less than those established under 49 USC 11347 before

February 5, 1976 and under section 565 of title 45.

2. In the event any provision of this appendix is held

to be invalid or other wise unenforceable under applicable

law, the remaining provisions of this appendix shall not be

affected.

A-14

ARBITRATION COMMITTEE

In the Matter of the Arbitration ~. OPINION AND AW

Between: | ARD

- | Pursuant to Article I,

BROTHERHOOD RAILWAY | Section 4 of the New York

CARMEN - A DIVISION OF | Dock Conditions and

BRAC | Section 4 of the

; | November 3, 1966

Organization, \ Merger Protective

Agreement

and |

CSX TRANSPORTATION, INC. and | me a ‘

THE CHESAPEAKE and OHIO Docket No.

RAILWAY COMPANY,

Carriers.

Hearing Date: December 18, 1986

Hearing Location: Jacksonville, Florida

MEMBERS OF THE COMMITTEE

Employees’ Member: R. P. Wojtowicz

Carriers’ Member: J. T. Williams

Neutral Member: John B. LaRocco

APPEARANCES

For the Organization: For the Carrier:

WILLIAM G. MAHONEY, Esq. JAMES S. WHITEHEAD, Esq.

HIGHSAW & MAHONEY, P.C. SIDLEY & AUSTIN

Suite 210 One First National Plaza

1050 Seventeenth Street, N.W. Chicago, Illinois 60603

Washington, D.C. 20036

JAMES D. TOMOLA, Esq.

Mr. L. W. MCALPINE, JR. a verona ;

General Chairman ansportation, Inc.

Brotherhood Railway Carmen 100 North Charles Street

P. O. Box 3744 Baltimore, Maryland 21201

Savannah, Georgia 31404

Mr. R. UTTER

General Chairman

Brotherhood Railway Carmen

857 McKinley Street

Toledo, Ohio 43605

A-15

OPINION OF THE COMMITTEE

I. INTRODUCTION

On September 23, 1980, the Interstate Commerce

Commission (ICC) approved CSX Corporation’s petition to

control two non-carrier holding companies: Chessie Sys-

tem, Inc. and Seaboard Coast Line Industries, Inc. ICC

Finance Docket No. 28905 (Sub-No. 1). 363 LC.C. 521

(1980). The Chesapeake and Ohio Railway Company

(C&O) and the Baltimore and Ohio Railroad Company

(B&O) are the major railroad subsidiaries of Chessie Sys-

tem, Inc. In 1980, Seaboard Coast Line Industries, Inc.

was the parent of the Family Lines which included the

Seaboard Coast Line Railroad (SCL). The successor enter-

prises of the Family Lines were Seaboard System Railroad

and currently CSX Transportation, Inc. (CSX). The end to

end consolidation produced a large single system serving

the northeast, southeast and midwest. Jd. at 553. The rail-

road subsidiaries remained separate entities. Jd. at 575.

To compensate and protect employees adversely affected by

the control case and related proceedings, the ICC imposed

the employee merger protection conditions set forth in New

York Dock Railway - Control - Brooklyn Eastern District

Terminal, 360 I.C.C. 60, 84-90 (1979); affirmed, New York

Dock Railway v. United States, 609 F.2d 83 (2nd Cir. 1979)

(“New York Dock Conditions”) on all of the involved rail-

roads pursuant to the relevant enabling statute. 49 U.S.C.

11343, 11347; 363 LC.C. 521, 588.

In 1966, the ICC approved the merger of the Seaboard

Air Line Railroad Company (SAL) and the Atlantic Coast

Line Railroad Company (ACL). The merged carrier became

the SCL.

On November 3, 1966, the Brotherhood Railway Car-

men (BRC) and sixteen other rail labor organizations

entered into an Agreement with the SAL and ACL for

the Protection of Employees in the Event of the SAL-ACL

Merger. The Agreement, commonly referred to as the

A-16

Orange Book, was effective August 1, 1966. The parties

negotiated the Orange Book pursuant to the last sentence

of Section 5(2)(f) of the Interstate Commerce Act. In 1978,

Congress enacted 49 U.S.C. 11347 and repealed Section

5(2)(f).

II. BACKGROUND AND SUMMARY OF THE

FACTS -

CSX anc C&O (collectively “the Carriers”) issued writ-

ten notice, dated August 29, 1986, of their intent to close

CSX’s freight car heavy repair shop at Waycross, Geor-

gia and to simultaneously transfer “... freight car heavy

repair work and certain storeroom work at Waycross... ”

to the C&0O’s Raceland, Kentucky freight car heavy

repair facility. The work moved from Waycros would

be “... coordinated with such work presently being per-

formed at Raceland under the C&O Agreement.” The

repair work and Waycross employees are presently sub-

ject to the SCL Schedule Agreement. Approximately fifty

percent of the employees currently occupying positions at

the Waycross repair shop are present employees within the

definition set forth in Orange Book Section 2(a).

In their notice, the Carriers informed the Organiza-

tion of their intent to abolish 149 positions at Waycross

and establish 107 positions at Raceland. The Organization

represents 121 of the incumbents holding positions slated

for abolition. By class, the incumbents are 99 Carmen, 4

Carman Helpers, 13 Painters and 5 Painter Helpers. At

the coordinated Raceland facility, the Carriers estimated

that they would create 86 Carmen, 3 Carman Helper, 6

Painter and 4 Painter Helper positions to perform the work

transferred from Waycross. Except as described above, the

notice was silent concerning the 22 workers whose posi-

tions would be abolished but would be unable to either

obtain an equivalent, newly established Raceland position

or exercise their seniority to claim a remaining position at

Waycross. The Carriers anticipated that they would close

NEURONE A RU AES ASG AR RE

A-17

the Waycross freight car heavy repair shop on or about

December 31, 1986.

The notice also indicated that CSX would abolish

3 clerical positions, 11 jobs in the blacksmith’s craft, 6

laborer positions, 3 Machinist positions, 4 jobs held by

sheet metal workers and 1 electric crane operator position.

At Raceland, the Carriers intended to establish only 1 cler-

ical, 4 blacksmith and 3 laborer positions.

After the Carriers served the August 29, 1986 notice,

the parties conferred at least twice to negotiate an imple-

menting agreement. Their bargaining efforts were unsuc-

cessful primarily because irreconcilable disagreements

developed over the application of certain Orange Book pro-

visions, the interrelationship between the Orange Book

and a New York Dock implementing agreement and the

Carriers’ right to implement the transaction without first

complying with the Railway Labor Act. 45 U.S.C. 151

et seq. Thereafter, the Organization, and later the Car-

riers, invoked arbitration in accord with Section 4(a) of

the New York Dock Conditions.! Even though Section 4

contemplates arbitration by a single, neutral arbiter, the

parties formed this Committee to resolve all outstanding

disputes under the New York Dock Conditions and the

Orange Book. Thus, we derive dual authority from Section

4 of the New York Dock Conditions and Section 4 of the

Orange Book.

Beginning on November 4, 1986, the Organization

challenged the jurisdiction of this Committee to fashion

an implementing agreement. Despite its prior invoca-

tion of arbitration, the Organization may nonetheless con-

test our fundamental power to adjudicate this dispute. A

lack of jurisdiction allegation may be raised at any time.

1 All sections pertinent to this case are found in Article I of the

New York Dock Conditions. Thus, the Committee will only cite

the particular section number.

A-18

Therefore, the Organization is not estopped from urging

this Committee to dismiss all the substantive matters

which the parties previously agreed to submit to us.

The Organization and the Carriers filed prehear-

ing submissions and extensively argued their respective

contentions at the December 18, 1986 hearing. Also,

they filed post-hearing briefs which the Neutral Member

received on January 2, 1987. This decision was issued

within the thirty day limitation period found in Section

4(a)(3) of the New York Dock Conditions.

Ill. STATEMENT OF THE ISSUES

The Carriers pose the following question to this Com-

mittee:

“Shall the terms of the attached agreement, pro-

posed by the Carriers, apply to the implementation

of the Carriers’ August 29, 1986 notice to transfer

all freight car heavy repair work from Waycross,

Georgia to Raceland, Kentucky and to coordinate

such work with that presently being performed at

Raceland under the C&O Agreement?”

The “attached agreement” referred to in the Carriers’ ques-

tion at issue is a proposed implementing agreement which

it sent to the Organization on October 15, 1986. The Car-

riers withdrew all their prior proposals.

In its opening submission, the Organization proffered

four issues which read:

“ISSUE NO. 1:

“Is the CSX’s notice dated August 29, 1986

(attached as Exhibit No. 1), concerning transfer of

freight car heavy repair work from Waycross, Ga.

on the SCL to Raceland, Ky. on the C&O adequate

and specific enough notice under the New York

Dock conditions?

“ISSUE NO. 2:

“If this arbitrator has jurisdiction of this dis-

pute, can the affected employees who have lifetime

A-19

guaranteed jobs on the SSR under the Orange

Book agreement—which gives the SSR the right to

transfer work and employees only from their home

point to other points on the former SAL-ACL rail-

roads—be compelled to transfer to another point on

another railroad which is not on the property of

the former SCL and ACL railroads without uni-

laterally effecting a change in their wages, rules

or working conditions as set forth in the Orange

Book?

“ISSUE NO. 3:

“Can CSX move the work which is subject to

the SCL (SSR) Working Agreement and restricted

to the SCL employees, out from under the SCL

agreement and place it under another contract

(Working Agreement) on another railroad?

“ISSUE NO. 4:

“If the above issues each are answered in the

affirmative, what should be the terms of an imple-

menting agreement under Article I, Section 4 of

New York Dock?”

In addition, the Organization’s General Chairman on

the C&O raised another issue although the question is

actually a subset of the above stated fourth issue. The

C&O General Chairman presented the following question:

“Shall the C&O employees, junior in seniority

to employees transferring from Waycross, Geor-

gia, corresponding [sic] to the number of senior

employees transferring to the coordinated oper-

ations, be subject to the protective benefits set

forth in Article 5 and 6 of the New York Dock

Conditions?”

IV. RELEVANT STATUTES, ORANGE BOOK

PROVISIONS, EXCERPTS FROM NEW

YORK DOCK CONDITIONS AND RECENT

COURT DECISIONS

To fully understand the parties’ contentions, we must

first relate the relevant statutes, contract provisions and

legal authority.

, | )

A-20

The ICC promulgated and imposed the New York

Dock Conditions pursuant to the Congressiona! mandate

in Section 11347 of the Interstate Commerce Act. 49

US.C. 11347. Starting with Section 1(a), a transaction is

“any action taken pursuant to authorizations of this

Commission on which these provisions have been imposed.”

Section 4(a) states that “... any assignment of employees

made necessary by the transaction shall be made on the

basis of an agreement or [arbitrator’s] decision under this

section 4.” [Brackets added for clarification.] 360 I.C.C.

85. Assuming we have jurisdiction, Section 4 empowers

this Committee to write an implementing agreement pro-

viding for “... the selection of forces from all employees

involved on a basis accepted as appropriate for application

in the particular case... ” Jd. Also, Section 4 requires the

Carriers contemplating a transaction to issue a notice con-

taining “... a full and adequate statement of the proposed

changes to be affected by such transaction, including an

estimate of the number of employees of each class affected

by the intended changes.” With regard to its jurisdictional

challenge, the Organization relies heavily on Sections 2

and 3 of the New York Dock Conditions. These two sec-

tions state:

“2. The rates of pay, rules, working con-

ditions and all collective bargaining and other

rights, privileges and benefits (including continua-

tion of pension rights and benefits) of the railroad’s

employees under applicable laws and/or exist-

ing collective bargaining agreements or otherwise

shall be preserved unless changed by future collec-

tive bargaining agreements or applicable statutes.

“3. Nothing in this appendix shall be con-

strued as depriving any employee of any rights

or benefits or eliminating any obligations which

such employee may have under any existing job

security or other protective conditions or arrange-

ments; provided, that if an employee otherwise is

eligible for protection under both this appendix

and some other job security or other protective

SO OO EE

A-21

conditions or arrangements, he shall elect between

the benefits under this appendix and similar

benefits under such other arrangement and, for

so long as he continues to receive such benefits

under the provisions which he so elects, he shall

not be entitled to the same type of benefit under |

the provisions which he does not so elect; pro-

vided further, that the benefits under this appen-

dix, or any other arrangement, shall be construed

to include the conditions, responsibilities and obli-

gations accompanying such benefits; and, pro-

vided further, that after expiration of the period

for which such employee is entitled to protection

under the arrangement which he so elects, he

may then be entitled to protection under the other

arrangement for the remainder, if any, of this pro-

tective period under that arrangement.”

Section 3 (a) of the Orange Book reads:

“In consideration of the foregoing employee benefits

the Merged Company shall, subject to compliance

with the provisions of Appendix F attached hereto,

be entitled to transfer the work of the employees pro-

tected hereunder throughout the merged or consoli-

dated system and tie labor organizations will, sub-

ject to provisions contained in the Memorandum

of Understanding attached hereto as Appendix G,

enter into implementing agreements providing for

the transfer and use of employees and allocation or

rearrangement of forces made necessary by changes

for which protection is herein provided and the

employees, their organizations and the Carriers

will cooperate to that end.” [Emphasis added.]

The pertinent portion of Section 11341 (a) of the Inter-

state Commerce Act provides that a carrier or person par-

ticipating in an approved transaction “... is exempt from

the antitrust laws and from all other law ... as neces-

sary to let that person carry out the transaction ... ” 49

U.S.C. 11341(a). In Denver and Rio Grande Western Rail-

road Co. - Trackage Rights - Missouri Pacific Railroad Co.,

Finance Docket No. 30000 (Sub-No. 18) (October 19, 1983)

(unreported) (“the DRGW Case”), the ICC interpreted the

A-22

scope of its Congressionally delegated authority pursuant

to Section 11341 (a). The Commission asserted: “Our

approval exempts such a transaction from the require-

ments of all laws as necessary to permit the transaction

to be carried out, and includes an exemption from the

requirements of the ... ” Railway Labor Act. DRGW at

5. The ICC observed that if its approval of a transaction

“ _. did not include authority for the railroads to make

necessary changes in working conditions, subject to pay-

ment of specified benefits, our jurisdiction to approve trans-

actions requiring a change in working conditions of any

employees would be substantially nullified.” DRGW at

6. The ICC ruled that a duly approved trackage rights

agreement containing crew assignments was paramount to

conflicting terms in the schedule labor agreements.

The District of Columbia Circuit Court of Appeals

reversed the ICC’s decision. Brotherhood of Locomotive

Engineers v. Interstate Commerce Commission, 761 F.2d

714 (D.C. Cir. 1985); cert. granted _ U.S. _ (1986). While

recognizing that Congress granted the ICC broad powers to

exempt transactions from legal obstacles, the Court ruled

that the ICC must justify the exercise of its statutory

authority. The case is currently pending before the United

States Supreme Court.

V. THE POSITIONS OF THE PARTIES

A. The Organization’s Position on Jurisdic-

tion

The Organization strenuously argues that we lack

jurisdiction to fashion an implementing agreement which

changes the rules and working conditions in existing col-

lective bargaining and job security agreements. Section 2

of the New York Dock Conditions bars the Carriers from

utilizing the compulsory interest arbitration mechanism in

Section 4 to remove either employees or work from the

SCL Agreement and place the work or workers under the

C&O agreement without exhausting the notice and collec-

A-23

tive bargaining requirements in the Railway Labor Act. 45

U.S.C. 151, 156. Neither the ICC nor a Section 4 arbitrator

can bind the Organization absent its consent.

The Organization reviewed the history of employee

protection in the railroad industry. The historical

record evinces a consistently strong public policy favor-

ing employee protection as the consequence of streamlin-

ing the national rail transportation network. The Orga-

nization emphasizes that the New York Dock Conditions,

like all employee protective arrangements, are imposed on

carriers for the sole benefit of their workers. If Section

4 of the New York Dock Conditions becomes a subterfuge

for inflicting mandatory, binding interest arbitration on

employees and their representatives contrary to Sections 6

and 7 of the Railway Labor Act, the employee protection is

irrationally twisted into a formidable weapon for, instead

of an obligation on, rail carriers. Railroads will routinely

resort to Section 4 to unilaterally fix rates of pay, rules

and working conditions. Needless to say, such a result

compoletely undermines collective bargaining. Pursuant

to express statutory provisions, interest arbitration in the

railroads has always been voluntary. 45 U.S.C. 157, First.

Arbitrators acting under the ICC’s New York Dock Con-

ditions lack the power to change or vitiate existing labor

contracts.

Before and immediately after the formulation of the

New York Dock Conditions, the ICC and arbitrators uni-

formly ruled that they lacked jurisdiction to alter the terms

of collective bargaining agreements within the context of

promulgating an implementing agreement to govern the

effectuation of an ICC approved transaction. NW/IT v.

RYA/UTU, NYD § 4 Arb. (Sickles, 1981); NW/IT v.

BLE/UTU, NYD § 4 Arb. (Zumas, 1982); NW/IT v. UTU,

NYD §4 Arb. (Edwards, 1981); and B&O v. BMWE,

NYD §4 Arb. (Seidenberg, 1983). Any other outcome

would render Section 2 of the New York Dock Conditions

A-24

meaningless. More particularly, the ICC never claimed

authority to indefinitely supersede the Railway Labor Act

far into the future merely because it, at one time, imposed

employee protective conditions on a railroad. Southern

Railway Co. - Control - Central of Georgia Railway Co.,

331 I.C.C. 151, 169-170 (1967); and Texas and New Orleans

Railroad Co. v. Brotherhood of Railroad Trainmen, 307

F.2d 151 (5th Cir. 1962). After the ICC’s decision in the

DRGW case, arbitrators overruled tiie prior line of deci-

sions and held that they had authority to amend or nullify

collective bargaining agreements and, in the extreme, to

change representation. The issue is before the Supreme

Court. At the specific request of the carrier-applicants in

the DRGW case, the ICC expressly approved a trackage

rights agreement containing crew assignment provisions at

odds with existing collective bargaining agreements. In its

brief to the Court, which is the ICC’s latest pronouncement

on its exemption authority, the ICC limited its claimed

preemption over the Railway Labor Act. In footnote 17 on

page 25 of its opening brief, the Commission wrote, “The

Section 11341 (a) exemption applies, of course, to terms

comprehended by the Commission’s approval order.” So,

the ICC has now informed the Supreme Court that it seeks

to supersede the Railway Labor Act only to the extent

that it approved specific, future projects which the carrier-

applicants presented to it during the course of the admin-

istrative proceeding. The transfer of work and workers

from Waycross to Raceland was not placed before the ICC

as part of the control application. On the contrary, the

ICC, relying on the Carriers’ representations, opined that

the merger of the two holding companies would cause only

short-lived employee displacements. 363 I.C.C. 521, 589.

The ICC observed that, “It is anticipated that all changes

in employee positions will occur within € months following

final approval of the applications.” Jd. Again, the Carriers

led the ICC to believe that “perceptible dislocations” will

be necessary only “... at points where the ... end-to-end

systems meet ... ” Waycross is approximately 600 miles

i i

A-25

from Raceland and almost 500 miles from the nearest C&O

point. Without doubt, the ICC did not foresee the Carriers’

misguided attempt to coordinate work at two distant shops

on two separately operated rail subsidiaries. The Carriers

conveniently ignore the differences between the merger of

two holding companies and the full scale merger of the sub-

sidiaries. Since the subsidiaries are separate companies,

the Carriers may only effect their proposed coordination

pursuant to the terms of the Washington Job Protection

Agreement. Inasmuch as the Carriers did not present the

instant coordination to the ICC, jurisdiction accrues to this

Committee only after the Carriers fully comply with the

Railway Labor Act.

Similarly, this Committee may not entertain any

changes in the Orange Book inasmuch as that merger pro-

tective agreement vests covered employees with lifetime

employment on the former SCL property. Section 3 of

the New York Dock Conditions absolutely preserves work-

ers’ rights and benefits under existing protective agree-

ments. The ICC has never even hinted that its approval of

a transaction abrogates prior employee protective contracts

especially when those agreements, like the Orange Book,

were negotiated in conjunction with the ICC’s imposition

of employee protection as a condition precedent to consum-

mating an earlier merger. Since the ICC has never ruled

that its orders prevail over the types of contracts listed

in Section 3 of the New York Dock conditions, the Carri-

ers cannot use Section 4 to compel the BRC to surrender

Orange Book benefits.

Finally, the Organization may, at its discretion, nego-

tiate implementing agreements which modify existing

agreements. The Carriers cannot force the Organization

to change the existing collective bargaining agreements

in this case merely because, a few times in the past,

the Organization voluntarily reached implementing agree-

ments with the Carriers.

A-26

Raising an alternative jurisdictional consideration, the

Organization avers that the Carriers’ August 29, 1986 cor-

respondence failed to satisfy the Section 4 notice require-

ments for two reasons. First, the notice was vague as to

both employees and work. The notice failed to describe

exactly what freight car heavy repair work was going

to Raceland. Although the Carriers were creating 22

fewer positions at Raceland than they were eliminating at

Waycross, they did not give any indication as to the status

of the 22 employees who would be detrimentally affected

by the transaction. Second, BRC’s C&O General Chair-

man was skeptical of the Carriers’ estimated need for 99

Raceland positions to perform the work moved from Way-

cross. Furthermore, he was particularly wary of the Car-

riers’ intent to bring more employees into Raceland inas-

much as the C&O furloughed more than 200 Raceland Car-

men on November 28, 1986. An improper Section 4 notice

deprives this Committee of jurisdiction and the case must

be dismissed. The Carriers must initiate the Section 4 pro-

cess de novo, by tendering a new notice which fully and

adequately describes their proposed changes including an

accurate estimate of workers needed to perform the trans-

ferred work.

B. The Carriers’ Position on Jurisdiction

At the onset, the Carriers underscore the rational busi-

ness purpose of the coordination. Shippers’ demand for con-

ventional type freight cars is diminishing. They are opting

for privately owned cars or intermodal equipment. While

Raceland Shop is plagued with excess capacity, the Way-

cross facility lacks the space to assume repair work from

Raceland unless CSX expends enormous sums to expand

and renovate the plant. Since both shops will not be needed

in the future, the Carriers chose to close the Waycross

repair facility and transfer the work to Raceland.

During oral argument, the Organization conceded that

the planned Waycross-Raceland coordination was a trans-

A-27

action within the ambit of the New York Dock Conditions.

Admittedly, the Carriers did not specifically present the

instant coordination to the ICC but all parties as well as

the ICC realized that the railroads might engage in trans-

actions other than those alluded to in their initial operat-

ing scheme long after the ICC’s omnibus approval of the

control application. The Commission remarked that it is

“... possible that as the two systems mesh their opera-

tions, additional coordinations may occur that could lead

to further employee displacements.” 363 I.C.C. 521, 589

(1980). In his affidavit, the General Counsel of the Brother-

hood of Maintenance of Way Employees realized that

approval would eventually permit extensive future changes

not needing ICC approval. The Commission responded to

labor’s concerns by imposing the New York Dock Condi-

tions on each and every transaction. As the ICC found,

the “... conditions will adequately protect those employ-

ees now identified as affected by the consolidation as well

as those who may be affected in the future, but are not now

identified specifically.” Jd. Most importantly, the ICC con-

cluded that the operation of a single system would permit

the Carriers to reap operating and cost efficiencies includ-

ing the alleviation of excess capacity at the C&O’s Race-

land facility. Jd. at 538 and 561.

The Organization’s position that this Committee lacks

jurisdiction to formulate an implementing agreement cov-

ering the coordination of work between Waycross and

Raceland is inconsistent with its past participation in con-

solidations which the Carriers undertook pursuant to the

control case and in accord with arbitrated implementing

agreements. See BRC v. B&O, NYD § 4 Arb. (Freden-

berger, 1984); C&O v. BRC, NYD § 4 Arb. (Marx,

1984); and BRC v. B&O, NYD § 4 Arb. (Fredenberger,

1983). Jurisdiction was not an issue in any of these three

prior Section 4 arbitrations manifesting the Organization’s

recognition that the sole purpose of Section 4 is to procure

an implementing agreement covering the transaction.

A-28

The jurisdictional issue presented to this Committee is

not a question of first impression. Many respected neutrals

have ruled that, under Section 4 of the New York Dock

Conditions, an arbitrator has the power to issue an imple-

menting agreement governing a work transfer even though

the transaction had not been anticipated during the ICC

proceedings and implementation would override terms of

existing collective bargaining agreements. UP v. ATDA,

NYD §4 Arb. (Fredenberger, 1984); UP v. UTU, NYD

§4 Arb. (Brown, 1985); BLE v. UP/MP, NYD §4 Arb.

(Seidenberg, 1985); and UTU v. NW/SR, NYD $4 Arb.

(Ables, 1985). In UP v. ATDA, supra at 12, Arbitrator

Fredenberger relied on the DRGW case and concluded that

“ .. the ICC... determined that the Railway Labor Act

and existing collective bargaining agreements must give

way to the extent that the transaction authorized by the

Commission may be effectuated.” When it approved the

CSX control application, the ICC necessarily authorized

the transfer of work from one carrier to another as the

inevitable consequence of implementing a transaction. If

the Organization prevails, it would achieve its objective of

thwarting all transactions. Such an outcome effectively

cancels the ICC’s approval in the control case. The Carri-

ers would be precluded from ever obtaining the savings and

benefits of operating a single rail system. In the DRGW

case at page 5, the ICC emphasized that its “... approval

exempts a transaction from the requirements of all laws as

necessary to permit the transaction to be carried out, and

includes an exemption... ” from the Railway Labor Act.

See also, Brotherhood of Locomotive Engineers v. Chicago &

North Western Railway Co., 314 F.2d 424 (8th Circ. 1963),

cert. den., 375 U.S. 819 (1963). Continuing on the next

page of its decision, the ICC squarely rejected the Organi-

zation’s inference that its ruling conflicted with Section 2

of the New York Dock Conditions when it declared:

“The terms of those conditions, however, must

read in conjunction with our decision authorizing

A-29

the involved transaction and the underlying statu-

tory scheme. To the extent that existing work-

ing conditions and collective bargaining agree-

ments conflict with a transaction which we have

approved, those conditions and agreements must

give way to the implementation of the transac-

tion.”

The Organization employs wishful thinking when it

asserts that the ICC subsequently modified its view of its

own authority when the DRGW case reached the Supreme

Court. The footnote which the Organization cites from the

ICC’s brief is attached to an unequivocal sentence read-

ing: “The scope of the exemption is defined by the terms of

the approved transaction.” The ICC’s brief provides little

solace for the Organization. In its Reply Brief filed with the

Court, the ICC vigorously asserted that provisions of the

Railway Labor Act and collective bargaining contracts are

automatically superseded to the extent necessary to carry

out approved transactions. The ICC knew, as stated in its

brief, that if the Carriers first had to endure the protracted

negotiating procedures, with the right of economic self-

help, contained in the Railway Labor Act, the transaction

would be indefinitely delayed and most probably nullified.

Thus, mandatory arbitration under Section 4 of the New

York Dock Conditions insures that the parties will arrive,

through either negotiation or arbitration, at an implement-

ing agreement. Section 4 obviates the “... risk of non-

consummation as a result of the inability of the parties

to agree on new collective bargaining agreements effect-

ing changes in working conditions necessary to implement

these transactions... ” Maine Central Railroad Co., Geor-

gia Pacific Corporation, Canadian Pacific Ltd. and Spring-

field Terminal Railway Co. - Exemption From 49 U.S.C.

11342 and 11343, I.C.C. Fin. Docket No. 30532 (August 22,

1985); appeal pending No. 85-1636 (D.C. Cir.).

A-30

All Carmen, who transfer from Waycross to Raceland,

must be placed under the C&O Agreement to necessarily

effectuate the coordination. And, the transaction cannot be

consummated unless the Waycross freight car heavy repair

work is shifted to the coordinated facility.

On December 30, 1980, the Organization entered into

an implementing agreement providing for the transfer of

SCL Carmen’s work to the C&O. To reiterate, te Organi-

zation acknowledged that, as a consequence of accomplish-

ing the transaction, Carmen may be removed from the SCL

Agreement and placed under the C&O Agreement. In addi-

tion, the Carriers stress that they successfully negotiated

implementing agreements covering this particular trans-

action with four of the six other labor unions representing

affected Waycross employees. As to the two unions which

have not signed implementing agreements, the unresolved

issues are unrelated to the Carriers’ right to transfer work-

ers from Waycross to Raceland.

The Organization has the misplaced notion that the

Carriers desire, through this Section 4 arbitration, to viti-

ate the Orange Book and schedule Agreements. After

implementation, the SCL working Agreement and the

Orange Book will remain viable and unaltered. Orange

Book protected employees moving to Raceland will retain

the full spectrum of benefits in the Orange Book.

In summary, this Committee has the jurisdiction to

prepare an implementing agreement so that the Carriers

may consolidate the work at Raceland. The exemption

from the Railway Labor Act is coextensive with the ICC’s

approval in the control case.

With regard to the sufficiency of the Carriers’ August

29, 1986 notice, the document disclosed exactly what

changes were forthcoming and included an estimate of

the number of employees, in each class, affected by the

planned changes. The notice described the relevant Way-

cross work, noted the Waycross positions to be abolished

A-31

and the Raceland positions to be established, and informed

the Organization of CSX’s intent to close the Waycross

facility. The plain, obvious fact was that the 22 employees

(directly affected by the coordination) would be protected

under the New York Dock Conditions. The notice con-

tained sufficient details to permit the Organization to dis-

cuss the impending changes. None of the other labor orga-

nizations (which represent members affected by the trans-

action) challenged the adequacy of the notice. The Neutral

Member of this Committee has previously ruled that the

adequacy of Section 4 notices must be adjudged on a case

by case basis. CkO/L&N v. BRS, NYD § 4 Arb. (LaRocco,

1985). The notice in this case is even more specific and

informative than the notice tendered in the above case and

thus, it conformed to Section 4 of the New York Dock Con-

ditions.

C. The Carriers’ Position on the Contents of an

Implementing Agreement

During negotiations, the Carriers offered the BRC

more generous terms than the minimum level of benefits

contained in the New York Dock Conditions. However,

the Carriers’ offer was conditioned on expeditiously con-

summating an agreement without resorting to arbitration.

When negotiations reached impasse, the Carriers withdrew

their offer and substituted the proposed October 15, 1986

implementing agreement. This Committee should disre-

gard the Carriers’ withdrawn proposals to encourage the

Organization to reach negotiated settlements on future

transactions. In addition, a Section 4 Arbitrator lacks

the authority to write an implementing agreement which

grants workers benefits greater than those specified in the

New York Dock Conditions.

Immediately upon notification of the impending trans-

action, the Organization took the novel position that

Orange Book protected workers could not be transferred to

Raceland. Contrary to the Organization’s bold assertion,

eee sienna |

A-32

there is no language in the Orange Book prohibiting the

Carriers from moving Orange Book protected employees

to points beyond the boundaries of the former SCL prop-

erty. Since 1966, none of the labor organizations which

are parties to the Orange Book, including the BRC, have

even suggested that the Carriers may only transfer Orange

Book covered employees to other SCL locations. If any

labor organization had taken such an untenable position,

the issue would certainly have been adjudicated long ago.

Orange Book Section 3(a) permitted the Carriers to trans-

fer Orange Book employees throughout the former SCL

system and concomitantly required the Organization to

negotiate implementing agreements governing the force

rearrangements. The Organization cannot, twenty years

later, convert an affirmative right flowing to the SCL into

a restriction on the Carriers’ right to move Orange Book

employees beyond the former SCL property.

By already signing implementing agreements, other

labor organizations involved in this coordination recog-

nize the Carriers’ right to require Orange Book protected

employees to transfer to Raceland with their work. More-

over, the current BRC General Chairman was not in office

when the Orange Book was signed. His predecessor was

privy to Orange Book negotiations. The former General

Chairman implicitly acknowledged that Orange Book pro-

tected employees could be transferred to other than SCL

points because he entered into implementing agreements

providing for such transfers. The Seaboard System Rail-

road’s former Executive President, who is also familiar

with both negotiating and applying Orange Book provi-

sions, confirmed that the parties never intended to grant

Orange Book protected workers insulation from transfers

to locations other than those on the former SCL property.

The retired Executive Vice President further attested in

Paragraph 12 of his December 8, 1986 affidavit:

“12. From my familiarity with the negotiations

leading to the agreement known as the Orange

A-33

Book, there was a ‘give and take’ whereby certain

working life income guarantees were granted by

the merging railroads in exchange for the right

of the merged carrier, SCL, to transfer work, con-

solidate facilities, and thereby transfer employees

pursuant to implementing agreements to be nego-

tiated thereunder.”

The Orange Book was negotiated in an atmosphere replete

with railroad mergers. The Orange Book drafters could

easily foresee that there would be additional mergers

necessitating SCL employees to relocate on the expanded

property of a successor employer.

The parties have never accorded Orange Book cov-

ered employees the absolute right to remain on the SCL

property. Pursuant to a December 30, 1980 implement-

ing agreement, SCL Carmen, including Orange Book

employees, transferred to the C&O. Six SCL Carmen, three

of whom came under the Orange Book, shifted to the C&O

and continued to enjoy Orange Book protection. In 1967,

shortly after the Orange Book was signed, the Organiza-

tion was a party to an implementing agreement providing

for the transfer of SCL Carmen to the Richmond, Freder-

icksburg and Potomac Railroad. In 1973, the BRC along

with other shop craft unions entered into an implementing

agreement covering the coordination of SCL and Louisville

& Nashville Railroad (L&N) shop facilities in Alabama.

Other labor unions have also entered into implementing

agreements requiring Orange Book protected workers to

transfer off the SCL. Some Orange Book employees opted

for a separation allowance per Orange Book Appendix G.

The Organization is again attempting to forever block

the transaction by arguing that the transfer would place

workers in a worse position, as specified in Orange Book

Section 2(b), due to weather differences between Raceland

(“harsh”) and Waycross (“mild”). The contention is ludi-

crous. Greater weather variations can be expected vis-a-

vis Miami, Florida and Richmond, Virginia yet, even the

A-34

Organization concedes that the Orange Book allows trans-

fers between these two SCL points.

The Organization’s proposed implementing agreement

terms go far afield of the New York Dock Conditions and

would render the transaction so expensive as to effectively

prevent implementation. The Organization proposes that

all Carmen may decline Raceland positions and, upon their

voluntary furlough, still collect Orange Book benefits or

New York Dock dismissal allowances. The Carrier would

not only be burdened with paying expensive protection

benefits but also would have to pay Raceland employees

to perform Waycross work. The BRC General Chairman

on the C&O seeks to automatically certify an unspecified

number of Raceland employees even though dovetailing

seniority does not constitute a per se adverse effect on

junior Raceland Carmen. Whether or not any Raceland

workers are eligible for New York Dock payments is best

left to a Section 11 proceeding. In the control case, the

ICC rejected labor’s requests to prohibit residence changes

and to enact a conclusive presumption as to adverse effect.

363 I.C.C. 589-590. Another Organization proposal might

be inequitably construed to allow senior, furloughed Race-

land Carmen to immediately displace junior workers who

just followed their work from Raceland. Finally, the SCL

General Chairman inappropriately urges utilization of fur-

loughed Waycross Carmen ahead of Raceland employees.

Not surprisingly, both the Carriers and the Organization’s

C&O General Chairman oppose this proposal.

On the other hand, the Carriers’ proposed implement-

ing agreement follows the New York Dock Conditions.

Forced assignments at Raceland should be made in senior-

ity order consistent with an emp!syee’s duty to exercise

seniority over his work to the fullest extent. Once the

transaction is implemented, there is no reason for the

transferred workers to retain seniority at Waycross. The |

a - J

A-35

Carriers request the Committee to adopt their October 15,

1986 proposed implementing agreement.

D. The Organization’s Position on the Contents

of an Implementing Agreement

The Orange Book clearly and unambiguously affords

covered workers lifetime job protection on the SCL. The

only exceptions are found in Orange Book Section 2(e).

Section 3(a) permits work transfers on the ACL-SAL con-

solidated system but no further. Transferring Orange

Book employees beyond the SCL property places them

in a worse position with respect to their working condi-

tions. See Orange Book Section 2(b). The intent and

language of the Orange Book demonstrates that covered

employees received guaranteed jobs on the former SCL

property throughout their worklife. The Orange Book pro-

tection is shielded by Section 3 of the New York Dock

Conditions and Orange Book protected employees have the

right to elect Orange Book benefits as soon as they are

affected by a New York Dock transaction. SSR v. BRAC,

NYD § 4 Arb. (Zumas, 1983). Thus, they are entitled to opt

for protective benefits and decline to transfer to Raceland.

The Carriers are unable to point to any Orange Book

provision giving the Carriers the unilateral right to move

Orange Book employees to the C&O property. On the con-

trary, Section 3(a) seta the limits of the Carriers’ right.

Moreover, the terminology regarding seniority in Section

2(e) refers to “... existing rules or agreements.” Those

rules, which are found in the agreements in effect at the

time of the merger, provide for point seniority. For the

same reasons, the classification of work rule in the Jan-

uary 1, 1968 schedule Agreement preserves the Waycross

freight car heavy repair work to the Carmen’s craft on

the SCL. The Carriers’ proposed implementing agreement

would abrogate the Orange Book and the then existing

working agreement.

A-36

At one time (in 1980), the Organization voluntar-

ily entered into an implementing agreement allowing

the Carriers to transfer SCL employees, including some

Orange Book protected workers, from the SCL property at

Richmond tc a C&O facility in the same city. The Orga-

nization’s voluntarism is not precedent for the wholesale

removal of all Orange Book protected employees from the

SCL. In contrast to the instant transaction, the Orange

Book employees were not required to change their resi-

dence. The Carriers cannot compel the Organization to

execute a similar implementing agreement under the guise

of the New York Dock Conditions. The Organization’s vol-

untary action was non-precedential. Although other labor

“organizations signed implementing agreements to govern

this transaction, none (or at most one) of their members,

who are involved in this transaction, enjoy Orange Book

protection.

The Raceland weather is much more severe than at

Waycross. Many of the Waycross Carmen work outdoors.

Moving to a harsher working environment constitutes a

change in working conditions which is prohibited by Sec-

tion 2 of the New York Dock Conditions.

Besides provisions keeping Orange Book protected

employees on the former SCL property and guaranteeing

these workers an election of benefits at the time this trans-

action is effectuated, the implementing agreement should

contain terms close to the implementing agreement origi-

nally proposed by the Carriers. The Carriers’ October 15,

1986 proposal is grossly inferior to their prior offer. The

Carriers are improperly penalizing the Organization for

sincerely raising other issues, such as Orange Book inter-

pretation, which directly impacted on the negotiations over

an implementing agreement.

The BRC advocates the following changes to the Car-

riers’ October 15, 1986 proposal. First, forced assignments

to unfilled Raceland positions should be accomplished in

A-37

reverse seniority order. Since there will be fewer posi-

tions established at Raceland, it is more logical to start

with junior affected employees allowing the senior work-

ers, a8 opposed to junior workers, to remain in Waycross

and draw protective benefits. Second, since the work

being transferred to Waycross would have accrued to fur-

loughed Waycross Carmen upon the retirement, resigna-

tion or death of active Waycross employees, the furloughed

Waycross Carmen should have superior rights over Race-

land employees to the transferred work. However, the BRC

General Chairman on the C&O takes exception to this par-

ticular proposal. Third, workers who transfer should retain

dual seniority at Raceland and Waycross. If a position

(other than one of temporary duration) becomes vacant at

Waycross, these workers will have a one time opportunity

to return to Waycross and depending on their election, they

will forfeit either their Raceland or Waycross seniority.

Fourth, the Organization proposes the following language

for inclusion in the implementing agreement:

“When the transfers from Waycross to Race-

land take place, a like number of the C&O

employees at Raceland will be provided with New

York Dock protective conditions starting with the

oldest Raceland employee that falls below the

youngest employee transferring in from Waycross;

i.e., if 86 Waycross carmen are dovetailed into the

Raceland seniority roster, then 86 Raceland car-

men-starting with the oldest Raceland carmen in

seniority—who falls below the youngest carmen in

seniority from Waycross will be protected by the

New York Dock protective conditions.”

The C&O General Chairman asserted that Raceland has

already absorbed several consolidations involving incom-

ing workers over the last several years. While dovetail-

ing is the fairest method of combining seniority rosters,

each added coordination has detrimentally affected the rel-

ative seniority standing of Raceland Carmen. The con-

stant influx of more senior workers cancels the benefits

A-38

derived from the accumulation of seniority. Subsequent to

the transfer of work from Waycross, it becomes more likely

that some presently employed Raceland Carmen will be

furloughed. Protecting Raceland workers would give them

more job security and compensate them for the loss of rel-

ative seniority. If the Carriers have correctly estimated

that there will be sufficient work to occupy 99 additional

Carmen, it should not object to protecting an equivalent

number of Raceland Carmen because presumably the lat-

ter will continue in active employment.

VI. DISCUSSION

A. Jurisdiction

1. The Notice. The threshold issue before this

Committee is whether the Carriers’ August 29, 1986 notice

conforms to the minimum requirements of Section 4 of

the New York Dock Conditions. The pertinent portion of

Section 4 provides: “Such notice shall contain a full and

adequate statement of the proposed changes to be affected

by such transaction, including an estimate of the number of

employees of each class affected by the intended changes.”

The Neutral Member of this Committee commented on

the purpose and meaning of the above language in another

Section 4 case, as follows:

“The purpose of the advance notice is twofold: the

notice triggers the Section 4 procedures which con-

tain tight time deadlines for obtaining an imple-

menting agreement; and, it informs the Organiza-

tion (as well as all interested employees) of the

impending, authorized New York Dock transac-

tion so that the Organization and the Carriers

may bargain, in good faith, over the terms of an

implementing agreement. .360 I.C.C. 71. The

notice must contain a full and adequate statement

of the intended transaction and include an esti-

mate of the number of affected workers. Since

the ICC, in Article 1, Section 4(a) did not enumer-

ate the essential elements of a New York Dock

A-39

notice (aside from the adjectives “full and ade-

quate” and the mandatory estimate), whether a

particular notice conforms to Section 4(a) must be

decided on a case by case basis.” C&O/LEN v.

BRS, NYD § 4 Arb. (LaRocco, 1985).

Thus, the propriety of a Section 4 notice must be evaluated

on a case by case basis taking into account the surrounding

circumstances and peculiarities of each New York Dock

transaction.

In this case, the notice satisfied Section 4. Since the

Carriers intend to close the Waycross facility, all freight

car heavy repair work will be transferred to Raceland and

thus, the Carriers did not have to quantitatively or qual-

itatively describe the freight car repair work. Also, the

Carriers, in good faith, estimated the number of employees

in each class who would be involved in the force rear-

rangement. The notice laid the groundwork for meaningful

negotiations. The Organization can hardly contend that

it was ill-prepared for bargaining. The notice adequately

apprised the Organization of the nature of the impending

transaction because it easily ascertained that, from its per-

spective, the transaction would vitiate employee rights in

the Orange Book and the SCL working Agreement.

2. Subject Matter Jurisdiction. In Section 1(a)

of the New York Dock Conditions, the ICC broadly defines

a transaction as “... any action taken pursuant to autho-

rizations of this Commission on which these provisions

have been imposed.” 360 I.C.C. 84. The parties concur that

the transfer of freight car heavy repair work from Way-

cross to Raceland constitutes a New York Dock transac-

tion. It is also undisputed that the intended consolidation

was not expressly and specifically presented to the Com-

mission during administrative proceedings culminating in

approval of the control application.

Where a transaction may cause the dismissal of dis-

placement of workers, an implementing agreement:

A-40

* .. shall provide for the selection of forces from

all employees involved on basis accepted as appro-

priate for application in the particular case and

any assignment of employees made necessary by the

transaction shall be made on the basis of an agree-

ment or decision under this section 4.” [Emphasis

added.] 360 I.C.C. 85.

While the ICC clearly authorizea the Carriers to under-

take transactions, it also plainly provided for the plenary

preservation of all existing collective bargaining rights,

collective bargaining agreements and employee protection

agreements. (See Sections 2 and 3 of the New York Dock

Conditions.) When the Carriers’ authorized transaction

embraces components which could arguably conflict with

the terms of one or more existing agreements, the issue

becomes to what extent, if any, a New York Dock imple-

menting agreement may properly preempt the existing

agreements and the Railway Labor Act. The issue is an

ongoing controversy in rail labor relations and is currently

before the United States Supreme Court. Thus, any princi-

ples we espouse on this matter should be reevaluated based

on the Supreme Court’s decision in the DRGW case.

To resolve the issue in this case, we start by attempt-

ing to balance the competing policies of the Railway Labor

Act and the ICC’s New York Dock Conditions on the one

side and the Interstate Commerce Act on the other side.

The New York Dock Conditions were imposed on railroads

for the exclusive benefit of any employee affected by a

transaction. However, the Conditions were imposed as part

of the ICC’s overall regulatory scheme which is designed to

encourage merged rail carriers to augment their ability to

compete in the transportation marketplace by consolidat-

ing operations. Transactions leading to more efficient oper-

ations frequently contradict the Railway Labor Act’s policy

of avoiding disruptions to interstate commerce by promot-

ing collective bargaining. Consolidations upset stable col-

lective bargaining relationships. Thus, there is not just

—

A-41

tension between the Railway Labor Act and the Interstate

Commerce Act but a classic clash of two important Federal

statutes. Compare: Texas and New Orleans Railroad Co. v.

Brotherhood of Railroad Trainmen, supra at 158-160, with

Brotherhood of Locomotive Engineers v. Chicago and North

Western Railway Co., supra. The conflict has been carried

forward into the New York Dock Conditions.

As a quasi-judicial extension of the ICC, this Com-

mittee must strictly follow the ICC’s interpretation of its

own authority. In the DRGW case, the ICC decided that

49 U.S.C. 11341(a), the source of the exemption, granted

the Commission expansive and self-executing authority to

immunize an approved transaction from the Railway Labor

Act and existing collective bargaining agreements to the

extent the statute and terms of the agreements bar imple-

mentation of the transaction. According to the ICC, Sec-

tion 11341{a) insulates a transaction from all legal _obsta-

cles preventing or impeding effectuation. Subsequent to

the ICC’s ruling in the DRGW case, arbitrators who pro-

mulgated New York Dock implementing agreements pur-

suant to Section 4, have universally decided that imple-

mentation of a transaction prevails over conflicting terms

in existing collective bargaining agreements. ATDA v.

UP, NYD § 4 Arb. (Fredenberger, 1984); UTU v. MP/UP,

NYD § 4 Arb. (Ables, 1985); and BLE v. UP/MP, NYD

§ 4 Arb. (Seidenberg, 1985). In an effort to distinguish

those decisions, the Organization argues herein that the

ICC recently tempered its perception of the outer limits

of the Section 11341(a) exemption. Pointing to a foot-

note at page 25 of the ICC’s Brief to the Supreme Court,

the Organization submits that the ICC now asserts that

the exemption applies “...only to terms comprehended

by the Commission’s approval order.” The Organization

concludes therefore, that the exemption is inapplicable to

the Waycross-Raceland coordination. We disagree. The

ICC’s Opening and Reply Briefs do not include any defini-

tive language demonstrating a modification of the ICC’s

A-42

broad determination that its orders supersede the Railway

Labor Act. Indeed, the footnote relied on by the Organiza-

tion is appended to a statement asserting that the exemp-

tion mirrors the scope of the approved transaction. Else-

where in its briefs, the ICC reiterates that the exemption

goes beyond the transactions specifically mentioned in the

approval proceeding so that railroads do not have to con-

stantly return to the ICC to receive approval for each and

every change made pursuant to the ICC’s original order.

At page 26, the ICC emphasized that the exemption arises

automatically to cover “anything authorized or required”

by an approval order. The last ICC pronouncement (more

recent than the footnote cited by the Organization) is found

at page 11 of its Reply Brief where the ICC declared:

“The unions are also mistaken in contending

that the ICA’s own labor protective provisions, 49

U.S.C. (Supp. II) 11347, prohibit the Commission

from adjusting collective bargaining rights. As the

Commission explained (Pet. App. 59a-60a), Sec-

tion 11347 and the Commission’s labor protective

provisions preserve existing collective bargaining

rights only to the extent that they do not conflict

with implementation of an approved transaction.”

Although not expressed within the control application, the

Raceland coordination is an approved transaction exempt

from the Railway Labor Act.

However, the exemption is only triggered when nec-

essary. The ICC has never indicated that an approved

transaction can be utilized as a pretext for extinguishing

or amending existing collective bargaining agreements. To

the extent that terms of collective bargaining agreements

and collective bargaining rights do not thwart or substan-

tially impede the approved transaction, those agreements

and rights are preserved. Therefore, there is some har-

mony between Section 11341(a) of the Interstate Com-

merce Act and Section 6 of the Railway Labor Act. 49

U.S.C. 11341(a); 45 U.S.C. 156. If feasible, the trans-

A-43

action should reasonably accommodate existing collective

bargaining agreements and collective bargainning rights.

Next, the Organization urges us to draw a delicate dis-

tinction between Section 2 and Section 3 of the New York

Dock Conditions. Prior merger protection agreements

might be more inviolable than existing collective bargain-

ing agreements because the prior merger agreements, like

the Orange Book, were formulated under the auspices of

Section 5(2)(f) (now Section 11347) of the Interstate Com-

merce Act. If so, the Organization correctly argues that the

ICC must expressly relieve the Carriers from Orange Book

provisions when it engages in a New York Dock trans-

action pursuant to an approval order issued subsequent

to the order approving the ACL-SAL merger. Given the

mandate in Section 11347, there is some doubt that Sec-

tion 11341(a) exempts New York Dock transactions from

conflicting terms in prior merger protective agreements.

To our knowledge, the ICC has not addressed this dilem-

ma. In the DRGW case, the ICC did not patently rule that

the exemption abrogates prior employee protective agree-

ments such as the Orange Book. We cannot speculate on

exactly how the ICC would handle prior merger protection

agreements. However, as we discussed above, the ICC has

emphasized that a transaction hurdles all legal obstacles

preventing implementation. Moreover, most rights and

benefits preserved to employees under Section 3 of the New

York Dock Conditions will be safeguarded through prudent

applications of the reasonable accommodation standard.

Therefore, this Committee has jurisdiction to formu-

late an implementing agreement governing the transfer of

work and employees from Waycross to Raceland.

B. The Contents of an Implementing Agree-

ment

1. The Orange Book. Section 2(b) of the Orange

Book provides that a covered employee will not be deprived

of employment or placed in a worse position with regard

A-44

to his working conditions at any time during such employ-

ment with the SCL. In exchange for lifetime protection, the

Carriers acquired the right to transfer work and workers

throughout the merged (SAL-ACL) system. See Orange

Book Section 3(a). To that end, Section 3(a) calls for the

execution of mandatory implementing agreements. With-

out such a clause, the point seniority terms of the working

agreement would have restricted the Carriers from moving

employees. Since it was necessary for the SCL to obtain

a provision allowing it to transfer Orange Book protected

employees throughout the merged system, it logically fol-

lows that a similar term is essential to permit the Carriers

to transfer Orange Book covered workers beyond the SCL

property. Instead, the Carriers desire to translate a limit-

ed, affirmative right into the unfettered discretion to trans-

fer Orange Book workers throughout any enlarged rail sys-

tem. An affirmative right carries an inherent implication

that the right is restricted to the express terms confer-

ring the affirmative right. The affirmative right is capped.

Under the Carriers’ interpretation, the Section 3(a) lan-

guage would be unnecessary since they ostensibly have

the right to transfer Orange Book employees throughout

the SCL, L&N, B&O and the C&O. The parties do not

enter into solemnly negotiated agreements only to have

the terms of their agreements rendered meaningless or

superfluous. The ACL and SAL could have foreseen that

they might later become the part of an even larger rail

enterprise. Thus, drafters of the Orange Brook could have

easily written terms providing for unrestricted transfers

across any enlarged rail system.

Our decision that the Carriers may not transfer

Orange Book protected employees beyond the former SCL

property is premised on the clear and express language

of Section 3(a). While a past practice may not vary or

alter the clear and unambiguous Orange Book language,

the Carriers’ reference to prior implementing agreements

was insufficient to raise a consistent and genuine past prac-

A-45

tice even if Section 3(a) was susceptible to differing inter-

pretations. The prior implementing agreements involved

a modicum of Orange Book covered workers and under

some of the agreements, the Orange Book employees could

receive separation pay, an option they probably chose. The

December 30, 1980 implementing agreement resulted in

the transfer of Orange Book covered employees form the

SCL to the C&O but only within the same city. In any

event, the Organization voluntarily entered into the imple-

menting agreement. Although other labor organizations

have signed implementing agreements with the Carriers

governing this transaction, at most there was only one

Orange Book employee involved. Thus, these implement-

ing agreements provide us with little guidance in inter-

preting the Orange Book.

Even though Orange Book Section 3(a) provides that

the work of Orange Book protected employees may be

transferred throughout the SCL property (but no further),

the provision must be subordinated to the Carriers’ right

to engage in the authorized New York Dock transaction.

Otherwise, the Carriers would be effectively thwarted from

transferring all the Waycross freight car heavy repair work

to Raceland. Unlike the work, the Orange Book limita-

tion on transferring covered employees throughout the SCL

system can be reasonably accommodated with the trans-

action. Permitting Orange Book covered workers to be

transferred only throughout the SCL (absent a voluntary

agreement with the Organization) will only slightly impair

the transaction while preserving the essence of the Orange

Book pursuant to.Section 3 of the New York Dock Con-

ditions. Even under the Carriers’ proposed implement-

ing agreement, some of the Orange Book employees would

have exercised their seniority to remaining positions at

Waycross in lieu of transferring to Raceland. In summa-

ry, this Committee emphasizes that whether or not Section

3(a) can be reasonably accommodated with a New York

Dock transaction must be analyzed on a case by case basis.

eee

A-46

Enforcing the limit on transferring Orange Book protected

employees might, under different facts, operate to com-

pletely bar the transaction. Then, the ICC’s authorized

transaction would be paramount to Orange Book Section

3(a). In tnis case, the Carriers may not compel Orange

Book protected workers to accept Raceland positions.

This Committee realizes that its decision will cre-

ate an anomaly. The more senior Orange Book workers

will be able to obtain other positions at Waycross. The

junior Orange Book protected workers, who will presum-

ably decline Raceland positions will collect Orange Book

benefits. However, the Carriers have other alternatives

under the Orange Book.

Despite the terminology in Orange Book Section 3(a),

the New York Dock implementing agreement covering this

transaction shall provide, without restriction, for the trans-

fer of all freight car heavy repair work from Waycross to

Raceland. As soon as the Carriers commence the transac-

tion, Orange Book protected employees who are affected by

the transaction must elect either New York Dock benefits

or Orange Book protection. BRAC v. SSR, NYD § 4 Arb.

(Zumas, 1983).

2. Other Issues. For the reasons discussed earlier

in our opinion, the work and employees transferred from

Waycross shall be placed under the C&O schedule Agree-

ment. Maintaining the work or employees under the SCL

working agreement would for all practical purposes, block

the transaction. A reasonable accommodation is impossi-

ble since the terms of the working agreement conflict with

the implementation of the transaction.

Regardless of whether Raceland or Waycross has the

more comfortable climate, the Carriers would be barred

from effectuating any New York Dock transaction if work-

ers could decline a transfer merely by asserting that the

weather at their current point was more amenable than

the meteorological conditions at the coordinated location.

A-47

Most importantly, the Organization is unable to cite any

term in any existing agreement vesting Carmen with the

right to perform work in a particular climate.

Most of the Organization's other proposals concern the

inclusion of benefits more generous than the minimum

level of benefits prescribed by the New York Dock Con-

ditions. When fashioning an implementing agreement, a

Section 4 arbitrator must adhere to the New York Dock

Conditions. BRC v. C&O/SSR (L&N), NYD § 4 Arb.

(Marx, 1984). The parties are, of course, free to incorporate

benefits above and beyond those in the New York Dock

Conditions. In addition, the Carriers cannot be bound to

their earlier offers containing benefits greater than those

in the New York Dock Conditions. No party would offer

a compromise if the party could later be held to the offer.

Conditioning an agreement on acceptance of a package deal

is a common tactic in labor negotiations. Thus, the Car-

riers could properly withdraw their October 10, 1986 pro-

posed implementing agreement without prejudice to their

position before this Committee.

The BRC’s General Chairman on the C&O petitions

us to automatically certify (for New York Dock protection)

an equivalent number of junior Raceland Carmen corre-

sponding to the number of workers transferring into Race-

land. Section 1 of the Carriers’ proposal provides blanket

New York Dock coverage for all workers (at any location)

who are affected by the instant transaction. The Carri-

ers’ proposal is simple and straightforward. In the con-

trol case, the ICC rejected labor’s position that any adverse

employment effect should be conclusively presumed to be

merge related. 363 I.C.C. 521, 589. Whether any Race-

land worker is affected by this transaction and eligible for

New York Dock protection must be referred to a Section

11 arbitration committee. Waycross employees moving to

Raceland shall be dovetailed into the appropriate roster

under the C&O Agreement.

eee

aaa aaa iit ai

A-48

Section 4 of the New York Dock Conditions charges us

with selecting forces on a basis appropriate for this transac-

tion. The BRC proposes that Waycross Carmen, who trans-

fer to Raceland, retain their Waycross seniority and have

a one time right of first refusal to a permanent Waycross

vacancy. The New York Dock Conditions contemplate an

orderly and final adjustment of forces during implemen-

tation of the transaction. Maintenance of dual seniority

defeats that objective. Finally, the parties should incorpo-

rate the Carriers’ proposed preference tires for filling Race-

land positions. [See Section 3(f) of the Carriers’ October 15,

1986 proposal.]

Due to our finding that, under the unique facts of this

case, the New York Dock Conditions prevent the Carrier

from transferring Orange Book protected workers to Race-

land, the Carrier must be given an opportunity to reeval-

uate the number of positions to be either abolished at

Waycross or established at Raceland. If the Carrier adjusts

the number of positions at either point, the amendment

should be incorporated into the implementing agreement.

In summary, this Committee adopts the Carriers’ pro-

posed implementing agreement dated October 15, 1986

with the modifications specified in our Opinion. The par-

ties agree that the effective date of this Award shall be

March 23, 1987.

A-49

AWARD AND ORDER

This Committee renders the following Award and

Order:

ro oa ® W

. The Committee has jurisdiction over the subject matter

of this dispute;

. The parties shall adopt the Carriers’ October 15, 1986

proposal as the Implementing Agreement governing

the Waycross-Raceland Coordination with the following

modifications:

a. Adopt any adjustment in the number of positions to be

either abolished at Waycross or established at Race-

land; and,

b. Adopt a provision relating to Orange Book protected

workers which is consistent with this Opinion;

. The Answer to the Organization’s Issue No. 1 is “Yes”;

. The Answer to the Organization’s Issue No. 2 is “No”;

. The Answer to the Organization’s Issue No.3 is “Yes”;

. The Answer to the Organization’s Issue No. 4 is specified

in (2) above;

. The Answer to the Question at Issue presented by the

BRC General Chairman on the C&O is “No.”

Dated: March 23, 1987

/s/ R.P. Wostowicz, Dissenting /g/ J T. WiiaMS.

R.P. Wojtowicz Concurring in Part

Employees’ Member And Dissenting in Part

J.T. Williams

Carriers’ Member

/s/ JOHN B. LaRocco

John B. LaRocco

Neutral Member

A-50

CARRIERS MEMBER’S CONCURRENCE AND

DISSENT TO AWARD DATED MARCH 23, 1987,

PURSUANT TO ARTICLE I, SECTION 4 OF THE

NEW YORK DOCK CONDITIONS AND SECTION 4

OF THE NOVEMBER 3, 1966 MERGER

PROTECTIVE AGREEMENT

I concur with the Committee’s Award and Order in

paragraphs 1, 2, 2(a), 3, 5, 7, and that portion of para-

graph 6 that incorporates paragraphs 2 and 2(a). I dissent

from the Committee’s Award and Order in paragraphs 2(b),

4, and that portion of paragraph 6 that incorporates para-

graph 2(b), for the reasons set forth below.

I. The Committee’s Interpretation of the

Orange Book Is Completely Without

Foundation in the Arbitral Record or the

Agreement and Exceeds Its Jurisdiction.

The Orange Book Agreement is a merger protective

agreement entered into by Seaboard Air Line Railroad

Company and Atlantic Coast Line Railroad Company on

November 3, 1966, in connection with the ICC-autorized

merger which created the Seaboard Coast Line Railroad

Company (SCL). Pursuant to Section 4 of the Orange

Book, this Committee was constituted in part to determine

whether the Orange Book prohibited transfer of Orange

Book-protected employees from a freight car heavy repair

facility at Waycross, Georgia, formerly an SCL location, to

Raceland, Kentucky, on The Chesapeake and Ohio Rail-

way Company (C&O). The conclusion of this Commit-

tee that the Orange Book prohibits transfer of protected

employees and their work off the SCL property is com-

pletely without foundation in the arbitral record or the

Orange Book itself and exceeds the Committee’s jurisdic-

tion. There is absolutely no language in the Orange Book

* As a result of subsequent mergers and name changes, CSX

Transportation, Inc., is the current successor of SCL.

A-51

that supports such a conclusion and the action of the Com-

mittee is tantamount ot ignoring its express provisions and

to rewriting the Agreement.

The Committee places total reliance for its conclusion

on section 3(a) of the Agreement, which provides, in rele-

vant part:

(a) In consideration of the foregoing employee

benefits the Merged Company shall, subject to

compliance with the provisions of Appendix F

attached hereto, be entitled to transfer the work

of the employees protected hereunder throughout

the merged or consolidated system and the labor

organizations will, subject to provisions contained

in the Memorandum of Understanding attached

hereto as Appendix G, enter into implementing

agreements providing for the transfer and use

of employees and allocation or rearrangement of

forces made necessary by changes for which pro-

tection is herein provided and the employees, their

organizations and the Carriers will cooperate to

that end.

This language does not even purport to prohibit the

transfer of work and protected employees off the former

SCL system. The Committee’s assertion that section 3(a)

clearly and unambiguously prohibits such transfers is com-

pletely outside any reasonable reading of that section.

Indeed, clear and unambiguous language to that effect

could have easily been written, had such a limitation been

intended, i.e.: “ The Merged Company is prohibited from

transferring work and protected employees off the property

of the Merged Company as it exists on the date of merger.”

The Orange Book contains nothing even remotely resem-

bling such language.

Section 3(a) quite simply authorized the SCL to trans-

fer work and employees throughout its merged or consolli-

dated system as it then existed as a result of the authouized

SAL-ACL merger. The Orange Book does not include a

prohibition on transfers off the SCL property. If any such

A-52

prohibitions exist, they must be found in the applicable

working agreement, not in the Orange Book. Indeed, the

Committee acknowledges at p. 35 of the Award that the

source of any such restriction is the “point seniority terms

of the working agreement.” Thus, the affirmative transfer

rights provided by the Orange Book overrode the working

agreement by permitting transfers throughout the merged

system.

Orange Book protected employees were not intended

to have greater protections against transfers than non-

protected employees; indeed, one purpose of the Orange

Book was to eliminate any restriction against transfers in

exchange for the protective benefits granted in that agree-

ment.

The Committee is totally in error when it states at

page 35 of the Opinion that the Carriers are attempting “to

translate a limited, affirmative right [to transfer Orange

Book employees throughout the SCL] into an unfettered

discretion to transfer Orange Book workers throughout any

enlarged rail system.” The Carriers never urged that the

Orange Book was the source of its right to transfer Orange

Book employees from Waycross to Raceland. The Carriers

never served a notice under the Orange Book to accomplish

the transfer to Raceland. The source of the Carriers’ right

in this transaction is the ICC authorization and the New

York Dock Conditions. The Carriers served a New York

Dock notice under the ICC’s CSX-Control authorization to

accomplish not only the transfer of work, but equally as

important, the transfer of Orange Book employees to Race-

land. Where the carrier obtains the authorization to trans-

fer its employees off former SCL property from an indepen-

dent source, such as the instant ICC order and the accom-

panying New York Dock conditions, nothing in the Orange

Book prohibits the exercise of that authority with respect

to Orange Book-protected employees.

A-53

Contrary to the Committee’s understanding, the Car-

riers never stated that Section 3(a) of the Orange Book pro-

vided the affirmative right to transfer employees to Race-

land. The Carriers correctly asserted that Section 3(a) did

not prohibit transfers off the SCL. It neither authorized nor

prohibited such transfers because the Orange Book looked

only to the SCL merger. Absent any such prohibition, the

Committee exceeded its authority by fashioning one out of

whole cloth.

Furthermore, the Committee’s discussion of the

Orange Book in Section B.1. completely ignores Section

2(e) of the Orange Book, which expressly provides that

Orange Book protection may be terminated in case of an

employee’s “failure to obtain a position available to him

in the exercise of his seniority rights in accordance with

existing rules or agreements.” This language is not lim-

ited to exercise of seniority rights on the SCL property.

Rather, it requires the exercise of any seniority rights an

Orange Book employee may have or may acquire under

existing agreements at any point in time. Section 2(e) is

full applicable to situations such as the present one where

by virtue of an ICC-authorized New York Dock transaction,

an Orange Book employee acquires seniority rights to a

position available to him off the SCL property. In this case

the Carriers, transaction results in Orange Book employ-

ees acquiring seniority rights to Raceland positions. The

Committee’s conclusion that an Orange Book employee can

reject a position to which he has seniority rights and retain

his Orange Book protection is flatly contrary to the express

mandate of section 2(e) of the Orange Book. The Commit-

tee’s Award effectively writes section 2(e) out of the Agree-

ment.

The Committee’s interpretation of the Orange Book

is also contrary to all of the evidence submitted at the

hearing. The Carmen submitted absolutely no evidence to

support their claimed interpretation of the Orange Book.

A-54

Carriers, by contrast, submitted numerous implementing

agreements with various crafts, including the Carmen,

that explicitly provided that an Orange Book employee who

declines a job off former SCL property forfeits his Orange

Book protection. An Orange Book employee’s only alterna-

tive to making a required relocation is to elect to resign in

exchange for a lump sum separation allowance pursuant

to Appendix G of the Orange Book.

These prior implementing agreements stand as unre-

futed evidence of the parties’ interpretation of the Orange

Book. The first such agreement was entered into in 1967

and the Carmen were a party to it; more recently, such

agreements were entered into less than two months prior

to this arbitration hearing. The 1967 agreement is par-

ticularly compelling since it was entered into within one

year of the Orange Book itself. These agreements estab-

lish that the parties have in fact applied the Orange Book

precisely in accordance with the Carriers’ position in this

case: if an implementing agreement makes a position off

the former SCL available to an Orange Book employee and

that employee cannot otherwise hold an SCL position, the

employee cannot decline the available position and retain

his Orange Book protection.

The arbitral record contains no contrary evidence - -

the Carmen could produce no implementing agreements

which provided that Orange Book employees could decline

positions off former SCL property and retain their Orange

Book protection; nor could they cite even one instance

where the Carriers attempted to transfer Orange Book

employees off the SCL but were unable to do so because

of any language in the Orange Book. Furthermore, the

Carriers produced actual instances of approximately eighty

Orange Book protected employees who were transferred

off SCL property. The Carmen could not produce even

one instance where an Orange Book-protected employee

refused to transfer off former SCL property and retained

A-55

his protection. The implementing agreements unequivo-

cally support Carriers’ position that the Orange Book does

not prohibit transfers off SCL property.

Carriers exhibited as part of their evidence in this case

a prior New York Dock Section 4 arbitration award on this

property in which the Neutral Member of this Committee

(LaRocco) held:

“Article I, Section 4 provides for the selection of

forces which is most appropriate in each case. The

most reliable evidence for determining the appropri-

ate method of allocating forces in this case is to look

at how the parties resolved a similar issue in the

past.” (emphasis added)

In the case at hand, the Carriers submitted in evi-

dence a dozen implementing agreements with the Carmen

and other unions party to the Orange Book, all of which

contemplated the transfer of Orange Book employees off

the SCL to other railroads. Despite “looking” at these

instances of how the parties interpreted the Orange Book

in the past, this same Neutral Member (LaRocco) unac-

countably chose to discount the implementing agreements

as providing “us with little guidance in interpreting the

Orange Book.” Opinion at p. 36.

Of the dozen implementing agreements submitted in

evidence by the Carriers, the Committee chose to discuss

one —a 1980 agreement —- which it noted involved trans-

fers within the same city, but for reasons unexplained,

ignored the several other agreements involving transfers

between different cities. Although the Carriers’ evidence

clearly showed the actual names of more than eighty

Orange Book employees who did transfer off the SCL to

other railroads, the Committee described that number as

a “modicum” and speculated without foundation that the

Orange Book employees “probably” opted for a separa-

tion allowance in lieu of transferring. The Committee

ignored the fact that separation allowances would have

been available in the present transaction to those Orange

A-56

Book employees who prefer that option to transferring to

Raceland.

The Committee at page 36 lays the erroneous founda-

tion that the language of Section 3(a) is “clear and express”

in prohibiting transfers of Orange Book employees off the

SCL in order to discount the compelling evidence of past

practice presented by the Carriers and to divert attention

from the glaring lack of evidence presented by the Carmen.

The Committee then characterizes the Carriers’ evidence

as “insufficient to raise a consistent and genuine past prac-

tice.” An unbiased review of the record reveals a dozen

implementing agreements which contemplated transfers of

Orange Book employees off the SCL. The Carmen produced

no implementing agreements at all. Thus, 100% of the evi-

dence demonstrated a consistent and genuine past practice

of twenty years’ duration supporting the Carriers’ position.

There is absolutely no support in any of the agreements for

existence of an Orange Book prohibition against transfers

off SCL property.

The Committee also implicitly suggests that the orga-

nizations may have voluntarily waived Orange Book rights

of their members. This suggestion is ludicrous. There is

only one explanation why time after time over a twenty

year period organizations acknowledged that Orange Book

employees must accept positions off SCL property: they had

no choice, because the Orange Book itself did not protect

the employees against the required transfers.

The foregoing agreements and evidence flatly contro-

vert the Committee’s conclusion that an Orange Book

employee may refuse to transfer off SCL property and still

retain his Orange Book protection. They compel the find-

ing that an Orange Book employee has no such right.

Finally, Carriers submitted an affidavit from C. E.

Mervine, the retired Senior Vice President - Labor Rela-

tions who participated in the Orange Book negotiations,

which was in complete harmony with the history of the

A-57

parties’ actions as evidenced by the implementing agree-

ments. For example, the affidavit states:

10. ...I have particularly noted Mr. McAlpine’s

claims that the Orange Book insulates an

employee protected under its terms from being

required to transfer to locations other than those

on the former Seaboard Coast Line property. Mr.

McAlpine is in error, because from my knowledge

of the Orange Book and its terms, and being very

familiar with its intent, I can state that it grants

no such right to employees protected thereunder;

nor did the parties signatory to the Orange Book

ever intend or contemplate that Orange Book pro-

tected employees would ever have or secure such

rights.

The Carmen produced no contrary evidence from any

union negotiators. The Committee simply ignored the affi-

davit, which makes clear that the Orange Book does not

permit protected employees to refuse transfers off former

SCL property and retain protection.

The Committee, acting in its capacity under Section

4 of the Orange Book Agreement, has exceeded its juris-

diction by reaching an interpretation of the Orange Book

that disregards the express language of that Agreement as

well as the unrebutted evidence in the record. The inter-

pretation is wholly baseless and fails to draw its essence

from the Orange Book or the record before the Committee;

accordingly, I dissent.

II. The Committee Errs in Refusing to

Supersede its Perceived Limitation on

the Transfer of Orange Book-Protected

Employees.

Separate from and independent of its erroneous con-

clusion discussed above, the Comittee errs in refus-

ing to carry out its obligation under the Interstate Com-

merce Act and Article I, Section 4 of the New York Dock

Conditions to supersede those provisions of the Orange

Book that the Committee finds limit Carriers’ authority to

A-58

transfer Orange Book-protected employees from Waycross

to Raceland.

In refusing to supersede this perceived contractual lim-

itation, the Committee has erroneously applied the very

I.C.C. decisions that it recognizes establish the proper stan-

dard under the Interstate Commerce Act and that it pur-

ports to follow. Those decisions establish that contractual

and other legal limitations that “conflict with” a carrier's

proposed implementation of an I.C.C.-approved “transac-

tion” are, as a matter of law, superseded as a result of sec-

tion 11341 (a) of the Interstate Commerce Act. Because

a limitation on the transfer of Orange Book-protected

employees clearly “conflicts with” the authorized trans-

action, as the Committee recognizes in its Opinion, the

Committee should have approved the Carriers’ proposed

implementing agreement that would have required such

employees to follow their available work from Waycross to

Raceland.

At page 33 of its Opinion, the Committee cor-

rectly concludes that “the Raceland coordination is an

approved transaction.” Indeed, as the Committee accu-

rately observed, the Carmen acknowledged the the “trans-

fer of freight car heavy repair work from Waycross to Race-

land constitutes a New York Dock transaction.” Opinion

at 29-30. Thus, the proposed transfer of work is an “action

taken pursuant to authorizations of [the Interstate Com-

merce] Commission” in CSX-Control. New York Dock Con-

ditions, Article I, Section 1 (a).

The Committee also correctly recognizes at page 33

of its Opinion that, as an I.C.C.-approved transaction, the

proposed transfer is “exempt from the Railway Labor Act”

as a result of the provisions of section 11341 (a) of the

I.C.A., which provides in relevant part that:

“A carrier ... participating in that approved or

exempted transaction is exempt from the anti-

trust laws and from all other law, including State

and municipal law, as necessary to let that person

carry out the transaction ....”

A-59

Moreover, the Committee properly recognizes that,

under Article I, Section 4 of the New York Dock Condi-

tions, it serves as “a quasi-judicial extension of the ICC”

and, as such, “must strictly follow the ICC’s interpreta-

tion of its own authority.” Opinion at 31. The Committee

acknowledges that the I.C.C.’s definitive interpretation of

its authority under the Interstate Commerce Act is con-

tained in its D.R.G.W. decision.

The standard articulated by the I.C.C. in its D.R.G.W.

decision is a clear one and is quoted by the Committee in

its Opinion:

“To the extent that existing working conditions

and collective bargaining agreements conflict with

a transaction which we have approved, those con-

ditions and agreements must give way to the

implementation of the transaction.” D.R.G.W.,

slip op. at 6 (emphasis added); Opinion at 17.

As the I.C.C. explained in its Supreme Court reply brief in

B.L.E. v. 1.C.C:

“Section 11347 and the Commission’s labor pro-

tective provisions preserve existing collective bar-

gaining rights only to the extent that they do not

conflict with imp

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