Opposition Brief — Brotherhood of Railway Carmen v. Atchison, Topeka & Santa Fe Railway Co.

if. -— = +t At 22)

‘at

‘| JOSEPH F. sp

No. 90-17 ‘ CUR 7

A + EY SESSA ea SSS

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1990

BROTHERHOOD OF RAILWAY CARMEN

(Division Of TCU), et al.,

Petitioners,

V.

THE ATCHISON, TOPEKA AND SANTA FE RAILWAY

COMPANY,

Ree; ondent.

On Petition For A Writ Of Certiorari To The Court

Of Appeals For The Fifth Circuit

BRIEF OF RESPONDENT IN OPPOSITION

Of Counsel: GEORGE P. PARKER, JR.

Counsel of Record

J. JOE HARRIS

JuDY K. JETELINA

106 South St. Mary’s Street, #800

San Antonio, Texas 78205-3692

(512) 226-4211

MATTHEWS & BRANSCOMB

A Professional Corporation

Attorneys for The Atchison,

Topeka and Santa Fe

Railway Company

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

ow

QUESTIIN PRESENTED

1. Was the Fifth Circuit correct in affirming the

district court’s judgment that the Petitioner-Unions’

claim of unlawful direct dealing in violation of the

Railway Labor Act, 45 U.S.C. § 151, et seq. (““RLA’’),

involved a minor dispute within the exclusive juris-

diction of the RLA arbitration board’

ii

LIST OF PARTIES

The parties are properly identified in the caption

and in footnote 1 of Petitioner-Unions’ brief.

RULE 29.1 LISTING

Pursuant to Supreme Court Rule 29.1, Respondent’s

parent companies are Santa Fe Industries, Inc. and

Santa Fe Pacific Corporation. In addition, Respondent

jointly owns the following subsidiaries: Alameda Belt

Line, Central California Traction Compary, The Oak-

land Terminal Railway, St. Joseph Terminal Railroad

Company, and Sunset Railway Company.

TABLE OF CONTENTS

se

EE

I. THE FIFTH CIRCUIT’S DECISION IS IN CON-

FORMITY WITH WELL-ESTABLISHED

SUPREME COURT PRECEDENT ...................

II.

A.

The Fifth Circuit Correctly Held That

This Case Involves a Minor Dispute Un-

der the Railway Labor Act ........000..00.....

. The Fifth Circuit Correctly Decided the

Claims Regarding Direct Dealing, Waiver

and Stay of Proceedings ................000000

1. The RLA Permits a Carrier To Deal

Directly with Employees in Compen-

sating Them for Their Voluntary

Saints daninbikisnattitiisneendisncsens

. The Fifth Circuit Properly Rejected the

Unions’ ‘‘Waiver” Arguments ............

. The Fifth Circuit Properly Affirmed

the District Court’s Dismissal of the

a emee

THERE IS NO CONFLICT BETWEEN THE

CIRCUITS AND, IN FACT, THE CIRCUITS

ARE UNIFORM IN THEIR RULINGS ON THIS

ISSUE

POSS SSSSETESSEHESES ESSE SEESEEEOEH SEES ESE SEDER ESESESEEEEEES

11

12

17

21

23

iv

III. THE FIFTH CIRCUIT’S REASONING WILL

PROMOTE, NOT UNDERMINE, OPERATION

OF THE RAILWAY LABOR ACT ..........:+++0005 26

CONCLUSION .........ssscsesssssscerseeesrsesserseeseneneeennecessenansncees 27

3

|

1

:

;

TABLE OF AUTHORITIES

CASES: Page

Air Line Pilots Association v. Eastern Air Lines,

Inc., 869 F.2d 1518 (D.C. Cir. 1989) .............. 8,9

American Railway & Airway Supervisors Associ-

ation v. Soo Line Railroad, 891 F.2d 675 (8th

Cir. 1989), petition for cert. he’ 58 U.S.L.W.

0. 8

3615 (U.S. Mar. 27, 1990) 9-1435) ........ 18

Andrews v. Louisville & Nashville Railroad, 406

as ROTI shnsncinci eee Dtnennibiainiinidbiiicdetens 3,8,22,26

AT&T Technologies, Inc. v. Communication Work-

ers of America, 475 U.S. 643 (1986) .............. 8

Beeler v. Chicago, Rock Island & Pacific Railway,

169 F.2d 557 (10th Cir. 1948), cert. denied, 335

SE TUE MII -Aiitinnadisdtahachioniipsiblileribadelaciinaarnabiens 14

Brotherhood of Railway, Airline & Steamship Clerks

v. Atchison, T & Santa Fe Railway, 847

F.2d 408 (7th Gir. 19GB) .......cccccccccccccccsee 19,23,24,26

Brotherhood of Locomotive Engineers v. Atchison,

Topeka & Santa Fe Railway, 768 F.2d 914 (7th

an SEED eenedbcssnshuansspeeddnnitiitaetrdecsnnasesamanblinasannisieen 25

Brotherhood of Locomotive Firemen & Enginemen

v. Southern Pacific Co., 447 F.2d 1127 (5th Cir.

PE scidivteininiaetpabiaisauiesnshedidiesinahiaitaapahaalescialabiiesi 9

Burlington Northern, Inc. v. Brotherhood of Rail-

way, Airline & Steamship Clerks, Spec. Bd.

Adj. Award No. 16 (1975) ................0.0... 11,16,26,27

Caterpillar, Inc. v. Williams, 482 U.S. 386

CED aiitenansonaa CPT 14

Chambers v. Burlington Northern, Inc., 692 F.2d

re TG HE itiirecctcitscindeinecnsnannunctenanionaen 25

Clausen v. Burlington Northern, Inc., 106 L.R.R.M.

(BNA) 2496 (D. Mont. 1980) ................ eee 25

Consolidated Rail Corp. v. Railway Labor Execu-

tives’ Association, 109 S. Ct. 2477

CUED tiniseisdiasiasccicitisienansinevinsnatlbinns 6,8,19,20,21,22

Elgin, Joliet & Eastern Railway v. Burley, 325 U.S.

FED IE Mesinnntensainsinltin satin dibatistasidanidiiaane 7,8,14

Table of Authorities Continued

Page

International Association of Machinists v. Illinois

Central Rail , 120 L.R.R.M. (BNA)

2629 (S.D. Ml. 1984) ...........ccccsccccoscssersseesereeees

International Association of Machinists v. Soo Line

Railroad, 850 F.2d 368 (8th Cir. 1988Xen banc),

cert. denied, 109 S. Ct. 1118 (1989) ....... 18,24,25,26

J. I. Case Co. v. National Labor Relations Board,

S21 U.S. SBR CUDEE) ....rrcccrccrecccccsssossccccccsccess 13,14,26

Johns v. Baltimore & Ohio Raiircad, 118 F. wii

317 (N.D. Ill.X8-judge court), affd, 347 U.S.

GEE CRGGA)- cnccsccorsccsscsssesreciscorcssencsccsecsssnsesssnecsees 27

Jos. Schlitz Brewing Co., 175 N.L.R.B. 141

(BBD cacscrorersrsecercccsrccncesscccnscconososesesstisnsnseceessnes 20

Knighten v. Commissioner of Internal Revenue, 702

F.2d 59 (5th Cir.), cert. denied, 464 U.S. 897

(RBTB) .cncessccessissccrcnccsesevsesevecnessnssassecnsencscnsasnecscs 21

Medo Photo Supply Corp. v. National Labor Rela-

tions Board, 321 U.S. 678 (1944) ..........ceeeee 15,16

Metropolitan Edison Co. v. National Labor Rela-

tons Board, 460 U.S. 693 (1983) ........... ee 17

National Labor Relations Board v. Magnavox Co.,

GDB UB. BRE CLOTE) .....0cscecccoseresrcsnccccccccccsssenes 17

Order of Railroad Telegraphers v. Railway Express

Agency, Inc., 8321 U.S. 342 (1944) .. 10,11,14,18,26,27

Order of Railway Conductors v. Pitney, 326 U.S.

GEL CIDER) .....erersoceserrccccrssocesscossenssnnsccssnenssssnese 22

Radioear Corp., 199 N.L.R.B. 1161 (1972) ............ 20

Railway Express Agenty, Inc. v. Order of Railroad

Telegraphers, 137 F.2d 46 (5th Cir. 1943) ..... 10

Railway Labor Executives’ Association v. Consolt-

dated Rail Corp., 884 F.2d 1385 (3d Cir.

BE ctasicacrnaneinvanenscenlinnansimnitannsewneinaneanbareanannsenen 22

ee -adenats

Table of Authorities Continued

Page

Railway Labor Fixecutives Association v. Norfolk &

Western Railway, 833 F.2d 700 (7th Cir.

ee REET (Ee ee a 8

St. Louis Southwestern Railway v. United Trans-

portation Union, 646 F.2d 230 (5th Cir.

| ERT HK. TN OPED ae Ro 8

Singleton v. Wulff, 428 U.S. 106 (1976) 00.0... 21

Slocum v. Delaware, Lackawanna & Western Rail-

TOad, S89 U.S. 289 (1950) ........ccccccccccccccccccesce, 8

System Federation No. 69 v. Florida East Coast

Railway, N.R.A.B. Award No. 4733 (2d Div.

TD siuevissicinniagiiiiasioceanieinnasiitanaiiasaaiinatisisannusdianen 11,16,26,27

System Federation No. 2 v. Missouri Pacific Rail-

road, N.R.A.B. Award No. 1579 (2d Div.

UT Siceuslenteenesiietbiniiaditatiienanennsiindiniabastinatiicanianies 11,16,26,27

Trans World Airlines, Inc. v. Independent Feder-

ation of Flight Attendants, 489 U.S. 426

CUTE scahansessscteesnenntilnnthinsntiasisambansabandinseanannaatnnanen 16

Tra ton-Communication Employees v. Grand

runk Western Railroad, 679 F. Supp. 696

GR TRIES SIUIIED Kadllnenssscrinnaihsnseensshanseneincsaracen 25

Union Pacific Railroad v. Sheehan, 439 U.S. 89

UTED satlahihcenseennsitesbintststiunhignnsnsintnnpiiasinnsitsanonebenussnan 23,26

United Steelworkers v. Warrior & Gulf Navigation

GO., SEB UB. GE (RBCD) .nncccccccccccccecesscscesscecess 9

Virginian Railway v. System Federation, 300 U.S.

PEE TINIE sc thitcisnenslanniahnincnistidhidastantibisesnnananamaauennes, 12,13,26

FEDERAL STATUTES:

National Labor Relations Act, 29 U.S.C. § 151,

FP TE tannestneninnanicnsenenenrndiaesereenantransntinnne 6,13,15,16,20

Railway Labor Act, 45 U.S.C. § 151, et seg. ....... passim

Section 2, 45 U.S.C. § 152 .....ccccccccccccccccseces 7

Section 2 First, 45 U.S.C. § 152 First .............. 4

Table of Authorities Continued

Page

Section 2 Second, 45 U.S.C. § 152 Second ....... 4

Section 2 Third, 45 U.S.C. § 152 Third ............ 4

Section 2 Fourth, 45 U.S.C. § 152 Fourth ........ 4

Section 2 Seventh, 45 U.S.C. § 152 Seventh .... 4

Section 2 Ninth, 45 U.S.C. § 152 Ninth ............ 4,12

amnion ©, Gh UG. ' 6 BD ccncscciencrsinnen 8

Section 4, 45 U.S.C. § 154 ..........cccccrcsscseeee. 7

Section 5, 45 U.S.C. § 156 ................cccccccsceecees 7

Section 6, 45 U.S.C. § 156 ..................ccccccccees 4,7,18,20

Section 9 Eighth, 45 U.S.C. § 159 Eighth ........ 14

FEDERAL RULES:

Bap. Ct. BR. BOT .....ccrcrrrcrcccccrrccsercssveccensessensssesnssenes ii

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1990

ND hte A a A

No. 90-17

BROTHERHOOD OF RAILWAY CARMEN

(Division OF TCU), et al.,

Petitioners,

Vv.

THE ATCHISON, TOPEKA AND SANTA FE RalLway COMPANY,

Respondent.

On Petition For A Writ of Certiorari To The

Court of Appeals for the Fifth Circuit

BRIEF OF RESPONDENT IN OPPOSITION

Respondent, The Atchison, Topeka and Santa Fe

Railway Company (‘‘Santa Fe’’), respectfully submits

that this case does not present any issue worthy of

review by this Court and that the petition for a writ

of certiorari should be denied.

The dispute between the parties turns on conflicting

interpretations of a collective bargaining agreement,

including the parties’ past practices and the common

law of the shop and the railroad industry. The issue

presented to the Court is which tribunal—a court or

an expert arbitration board—has jurisdiction to de-

termine whether Santa Fe’s voluntary resignation

program, whereby emplevees are merely given the

option of resigning in exchange for a lump sum pay-

ment, is authorized by the parties’ collective agree-

ment.

In deciding that jurisdiction lies with the arbitration

board and not the courts, the Fifth Circuit Court of

Appeals correctly applied well-settled law regarding

disputes between carriers and unions subject to the

Railway Labor Act, 45 U.S.C. § 151, et seg. (““RLA’”’).

The Fifth Circuit recognized that if Santa Fe is cor-

rect in its interpretation of the collective agreement—

i.e., that the agreement, as established by past prac-

tice, authorizes Santa Fe’s actions—then Santa Fe did

not deal directly with its employees in violation of

the RLA, but rather acted in conformity with the

agreement. Although the Petitioner-Unions (“Unions’’)

disagree with Santa Fe’s contract interpretation, sub-

stantial precedent from this Court, the lower courts

and even boards of arbitration supports the Fifth Cir-

cuit’s ruling, based on the “minor dispute’’ principles

of the RLA. Indeed, the Fifth Circuit’s decision does

not conflict with any other circuit court decision, and,

in fact, it is entirely consistent with Supreme Court

precedent and the two other appellate decisions that

have addressed this issue.

Furthermore, this case turns on unique facts, such

as the meaning of the past practices and course of

dealing between Santa Fe and the Unions under their

collective bargaining agreement. The case law reflects

that RL disputes over voluntary resignation pro-

grams are best suited for a case-by-case resolution.

Accordingly, the Fifth Circuit’s decision has no sig-

nificance or policy import beyond the particular facts

and parties in this case.

STATEMENT OF THE CASE

A. Statement of Facts.

Santa Fe is an interstate carrier subject to the

RLA; the Unions are the exclusive bargaining rep-

resentatives of Santa Fe’s shop craft employees. Pet.

la.! Santa Fe and the Unions are each signatory to

the 1964 Shop Crafts Agreement (‘“Agreement’’),

which provides protective benefits for employees who

are involuntarily deprived of employment or placed in

a worse position as a result of certain operational

changes, including ‘‘transfers of work.’’ Pet. 5a-6a.

The Agreement (art. I § 3) recognizes that employees

may resign and denies protective benefits to an em-

ployee upon “his resignation.”’ Pet. 12a n.11. In ac-

cordance with the RLA, article VI §1 of the

Agreement creates a Shop Craft Special Board of

Adjustment with exclusive authority to resolve dis-

putes arising under the Agreement.’

During the last four months of 1987, Santa Fe fur-

loughed a number of shop craft employees at its Cle-

burne, Texas facility. Pet. 2a. On December 21, 1987,

Santa Fe posted a notice at its Cleburne facility, of-

fering certain shop craft employees, including those

on furlough, an opportunity to resign voluntarily in

‘The Fifth Circuit’s opinion is reported at 894 F.2d 1463. It

is reproduced as Appendix A to the Petition for a Writ of

Certiorari. References in this brief to the Fifth Circuit’s decision

are cited to the pages in Appendix A.

* Even if the Agreement did not provide for arbitration, the

parties would be required to arbitrate any disputes under the

Agreement in accordance with the mandatory arbitration pro-

visions of the RLA. See Andrews v. Louisville & N.R.R., 406

U.S. 320, 323 (1972).

return for $20,000.00. Jd. Over 200 Cleburne em-

ployees accepted the offer. Jd.

B. Course of Proceedings.

On January 12, 1988, six of Santa Fe’s shop craft

unions filed-suit in federal district court, seeking a

declaratory judgment and injunctive relief over Santa

Fe’s voluntary resignation program. Pet. 2a. In the

one cause of action pursued on appeal, the Unions

contended that in offering the resignation program,

Santa Fe violated RLA §§2 First, Second, Third,

Fourth, and Ninth (45 U.S.C. §§ 152 First, Second,

Third, Fourth, Ninth) by dealing directly with its Cle-

burne shop employees rather than through their des-

ignated representatives.’ Pet. 2a.

In the district court, Santa Fe presented evidence

of an established past practice of offering shop craft

employees compensation in return for their voluntary

resignations, without the express prior approval of

the Unions. Pet. 12a-13a & n.12. This evidence in-

cluded previous voluntary resignation offerings in

January of 1984 and in January, May and August of

1987, as well as compensated resignations worked out

with employees on an individual basis. Pet. 12a &

n.12.

The Unions asserted two additional causes of action in the

district court: (1) that Santa Fe violated the Agreement by al-

legedly transferring work from its Cleburne shop to shops in

other states and by offering employees the voluntary resignation

program and (2) that Santa Fe’s resignation program constituted

a unilateral change in the rates of pay, rules, and working con-

ditions of the Cleburne shop employees, and thus violated RLA

§§ 2 Seventh and 6 (45 U.S.C. §§ 152 Seventh, 156). The Unions

did not appeal the judgment in Santa Fe’s favor on these causes

of action.

On October 26, 1988, the district court dismissed

the Unions’ complaint for lack of jurisdiction because

the parties’ disagreement constituted a minor dispute

subject to mandatory arbitration under the RLA. Pet.

2a. The court looked to past practice evidence of vol-

untary, compensated resignations and concluded that

Santa Fe’s clairn that the voluntary resignation pro-

gram was consistent with a mutually understood

course of dealing between the parties was nonfrivo-

lous; thus the dispute was minor and within the ex-

clusive jurisdiction of the arbitration board. Pet. 2a,

12a-13a.

On February 28, 1990, the Fifth Circuit affirmed

the district court’s judgment. The court held that

Santa Fe’s claims that the voluntary resignation pro-

gram was contractually authorized by the parties’ past

practices has an arguable basis sufficient to render

this a minor dispute subject to mandatory arbitration

under the RLA. Pet. 12a-18a. The Unions’ assertion

that they could not have contractually permitted the

resignation program because they are not authorized

to waive the statutory right against direct dealing

was rejected by the Fifth Circuit as being contrary

to a body of case law that permits unions to waive

statutory rights under the RLA. Pet. 5a n.5.

The Fifth Circuit also rejected the Unions’ argu-

ment that the dispute in this case is neither a major

nor a minor dispute, but a direct statutory violation

of the RLA’s direct dealing prohibition. Pet. 8a-9a.

The court recognized that if Santa Fe is correct that

the voluntary resignation program is permitted under

its collective agreement with the Unions, then there

has been no violation of the RLA. Jd. Thus, resolution

of the dispute turns on interpretation of the collective

agreement between the parties, which constitutes a

minor dispute. Jd.

Finally, the court rejected the Unions’ argument

that where an alleged contractual provision involves

waiver of a statutory right, a higher level of scrutiny,

1.e., “clear and explicit’? rather than ‘‘arguable,”’

should be applied in determining whether a dispute

is minor. Pet. 10a. The court relied on Consolidated

Rail Corp. v. Ratlway Labor Executives’ Ass’n, 109

S. Ct. 2477 (1989), in which this Court rejected a

similar suggestion. Pet. 10a-lla. The Fifth Circuit

noted that the ‘“‘clear and explicit” waiver test urged

by the Unions is a test for determining actual sub-

stantive contractual questions under the National La-

bor Relations Act, 29 U.S.C. § 151, et seg. (““NLRA”’),

and not a test for determining the preliminary ques-

tion of what body has jurisdiction to address the un-

derlying contractual dispute under the RLA. Pet. lla

n.9.

REASONS FOR DENYING THE WRIT

The Unions’ articulated reasons for seeking

certiorari do not fit within any of the recognized

grounds for invocation of this Court’s discretionary

jurisdiction. The Fifth Circuit applied settled case law

to the facts of this case and properly held that this

case presents a minor dispute subject to mandatory

arbitration under the RLA and the parties’ collective

agreement. Its decision does not conflict with any

other court of appeals’ decision, nor with any decision

of this Court. Moreover, it turns on facts which are

unique and, as reflected in the case law, are best

suited for case-by-case resolution. Since this case was

properly decided and does not fit any of the accepted

standards for granting Supreme Court review, the

petition for certiorari should be denied.

I. THE FIFTH CIRCUIT’S DECISION IS IN CONFORMITY

WITH WELL-ESTABLISHED SUPREME COURT PREC-

EDENT.

The gist of the Unions’ argument is that the Fifth

Circuit erred in holding that the district court did not

have jurisdiction over their direct dealing cause of

action because that claim alleged a violation of the

RLA. As shown below, the Unions’ direct dealing

ciaim is merely a component part of the overall dis-

pute between the parties regarding Santa Fe’s vol-

untary resignation program and the propriety of that

program under the collective agreement. As such, the

entire matter, including the direct dealing claim, con-

stitutes an arbitrable minor dispute.

A. The Fifth Circuit Correctly Held That This Case

Involves a Minor Dispute Under the Railway La-

bor Act.

The Fifth Circuit recognized that the RLA provides

two distinct procedures to promote the orderly res-

olution of labor disputes in the railroad industry. Pet.

7a-8a. In the case of a so-called ‘‘major dispute’’—

relating to disputes over the formation of collective

agreements or efforts to secure them—before resort-

ing to self-help, the parties are required to submit to

conference and, if necessary, mediation in an effort

to reach agreement over the matter in controversy.

45 U.S.C. §§ 152, 154-56. See Elgin, J. & E. Ry. v.

Burley, 325 U.S. 711, 723-25 (1945). Where, however,

the dispute is classified as ‘‘minor’’—relating to the

meaning or proper application of a particular contract

provision with reference to a specific situation or an

omitted case—if not settled informally, it is subject

a.

exclusively to resolution through arbitration. 45 U.S.C.

§ 153. See, e.g., Andrews v. Louisville & N.R.R., 406

U.S. 320, 322 (1972); Slocum v. Delaware, L. &

W.R.R., 339 U.S. 239, 244-45 (1950); Burley, 325 U.S.

at 723-25.

The Supreme Court recently placed its imprimatur

on the standard applied by the lower courts in dis-

tinguishing between major and minor disputes when

it held that

[w]here an employer asserts a contractual

right to take the contested action, the en-

suing dispute is minor if the action is ar-

guably justified by the terms of the parties’

collective-bargaining agreement. Where, in

contrast, the employer’s claims are frivolous

or obviously insubstantial, the dispute is ma-

jor.

Consolidated Rail Corp. v. Railway Labor Executives’

Ass’n, 109 S. Ct. 2477, 2482 (1989). See also Air Line

Pilots Ass’n v. Eastern Air Lines, Inc., 869 F.2d

1518, 1521-22 (D.C. Cir. 1989); St. Lowis S.W. Ry. v.

UTU, 646 F.2d 230, 232-33 (5th Cir. 1981). The lower

federal courts have refined the controlling test to the

point that “if there is any doubt that a dispute is

major or minor, a court will construe the dispute to

be minor.” Ratlway Labor Executives Ass’n v. Norfolk

& W. Ry., 833 F.2d 700, 704 (7th Cir. 1987). See also

AT&T Technologies, Inc. v. CWA, 475 U.S. 643, 650

(1986) (‘‘ ‘[AJn order to arbitrate the particular griev-

ance should not be denied unless it may be said with

positive assurance that the arbitration clause is not

susceptible of an interpretation that covers the as-

serted dispute. Doubts should be resolved in favor of

coverage.’ ’’) (quoting United Steelworkers v. Warrior

& Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)).

It is well-established that ‘{tJhe labor arbitrator’s

source of law is not confined to the express provisions

of the contract, as the industrial common law—the

‘practices of the industry and the shop—is equally a

part of the collective bargaining agreement although

not expressed in it.’”’ United Steelworkers, 363 U.S.

at 581-82. Accord Air Line Pilots Ass’n v. Eastern

Air Lines, Inc., 869 F.2d 1518, 1521-22 (D.C. Cir.

1989) (‘‘The presumption in favor of arbitration is

particularly strong because a collective bargaining

agreement may include not only the terms of the

written contract but also the ‘common law of a par-

ticular industry or of a particular plant ... .’ ’’) (quot-

ing United Steelworkers, 363 U.S. at 579); Brotherhood

of Locomotive Firemen & Enginemen v. Southern Pac.

Co., 447 F.2d 1127, 1136 (5th Cir. 1971) (questions

which turn on ‘“‘custom and practice ... are the grist

for the decisional mill of the [RLA arbitration boards]

created by Congress with primary jurisdiction over

such matters’’).

In the instant case, the Fifth Circuit found that

Santa Fe’s evidence of past practice created a non-

frivolous claim that the resignation program was ar-

guably justified by past practice. Pet. 12a-13a. The

court’s ruling was supported by substantial evidence

of past practice, including previous resignation offer-

ings to craft employees and individually negotiated

resignation agreements. Pet. 12a & n.12. The court

thus properly held that the dispute presented was

minor and subject to the exclusive jurisdiction of the

arbitration board.‘ Pet. 8a-9a, 13a.

‘The correctness of the court’s holding is underscored by the

a

10

In an attempt to avoid federal policy mandating

arbitration, the Unions (Pet. 8, 14.) argue that the

Fifth Circuit erred in holding that the district court

had no jurisdiction over their direct dealing claim since

they alleged an RLA violation. As they alleged in the

court below, the Unions apparently contend that an

arbitration board has no jurisdiction over this dispute.

The Unions’ argument is directly contrary to this

Court’s decision in Order of R.R. Telegraphers v. Rail-

way Express Agency, Inc., 321 U.S. 342 (1944).

In Telegraphers, the railroad unilaterally negotiated

individual pay rates with certain employees. When the

railroad contended that the individual agreements

superseded the terms of the collective agreement, the

resulting dispute was submitted to the National Rail-

road Adjustment Board. That Board issued ‘‘an award

sustaining the claims that the agents were entitled

to the compensation provided by the collectively bar-

gained agreement”’ and also held ‘‘that the individual

contracts were ineffective.”’ Jd. at 345. When the rail-

road did not comply with the arbitration award, the

union sued to enforce the award in federal court. The

railroad contended that the Adjustment Board lacked

jurisdiction and was wrong on the merits. See decision

below, Railway Express Agency, Inc. v. Order of R.R.

Telegraphers, 137 F.2d 46, 49 (5th Cir. 1943). The

Supreme Court held that the award “was in accord-

fact that two of the Unions filed grievances contending that the

alleged transfer of work from the Cleburne shop to shops in

other states violated the Agreement in that Cleburne employees

affected by the alleged transfer should be paid protective ben-

efits under the Agreement. One of these grievances, filed by

Petitioner Brotherhood of Railway Carmen, specifically com-

plained of the voluntary resignation program challenged in this

case.

:

|

11

ance with the law,” 321 U.S. at 347, and thus rec-

ognized that RLA arbitration boards are competent

to decide direct dealing issues.

Thus, strong federal policy and controlling Supreme

Court precedent support the propriety of the Fifth

Circuit’s holding in this case. Significantly, adjust-

ment board awards themselves demonstrate that

claims of direct dealing in offering compensated res-

ignation programs are grist for RLA arbitrators. See

awards cited, infra, p. 16, n. 7.

B. The Fifth Circuit Correctly Decided the Claims

Regarding Direct Dealing, Waiver and Stay of

Proceedings.

The Unions’ claims that Santa Fe engaged in sta-

tutorily prohibited direct dealing, that the Unions

could not waive the employees’ statutory rights

against direct dealing or, alternatively that such a

waiver must be ‘clear and unmistakable,’ and that

the lower courts should not have dismissed their com-

plaint, but rather should have stayed the proceedings

pending arbitration, are without merit. First, contrary

to the Unions’ asserticns, direct dealing over com-

pensated voluntary resignations is permitted under

the RLA, as shown by controlling Supreme Court

precedent. Second, the Unions’ contractual authori-

zation allowing Santa Fe to offer its voluntary res-

ignation program directly to employees does not

constitute a waiver of the employees’ statutory right

to choose their bargaining representative, but is, at

most, the relinquishment of the right to bargain over

a particular economic subject matter—an action le-

gally within the Unions’ power. In addition, this Court

has previously rejected a union’s claim that a waiver

must be “clear and unmistakable.”’ Third, the Unions

12

did not timely raise, and thus waived, their argument

that the court below should have stayed this action.

In any event, under the RLA, a court has no juris-

diction over minor disputes, and dismissal, rather than

a stay of proceedings, is proper.

1. The RLA Permits a Carrier To Deal Directly

with Employees in Compensating Them for Their

Voluntary Resignations.

The Unions argue (Pet. 9-14) that an employer can-

not deal directly with its employees because such con-

duct is prohibited by the RLA and Supreme Court

precedent. As a result, they assert that the dispute

presented in this case is neither major nor minor,

but, rather, involves a direct violation of the RLA

because the voluntary resignation program consti-

tuted ‘‘direct dealing”’ in derogation of the employees’

right to be represented exclusively by their chosen

collective bargaining representatives. Only through

this convoluted analysis are the Unions able to con-

tend that their direct dealing claim can escape arbi-

tration.

In support of their argument, the Unions cite sev-

eral Supreme Court decisions regarding the right of

employees to choose their own bargaining represent-

ative and to be exclusively represented by that entity

in negotiations with a carrier. Pet. 9-14. Contrary to

the Unions’ assertions, however, these cases show that

direct dealing of the type alleged in this case is per-

mitted under the RLA.

Section 2 Ninth of the RLA (45 U.S.C. § 152 Ninth),

provides that a carrier “treat with’ its employees’

certified bargaining representative. In Virginian Ry.

v. System Fed’n, 300 U.S. 515 (1937), cited by the

13

Unions, the Court interpreted this provision as bar-

ring a railroad from negotiating with any other rep-

resentative on a collective basis; however, the Court

made clear that the RLA does not prohibit individual

contracts that do not establish or change the rights

or obligations of employees as a class:

When read in its context it must be taken to

prohibit the negotiation of labor contracts, gen-

erally applicable to employees in the mechanical

department, with any representative other than

respondent, but not as precluding such individual

contracts as petitioner may elect to make directly

uith individual employees.

Id. at 549 (emphasis added).

In J. I. Case Co. v. NLRB, 321 U.S. 332 (1944),

also cited by the Unions, the Supreme Court reaf-

firmed the Virginian Ry. holding in the context of

the NLRA. The Court recognized that individual con-

tracts which do not abolish or diminish an employer’s

obligations under a collective agreement, and which

do not increase those of the employees, are permis-

sible:

We know of nothing to prevent the employee’s,

because he is an employee, making any contract

provided it is not inconsistent with a collective

agreement or does not amount to or result from

or ts not part of an unfair labor practice. But

in so doing the employer may not incidentally

exact or obtain any diminution of his own obli-

gation or any increase of those of employees in

the matters covered by collective agreement.

Id. at 339 (emphasis added). The Court’s specific focus

on the employer’s and employee’s freedom to decide

14

individually whether to engage in the employment

relationship, id. at 335, confirms the law’s special

tolerance for voluntary resignation agreements, which,

rather than waiving a condition of employment while

employment continues, merely sever the relationship

altogether. Indeed, § 9 Eighth of the RLA (45 U.S.C.

§ 159 Eighth) specifically guarantees an employee’s

right to resign unilaterally.

The same day J. J. Case was decided, the Court

issued its instructive opinion in Order of R.R. Teleg-

raphers v. Railway Express Agency, Inc., 321 U.S.

342 (1944), and held that the RLA prohibits those

contracts with individual employees that modify the

obligations of the employer and employees already set

forth in a collective agreement. Jd. at 347. In Teleg-

raphers, the Court sustained an NRAB award ~vhich

found that individual agreements, which set a rate of

pay for certain employees, were invalid because they

established a rate of pay that was different from and

completely inconsistent with the rate of pay specified

in the collective agreement. 321 U.S. at 346-47.5

8 See also Caterpillar, Inc. v. Williams, 482 U.S 386, 396

(1987) (‘‘J. I. Case does not stand for the proposition that all

individual employment contracts are subsumed into, or elimi-

nated by, the collective bargaining agreement.’’); Elgin, J. & E.

Ry. v. Burley, 325 U.S. 711, 733-34, 736 (1945) (“It would be

difficult to believe that Congress intended . . . to submerge wholly

the individual and minority interests, with all power to act con-

cerning them, in the collective interest and agency, not only in

forming the contracts which govern their employment relation,

but also in giving effect to them and to all other incidents of

that relation.’’); Beeler v. Chicago, R.I.& P. Ry., 169 F.2d 557,

559 (10th Cir. 1948), cert. denied, 335 U.S. 903 (1949) (RLA

“specifically recognizes the right of an individual employee to

confer with management concerning matters of individual in-

15

In the instant case, the Unions cannot legitimately

contend that the voluntary resignation program

changes or undermines any collectively bargained

rights or obligations. No language in any existing

collective agreement restricts or conditions an em-

ployee’s right to resign or Santa Fe’s right to solicit

a resignation. The only agreement even implicated in

this case is the Shop Crafts Agreement, which indis-

putably contains no language prohibiting Santa Fe

from offering money to employees in exchange for a

voluntary resignation. Indeed, the Agreement (art. I,

§ 3) specifically denies to employees who voluntarily

resign the benefits otherwise provided by the Agree-

ment:

An employee shall not be regarded as deprived

of employment or placed in a worse position with

respect to his compensation and rules governing

working conditions in case of his resignation ....

[emphasis added]

Thus, under the express terms of the Agreement,

employees who resign do not fall within any class of

even potentially protected employees, and they clearly

have no right under the Agreement to any of the

protective benefits. Santa Fe’s resignation program

accordingly does \:ot undermine or change the terms

of the Agreement.® In fact, the resignation program

terest, and the bargaining representative is not authorized to

bind the individual employees on matters outside the scope of

the collective interest.”’).

®* The Unions’ reliance on Medo Photo Supply Corp. v. NLRB,

321 U.S. 678 (1944), is also misplaced. In that case, which arose

under the NLRA, the employer negotiated with a group of em-

ployees rather than the union for a wage increase. The union

had not authorized the employer to deal directly with the em-

16

and alleged direct dealing with employees is sup-

ported by and consistent with the common law of the

railroad industry as reflected in adjustment board

awards.’

ployees. As a result, the employer committed an unfair labor

practice when it bypassed the union in negotiations. In contrast,

in the instant case, Santa Fe did not bypass the Unions to deal

directly with employees, but rather dealt with employees over

their resignations pursuant to its claim of contractual authori-

zation from the Unions, as reflected by the parties’ agreement,

including their past practices. In Medo, there was no claim that

any contract authorized direct dealing, nor were questions of

arbitral jurisdiction involved. See also Trans World Airlines, Inc.

v. Independent Fed’n of Flight Attendants, 109 S. Ct. 1225, 1233

(1989) (‘“{TJhe NLRA ‘cannot be imported wholesale into the

railway labor arena.’ ”’).

7The RLA’s expert arbitration boards have uniformly held

that, absent an express labor agreement prohibition, the solic-

itation and consummation of voluntary resignations are entirely

permissible. See System Fed’n No. 69 v. Florida East Coast Ry.,

N.R.A.B. Award No. 4733, at 30 (2d Div. 1965) (‘Nowhere in

the Agreement or in the Railway Labor Act is there any pro-

hibition forbidding employees from resigning their jobs; nor is

there any requirement that resignations must take place with

the concurrence of the labor organization. It is indisputable that

an employee has an absolute right to resign from his job; it

seems to be a logical extension of this concept to go further

and conclude that an employee has the right to resign in ex-

change for a monetary consideration.”); System Fed’n No. 2 v.

Missouri Pac. R.R., N.R.A.B. Award No. 1579, at 4 (2d Div.

1952) (Board held that under RLA and parties’ agreement em-

ployee was free to terminate his employment relationship with

carrier, with or without pecuniary consideration and was free

to agree, for such consideration, never again to be employed by

carrier; Board found nothing in parties’ agreement or in RLA

that prohibited making of contract between employee and car-

rier); Burlington Northern, Inc. v. BRAC, Spec. Bd. Adj. Award

No. 16 (1975) (pursuant to Merger Agreement of Nov. 17, 1967)

17

2. The Fifth Circuit Properly Rejected the Unions’

“‘Waiver”’ Arguments.

The Unions (Pet. 14-22) contend that dismissal of

their direct dealing claim for lack of jurisdiction is

inconsistent with decisions of this Court concerning

waivers of statutory rights. They assert that the sta-

tutory prohibition against direct dealing cannot be

waived by the employees’ chosen bargaining repre-

sentative because it is fundamental to the statute.

Pet. 15. The Unions cite NLRB v. Magnavox Co., 415

U.S. 322 (1974) and Metropolitan Edison Co. v. NLRB,

460 U.S. 693 (1983), for the proposition that “ ‘a

union may bergain [sic] away its member’s economic

rights, but it may not surrender rights that impair

the employees’ choice of bargaining representative.’ ”’

Pet. 16.

Contrary to the Unions’ belief, this labor relations

truism actually supports the Fifth Circuit’s decision.

The Unions confuse the impairment of employees’

choice of bargaining representative with a duly-des-

ignated bargaining representative’s right to forego

bargaining on a particular economic subject of bar-

gaining. Santa Fe’s argument and the Fifth Circuit’s

holding, that the Unions, through past practice, have

contractually authorized Santa Fe to offer employees

a voluntary resignation program, does not compro-

mise the Union’s representative status. Rather, this

contractual authorization, even if denominated a

waiver, was simply a relinquishment of the right to

bargain over a particular economic subject matter,

which Magnavox and Metropolitan Edison establish

(Board, in effect, ruled that mere existence of contract provision

permitting one type of employee separation allowance did not

bar alternate voluntary resignation program).

18

was within the Unions’ power to do. Significantly, in

Order of R.R. Telegraphers v. Railway Express

Agency, Inc., 321 U.S. 342 (1944)—a case on which

the Unions rely extensively—this Court expressly ac-

knowledged that under the RLA a union can “agree{ |

that the company should be free to negotiate with

[employees] severally.” Id. at 347.°

® The Unions’ effort to create a conflict in the circuits on this

issue by relying on American Ry. & Airway Supervisors Ass'n

v. Soo Line R.R., 891 F.2d 675 (8th Cir. 1989), petition for cert.

filed, 58 U.S.L.W. 3615 (U.S. Mar. 27, 1990) (No. 89-1435), is

farfetched and unavailing. In that case, the unions sought to

require the railroad to bargain only through a national multi-

carrier representative, despite the railroad’s desire to designate

its own representative to bargain over health and welfare issues

on a local level. The Eighth Circuit held that the railroad had

a statutory right to choose its own representative for bargaining

and could not be forced to use the representative required by

the union. In the instant case, the employees have designated

the Unions as their bargaining representatives. Santa Fe has

not attempted to force the employees to bargain through some

other representative. Rather, the Unions, the representatives

chosen by the employees, have through their past acquiescence

given Santa Fe the right to deal directly with employees over

resignation issues. If the Unions wish to change the terms of

the collective agreement with Santa Fe, they are free to seek

bargaining over the issue pursuant to RLA § 6 (45 U.S.C. § 156).

More destructive of the Unions’ effort to create a conflict,

however, is the fact that the Eighth Circuit, in IAM v. Soo Line

R.R., 850 F.2d 368 (8th Cir. 1988) (en banc), cert. denied, 109

S. Ct. 1118 (1989), specifically held that an employee resignation

program, like the one considered by the Fifth Circuit in this

case, was arguably permitted by the parties’ collective bargain-

ing agreement and thus gave rise to a minor dispute, notwith-

standing the union’s direct dealing claim. The Eighth Circuit

thus is in complete agreement with the Fifth Circuit on the very

issue presented in this case.

19

The Unions further contend that even if they could

waive the employees’ right to bargain over compen-

sated resignations solely through their collective bar-

gaining representative, such a waiver must be “clear

and unmistakable,” and not merely “arguable.” Pet.

18-22. This argument was specifically rejected by this

Court in Consolidated Rail Corp. v. Railway Labor

Executives’ Ass’n, 109 S. Ct. 2477, 2483-84 (1989).

The Unions’ position, if accepted, would mean that

disputes of this nature, where the carrier contends

that the contract, past practices and common law of

the industry authorize its conduct, would never pro-

ceed to arbitration because the court would be re-

quired to decide in the first instance whether the

contract clearly and unmistakably authorized the car-

rier’s conduct. If the court made that determination,

there would be nothing left to arbitrate since the

contract interpretation dispute would be decided by

the district court. Such a rule would reverse the test

for minor disputes and would be totally at odds with

the strong policy of the RLA, which relegates matters

of contract interpretation (whether they be based on

past practices, the common law of the industry or

the express terms of the contract) to arbitration. See,

e.g., BRAC v. Atchison, T. & S.F. Ry., 847 F.2d 403,

408 (7th Cir. 1988\“WJhether [past practice] evi-

dence is sufficient to establish an enforceable, con-

tractual obligation is a question solely for the

NRAB.”’).

Moreover, the Fifth Circuit correctly ruled that

whether there has been a clear and unmistakable

waiver of the right to negotiate over resignation is-

sues is a question more properly addressed to the

arbitration board and is not for the court to deter-

20

mine. Pet. lla & n.9. The court’s role is merely to

determine whether there is an arguable basis for

Santa Fe’s position.®

The Unions assert (Pet. 21-22) that Consolidated

Rail Corp. v. Railway Labor Executives’ Ass’n, 109

S. Ct. 2477 (1989), considered controlling by the Fifth

Circuit, does not apply to the instant case because

that case involved a refusal to bargain, while this case

allegedly involves direct dealing, and to apply Con-

solidated Rail to this case would be destructive of

the statutory scheme. In Consolidated Rail, the rail-

road asserted that a dispute over implementation of

drug testing was minor because its past practice of

conducting physical examinations of employees, in-

®Santa Fe has never claimed that the Unions have waived

the right to bargain over the resignation program. Rather, Santa

Fe only asserts that the program is already permitted by con-

tract, including the practices of the shop and industry. Even

under the NLRA, from which the Unions purport to borrow

their clear and unmistakable waiver theory, that test applies

only when an employer contends that the union has contractually

given up its statutory right to bargain over some issue. And

even then, the NLRB will remit such disputes to arbitration.

E.g., Radioear Corp., 199 N.L.R.B. 1161 (1972); Jos. Schlitz

Brewing Co., 175 N.L.R.B. 141, 142 (1969). The Unions here

have never served a notice under RLA §6 (45 U.S.C. § 156) to

bargain over this subject, but instead seek to eliminate the pro-

gram by judicial fiat.

10 The Unions fail to explain why a refusal to bargain is less

destructive of the statutory scheme than an employer’s attempt

to deal directly with employees. An employer’s refusal to bargain

could be more destructive of the statutory scheme since an em-

ployee has the right to refuse to deal directly with his employer

and to refer all matters to his union if he so desires, whereas

an employee would not be in a position to force his employer

to bargain.

21

cluding drug testing under certain circumstances, ar-

guably gave it the discretion to include drug testing

in all physical examinations. The unions argued that

it was a major dispute and that drug testing could

not be implemented prior to the parties’ bargaining

over the issue. This Court held that where an em-

ployer asserts a contractual right to take a contested

action, the dispute is a minor one subject to man-

datory arbitration if the action is arguably justified

by the terms of the collective agreement. Jd. at 2482.

The Unions’ efforts to distinguish Consolidated Rail

are disingenuous. The instant case, like Consolidated

Rail, involves the assertion by an employer, Santa

Fe, of a contractual right to take a contested action,

v.e., to implement its voluntary resignation program.

Thus, this case fits squarely within the Consolidated

Rail holding.

3. The Fifth Circuit Properiy Affirmed the District

Court’s Dismissal of the Case.

The Unions contend (Pet. 22-25) that even if the

dispute in this case is arbitrable, the district court

should not have dismissed the case, but rather should

have stayed the proceedings during the pendency of

the arbitration process. This argument was not raised

in the district court and was not asserted on appeal

until the Unions filed their reply brief and then only

in a footnote. See Pet. 7 & n.4. The issue was not

addressed by the Fifth Circuit. Under these circum-

stances, the Unions have waived their stay of pro-

ceedings argument. See Singleton v. Wulff, 428 U.S!

106, 120-21 (1976); Knighten v. Commissioner of In-

ternal Revenue, 702 F.2d 59, 60 n.1 (5th Cir.), cert.

denied, 464 U.S. 897 (1983).

22

Even if the Unions had not waived their argument,

their reliance on Consolidated Rail, supra, and Order

of Ry. Conductors v. Pitney, 326 U.S. 561 (1946), is

wholly unavailing. The Unions quote several passages

from the Court’s decision in Consolidated Rail which

they claim support their stay argument: e.g., the court

must “‘ ‘defer to arbitration’ ’”’ when a carrier’s claim

of contractual authority to make a unilateral change

in working conditions is arguably justified, and the

effect of that ruling will be to “ ‘delay collective bar-

gaining in some cases’”’ and to “ ‘delay [] the onset

of [the Section 6] process until the Board determines

on the merits that the employer’s interpretation of

the agreement is incorrect. ...’” Pet. 22 (emphasis

in petition). The Unions, however, fail to point out

that in Consolidated Rail this Court reversed the

Third Circuit which had held that the case involved

a major dispute within the court’s jurisdiction. This

Court did not reverse and remand with instructions

for the lower court to stay proceedings during the

pendency of arbitration. Moreover, on remand the

Third Circuit affirmed the order of the district court

dismissing the complaint for lack of subject matter

jurisdiction. Railway Labor Executives’ Ass’n v. Con-

solidated Rail Corp., 884 F.2d 1385 (1989).

The Unions’ reliance on Pitney is similarly unper-

suasive. In Pitney, the court had supervisory author-

ity over the bankrupt railroad and thus had an

independent basis for maintaining jurisdiction during

the pendency of arbitration—the Bankruptcy Act.

Moreover, Pitney was decided prior to the seminal

decision in Andrews v. Louisville & N.R.R., 406 U.S.

320 (1972), in which this Court recognized the arbi-

tration boards’ exclusive jurisdiction over all minor

23

disputes and emphasized that the courts are without

jurisdiction when a minor dispute is in issue. See also

Union Pacific R.R. v. Sheehan, 439 U.S. 89, 94 (1979).

Thus, the Fifth Circuit properly upheld dismissal of

the case because the issue presented was a minor

dispute over which courts have no jurisdiction.

II. THERE IS NO CONFLICT BETWEEN THE CIRCUITS

AND, IN FACT, THE CIRCUITS ARE UNIFORM IN

THEIR RULINGS ON THIS ISSUE.

At least two other courts of appeals have held that

disputes over a railroad’s right to implement a res-

ignation program must be arbitrated. In BRAC v.

Atchison, T. & S.F. Ry., 847 F.2d 403 (7th Cir. 1988),

the union contended that Santa Fe engaged in un-

lawful ‘direct dealing’’ by unilaterally offering em-

ployees a resignation program that was virtually

indistinguishable from the one in this case. The dis-

trict court dismissed BRAC’s lawsuit based on evi-

dence of past practice by Santa Fe of offering cash

payments in exchange for resignations by BRAC-rep-

resented employees on two separate occasions.

The Seventh Circuit affirmed. The court found that

“Santa Fe’s past-practice evidence was sufficient to

support a nonfrivolous claim that buyouts of clerical

employees had become an established part of the par-

ties’ understanding of their contract.’’ Jd. at 406. Sig-

nificantly, the court stated that “‘whether the [past

practice] evidence is sufficient to establish an enforce-

able, contractual obligation is a question solely for

the NRAB.” Id. at 408.

The Seventh Circuit also held that it could not as-

sert jurisdiction over BRAC’s direct dealing claim.

The court noted that the federal courts’ ‘“‘jurisdicticn

24

over RLA violations is quite narrow” and that a court

should not assert jurisdiction when contractual justi-

fication for the action is claimed, because to do so

would intrude into the realm of RLA arbitration. Jd.

at 409.

In IAM v. Soo Line R.R., 850 F.2d 368 (8th Cir.

1988) (en banc), cert. denied, 109 S. Ct. 1118 (1989),

the Eighth Circuit held that Soo Line’s resignation

program raised an arbitrable minor dispute. Soo Line

had acquired another railroad and entered into an

employee protective agreement with the machinists’

union. Thereafter, Soo Line decided to reduce the

workforce and offered a voluntary resignation pro-

gram whereby employees could resign for $15,000.00.

Id. at 372. IAM sued to enjoin the program. The

district court granted an injunction, but was reversed

by the Eighth Circuit en banc.

The court considered whether IAM’s lawsuit pre-

sented a major or minor dispute and held that “the

conclusion is inescapable that the dispute is minor.”

Id. at 376. The court articulated the following con-

trolling guidelines:

In deciding whether a dispute is major or mi-

nor, it is not our function to interpret or construe

the language of the collectively bargained-for

agreements between the parties ...; rather, our

function is to determine whether this case im-

plicates a question of contract interpretation. If

the parties disagree whether the dispute can be

resolved by reference to an agreement, the dis-

pute is minor unless the claims of contractual

justification are “frivolous” or “obviously insub-

stantial.’”’ ... This rule is a necessary adjunct of

25

the need to protect the arbitrator’s exclusive ju-

risdiction over minor disputes and supports the

additional corollary that ‘‘when in doubt, the

courts construe disputes as minor.’’ Thus, in this

case, if the bargained-for agreements arguably

permit the practice, then the Soo Line may pro-

ceed unilateraliy, subject to arbitration before the

National Railroad Adjustment Board.

Id. at 376-77 (citations omitted) (quoting Brotherhood

of Locomotive Eng’nrs v. Atchison, T. & S.F. Ry., 768

F.2d 914, 920 (7th Cir. 1985)).

In concluding that IAM’s challenge to Soo Line’s

buyout program presented a minor dispute, the Eighth

Circuit noted that ‘{a] number of tribunals have held

that the very argument that the Soo Line sets forth

here presents a minor dispute.”’ Jd. at 378. Relying

on these cases, the court held that “ijt is difficult to

conceive how a legal position such as the Soo Line’s,

which has received such widespread judicial accept-

ance, could be ‘frivolous’ or ‘obviously insubstan-

tial.’”’ Jd. at 380. Accord Transportation-

Communication Employees v. Grand Trunk W.R.R.,

679 F. Supp. 696 (E.D. Mich. 1988); IAM v. Illinois

Cent. Gulf R.R., 120 L.R.R.M. (BNA) 2629 (S.D. III.

1984). See also Chambers v. Burlington Northern, Inc.,

692 F.2d 109, 112 (10th Cir. 1982) (question whether

individual transfer agreement superseded right to al-

lowances under merger protection agreement and col-

lective agreement must be arbitrated); Clausen v.

Burlington Northern, Inc., 106 L.R.R.M. (BNA) 2496,

2498 (D. Mont. 1980) (controversy whether transfer

agreement negotiated between individual employee

and railroad violates RLA and merger protection

agreement is arbitrable minor dispute).

26

Ill. THE FIFTH CIRCUIT’S REASONING WILL PRO-

MOTE, NOT UNDERMINE, OPERATION OF THE

RAILWAY LABOR ACT.

The Unions assert (Pet. 25-27) that the Fifth Cir-

cuit’s decision that this case presents an arbitrable

minor dispute will substantially undermine the oper-

ation of the RLA. They argue that Santa Fe’s offer

of the voluntary resignation program subverts the

RLA’s exclusive representation principle. The Unions,

however, ignore the fact that this Court has recog-

nized that a carrier may enter into individual con-

tracts with its employees without violating the RLA.

See Order of R.R. Telegraphers v. Railway Express

Agency, Inc., 321 U.S. 342, 347 (1944); J. I. Case Co.

v. NLRB, 321 U.S. 332, 339 (1944); Virginian Ry. v.

System Fed’n, 300 U.S. 515, 549 (1937). See also dis-

cussion, supra, at 12-16. In addition, they ignore the

strong policy favoring arbitration of RLA disputes.

See Union Pacific R.R. v. Sheehan, 439 U.S. 89, 93-

94 (1979); Andrews v. Louisville & N.R.R., 406 U.S.

320 (1972). See also discussion, supra, at 7-9. Finally,

they ignore the fact that disputes over compensated

resignations, such as the one in issue here, have con-

sistently been deemed minor disputes within the ex-

clusive jurisdiction of RLA arbitration boards. See

IAM v. Soo Line R.R., 850 F.2d 368 (8th Cir. 1988)

(en banc), cert. denied, 109 S. Ct. 1118 (1989); BRAC

v. Atchison, T. & S.F. Ry., 847 F.2d 403 (7th Cir.

1988). See also adjustment board awards cited, supra,

at 16 n. 7.

Significantly, the Court’s decision in Order of R.R.

Telegraphers v. Railway Express Agency, Inc., 321

U.S. 342 (1944)—that the National Railroad Adjust-

ment Board had jurisdiction to adjudicate and fashion

27

remedies in a dispute alleging direct dealing by the

railroad with its employees—directly refutes the

Unions’ claim and supports the Fifth Circuit’s rea-

soning that this dispute must be arbitrated, despite

the Unions’ assertion of an RLA violation. The Te-

legraphers decision provides proof positive that direct

| dealing disputes are proper subject matter for RLA

arbitration, and it further underscores the fact that

| arbitration boards do have both the authority and the

ability to decide such disputes and to fashion appro-

priate remedies. Based on the Supreme Court’s de-

cision in Telegraphers and the adjustment board

awards discussed previously in this brief (supra, at

16 n.7), it is clear beyond peradventure that the

Unions’ direct dealing claim can be arbitrated without

upsetting the RLA statutory scheme. Indeed, arbi-

tration would be in perfect he-mony with that scheme.

See also Johns v. Baltimore & O.R.R., 118 F. Supp.

317, 320-21 (N.D. Ill.) (3-judge court), aff'd, 347 U.S.

964 (1954) (per curiam).

CONCLUSION

| For the foregoing reasons, the petition for a writ

| of certiorari should be denied.

DATED: August 31, 1990 Respectfully submitted,

Of Counsel: GEORGE P. PARKER, JR.

MATTHEWS & BRANSCOMB Counsel of Record

. J. JOE HARRIS

A Professional Corporation =, JETELINA

106 South St. Mary’s Street, #800

San Antonio, Texas 78205-3692

(512) 226-4211

Attorneys for The Atchison,

Topeka and Santa Fe

Railway Company

———— ——