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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Brief for the United States
- **Published:** January 1, 1972
- **Citation:** 404 U.S. 37

## Text

(pinions below- -- - - eee eee eeeeoeeeee ee

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..___________.

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8

— et . . . ‘
WOR WN ee

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17

22

25

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II

; 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
© the district court. therefore had no page

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-*-. 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 |

ll

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)

2

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. ° _ .

3

z

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

4

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.

a

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
©7d. at 66, 83,88. a

“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).
e

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 .

u
a,

- 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

12

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

13

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.

14

‘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.

: ry

7 °
. Pn ad

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n

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

~

a2 , — ee PS SSS ' “ |

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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 .

-

oe

-“)

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. .

“|

"S

™

a

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.

ty

> 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. — . .

25

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 |

27
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 ¢

28

“ , ;

de,

f.

wea

ier

| 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-

*e

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.

34
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.
Fritz R.KauN, © - oo
General Counsel, |

LEONARD 8S. GOODMAN,
“Associate General Counsel,
Interstate Commerce Commission.

~~

; Aver 1971.

.
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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0359%3A04. Public record. Not legal advice.