Brief for the United States — Norfolk & Western R. Co. v. Nemitz

Supreme Court brief1972

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PUNISCIOUOR 2 ee ee ee oe eee

" Question. presented... seen eee ee

Statute involVed-------- beeee ee Soe seeeeeeee

Interest of the amici-curiae___._------ a Sen

Statement. __--------- pee eee Seep

Summary of argumerit___-__-------------------

_Argument pee tee eee Pe ene e-.

I. The last sentence of Section 5(2)(f) of

the Interstate Commerce Act allows \a

railroad and the representatives of its

employees to reach-a freely negotiated

agreement on employee protective con-

ditions which ignot subject to Commis-

sion review under that Section _____-_-

A. Background of Congress’ consider-

ation of legislation leading to

enactment of the ETEMEPORA-.

tion Act of 1940

_ B. Legislative history of Section 3(2)

a (f) of the Interstate Commerce

C. The Commission’s interpretation _

of Section 5(2)(f) comports with

the congressional objectives re-

flected in that section’s back-.—

ground and legislative history -

D. The Commission’s interpretation

of Section : ‘5(2)(f) is also sup-

ported by considerations — of |

policy and of practicality and by

-a consistent course of adminis- -

trative conduct..___________.

a - (hy

a‘)

— et . . . ‘

WOR WN ee

e ‘ ,

; Aceiment—Contaued |

II. Plaintiffs’ rights to protection from the °*

effect of N&W’s acquisition flowed from

collective bargaining agreements, not

from an order of the Commission, and

jurisdiction under 49 U.S.C. 9--------- . 380. }

Conchusion-.. .----------p------2--2-2---20-74 "34

CITATIONS _/ |

Cases: |

American Airlines v. Civil Ueronanties Board,

‘No. 1083,-decided July 23, 1971_--------- 26 |

Arnold v. Louisville,-& NashvilleR.R.Co.,Co, |

180,F. Supp. 429, affirmed sub nom. Batts v. ,

‘Louisville & Nashwille. R.R. Co., 316-F. 2d

i) Ee PEPE ee 31

a Brotherhood of M aintenance of Way Employes |

“a vy. United States, 336 U.S. 169_- ,.--------- 21, 32

Burlington Truck Lines v. United States, 37r

| U.S. 156.__.----------------0-*-<-+---- 25

° Chicago, B. & Q. R. Co. pore Rights, |

971 I.C.C. 675...----_.--------£-------- 29

Chicago & N.W.R. Co. v. Transportation Union

No. 189, October. 2m, 1970, decided |

June 1, 1971-. ------------------------- 26 |

Clemens v. Central R.R. Co. of N.J., 264 F. a

Supp: 551, reversed, 399 F. 2d 825, certiorari <

denied, 393 U.S. 1023_------------------ 31

County of Marin v. United States, 356.U.S.

412________-.--------------------- _--. . "25

Detroit, T. & I. R. Co., 275 I.C.C. 455-_ ----- «29

Duluth S.S. & A. R. Co. Merger, 312 1.C.C. .

+ §Al________---....-------------------- >. an

General Committee v. M.K.T.R. Co., 320 U.S.

: 0 B98 liane seen eee ee eee ene 26

Great Northern Pac. —M erger—Great N orthern

Ry. Co., 331 LCC. 228....---- a 29, 32

“Cates Contina sl |

Gulf, M. & O. R. Co. Purchase, 261 I.C.C. 693. . 28

_ Gulf, M. & O. R. Co. Purchase, saccinaet 267

— LCC, 265-22 ee 29 -

Houston Belt & Term. Ry. Co. “Control, 275 | .

7 ™ TC.C, 289... 222s eee eee 29

International—G..N..R. Co. ‘Trustee. Trackage —

Rights, 281 1.C.C. 30_.-__-__-2-______ 28

Missouri Pac. R. Corp. in Nebraska Trustee

Operation, 247 I.C.C. 653-_.____________.- 28

Nap Haven Inclusion Cases, 399 U.S: 392: _ __. 24

Norfolk & Western Ry. Co. Merger, Ete,

Virginian Ry. Co., 307 I.C.C. 401__:--__._- 28

re Norfolk & Western Ry. Co. and N.Y.C. & St.. |

L. R. Co.—Merger, Btc., 324 1.C.C.1__ 4, 5,7, 8, 30

* Oklahoma Ry. Co. Trustees Abandonment, 257 7

I.C.C. 1772-2 eee 28

Outland v. Civil Aeronautics Board, 284 F. 2d

224... _. bapa ee pee pete een wees en 25, 26

Pennsylvania R. Co.—M erger—New York Cen-.

tral R. Co., 327 I.C.C. 475... 29,31,32 *

Pere M arquette Ry. . Co. Merger, 267 I. C.C.

? Ay i a ee ee 29

Phelps Dodge Corp. v. N ational Labor Relations |

Board, 313 U.S. 177_.2_-_--- 2222 8 14

Railway. Labor Ass’n v. United ‘States, 339 -

US. 142.00 5, 21,33

Southern*Ry. Co.—Control—Central of Georgia

Ry. Co.; 317 I.C.C. 557, 729__-._________. 8, 28

Southern Ry. Co.—Control—Central of Georgia

' Ry. Co., 320°1.C.C. 377... 8

Southern Ry. Co.—Control—Central of Georgia

Ry: Co., 331 1.C:C. 151 on remand from -

Railway Labor Executives’ Assn. v. United |.

. States, 379 U.S. Le 28, 29, 30

ee eee

Cases—Continued | rage

Savannah & A. Ry. Co. Control, 282 1.C.C. 39. = * 29 ©

St. Joe Paper Co. v. Atlantic Coast Line R. Co.,

347 U.S. 298... eee. 14°

. Udall v. Tallman, 380 U.S. 1__- _- joe 30

United States v. Lowden, 308 we S, 225. eeeeee 32

Statutes: / —_

Emergency Railroad ‘Craneportation Act of

‘1933, 48 Stat. 211, Section 7(b)__...____._ 15, 17.

Interstate Commerce Act, 49 U.S.C. 1, et seq: .

49 U.S.C. Bea Sees 13, 25, 28

~. 49 U.S.C. 5(2)__-_____- -2 Xo e-----:-- 4,5, 10

49 U.S.C..5(2)(b).-- 2 eee 32, 33

49 U.S.C. 5(2)(f)_. ---- a yeecee-4 passim.

49 U.S... 809). 7on 2 ee ee ‘2 32 .

49 U.S.C. 8*.____ 2222 at eee ake Dad

49 U.S.C. 9__-__ eee --.---- 2, 10,13, 30, 33

49 U.S.C. 1378('b)------ asad aeons 20

National Labor Relations Act, 29 Us S. C. 7

~ 158(d)__.-- See ee ee eee eons 26

_ Railway Labor ‘Act, 45 U.S.C. 151, et seq. __. %

‘¢ Transportation Act of 1940, 54 Stat. 898.. 13, 14, 22

} ~\ Congressional material:

84°Cong. Rec. 6158 (1939) oe peaeeeeeene i 20

- 84 Cong. Rec. 9882 (1939). =... -_-.----__-- 20

- 86 Cong. Ree. A2684-85. —— --i- 24

- 86 Cong. Rec..5871___------- Geena at seeeee 21

86 Cong. Rec. 5886... ------2---.----2----. 21

* * 86 Cong. Rec. 10184 (1940):__2-2__-_--__-- 18

86 Cong. Rec. 10189_._:_..---_--___--_-__-- 22

Hearings held by the House Committee on

_. Interstate and—Foreign Commerce on |

~HLR. 2531, 76th Cong., Ist Sess. 231-241

(1989) ..- = 5,'16, 17, 18, 19

H. R: Rep. No. 2016, 76th Cong,, 3d Sess. 61 ;

(1940)... .-- eeeceesees er eee 21

[re . Pe

Congressional material—Confinued | pape

H.R. Rep. No, 1217, 76th Cong., Ist Sess. 12. 20

S. Doc. No. 119, 78d Cong., 2d Sess. 30-33. _ 17

S. Rep. No. 433, 76th Cong., 1st Sess. 29. -_- 20

Miscellaneous:

Latham, The Politics of Railroad Coordination

1933-1986 (1959)_______----- 15,17

Van Metre, T ransportation 2m the United States

337 (1939) ___ 2 ee 15

Fourth Report of the Federal Coordinator of .

Transportation on Transportation Legislation,

H. ‘Doc. 394, 74th Cong., 2d Sess. 50-58

Ce :) a 18 ,

_ Report of Committee appointed September 20, _- |

1938, by the President of the United States

to Submit Recommendations upon the Gen-

eral Transportation Situation, meremaber 23,

A9BB, p. B42, 18

Raflroad Trainman, vol. 57, p. 342 (une 1940). 24.

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Yu the Supreme Gourt of the Wited States

Ocroser TERM, 1971

No. 70-97 |

NORFOLK AND WESTERN RalLway COo., PETITIONER

gy, |

RicHaRD NEMITz, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT

OF APPEALS FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE INTERSTATE

. COMMERCE COMMISSION AS AMICI CURIAE

OPINIONS BELOW

The opinion of the court of appeals (App. II, at |

179-193) is reported at 436 F. 2d 841..The opinions of

the district court (App. I, at 19-36, 43-58) are

‘reported at 287 F. Supp. 221 and 309 F. Supp. 575.

JURISDICTION

The judgment of the court of appeals. was entered on

January 15, 1971. The petition for a writ of certiorari.

was filed on March 15, 1971, and was granted on May 24,

1971. The jurisdiction of this Court is invoked under 28

U.S.C. 1254(1).

(1)

QUESTION PRESENTED

In this ease the court of appeals upheld the district

court’s jurisdiction on the ground that plaintiffs, who

are employees of the Norfolk & Western Railway

Company, were seeking damages for violation of an

order of the Interstate Commerce Commission (see 49

U.S.C. 8 and 9). Although plaintiffs’ action involves

interpretation of the terms of.a collective bargaining |

agreement, the court held that this.1962 agreement for

the protection of eniplovees became incorporated

the Conmission’s 1964 order approving N & W's apphi-

cation tomerge;' the court so held on the ground that

the Commission has a duty to review the adequacy of

protective conditions in agreements entered into pur-

suant to the last sentence of Section 5(2)(f) of the

Interstate Commerce, Act (49 U.S.C. 5(2)(f)). This

case, therefore, presents the question whether the Com-

mission has such a duty and thus. should be held to

have incorporated the 1962 agreement ito its lafer

order so that plaintiffs’ rights to protection from the

adverse consequences of N&W’s merger flow. from a

Commission order rather than from a. collective bar-

gaining contract.’

STATUTE INVOLVED.

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

49 U.S.C. 5(2) (£), provides:

As a condition of its, approval, under this

paragraph (2), of any transaction involving a

1 Norfolk & Western Ry. Co. and N.Y., C. & St. L. R. Co.

Merger, 824 IL.C.C. 1

* This is ‘the only “question to which this brief amici curiae is

addressed. ° _ .

carrier or carriers by railroad subject to the

provisions of this part, the Commission shall -

require a fair and equitable arrangement, to

protect the interests of the railroad employees

affected. In its order of approval the Commis-

sion shall include terms and conditions provid-

ing that during the period of four years from =

the effective date of such order such transaction

will not result in employees of the carrier or car-

ners by. railroad: affected. by such order being

in a Worse position with respect to their em-

ployment, except that the protection afforded

to any employee pursuant to this sentence shall

not be required to continue for a longer period,

following the effective date of such order, than

the’ period. during which: such employee: ‘was in >

the employ of such carrier or carriers prior to

the effective date of stich order. Notwithstand-

ing any other provisions of this Act, an agree-

ment pertaining to the protection of the

interests of said employees may hereafter be

entered into by any carrier or earriers by rail-

_road and the duly authorized representative or

representatives of its. or their employees. -

INTEREST OF THE AMICI CURIAE

This case raises important issues. concerning the |

scope of the Interstate Commerce Commission’s obli-

gations under Section 5(2)(f) to protect employees

affected by rail mergers and concerning the impact of

a Commission order approving a merger upon prior

and subsequent labor agreements. The court of appeals’

Interpretation of Section 5(2) (f) is directly contrary

*to the interpretation the Commission has consistently |

given it for many years. This is a matter of interest

* 441— 295—71-—2

both to the’ Commission and to the United States,

which is a statutory party in proceedings for judicial

review of erders approving rail mergers.’ The present

question may well arise in connection with a substan-

tial number of future and past rail mergers where the.

sur viving railroad has agreements w ith employee rep-

resentatives concerning employee protection.

STATEMENT

The four plaintiffs m this case are employees of the

Norfolk and Western Railway Co. (*N&W") and mem-

hers of Cedar Point Lodge No. 844 of the Brotherhood

of Railroad Trainmen.’ Until October 16, 1964, they

were employed as brakemen in the Toledo Division of

the Pennsylvania Railroad Company. and worked on

the Pennsylvania’s Sandusky Line. This case concerns

the effect of N&W' s purchase of that line on the

plaintiffs.

In applications filed with the Tiferstate Connie 1Ce

Commission in 1961, N&W sought approval under Sec-

tion 5(2) of the Interstate Commerce Act, 49 U.S.C.

5(2), to merge with the New York, Chicago and

St. Louis Railroad Company (“Nickel Plate’’), to ae-

quire control of the Wabash Railroad.-Company and

lease its railroad line, and to purchase the Sandusky

Line of the Pennsylvania Railroad Company.’ The

‘The United States has concluded, however, that its interest

in the present case does not differ from that of the Commission.

“ Plaintiffs sued on behalf of “approximately twenty-five” simi-

larly situated members of Cedar Point Lodge No. 844 (App. I,

. - ab5).

’ Norfolk & W. Ry. Co. and New York, 0.&St.L. R. Co. Merger,

324 LC.C. 1, 4-5.

= 7 5 =

Sandusky Line, extending from Columbus, Ohio, to

the shores of Lake Erie at Sandusky, provided a con-

necting link between lines: of the N&W -and those of

the Wabash and ‘Nickel Plate; its acquisition gave

N&W a direct route for marketing lake cargo and ves-

sel fuel coal, the main commodities handled over the

Sandusky Line.° : o , ,

On June 24; 1964, the Interstate Commerce Com-

mission, acting pufsuant to Section (2) of the Act,

approved the proposed transactions, including N&W’s

purchase of the Sandusky Line. 324 I.C.C: 1. |

In January 1962, more than two years before the

Commission’s authorization -but while the railroads’.

applications were pending, the N&W, the Brotherhood

of Railroad Trainmen, and other unions, entered into

an “Agreement For Protection of Employees in Event

of Approval of Merger and Related Applications Filed

- by Norfolk and Western Company And Other Carriers”

(App. I, at 60). The parties expressly executed the

agreement “in accordance with the last sentence of Sec-

tion 5(2)(f) of the Interstate Commerce Act?’ (App.

I, at 62). In addition to incorporating the Washing-

ton Job Protection Agreement of 1936 * with certain

modifications, including a provision for arbitration of

disputes, the 1962 agreement essentially provided for

a voluntary “job freeze”: jobs could not be eliminated

“The Washington Agreement is described in Railway Labor -

Ass'n v. United States, 339 U.S. 142, 147 n. 7, and is published

in Hearings held by the House Committee on Interstate and .

Foreign Commerce on H.R. 2531, 76th Cong., Ist Sess. 231-241

(1939). < |

as a result of the proposed transactions except through

niormal attrition and employees could not be dismissed

for the sake of greater economy, although the carrier

might transfer their work to a differenit™location

(App. I, at 62-69).° | .

Section 3 of the agreement related specifically to

_ the Sandusky Line (App. I, at 67). Those who worked

on that line were employees of the Pennsylvania Rail-

road. Their working territory consisted of the entire

Toledo Division, of which the Sandusky Line was a

part (App. II, at 179). The Sandusky Line did. not

operate yedr-round; when Lake Erie froze over dur-

ing the winter, the line shut down (App. II, at 179-180).

‘Thus, the: ‘Pennsylvania Railroad employees who had

exercised employment rights on the Sandusky ‘Line

warked there when work was available, but during slack .

seasons and at other times: ‘they could exercise their.

seniority rights: and work elsewhere in the Toledo

Division (App. II, at 179-180). Section 3 of the 1962

-agkeement provided that N&W would employ.all em- .

ployees represented by the signatory unions who

shave exercised employment rights on said Sandusky

Line’’ and who, at the time of the acquisition, ‘elect

_ to accept such employment’ (App. I, at 6%). Section

"3 further stated that “none of such employees shall

be deprived of employment or placed i in a worse posi-

tion with respect to compensation at any time during

such employment’ except that N&W would not be

obligated to provide employment ‘of greater duration

than such employee enjoyed on. said line in the tw elve

® See also 324 I.C.C. at 106.

tT,

months’ period immediately preceding the effective

‘date of said acquisition” (App, at 67). Employees

would not be protected against any “‘furlough because

of reduction in forces due to seasonal requirements

as aforesaid or decline in volume of traffic or reve-

hues” (App. I, at 68). Also, N&W would assume

responsibility for all labor agreements relating to the

Sandusky Line, — : : _

| other than provisions therein. (1) granting em-

‘ ployees employed on s&id Line seniority or

employment rights beyond said Line and (2)

granting sehiority or employment rights on said

Line to employees having employment rights

- beyond gaid Line * * * subject to changes in ac-

cordance with the provisions. of the Railway

Labor Act * * *, [App. I, at 68.]° .

In recommending that the railroads’ applications be

approved, the Commission’s hearing examiner noted’

~ that N&W had entered into an agreement with the labor

—unions, and: stated that ‘‘In view. of this agreement,

no conditions need he imposed under any authority

granted herein for the protection of those employees

covered by such agreement.” 324 1.0.0. at 106: The

Commission, in authorizing the transactions, referred |

to these collective bargaining agreements and made its

authorization ‘‘subject to such agreernents.”’ 324 L.C.C.

at 50. For the benefit of employees not covered by the

- 1962 agreement, the Commission. imposed a detailed

set of protectivé conditions pursuant to the first two

° Following the Commission’s approval of the merger, N&W

and the- unions also entered: into various implementing agree-

_ments (App. I, at 83). <2

; sentenwees, of Section: 5(2) (£); these conditions in- —

cluded dismissal allowances, hump-sun - separation.

allowances, moving expenses, and other protections.”

After plaintiffs elected to beconie employees of:

N&W on the Sandusky Line, they receiv ed less work

than they. had received while they were w ith the Penn- |

sylvania Railroad, where they worked not only on the.

Sandusky: Line, but also throughout the Toledo Divi-

sion. Théy requested N&W to compensate them fér

the differénce between their av erage monthly wage -

" as employees of the Pennsylvania Railroad over the’

entire Toledo Divisjgn i in the twelve months preceding

the merger, and what they earned per month working °

for N&W (App. I, at 11-33). N&W) said it would

_ pay’ only the difference ‘between’ plaintiffs’ N&W

| wages and their average monthly wages on the San-

dusky Line alone in the twelve-month-pexiod before

_ the acquisition (7d.), and denied\furth - compensation

on the basis of its. interpretation of fthe. 1962 agree-

ment. Butsby October 1965, N&W hall failed to pay

even this amount because it had not yet raceive

cient wage data from the Pennsylvania

After the. Brotherhood_of Railroad Tr ainmen, threat-

ened to invoke arbitration under Section 1(d) of the

1962 agreement. (App. I, at- 102-106), the parties en-

tered into Implementing Agreement I- A on Octo- ’

her,-25, 1965 (App. I, at 85-88). This :provided ‘that.

until N&W received sufficient data té calculate the -

- employees’ earnings on'the Sandusky Line during the

, ; : i) a

- ae 324 LC.G. at 50. incorporating by reference the coriditions —

‘in Southern 2 y. Coe Conteol—Centrak of Georgia Ry. €0,

BUT LCC. 557: 317 LC.C. 729: 320.LCC. 87%.

year before the acquisition, NE&W would figure each’

employee’s average monthly compensation for that’ .

period on the basis of%75 percent of. his earnings

throughout the Toledo Division. If he’ hail been earn- -

ing less than 75 percent | at N&W, “he. would he Pe

the difference by N@W.™”. © eos

Plaintiffs were still ‘dissatisfied because, in their

_ View, the contract required their minintum average

monthly wage to correspond to their prior earnings

not’ just on the Sandusky Line, but throughout: the

—'Potedo Division (App. I, at 129-130)« Pursuant to a

Mee a of andereranding: between the unions, .

and N&W (App. I, at 77-79), qnter ed into at the time

of the 1962 agr eement, plaintiffs submitted $ their

claims td the’ local chairman of their union. When the

loeal chairman declined to pursue the claims on: the.

ground that the employees were not entitled to greater

compensation under the 1962 agreement, plaintiffs ap-

pealed to the National Board~ of Appeals: of the

Brotherhood of Railroad Trainmen. After holding a

afing and considering numerous exhibits, the Board,

on September* 16, 1966, rejected the claim and refused

to seek arbitration withN &W. The Board of Appeals

stated that arbitration was inappropriate since “thére

is fio such disagreement between our Brotherhood and_

Norfolk and Westey” (App. I, at 149), and. that the |

1962 agreement had expressly provided that “N &W ©

“shall not be required to provide employment or com-

pensation * * * of greater duration: or amount than

eK ad

When Naw finally calculated an employee’s actual ‘evel.

monthly ‘wage on the Saridusky Line, any Overpayments would

have to be paid back to N&W red I, at oer).

od performed by and paid for to the Sandusky 1 Line

— \—\employees * * * (App. I, 148).

~ Plaintiffs then commenced the pr esent ac tion in the :

district court under Section 9 of the*Interstate Com-

merece Act, 49 U.S.C. 9, on the theory that N&W: had

” acted contrary to the 1962 agreement, that the Com- .

. the. representatives of the affected employees, may ws

mission had incorporated the agreement | in its 1964

order authorizing N&W’s purchase, and that N&W

“had therefore violated. an order of the Inter state Com-

merce Commision. The district court agreed (App. I,

at 43-08). The court of appeals affirmed (App. IL, at

179-193), holding that: urider Section 5(2)(f) of the |

Act the Commission is required to provide protection |

for affected. employees whether or not a prior agree-.

ment exists between the employees’ representative and —

‘the railroad (id. at 185). Accordingly, the court con-

strued the Commisston’s report as having’ “first deter-

mined - that: =the. protective conditions in the 1962

agreement were adequate” and ‘having then incor-

porated them in the order (id. at 185-1 186).

SUMMARY OF ARGUMENT , .

The first two sentences of Section 5(2)(f) of the |

Interstate Commerce, Act require the Interstate Com-

“merce Commission, as a prerequisite to. approving a -

transaction, under. Section 5(2), to impose protec-

tive conditions for the benefit of railroad employees ©

affected. by tf@transaction. The last. sentence of Sec-

tion 5(2) (f), however, provides that “Notwithstand-.

-ing any.other provisions of this Act” the carrier and

af enter into a collective bargaining agreement pertain-

eo .

- ing to the protection. of ‘the employees. The-Commis- _

sion has interpreted Section 5(2) (f) to mean that

when the union has negotiated a protective agreement.

_ with the carrier, the Commission has no responsibility

to review that agreement - ‘under Section 5(2)(f) .

~~ because such an agreement’ in itself satisfies the

requirements of that Section. The legislative history

of Section 5(2)(f) supports the Commission’s view |

that, by adding the “N otwithstanding” clause, Con-

gress intended to allow such agreements to be freely

negotiated without heing subjeet to. Commission review

under that Section.

At the time Congress: passed Section 5(2)(f), all

but a small percentage of the railroad employees in

the country were protected from the effects of mergers

and similar transactions by the Washington J ob Pro-

tection Agreement of -1936. By requiring the ‘Com-

mission to impose protective conditions, Congress

intended in the first two sentences of Section 5(2)(f)

to grant similar protection to employees not covered

- by the Washington’ Agreement. But Congress did not

intend to require the Commission to review the ade- —

‘quacy of agreements the unions and railroads might

enter into in the future. The unions themselves drafted

the “ Notwithstanding” clause ; in view of the unions’

expressed desire to preserve free eolletive bargaining

with respect to employee protection, it is reasonable to

conclude that the very purpose of that clause was to

make clear that freely negotiated agreements would not

be subject to Commission review under Section 5(2) (f).

| in addition, when Congress passed Section 5(2) (£),

44 1-895—7 1——3

many of the nation’s railroads were in bankruptcy.

In these circumstances, Congress clearly did not. intend

to require the Commission to demand employee pro-

tection according to the first two sentences of Section

5(2)(f). if the union would agree. to less so’ that

the carrier could merge in order to avoid shutting —

down and if requiring greater employee protection

might make it financially impossible for the carrier

to merge at all. |

The -deeision of the court of appeals would: require

the Commission to intrude on the collective bargain-

ing process by altering the terms of previously nego-

tiated agreements. The’ result would necessarily be to

discourage settlement of these matters in the future

through. negotiation, and thus. would contravene the

strong congressional policy in favor of having labor

differences settled through collective bargaining rather

than having agencies or courts impose settlements on °

labor and management. The Commission’s consistent

practice for three decades in refusing to review nego-

tiated agreements promotes collective bargaining and

avoids Commission intervention in labor-management

_ relations, an area where it has no special expertise. The

Commission is responsible for administering Section

5(2)(f); the courts should thus give great weight to

- its long-standing interpretation of that Section.

Since the Commission did not review the agreement

in this case under Section 5(2)(f), and since it had

no responsibility to do so, the court below erred in.

upholding the district court’s jurisdiction on the

ground that the Commission must have incorporated

the terms of the previously negotiated agreement in

its. order approving N&W’s acquisition of the San-

dusky Line. The employees’ rights to protection flowed

from the collective bargaining agreement, not the

Commission’s order, and the district court therefore —

did not have jurisdiction over plaintiffs’ claims for

damages under 49 U.S.C. 9.

ARGUMENT

I. THE LAST SENTENCE OF SECTION 5 (2) (F) OF THE INTER-

STATE COMMERCE ACT ALLOWS A RAILROAD AND THE

REPRESENTATIVES OF ITS EMPLOYEES TO REACH A FREELY

NEGOTIATED AGREEMENT ON EMPLOYEE PROTECTIVE CON-

DITIONS WHICH IS NOT SUBJECT TO COMMISSION REVIEW

UNDER THAT SECTION

In the Transportation Act of 1940, Congress revised

Section 5 of the Interstate Commerce Act to empower

the Commission to authorize voluntary railroad merg-

~ ers and other financial transactions. While hoping that

“such transactions would bring about much-needed

economies in railroad operations, Congress at the same

timé realized that reducing jobs on the merging lines

for the sake of efficiency could place a severe burden

on the affected employees. In the first two sentences of

Section 5(2) (f), Congress therefore directed the Com-

mission to include protective conditions for employees ~

in its orders authorizing transactions under Section

5(2). In the last sentence of Section 5(2)(f), how-

ever, Congress provided that ‘‘N otwithstanding any

other provision of this Act’’ carriers and unions

could enter into agreements pertaining to the pro-

tection of the interests of the affected employees.

‘This case involves the effect of a collective agree-

‘ment entered’ into pursuant to the last: sentence of

Section 5(2)(f£) on the Commission’s responsibility

under the first two sentences of that provision. The

court of appeals held that the Commission must review

every such agreement to determine whether the union

has negotiated adequate protection for its members. In

the Commission’s view, however, Section 5(2)(f) -

requires it to impose protective conditions only if the

representatives of the. affected: employees have. not

entered into a protective agreement with the.carriers;

if such an agreement has been negotiated pursuant to

the last sentence of Section 5(2)(f), the Commission

~has no responsibility to review it under the first two

sentences of that Section. _ 4

A. BACKQ@ROUND OF CONGRESS’ CONSIDERATION OF LEGISLATION

LEADING TO ENACTMENT OF THE TRANSPORTATION ACT OF 1940

Mr. Justice Frankfurter’s observation that “words

acquire scope and function from the history ‘of events

which they summarize,” is particularly pertinent to

Section 5(2) (f). That provision is the culmination of

a. decade of experience, during which the carriers, the

unions, and the government sought a solution tothe

economic troubles that beset the railroads.” .

The economic depression of the 1930’s had a devas-

= Phelps Dodge Corp. v. -National Labor Rilations Board,

313 U.S. 177, 186. .

18 The events leading to enactment of the Transportation Act

of 1940 are discussed in an Appendix to the Court’s. opinion in

St. Joe Paper Co. v. Atlantic Coast Line R. Co., 8347 U.S. 298,

815.

<a Ae

tating impact en the railroad industry. By 1982, busi-

ness had been cut in half, half of the railroads’ —

employees had been laid off, many lines had declared —

insolvency, and even the strongest were struggling to _

avoid bankruptcy court. Congress responded by pass-

_ ing the Emergency Railroad Transportation Act of —

1933, 48 Stat. 211. The Act created an Office of Fed-

eral Coordinator of Transportation and, among other

things, sought to encourage coordination of carrier

‘ aetivity for the purpose of eliminating waste and

needless expense. Section. 7(b), however, prevented

carriers from reducing the number of their employees

as a result of action taken pursuant to the. Act and

guaranteed that no employee would “be in a worse

position with respect to his compensation’? as a conse-

quence of such action.

The Emergency Act continued in effect until 1936.

During these three years the Act brought’ about little

- tailroad coordination and still less improvement. in

_ the condition of the railroad industry.” On February.1,

1936, after efforts to secure voluntary action had

failed, Joseph B. Eastman, the. Federal Coordinator

of Transportation, announced that he would shortly |

order unification .in twelve different railroad’ ter-

minals.* The proposed order caused great coneern

throughout the industry. Carriers threatened to chal-

lenge the Coordinator’s authority in court ; the unions

4 See Van Metre, Transportation in the, United States 337

(1939). |

Gee generally Latham, The Politics of! ‘Railrotd Loordina-

tion 1983-1986 (1959).

167d, at 244, 245.

sought legislation b prevent any reduction in eaileoad

employment. Finally President Roosevelt intervened

‘ahd urged both sides to settle their differences through

‘collective bargaining. His letter to the carriers and the

unions stated in part: |

The Emergency Railroad“Pransportation Aet,

1933, undertook: to promote the elimination

- of railroad waste and at the same timecprotect

the employees. This protection is now satisfac- |

tory neither to the companies nor to the em-

ployees * * *. It is a matter which is capable

of being settled to better advantage by negoti-

ation than by legislation. Given sufficient time

the management, ‘and the men ought to be’able

to agree in their common interests upon a reason-

able plan of protection.” :

Negotiations ensued and on May 31, 1936, the

- parties announced the signing of. the Washington J ob

Protection Agreement. This Agreement, which covered

appr ais 85 percent of the railroad mileage in the

country," was to be in effect for five years from June 18,

1936, and was to continue 1 in effect thereafter, although -

a carrier or union could then withdraw one year after

~ giving notice. The Agreement provided that,employees

who continued in service after a coordination -would

not.be placed in a worse position with respect to their.

‘compensation. for five years.after the effective date of

17The letter is reprinted in Hearings on H.R. 2531. batoce

the House Committee on Interstate and Foreign Commence, 76th

Cong., 1st Sess., at 1721-1722 (1939). .

18 Statement ‘of George M. Harrison, in Heatirigs; ‘supra

note 17, at 216. — . as

the Granmaction: ? Employees dismissed as a result gf |

the coordination would receive a ‘‘coordination allow-

ance” of 60 percent of their average monthly pay prior

to the transaction. The period of payment depended on

the employee’s length of sefvice: for example, those

with one to two years of seniority would -receive an

allowance for 6 months; employees with more than 15

years service. would be paid for 60 months.” An em-

ployee’s dismissal allowance could be. reduced only

by, other railroad earnings. After the Agreement had

been signed, the carriers and the unions joined in urg-

ing that the Emergency Transportation Act of 1933

be allowed to expire in 1936.” .

B. LEGISLATIVE HISTORY OF SECTION 3 2)(F) OF THE INTERSTATE

COMMERCE ACT

- When the condition of the railroad industry showed

“ho signs of i impr ovirig, President Roosevelt appointed,

in 1938, a Committee consisting of three railroad

_ executives and.three representatives of: railway labor

~ (the “Committee of Six’’) to recommend legislation.

In December 1938 the Committee of Six submitted its

report to the President. Although the Coordinator of

Transportation under:the 1933 Emergency Act would

have required railroad consolidations as a means of

achieving efficiencies in operation, * the Committee of

Six rejected this approach “And suggested instead an

easing of restrictions on mergers and: consolidations

**Thé Agreement is..reprinted in Hearings, supra note 17, .

at 231-241. |

7° Td. Section 7. . + 7

*1 Latham, supra, note 15, at 244-266.

* See S. Doc. No, 119, 73d Cong., 2d Sess. 30-33, 5-8,

86-88. ,

baa,

voluntarily entered into by the carriers.” In early

1939, with approximately one-third of the railroad

mileage in the country in- bankruptcy,” Congress

began consider ation of legislation that eventually led |

to passage &&the Transportation Act of 1940, and,

specifically, Section 5(2)(f) of the Interstate Com-

merce Act, the provision at issue in this case.

The bill (H.R. 2531) initially considered by ‘the

House Committee on Interstate and Foreign Com-

merce included standards for the approval of mergers

and other transactions, but contained no provision for

the protection of workers affected by these trans.

actions. Joseph ‘B. Eastman, a member of. the

Interstate Commerce Commission and formerly Co-

ordinator of ‘Transportation under the Emergency Act

of 1933, explained that such a provision was unneces- _

sary because the matter could properly be handled by —

negotiation, as the Washington Job Protection Agree-

ment illustrated,”» The Committee of Six, however,

recommended a provision that would require the Com-,

mission to demand, “as a prerequisite to its approval

a fair and equitable arrangement to protéct the in-

aa Report of Committee Appointed September’ 20, 1938, by the

ioe 4 of the United States to Submit Recommendations

upon*the General Transportation Situation, December 23, 1938,

pp. 30-32, reprinted in Hearings, supra note 17, at 259-308.

* Statement of George M. Harrison, in Hearings, supra

note 17, at 208; see also 86 Cong. Rec. 10184 (1540).

‘°° Hearings, supra note 17, at 1722..As Federal Coordina-

. tor, Eastman had recommended that the problem be settled by

agreement after negotiation between the unions and the car- -

riers. See Fourth Report of the Federal Coordinator of Trans-

portation on Transportation Legislation, H. Doc. No. 394,

74th Cong., 2d Sess. 50-58 (1936).

“e

f° | 19

terests’’ of the affected employees.” George M. Harri-

son, chairtnan of the Railway Labor -Executives

Association and a member of the Committee of Six,

testified on behalf of the Comfnittee. After referring

to the Washington Job Protection Agreement of 1936,

and stating that the Agreement had worked qut ‘‘very . °

satisfactorily,” Harrison explained‘ why the . Com-

mittee had recommended legislation for the. protec-

tion of employees:

Well, you might very properly ask the ques-

tion, If we have such an agree ment why we want

it is that about 15 percent of the mileage of the

country refuses to come into the agreement.

You always have the willful minority that will”

_ not go along with the general good and so you

. have got to make those people do what is right,

assuming that what has been done is right, and

so we propose that this Transportation Board

be\given the authority to impose and require

protection fox men who are adversely affected

when the changes are made.

Now, the exact formula of that, of course, I |

am not here prepared to suggest, but at least

we have solved that problem through collective

| bargaining with management and if we could get |

all of the roads into the agreement we would not

even suggest any pr otection as a matter of law.

[I d. 216-217. ] |

‘When asked, whether the Washington Aico eement had. ©

_ been satisfactorily, maintained, Harrison* replied that

¢ Hearings, supra note 17, at 1p 5. > : ry

7 °

. Pn ad

to put gnything in the law? Well, the reason for

a2 , — ee PS SSS ' “ |

L 8 /

although some enrployees ‘‘do not believe it is as liberal

as it ought to be,” nevertheless | 7

We have settled the question through. colléc-

tive bargaining and if it is not satisfactory, the

burden is on us to proceed in the same way ‘to

try to change it. [Id. at 243.] ©

Harrison summed up the reasons for the Committee’ S

proposal with respect to employee protection by stat-

ing how he would explain it to the carriers that had

signed the. Washington Job Protection Sinker

“We hate settled that question with

you are willing to accept it.”’

“We have got some roads, however, that have

not come in and you have tried-to get them in

and you have not succeeeded. So we have to

reach them through legislation.” [Zd. at 244.]

The bill Introduced and passed in the Senate (S.

"ou; and

~ 2009) - contained the } provision regarding a ‘fair and

equitable” arrangemént that the Committee of Six.

had. recommended. 84 Cong. Rec. 6158 (1939) ; see S.

Rep. No, 433, 76th Cong., Ist Sess.. 29. » bill intro-

duced in the House contained a similar pr vision (see

E.R. Rep. No.'1217, 76th Cong., dst Sess. 12), but | —

during the floor debate Representative Harrington in- -

~~ troduced an amengment adding a requirement that the _

_ Cornmission withhold. approyal if the consolidation

would displace workers, or unpair their employment,

_ rights. 84 Cong. Ree. 9882 (1939). The amendment was

= agreed to (id. at 9887), and the House passed the bill

in that’ form (ig. at 10127). The Conference Cémmit-

- tee, however, eliminated both the Harrington _Amend-

ment and the “fair and equitable” language, along .

-“)

4 7 - | 21

with the entire amendment relating‘to Commission ap-

proval of voluntary railroad mergers and other trans-

actions. H.R, Rep: No. 2016, 76th Cong. » 3d Sess. 61

(1940). \

a“

The House. voted to recommit with instructions to —

4. House managers to restore the “fair and equitable”

language and, to insist on a revised version of the

Harrington Amendment, which closely resembled : the

final Section 5(2) (f)— —‘[the] transaction -vill not re-

sylt in employes of said carrier *..* * being ina

worse -position with regard_to their employment. ” 86

Cong. Rec. 5886. The House ‘also inserted the “Not-

‘Withstanding” clause, which is’ now the last sentence

of Section 5(2) (f). As discussed below, the unions —

~ themselves, drafted this sentence. Representative Har-

_ ington, in urging recommittal, commented that the |

revised ‘ ‘provision’ also contains a clause that permits

the industry, through the processes of collective bar-

ee to work out its problems in a democratic man-

er.” 86 Cong. Ree. 5871. The Conference Committee

adopte da modified version of the recommitted Hons«

‘bill (id. at 10149-10150), and the House passed it in

that form (7d. at 10194).”

The debate on this final version neyer directly fo-

cused on the, relationship. between the “N otwithstan« -

ifig’’ clause and the first. two: -sentences of Section

5(2)(f). Representative Wolverton, a House conferee,

did note that some labor representatives had been t-

2" The legislative history of the first two sentences of Section

5(2)(f) is discussed in Railway Labor Asgn. v. United Ntates.

339 U.S. 142, and. Brotherhood of Maintenance of Way Em-

pinyes ¥. United States. 366 U.S. 169. .

“|

™

certain whether the Harrington “Amendment would

preclude voluntary. collective. bargaining agreements

in the future, an that the one brotherhood that had

opposed the cons dation provision had done so on the

. | | basis that the matter should “be left at this time asa

matter for collective bargaining. ”” 86 Cong. Ree, 10189.

Representative Lea said that the “Nétwithstanding”

clause confirmed the “right of employees to enter into

agreements with railroads to take care of them in case ,

~ of. unemployment as a result of consolidations,” and

that employees were not precluded from making an

agreement with a carrier for a period of protection

longer than the four-year period provided in the bill.

Id. at“10178. Representative Halleck was of the opin-

ion that the first two sentences of Section 5(2) (f)

gave greater protection than the Washington Job Pro-

tection Agreement, the principle of whieh that Section

“writes inte law.” Id. at 10187. |

C. THE COMMISSION’S INTERPRETATION OF SECTION 5(2)(£) COMPORTS .

WITH. THE CONGRESSIQNAL OBJECTIVES REFLECTED IN THAT SEC-

TION’S BACKGROUND AND LEGISLATIVE HISTORY

The series of events preceding Congress’ considera-’

-tion of -the "Transportation Act of 1940 -and the

legislative history of Section 5(2) (f) confirm the

Comynission’s long-standing interpretation that the. last. |

sentence of that provision permits a railroad and the

representatives of its employees to reach a freely ne-

gotiated collective agreement ‘on employee protective :

conditions which is not subject to Commission review

under that. Section.

> 23 *

: First, as the testimony oF George Harrison. « on

proposals for iipioyes protection were ie because

some carriers refused to be governed by. the Washing- ©

ton Job. Protection Agreement of 1936. See p. 19,

supra. Myr, Harrison emphasized that there was Jno

intention to alter the terms of the Agreement it elf,

that this should be done, if ‘at all, by collective bar-

‘gaining and that the proposed legislation Was aimed at |

.the employees who were unprotected by that Agree--

ment. There is simply no indication that anyone saw

a need to have the Commission review the adequancy.

of negotiated agreements. To the contrary, the theme:

running through ‘the hearings, the committee repor ts

and the floor debates w as that thé collective bargain- 7

ing process worked quite well when the carriers

allowed the process to work at all. But some earricrs |

refused to negotiate, : thereby leaving their employees

unprotected. This was the mischief sought to he -

remedied by. the proposed legislation.

Second, as, mentioned above, union representatives

_ themselves drafted the “Notwithstanding” clause.

, Once the conferees had reported out. the bill entirely

. excluding a revised consolidation section and further

labor protective provisions, the unions agreed among _

themiselves on the scope of the protection they desired

and sent a letter to each member of Congress request-

ing that the consolidation section be reinserted along

with revised protection for railroad labor, including

. 24

the last eenlence of the Srescat Section 5(2) (f).* The®

pr oposed protection was revised by the conferees, but

the ‘‘Notwithstanding”’ clause of. the final sentence

remained as the tnions had drafted it. Thus, in -

view of the ‘unions’ expressed desire to preserve

their right to free collective hargaining“: and |

the fact that the unions:themselves drafted the ‘‘Not- _

withstanding” clause of Section 5(2)(f), it is reason-

able to conelude that Congress did not intend to

require the Commission to review the unions’ volun-

tary. collective. bargaining: agreements’ and that the

unions insisted on the last sentence of that Section | ny

order to make this clear. :

Finally, it is significant that at the time Congress

enacted Section 5(2) (f), nearly one-third of the

nation’s railroads were in the hands of receivers or

trustees (see p: 18, supra). Some railroads today may be

.on the brink of shutting down, and, in the future, might

he able to save themselves only by merging. Compare

New Haven Inclusion Cases, 399 U.S. 392, 407-408. Sup-

ose, for example, that such a carrier could net merge

at all if-it had to absorb the financial burdens of pro-

viding compensation for four years for employees dis-

missed.as a result of the merger, and suppose also that

‘the union, knowing this, enters into an agreement -

*s Congressnian ,Lea discussed the letter and the unions’ pro-.

posal, which had been intorporated in a motion to recommit,

ina speech of May 3, 1940 (86 Cong. Rec. A2684-A2685). The

full text of the letter, including the unions’ acknowledgment of

suthorship of the proposed revision, appears-in the magazine

The Railroad Trainman, vol. 57, p. 342 (June 1940).

*° See Statement of Representative Harrington, see at p. 21

supra. — . .

with the carrier for employee protection of three years

instead of four as provided in the second sentence of -

Section 5(2)(f). Under thé decision of the court of

appeals ‘in this case, the Commissioh would have to

review this agreement, declare it inadequate under

Section 5(2)(f£), and require protection for four years.

As a result, the carrier might be forced to shut down,

to the detriment of all concerned. In light of the eco-

nomic crisis facing the railroad industry i in. 1940, the

carriers and the unions could not have contended for §.

such a result and Congress, we submit, did not intend

to require it. Instead, Congress must have intended to

allow the Commission to authorize a merger in these

-eircunistances, particularly, since the congressional

purpose in revising Section 5 in 1940 was to facilitate

railroad mergers, see County of M arin, v. United

States, 306 U.S. 412, 416. _Under the Commission’s

interpretation of Scion 5(2) (f), authorization would

be possible, because the collective hargaining— agree-

ment.would stand as negotiated.

. .

D. THE COMMISSION'S INTERPRETATION OF SECTION 5(2) (f) IS ALSO

SUPPORTED BY CONSIDERATIONS OF POLICY AND OF PRACTICALITY

AND BY A CONSISTENT COURSE OF .ADMINISTRATIVE CONDUCT

In addition to the background and legislative his-

tory of Section 9(2)(f), other considerations support

the Commission’s construction of that provision. The

~ Commission’s “experience and expertise is with trans-

portation not labor relations problems.” * ‘The Com-

~* Outland -v: Civil Aeronautics Board, 284 F. 2d 294, 298

(C.A.D.C.) (Burger, J.) 3 see Burlington Truck Lines v. United

States, 371 U.S. 156, 173. Outland involved whether the Civil

_ Aeronautics Board should i impose terms with respect to senior- _

c 26

. -mission has acted in’ the past only in the absence of

agreement. Imposing compulsory settlements in job

security matters runs contrary to Phe long-established

congressional policy, reflected in the Railway Labor

Act, 45 U.S.C. 151. et seg. (and the National Labor |

Relations Act, 29 U.S.C. 158(d)), of relying on nego- —

tiation rather than litigation before courts or agencies.

Compare General Committee v. M. K.T.R.. Co., 320

U.S. 323, 337. As this Court recently observed in re-

-gard to the Railway Labor Act, there is a ‘‘strong:

federal labor policy against governmental interference

with the substantive terms of. collective-bargaining

agreements.” Chicago-c: N.W.R. Co. v. Transportation

Union, No. 189, October Term 1970, decided June 1,

1971, slip op. at p.9n.11.

The danger in imposing upon the ‘Commission the

duty to follow a contrary policy by reviewing labor

agreements under Section 5(2)(f) is evident. Collec-

tive bargaining involves mtitual give-and-take in an_

ity to protect employees affected by a merger? The court ob-

served that the Board “has not seen fit to assume that burden

- and has held that the issue should be resolved by negotiation or .

arbitration.” 284 F. 2d at 228. If the unions and the carriers

fail to reach agreement, the Board will appoint an arbitrator

to decide what terms would be “just and, reasonable”. under 49

U.S.C. 1378(b) (compare the first sentence of Section 5(2) (f)

of the Interstate Commerce Act). See also American Airlines,

Ine. v. Civil Aeronautics Board, C.A. 2, No. 1083, decided’ .

July 23, 1971, upholding the Board’s practice in this regard

and stating that “If the Board’s experience convinced it that -

the integration of the seniority lists of employees of merging .

carriers was a function: which it was not well.suited to perform

and which, in the absence of agreement, had best. be left to arbi-

tration, that was a judgmpst it was competent to make.” Slip

op., at p. 4498. ' 8 |

effort to-reach an agreement acceptable to both- sides.

A unién, for example, may opt for’ greater émploy-

ment security ; the carrier may accept the union’s

terms in return for a lessening of the period during

which jit is obligated. to provide compensation. If the

Commission, or a court for that matter, reviews the

.Yesulting agreement according to. some minimum

standard” -and then requires that compensation be

paid for a longer period than had been agreed upon,

the entire collective bargaining process has been. upset:

The. carrier has given in on job security but has re-

ceived nothing in return. We do not say this i is neces-

sarily the situation in the instant case. It is the

Commission’s ‘position that it should not, in ordinary

circumstances (see p. 32, in fra), review and interpret

labor agreements and the Commission has not -done so

here. But the point re remains that the kind of intrusion

decision gi the court helow not only frustrates ie

expectations of the parties, but also, and ‘more im-

portant, discourages others from settling these matters

through negotiation in the future. .

To be sure, in the absence of an agreement protect-_— *

ing affected employees, -the Commission must, under

a J-

“The holding below presumably would require the Com-

mission to decide whether, on balance, ‘a collective bargaining

agreément provides protection that is substantially equal to.or.

greater than the protection that would. have been obtained

under Section 5(2)(f) in the absence of agreement. But we do.

not believe Congress intended the Commission to engage in-such

second-guessing of the negotiators’ judgment concerning the

‘relative importance of various -aspects ‘of employee protection

in the particular circumstances of each consolidation.

—— eositaameaisi at 2 i oor te ae ee oe,

EONAR PEGI POE hy In Soni

s ¢

“<:

: - Section 5(2)(£), impose terms and conditions. But

. . even .in such cases the Commission often adopts the

' terms of previously negotiated agreements, with neces-—

' . sary modifications, and requires that all disputes over

the conditions be arbitrated.” {ndeed, over the years

the conditions imposed. by the Commission under Sec-

tion 5(2)(f) have become fairly standardized.” The

carriers and the unions therefore have a firm idea of

what the Commission will require as a. condition to its.

authorization if there is no collective bargaining agree-

ment and their negotiations thus take place in a-con- |

_ text in which the adoption _of- vaflations: from .the

2 -

Commission’ s standard apron! would presumably

be deliberate. | a ;

Finally, ever since e the enactment of Section 5(2) (f)

- in 1940 it has been the Commission’s position that pro-.

tectie agreements entered into pursuant td the last

sentence ofthat provision are not subject’ta review

under that Section. In the first reported case under

Section. 3 inv olving such an agreement between: rail

labor and rail management, decided in 1941 less tharione

year after that provision had been amended by Sec- .-

tion 5(2)(f), the Commission stated that ‘no condi-

tion as to employment is necessary.” “ More recently

See, ¢.g., Oklahoma Ry. Co. Trustees Abandonment, 257

I.C.C. 177, 193; Southern Ry. Co—Control—Central of Georgia

Ry. Co., 317 LCC. 557, 566-567 ; id., 317 I.C.C. 729, 730:

= See generally Southern Ry. Co —Control—Central of Geor-

gia Ry. Co., 831 1.C.C. 151, 159-164.

* Missouri Pac. R. Corp. in:Nebraska Trustee Operation, 247

I.C.C. ‘658, 657; see also Gulf, M. & O. R. Co. Purchase, 261

I.C.C. 623, 625-626; Jnternational-G.N.R. Co. Trustee Trackage

Rights, 282 1.C.C, 30, 36; Norfolk & Western Ry. Co. Merger,

Ete. Virginian Ry. Co., 307 I.C.C. 401, 439; Duluth S.S. & A.R.

+ Co. Merger, 312 1.C.C. 341, 356-357.

es at

“a _

= the Commission found in a major proceeding that the

interests of employees would be protected by the

agreements they had reached, and added, “Under the- — |

terms. of the last sentence of section 5(2)(f), the enter-

‘ing into sugh a takes fromts the obliga-

tion of providing. prot ction for employees céveréd

thereby.” * se oo

—=

Indeed, even though the Washington Agreement of

|) 1936 is not included within the last seritence of Sec-

tion 5(2) (f) because it was entered into before enact-

_ ment of that Section,” the Commission has held that

Section 5(2) (f) -did not divest employees of their

rights under that Agreement if they are still covered

by it.” Thus, when the Commission imposes terms and

’ conditions in the absence of a protective agreement -—

under Section 5(2) (£), such employees retain any fur-

**Aveht. Northern Pac—Merger—Great Northern Ry. Co.. 331.

I.C.C, 228, 278. The Commission carefully distinguished its duty

under the first two ‘sentences toprovide protection to employees ~-

not covered by the agreements.

Other cases in which the Commission protected employees not

covered by voluntary agreements include Pere Marquette Ry. Co.

Merger, 267 1.C.C. 207, 235, 253; Gulf, M: & O. R. Co. Purchase,

Necurities, 267 I.C.C.. 265, 276-277; Chicago, B. & Q. R. Co.

Trackage Rights, 271 1.C.C. 675, 690-691; Houston Belt & Term. .

Ry. Co. Control, 275 I.C.C. 289, 318; Detreit, T. & I. R. Co. Con-

trol, 275 L.C.C. 455,.487; Savannah & A. Ry. Co. Control, 282

T.C.C 39, 57-58; Pennsylvania R. Co.—Merger—New Y. ork

Central R. Co., 827 .C.C. 475, 544-546. = _

** The last sentence of Section 5(2) (f) ‘refers only to protec-

tive agreements “hereafter” entered into. .

** See Southern Ry. Co.—Control—Central of Georgia Ry.

Co., 331 I.C.C. 151, 166-171, on remand from the decision of

this Court in Railway Labor Executives’ Ass’n v. United States,

879 U.S. 199. :

RET RR

ther. right: to protection agreed to in the, Washington »

‘Agreement, although ey may “not 1 receive duplicate

“benefits.” . . , ae .

The Commission’ s eonsistent practice in ‘adminis-

tering Section 5(2)(f) over a. period of niore than

three decades is entitled to great weight “when, as

hete, a court 1s faced with determining the: meaning

of that provision. See, C.).5 Udall Y. Tallman, 380°

“US. 1, 16, |

_-PLAIN cIPF s’R {HTS TO PROTECTION FROM THE EFFECT

“on N&W 5 ACQU ISITION FLOWED FROM’ COLL ECTIVE BAR-

’ GAINING AGREEMENTS, NOT FROM AN ORDER OF THE—

COMMISSION, AND THE DISTRICT COURT: THEREFORE HAD

NO JURISDICTION UNDER 49 U.S.C. 9.

In the instant case, ‘therefore, due Commission’s

“statement ‘that no conditjons were necessary, 324

LC.C. at 50, 196, meant only that its duty to protect

employees, under Section 5(2)(f) had heen satistied

by. the 1962 agreement. The Commission did not re-

view that agreement in light of Sectien 5(2)(f) and

did not adopt it. As will appear below, the Commis;

sion might have considered. whether, the terms of the

agrt eement rendered the entire transaction inconsistent

See Southern Ry. Co., supra, 331 I.C.C. at 169. In accord-

ance with. its consistent interpretation of: Section 5(2)(f), the

-Commissiofi noted that the carriers had submitted “proposals

to enter into agreements with employees” and ‘that if “the par-

ties.agreed to these proposals suggested by applicants, our duty

under Section 5(2)(f) would ‘cease,”. 331 I.C.C. at 176. Since

th® parties had not agreed, the Commission imposed protective

- terms and corfditions. ram ; \

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| with the able interest, * but ‘the Commission could

not, consistent with the final sentence of Séction 5.

(2) (f), interfere in the agreement reached for the

protection of employees: through their authorized rep:

resentatives. -Tt follows that the court of appeals erred

in holding that since the Commission has-a duty under

Section 5(2) (f) to review previously negotiated agrec-

ments pertaining to ‘employee protection, the Com-

mission mist have reviewed the 1962 agreement,

found it adequate, and then incorporated it .in tlie

order authorizing the: merger ( App. II, at 184-187).

The court similarly erred in, holding that Implement-

ing Agreement. I-A, executed in 196%, violated the

‘Commission’ S 1964 order.” Thereforé, since plaintifts’

action elates solely to the breach of a-collective bar-

gaining agreement, whieh had not been ‘incorporated, .

in an ofder of the Commission; the distrirt. court did

not have jurisdiction of plaintiffs’ clafins under “49 ;

U.S.C. 9, which allows private pexsens‘igsbring actions’

for damages in the district courts against cartier

™ See, e. o Pennsylvania R. Co—Merger—N ew York Central

(2 :,C0.5.327 LCC. 475, 544. |

_ 4 See Arnold v.. Louisville & Nashville R.R. Co. 180 F. Supp.

429 (M.D. Tenn. ),» affirmed sub nom. Batts v.. Louisville d:

| Nashville RR. Co. 318 F. 2d 22 (C.A. 6). holding that eni-

ployees could, through collective bargaining agreements with the

| J .cirrier entered into after the Commissjon’s order, re revise the

', terms and conditions imposed by the Commission for their pto-

tection. Compare Clemens v. Central R.R. Co. of NJ. 264 F.

Supp. 551 (E.D. Pa.), reversed,’ 399 F.2d 825 (C.A. 3), certi-

orari denied, 393 U.S. 1023. The Commission's brief as amicus

curwe in the district, court in Clemens is reprinted i in App. I

at 164-175, .

Trt. See

ae 32

_ only for violatj tion of the Interstate Gammarss Act and

Commission orders. ” :

This is not to say that the Commission had no ) power

to adopt further conditiéns under Section 5(2)(b)

of the Act, 49 U.S.C. .5(2) (b), which requires as a

pr erequisite to Commission approval that, subject to

such terms and conditions as the Commission shall

find to be ‘‘just and reasonable,” the proposed trans-

‘action. will be ‘‘consistent with the public interest.”

Although the 1962 agreement relieved the Commission

~ of any duty to act under Section 5(2)(f), the Gom-

mission retained, and still retains under Section 5(9)

of the Act, 49 U.S.C. 5(9),“ the power to supplement |

the protection afforded under Section’ 5(2)(f). In-

deed, in the complete absence of Section 5(2)(f),

the Commission would have discretionary authority to

: protect rail labor; “ Section 5(2)(f) does not limit

thée¥Commission’s authority to grant greater protec-

"See Brotherhood of Maintenance of Way Employes v.

United States, 366 U.S. 169, 172, n. 2.

** Compare Pennsylvania R. Co. —Merger—New y ork Central

PR. C0., 827 LCC. 475, 544:

The last sentence of Section 5(2) (f) of the act provides.

that, notwithstanding any other provisions of the act,

employee protection may be established by agreement

between a failroad and the unions representing its employ-

. Consequently, except to find, as we do, that the agree-

iment of May 20, 1964 does not render. the proposed

‘transaction. Inconsistent with the public interest, we can

make no requirement as to the protection of employees:

‘covered by the agreement. : 4

. See also Great Northern Pac. & B. Lines Merger—Great North-

ern. 331 I.C.C. 228, 279.

“s United States v. Lowden, 308 U.S. 225.

he ib CMM: le

- 33

tion.* To avoid a sie ‘with Section 5(2) (f), how-

ever, it is a power that must be used sparingly—for

example, to condition the approval of a transaction. .

that would otherwise be: disapproved because of an »

element contrary to the public interest such as invidi-

ous discrimination against a class of employees. In

the present case the Commission has not been re-

quested to exercise its authority under Section d(2)

(b) to impose such additional terms. In.the meantime

the rights of employees covered by the agreements

here, including plaintiffs, flow from the collective

agreements and not from any order of the Commission .

under Section 5(2) (f).

Since plaintiffs’ rights to protection derive from the -

1962 and other private agreements, they could not seek

damages ‘against the carrier for an alleged violation

- of a Commission order. The district: court therefore

did not have jurisdiction of plaintiffs’ action under 49

U.S.C. 8 and 9.

** Railway Labor Assn. v. United States; 339 U.S. 142.

CONCLUSION

The sniienieiit of the court of appeals. should’ be

reversed insofar as it held the district court had juris-

diction under the Interstate Commerce Act.

Respectfully submitted.

Erwin N. GRISWOLD,

Solicitor General.

_ A. RayMonp RANDOLPH, JY.,

Assistant to the Solicitor General.

General Counsel, |

LEONARD 8S. GOODMAN,

“Associate General Counsel,

Interstate Commerce Commission.

; Aver 1971.

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.