1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-5-1994

Mcquestion v. NJ Transit Auth.

Precedential or Non-Precedential:

Docket 93-5515

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Recommended Citation

"Mcquestion v. NJ Transit Auth." (1994). 1994 Decisions. Paper 71.

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

____________ 

No. 93-5515 

____________ 

RICHARD M. McQUESTION, 

 Appellant

v. 

NEW JERSEY TRANSIT RAIL OPERATIONS, INC., 

 Appellee

____________ 

LOUIS A. HART, 

 Appellant

v. 

NEW JERSEY TRANSIT RAIL OPERATIONS, INC., 

 Appellee

____________ 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW JERSEY 

(D.C. Civ. Nos. 88-04037 & 89-00660) 

___________ 

Submitted Pursuant To 3rd Cir. LAR 34.1(a) 

January 28, 1994 

Before: MANSMANN, NYGAARD, and WEIS, Circuit Judges

 

 Filed July 6, 1994 

____________ 

Thomas M. McCarthy, Esquire 

90 Maple Avenue 

Red Bank, New Jersey 07701 

Attorney for Appellants Richard M. McQuestion and Louis A. Hart

Fred Devesa, Esquire 

Acting Attorney General of New Jersey 

Joseph L. Yannotti, Esquire 

Assistant Attorney General 

Robert A. Shire, Esquire 

Deputy Attorney General 

Richard J. Hughes Justice Complex 

CN-112 
2 

Trenton, New Jersey 08625 

Attorneys for Appellee New Jersey Transit Rail Operations, Inc.

____________ 

OPINION OF THE COURT 

____________ 

WEIS, Circuit Judge. 

 In this appeal, we hold that under the Railway Labor 

Act, 45 U.S.C. § 151 et seq., grievances arising from the 

discharges of two employees should be arbitrated by the National 

Railroad Adjustment Board. We conclude that despite the absence 

of a formally ratified collective bargaining agreement, a de

facto agreement existed and that the Adjustment Board erred in 

declining to exercise jurisdiction over the grievances. 

Accordingly, we will reverse the district court's judgment 

sustaining the Adjustment Board's position. 

 Police Officers Richard M. McQuestion and Louis A. Hart 

were employed by New Jersey Transit Rail Operations, Inc. until 

they were discharged on June 20, 1985 and August 2, 1985, 

respectively. At the time of their discharges, they were members 

of the New Jersey Transit Policemen's Benevolent Association. 

Although the Benevolent Association was actively negotiating with 

N.J. Transit, no collective bargaining agreement had yet been 

ratified by the union membership at the time when the employees 

were discharged. During the pendency of negotiations, however, 

employee conduct and grievance procedures followed work rules 

derived from an earlier, non-ratified draft of an agreement. 
3 

 After unsuccessfully pursuing in-house grievance 

procedures, the Benevolent Association petitioned the Adjustment 

Board to arbitrate the employee discharges. The Adjustment Board 

dismissed both claims on the ground that it lacked jurisdiction, 

stating: "In the absence of a ratified contractual agreement 

between the parties that covers Claimant's employment, the Board 

has no contractual basis upon which to rule." 

 The employees then filed petitions for review in the 

United States District Court for the District of New Jersey. The 

court dismissed the petitions on the ground that the employees 

lacked standing to contest the Adjustment Board's rulings on 

claims filed on their behalf by the union. We reversed. See

McQuestion v. New Jersey Transit Rail Operations, 892 F.2d 352 

(3d Cir. 1990). 

 On remand, the district court again denied the 

petitions for review. The court concluded that the Adjustment 

Board's jurisdiction under 45 U.S.C. § 153 First (i) is limited 

to "resolve only `minor' disputes which have come to be defined 

as those arising out of the interpretation and application of the 

collective bargaining agreement." Rejecting the employees' 

argument that the interim operating procedures implemented by 

N.J. Transit governed the dispute, the court decided that they 

were "not the same as procedures which are the ratified product 

of the collective bargaining process." The employees then filed 

a second appeal with this Court. 

I. 
4 

 We exercise plenary review over the sole issue before 

us -- whether the employee discharges in this case are subject to 

the exclusive jurisdiction of the Adjustment Board. See Miklavic 

v. USAir, Inc., 21 F.3d 551, 553 (3d Cir. 1994). 

 One of the primary purposes of the Railway Labor Act is 

to avoid disruptions to commerce caused by interruptions in the 

operations of rail and air carriers as the result of labor 

unrest. The method of resolution of disputes between a carrier 

and its employees depends on whether the conflicts are classified 

as either "major" or "minor." "Major" disputes are those 

concerning the formation or modification of collective bargaining 

agreements. See id. "Minor" disputes cover those more-or-less 

routine employee grievances that arise daily within the railway 

industry. Union Pac. R.R. v. Sheehan, 439 U.S. 89, 94 (1978) 

(per curiam). 

 There is no serious contention here that we are 

confronted with a "major" dispute, and the real issue is whether 

the discharges are "minor" for purposes of establishing the 

exclusive jurisdiction of the Adjustment Board. The pertinent 

statutory provision, codified at 45 U.S.C. § 153 First (i), reads 

in pertinent part: 

"The disputes between an employee or group of 

employees and a carrier or carriers growing 

out of grievances or out of the 

interpretation or application of agreements 

concerning rates of pay, rules, or working 

conditions . . . may be referred by petition 
5 

of the parties or by either party to the 

appropriate division of the Adjustment Board 

. . . ." 

 In Elgin, Joliet & E. Ry. v. Burley, 325 U.S. 711, 723 

(1945), the Supreme Court described the statutory arrangement for 

the Adjustment Board's role as contemplating 

"the existence of a collective agreement 

already concluded or, at any rate, a 

situation in which no effort is made to bring 

about a formal change in terms or to create a 

new one. The dispute relates either to the 

meaning or proper application of a particular 

provision with reference to a specific 

situation or to an omitted case. In the 

latter event the claim is founded upon some 

incident of the employment relation, or 

asserted one, independent of those covered by 

the collective agreement, e.g., claims on 

account of personal injuries."1 

 Later in the opinion, the Court noted that the 

Adjustment Board had authority to determine what the employer and 

union had "agreed upon previously or, outside the scope of a 

collective agreement, what rights the carrier and its employees 

 

1The Court further pointed out that "minor" disputes are 

generally those over rights accrued under a collective agreement 

and are not aimed at creating new ones for the future. Burley, 

325 U.S. at 723. 
6 

may have acquired by virtue of other incidents of the employment 

relation." Id. at 747-48 n.44. 

 In Consolidated Rail Corp. v. Railway Labor Executives' 

Ass'n, 491 U.S. 299 (1989), the parties had entered into a 

collective bargaining agreement, and the issue was whether the 

dispute should be classified as "major" or "minor." After 

reiterating the Burley test, the Court observed that neither 

party relied on any express provision of the agreement. 

Commenting that the parties based their arguments instead on 

implied contractual terms, the Court concluded that "`practice, 

usage and custom' is of significance in interpreting their 

agreement." Id. at 311. Accordingly, although the collective 

bargaining agreement was completely silent on the issue at hand, 

the Court held that the dispute between the union and the 

railroad was a "minor" one and within the exclusive jurisdiction 

of the Adjustment Board. Id. at 312. 

 The purpose of the Railway Labor Act and the role of 

the Adjustment Board was set out in Sheehan, 439 U.S. at 94. 

Describing the Adjustment Board as a tribunal for workers and 

management to secure the prompt, orderly, and final settlement of 

day-to-day grievances between employees and carriers regarding 

rates of pay, rules, and working conditions, the Court observed 

that "Congress considered it essential to keep these so-called 

`minor' disputes within the Adjustment Board and out of the 

courts." Id.; see also Pennsylvania Fed'n of Bhd. of Maintenance 

of Way Employees v. National R.R. Passenger Corp., 989 F.2d 112, 
7 

114 (3d Cir. 1993); Association of Flight Attendants v. USAir, 

Inc., 960 F.2d 345, 347 (3d Cir. 1992). 

 The burden imposed upon a party asserting that a 

dispute is "minor" is a "light" one. Southeastern Pa. Transp. 

Auth. v. Brotherhood of R.R. Signalmen, 882 F.2d 778, 783 (3d 

Cir. 1989). Whenever there is doubt as to whether a particular 

dispute is a "major" or a "minor" one, courts will construe the 

dispute to be "minor." See, e.g., Hirras v. National R.R. 

Passenger Corp., 10 F.3d 1142, 1145 (5th Cir. 1994), petition for 

cert. filed, 62 U.S.L.W. 3693 (U.S. Apr. 7, 1994) (No. 93-1584); 

General Comm. of Adjustment, United Transp. Union, W. Md. Ry. v. 

CSX R.R., 893 F.2d 584, 591 (3d Cir. 1990); Brotherhood of 

Locomotive Eng'rs v. Atchison, Topeka & Santa Fe Ry., 768 F.2d 

914, 920 (7th Cir. 1985). 

 As a general matter, disagreements about whether a 

discharge from employment was proper and whether the claim 

brought by the employee is within the ambit of the relevant 

agreement are matters within the jurisdiction of the Adjustment 

Board. See Andrews v. Louisville & Nashville R.R., 406 U.S. 320, 

324 (1972); Capraro v. United Parcel Serv. Co., 993 F.2d 328, 333 

(3d Cir. 1993) (wrongful discharge is a minor dispute). In 

United Steelworkers, Local 913 v. Union R.R., 648 F.2d 905, 911 

(3d Cir. 1981), we held that "[a]n employee complaining of a 

wrongful discharge after an investigative hearing has been 

conducted must submit the claim to an adjustment board pursuant 

to the Railway Labor Act." 
8 

 Most of the decisional law in this area discusses 

situations where a collective bargaining agreement already 

exists. However, as Consolidated Rail points out, the dispute 

need not be governed by the specific terms of the collective 

bargaining agreement; implied terms, past practices, usage, and 

custom are sufficient bases for the resolution of a controversy 

by the Adjustment Board. Consolidated Rail, 491 U.S. at 311. 

 Some courts have mentioned in dicta the existence of a 

formal collective bargaining agreement as a prerequisite to the 

Adjustment Board's jurisdiction. See e.g., Consolidated Rail, 

491 U.S. at 305; Miklavic, 21 F.3d at 554; Association of Flight 

Attendants, 960 F.2d at 349; United Transp. Union v. Conemaugh & 

Black Lick R.R., 894 F.2d 623, 628 (3d Cir. 1990); General Comm. 

of Adjustment, 893 F.2d at 589; Southeastern Pa. Transp. Auth., 

882 F.2d at 783; Childs v. Pennsylvania Fed'n Bhd. of Maintenance 

Way Employees, 831 F.2d 429, 437 (3d Cir. 1987); International 

Ass'n of Machinists v. Northwest Airlines, 673 F.2d 700, 708 (3d 

Cir. 1982); Goclowski v. Penn Cent. Transp. Co., 571 F.2d 747, 

756 (3d Cir. 1977). The terms of an agreement are often 

irrelevant, however, to the actual resolution of the dispute. 

Courts must be wary of the curious metamorphosis that sometimes 

occurs in decisional law when a coincidence of fact in earlier 

opinions is treated as a jurisdictional element in later cases. 

See United States v. McElroy, 644 F.2d 274, 277 (3d Cir. 1981) 

(en banc), aff'd, 455 U.S. 642 (1982). That being so, dicta 

about the necessity of a formal collective bargaining agreement 

must be read with caution. 
9 

 The statute speaks of disputes "growing out of 

grievances or out of the interpretation or application of 

agreements concerning rates of pay, rules, or working 

conditions." 45 U.S.C. § 153 First (i). In Burley, the Court 

commented somewhat enigmatically about the existence of a 

collective bargaining agreement "already concluded or, at any 

rate, a situation in which no effort is made to bring about a 

formal change in terms or to create a new one [presumably a new 

collective bargaining agreement]." Burley, 325 U.S. at 723. What 

is considered an "agreement" for purposes of invoking the 

jurisdiction of an Adjustment Board has not received extensive 

analysis. 

 In Pittsburgh & Lake Erie R.R. v. Railway Labor 

Executives' Ass'n, 491 U.S. 490, 503 (1989), the issue in dispute 

-- the sale of railroad assets causing the loss of jobs of twothirds of the railroad's employees -- was concededly not within 

the scope of the written collective bargaining agreement. In its 

opinion, the Court wrote: "Of course, not all working conditions 

to which parties may have agreed are to be found in written 

contracts. It may be that `in the context of the relationship 

between the principals, taken as a whole, there is a basis for 

implying an understanding on the particular practice involved.'" 

Id. at 503-04 (quoting Detroit & Toledo Shore Line R.R. v. United 

Transp. Union, 396 U.S. 142, 160 (1969) (Harlan, J., 

dissenting)). It is not necessary that the relevant agreement 

between the parties be contained only in a formal written 

document that specifically addresses the issue in dispute. See
10 

Transportation-Communication Employees Union v. Union Pac. R.R., 

385 U.S. 157, 161 (1966) ("In order to interpret [an agreement 

under the Railway Labor Act] it is necessary to consider the 

scope of other related collective bargaining agreements, as well 

as the practice, usage and custom pertaining to all such 

agreements."); Chicago & N.W. Transp. Co. v. Railway Labor 

Executives' Ass'n, 908 F.2d 144, 156 (7th Cir. 1990) (normative 

practices can create implied obligations in a collective 

bargaining agreement); Southeastern Pa. Transp. Auth., 882 F.2d 

at 785 (parol evidence may be used to interpret collective 

agreements under the Railway Labor Act); CSX Transp. v. United 

Transp. Union, 879 F.2d 990, 1000 (2d Cir. 1989) (An agreement is 

established where a carrier's past practices have been accepted 

by union). 

 In Southeastern Pa. Transp. Auth., 882 F.2d at 784 n.4, 

we concluded that "principles developed in construing collective 

bargaining agreements in the NLRA context provide relevant and 

useful guidance [for interpreting the Railway Labor Act]." See

Mack Trucks, Inc. v. International Union, 856 F.2d 579, 592 (3d 

Cir. 1988) ("Adoption of an enforceable labor contract does not 

depend on the reduction to writing of the parties' intention to 

be bound."); see also Merk v. Jewel Food Stores Div. of Jewel 

Cos., 945 F.2d 889, 895 (7th Cir. 1991) ("[A] collective 

bargaining agreement may be partly or wholly oral as well as 

partly or wholly in writing, and a written collective bargaining 

agreement may be orally modified."); NLRB v. Haberman Constr. 

Co., 641 F.2d 351, 355-56 (5th Cir. 1981) (en banc) ("[A] union 
11 

and employer's adoption of a labor contract is not dependent on 

the reduction to writing of their intention to be bound. Instead, 

what is required is conduct manifesting an intention to abide by 

the terms of an agreement." (footnote and citations omitted)).2 

 In Luden's Inc. v. Local Union No. 6 of the Bakery 

Confectionery & Tobacco Workers Int'l Union, No. 92-1982, slip 

op. (3d Cir. June 17, 1994), employees remained on the job while 

the union and management continued to negotiate after a 

collective bargaining agreement had lapsed. After a new contract 

had ostensibly been agreed upon, a dispute erupted over one 

provision. We held that the arbitration process in the expired 

collective bargaining agreement should be utilized to resolve the 

dispute and described the relationship between the parties as 

creating an "implied in fact" contract. We determined that the 

arbitration provision had remained in effect given the absence of 

any evidence that the parties intended otherwise and because they 

acted as if that portion of the expired agreement would continue 

to govern. Id. at 35. 

 By way of contrast, in Davies v. American Airlines, 971 

F.2d 463, 468 (10th Cir. 1992), Regional Airline Pilots Ass'n v. 

Wings W. Airlines, 915 F.2d 1399, 1401 (9th Cir. 1990), and 

Lancaster v. Norfolk & W. Ry., 773 F.2d 807, 814 (7th Cir. 1985), 

the Courts of Appeals took the position that a dispute that was 

 

2Contrast the provision in the National Labor Relations Act, 29 

U.S.C. § 158(d), that requires the execution of a written 

contract if requested by either party. Note also the requirement 

for a writing if a claim implicates an employer's duty to pay 

into union pension funds under 29 U.S.C. § 186(c)(5)(B). See

Abbate v. Browning-Ferris Indus., 767 F.2d 52, 56 (3d Cir. 1985). 
12 

not covered by the terms of a written collective bargaining 

agreement was not a "minor" one. We are not persuaded by those 

cases, but are instead inclined to follow those courts which have 

adopted a flexible stance on the jurisdiction of the Adjustment 

Board. For example, in Railway Labor Executives Ass'n v. 

Atchison, Topeka & Santa Fe Ry., 430 F.2d 994, 996 (9th Cir. 

1970), the Court found that a pay dispute not within the terms of 

the collective bargaining agreement, but "founded upon some 

incident of the employment relationship" was within the 

jurisdiction of the Adjustment Board. 

 Similarly, in Missouri-Kansas-Texas R.R. v. Brotherhood 

of R.R. Trainmen, 342 F.2d 298, 300 (5th Cir. 1965) (Maris, J., 

sitting by designation), the Court concluded that grievances over 

unsafe and hazardous working conditions were arbitrable disputes 

within the jurisdiction of the Adjustment Board even where no 

express provision in the collective agreement governed that 

issue. In the same vein, Hirras, 10 F.3d at 1149 stated: 

"[S]tate law claims that `grow out of the employment relationship 

can constitute "minor disputes" under the [Railway Labor Act], 

even when the claims do not arise directly from the collective 

bargaining agreement itself.'" (quoting Morales v. Southern Pac. 

Transp. Co., 894 F.2d 743, 745 (5th Cir. 1990)). 

 The airline industry is also subject to the Railway 

Labor Act, but its contracts are more often subject to definite 

term limits than those of rail carriers. Consequently, disputes 

occurring at a time when a collective bargaining agreement is not 
13 

in effect are more numerous in that industry and have come to the 

attention of appellate courts. 

 In International Ass'n of Machinists v. Aloha Airlines, 

776 F.2d 812 (9th Cir. 1985), the parties disputed the wages 

payable after a collective bargaining agreement had expired and 

during the period of negotiations for a new agreement. The Court 

observed that the dispute was not subject to arbitration because 

"there was simply no existing collective bargaining agreement to 

interpret." Id. at 816. 

 The Court of Appeals for the D.C. Circuit rejected this 

approach in Air Line Pilots Ass'n, Int'l v. Eastern Air Lines, 

863 F.2d 891, 898 (D.C. Cir. 1988), concluding that the assertion 

that a dispute automatically becomes a "major" one when the 

agreement expires "appears to disregard the existence of disputes 

that are altogether outside the contractual relation of the 

parties and to slight the long line of precedents . . . that 

emphasize settled past practice in classifying disputes as major 

or minor." The Court commented that the nature of a dispute is 

not determined solely from explicit terms of a written agreement, 

but it may also be derived from the past course of dealings 

between the parties. Id. at 899. Disputes that were once 

considered "minor" before the termination of a collective 

bargaining agreement do not change their characteristics 

thereafter. The Court in Eastern Air Lines quoted with approval 

from Brotherhood of Maintenance of Way Employees, Lodge 16 v. 

Burlington N. R.R., 802 F.2d 1016, 1022 (8th Cir. 1986), 

acknowledging that "`[w]hen long-standing practice ripens into an 
14 

established and recognized custom between the parties, it ought 

to be protected against sudden and unilateral change as though it 

were part of the collective-bargaining agreement itself.'" 

Eastern Air Lines, 863 F.2d at 899. 

 In Miklavic, 21 F.3d at 554, we were confronted by the 

conflict between Aloha and Eastern Air Lines and adopted the 

rationale of Eastern Air Lines. We pointed out that following 

Aloha "would mean that every dispute, no matter how firmly based 

in the existing but expired contract and no matter how 

insignificant, would become a major dispute subject to federal 

court jurisdiction." Id. at 554-55. We had previously cited 

Eastern Air Lines with approval for the proposition that to gain 

a comprehensive picture of the relationship between the parties, 

and thus of the full scope of the dispute, "`courts must consider 

the express terms of any agreements and well established 

practices that have developed through the [parties'] past course 

of dealings.'" General Comm. of Adjustment, 893 F.2d at 592. 

 From these cases we may arrive at some general 

conclusions about the requirement of a collective bargaining 

agreement as it relates to the jurisdiction of the Adjustment 

Board: 

 1. The dispute need not be governed by the written 

terms of an agreement, but may be resolved by resorting to 

employment practice or custom; 

 2. An agreement need not be in writing for the 

purpose of invoking the jurisdiction of the Adjustment Board; and 

 3. After the expiration of a written, ratified labor 
15 

contract, the parties may by their practice or custom, continue 

to be governed by the terms of the prior contract. 

 III. 

 With these precepts in mind, we turn our attention to 

the grievances at hand. A determination of the legal 

consequences of the parties' relationship here requires a 

somewhat detailed history of the events that occurred before the 

grievances arose. 

 Our recital of the facts is colored by the posture of 

the case before us. In effect, the district court granted 

summary judgment for N.J. Transit in affirming the denial of 

jurisdiction by the Adjustment Board. Most of the pertinent 

facts are not controverted, but we have considered the evidence 

in the record in the best light from the standpoint of the 

employees, McQuestion and Hart. 

 The saga began before January 1, 1983 when N.J. Transit 

took over certain commuter rail lines that had previously been 

operated by Consolidated Rail Corporation (Conrail). The 

transfer was authorized by the Rail Passenger Service Act as 

amended by the Northeast Rail Service Act of 1981. 45 U.S.C. 

§§ 586, 588. The statute required N.J. Transit and employee 

representatives to negotiate an implementing agreement that would 

govern the transfer of former Conrail employees to N.J. Transit 

and the retention of their seniority rights. 

 The statute also required N.J. Transit and employee 

representatives to enter into new collective bargaining 

agreements by September 1, 1982. Id. § 590(a). If the parties 
16 

were unable to reach an agreement under § 590(b)-(g), an 

emergency board requested by a party and created by the President 

of the United States could make a non-binding selection of one of 

the final offers, with employees retaining the right to strike. 

This procedure was the "exclusive means" for resolving disputes 

relating to the formation of an initial collective bargaining 

agreement. Id. § 590(h). 

 Pursuant to the statute, N.J. Transit negotiated with 

the International Brotherhood of Teamsters, at that time the 

bargaining representative of police officers transferring from 

Conrail. Although the union representatives and N.J. Transit 

reached an agreement, the union membership failed to ratify it. 

 Following the procedures of 45 U.S.C. § 590, a 

Presidential Commission conducted a hearing and, in late 1982, 

issued its non-binding recommendation that the union adopt the 

contract its representatives had previously negotiated with N.J. 

Transit. The union rejected the recommendation and was then at 

liberty to strike if it so chose. The members, however, 

continued to work after January 1, 1983 without ratifying the 

proposed agreement even though the previous contract between 

Conrail and the union had expired on December 31, 1982. 

 In August of 1983, the Benevolent Association replaced 

the Teamsters as the bargaining representative for the police 

officers employed by N.J. Transit. In the fall of 1983, the 
17 

union sent an untimely request to the National Mediation Board in 

an attempt to bring an end to the impasse.3

 According to the union, when negotiations broke off, 

N.J. Transit -- using self-help -- implemented the unratified 

agreement as the operating guide for regulating the employment of 

the police officers. Correspondence from N.J. Transit supports 

this assertion.4 

 Article 16 of the unratified January 1, 1983 agreement 

provided that police officers who had been in service for more 

than one year would not be suspended or dismissed "without just 

cause and without a fair and impartial trial." Provisions for 

in-house trials and appeals were included as well. 

 This was the state of the relationship between N.J. 

Transit and its police officers in 1985. On June 20, 1985, 

McQuestion was dismissed because of an incident in which, while 

on his way to work, he fired his pistol and wounded a motorist. 

Hart was dismissed on August 2, 1985 because of evidence that he 

had been arrested and charged with possession of cocaine. Both 

 

3The facts in the two foregoing paragraphs were set out in an 

affidavit filed by Patrick J. O'Brien, past President of the 

Benevolent Association. 

4In other litigation, in a similar factual setting, N.J. Transit 

argued that there had been contract ratification through 

performance, rather than that N.J. Transit had lawfully and 

unilaterally implemented the unratified contract. See Dunn v. 

New Jersey Transit Corp., 681 F. Supp. 246 (D.N.J. 1987). 

Specifically, N.J. Transit argued that both it and the Benevolent 

Association had "followed procedures for resolution of grievances 

and appeals of disciplinary procedures which were contained in 

the unratified agreement, including the clause which provides 

that no employee dismissal shall occur `without just cause and 

without a fair and impartial hearing.'" Id. at 249 (internal 

quotation omitted). 
18 

McQuestion and Hart were given in-house trials and took appeals 

to management officials in N.J. Transit as mandated by Article 16 

of the agreement. It was only after failing to prevail in these 

efforts that the union filed petitions with the Adjustment Board. 

 In its submissions to the Adjustment Board, the union 

stated that the "unratified collective bargaining agreement . . . 

[was] independently under dispute before another authority,"5 but 

explained that the union was "forced to submit [the] submission 

to [the Adjustment] Board pursuant to said agreement." However, 

the legal arguments that followed were based upon language in 

"the applicable agreement," and the practice of the union and 

N.J. Transit in discharge cases indicated acquiescence with "the 

agreement." 

 The disputes between the two officers and their 

employer are classic examples of "minor" disputes that, had the 

agreement of January 1, 1983 been ratified, unquestionably would 

have been adjudicated by the Adjustment Board. Indeed, these are 

precisely the kinds of disputes that the Supreme Court made clear 

were to be kept out of the federal courts and to be resolved in 

arbitration. 

 

5On May 3, 1985, the union filed a petition with the New Jersey 

Public Employment Relations Commission, asserting that the state 

board had authority to resolve the impasse between N.J. Transit 

and the union over the formation of a formal collective 

bargaining agreement. In 1986, the agency held that the state 

statute was preempted by the Rail Passenger Service Act and, 

alternatively, by the Railway Labor Act. New Jersey Transit 

Corp., 12 NJPER ¶ 17280 (1986). The union explained that it did 

not wish to be prejudiced in that state case by asserting before 

the Adjustment Board that it had agreed with the implementation 

of the 1983 unratified contract. 
19 

 Based on the less than complete record here, it is 

apparent that although the January 1, 1983 agreement was not 

ratified by the union, N.J. Transit and the union put its 

grievance provisions into effect. These provisions formed the 

basis for the employment relationship between the union and N.J. 

Transit in the more than two-year interim before the McQuestion 

and Hart claims arose. 

 Neither the union nor N.J. Transit have ever questioned 

that an agreement existed to the effect that an officer could not 

be dismissed except for "just cause" and only after "a fair and 

impartial trial" -- the essential issues in the grievances 

presently before us. In addition, both the union and N.J. 

Transit scrupulously followed the procedures set out in the 

January 1, 1983 agreement in processing the two claims. 

 Nothing in the record indicates that the "just cause" 

and grievance procedures in Article 16 differed from those in the 

contract that had expired on December 31, 1982. In fact, in his 

affidavit, former union President O'Brien averred: "The 

discipline/appeals provisions essentially mirrored those in the 

[predecessor] Conrail-Teamsters' contract. They are pretty much 

industry standard." 

 In the absence of an agreement, N.J. Transit would have 

had the power to discharge the officers without cause. See

Conrad v. Delta Air Lines, 494 F.2d 914, 916 (7th Cir. 1974). 

However, the employer's compliance with the grievance procedures 

in Article 16 is strong evidence that N.J. Transit recognized its 

obligation to dismiss employees only for "just cause." 
20 

 N.J. Transit's joinder with the union in agreeing in 

its original submission that the Adjustment Board had 

jurisdiction is also significant. Although the union and N.J. 

Transit could not confer jurisdiction on the Adjustment Board by 

consent,6 their mutual view that it existed is further evidence 

that an enforceable employment relationship was in effect -- at 

least as to discharges for cause only. 

 In short, in the scenario we have discussed, there was 

a de facto ("implied in fact") agreement on certain aspects of 

the employment relationship between the union and N.J. Transit. 

The fact that these particular matters were not incorporated into 

a formal, ratified contract that included many other terms not 

relevant to the dispute at hand does not deprive the Adjustment 

Board of jurisdiction. As noted earlier, the prerequisite 

"agreement" is not limited to specific terms of a formal 

collective bargaining agreement, but may instead include evidence 

of past practices and custom such as those which seemingly exist 

here. 

 Moreover, if it develops that the discipline and "just 

cause" provisions in the contract that expired on December 31, 

1982 are essentially the same as those in the agreement the union 

and N.J. Transit implemented in the grievance procedures 

involving McQuestion and Hart, this case would fall within the 

holding of Eastern Air Lines that we approved in Miklavic. Thus, 

 

6The union argues that, in an earlier proceeding, the Adjustment 

Board found that it did have jurisdiction in a similar case. 

Dunn v. New Jersey Transit Rail Operations, Inc., Award No. 4365 

(N.R.A.B., Fourth Div. Oct. 24, 1985). 
21 

if the performance of the union and N.J. Transit establishes that 

the "just cause" and grievance provisions of the expired Conrail 

agreement remained in effect during the pendency of negotiations 

for a new collective bargaining agreement, they would constitute 

the terms of the continuing employment relationship and would be 

binding on the parties to this dispute. 

 It follows that the Adjustment Board took an unduly 

narrow view of its jurisdiction. The Railway Labor Act does not 

require a ratified collective bargaining agreement, but speaks 

only in terms of an "agreement." Caselaw also makes it clear 

that provisions other than those specified in a written document 

may be relevant and dispositive in the resolution of a dispute 

before the Adjustment Board. 

 In our view, the record establishes an agreement 

between the union and N.J. Transit on the conditions under which 

employment could be terminated and the grievance procedures to be 

followed by a discharged employee. In such circumstances, the 

Adjustment Board would have jurisdiction to arbitrate the 

disputes. However, because the parties did not fully focus on 

this aspect of the Adjustment Board's jurisdiction, they may 

require a hearing and an opportunity to present further evidence 

to clarify the record. 

 Accordingly, we will reverse the judgment of the 

district court and will remand for further proceedings consistent 

with this opinion. 
22 

McQuestion v. New Jersey Transit, No. 93-5515 

NYGAARD, Circuit Judge, concurring and dissenting. 

 The majority and I differ little in our reasoning and 

conclusion. But the differences, although small, are of 

considerable importance. I can assume without deciding that an 

agreement existed, but only between the two appellants and their 

employer, N.J. Transit. I cannot agree, however, that the facts 

of this case support the conclusion reached by the majority that 

a collective bargaining agreement had been reached between N.J. 

Transit and the appellants' union. I also do not agree that we 

can so lightly reject the Adjustment Board's definition of an 

"agreement." I would hold that the Adjustment Board properly 

concluded that without a ratified collective bargaining 

agreement, it had nothing to interpret and, therefore, no 

jurisdiction. I would conclude that if an agreement exists here, 

it is not a "collective" agreement, nor an agreement between N.J. 

Transit and the entire union, but merely an "individual" 

agreement, which will not independently support federal 

jurisdiction. Hence, I too would reverse the order of the 

district court, but would remand the cause for the district court 

to determine if there exists an independent basis for 

jurisdiction, and if not to dismiss. 

 The Adjustment Board's jurisdictional authority comes 

from 45 U.S.C. § 153 First (i), in which it is granted the power 

to hear "disputes growing out of grievances or out of the 
23 

interpretation or application of agreements concerning rates of 

pay, rules or working conditions." In Elgin, J. & E.R. Co. v. 

Burley, 325 U.S. 711, 65 S. Ct. 1282 (1945), the Court said that 

such disputes, termed "minor," are subject to arbitration and 

"contemplate the existence of a collective bargaining agreement 

already concluded or, at any rate, a situation in which no effort 

is made to bring about a formal change in terms or to create a 

new one." Id. at 723, 65 S. Ct. at 1290. 

 The essence of the Railway Labor Act is that it 

authorizes collective bargaining units to select bargaining 

agents and permits them to negotiate collective agreements with a 

carrier/employer. Union Pac. R.R. Co. v. Sheehan, 439 U.S. 89, 

94, 99 S. Ct. 399, 402 (1978) ("[T]he terms, purposes and 

legislative history of the Railway Labor Act ... endeavor[] to 

promote stability and labor management relations in this 

important national industry by providing effective and efficient 

remedies for the resolution of railroad/employee disputes arising 

out of the interpretation of collective bargaining agreements.") 

(emphasis added, internal citations omitted); Virginia Ry Co. v. 

System Federation No. 40, 300 U.S. 592, 515, 57 S. Ct. 592, 600 

(1937) (The declared purposes of the Act give to employees "the 

right to organize and bargain collectively through a 

representative of their own choosing ....") (emphasis added). The 

Act uses the term "agreement," but given the purposes of the Act, 

it is fundamental that it means a "collective bargaining 

agreement," and is not meant to cover the garden variety, private 

agreements any employer can reach with its individual employees. 
24 

See Griesmann v. Chemical Lehman Tank Lines, Inc., 776 F.2d 66, 

71 (3d Cir. 1985) ("A collective bargaining agreement is the 

paradigmatic labor contract, covering a wide array of 

contingencies that may arise in the employment relationship, and 

distinguished by provisions for the arbitration of disputes 

concerning the agreement's meaning and application.") (internal 

citations omitted). 

 In Davis v. Ohio Barge Line, Inc., 697 F.2d 549 (3d 

Cir. 1983), an employee contended that a settlement agreement he 

had reached with his employer should be enforceable under section 

301 of the Labor Management Relations Act. We rejected that 

argument and concluded that "[a] private agreement between an 

employer and employee independent of a collective bargaining 

agreement generally does not fall within [the Labor Management 

Relations Act] even though the complaint alleges some nexus with 

the union." Id. at 553. We held that a federal court has 

jurisdiction over a collective bargaining agreement under the 

Labor Management Relations Act, but has "no independent basis for 

jurisdiction" over the settlement agreement which the employer 

and employee in Davis had reached. 

 Here too, there is no collective bargaining agreement. 

Merely because these two employees and N.J. Transit had at some 

point acted as though they agreed upon some portions of the 

rejected draft agreement, an enforceable collective bargaining 

agreement was not thereby created between N.J. Transit and the 

entire union. At most, such an agreement would not be collective 
25 

but individual and would be enforceable, if at all, under state 

law and in state courts, not under the Railway Labor Act. 

 N.J. Transit did impose upon its employees many of the 

provisions which had earlier been proposed in the written draft. 

But inasmuch as that draft had not been ratified, and indeed 

because N.J. Transit had no collective agreement with its 

employees, it was free to impose upon its employees any 

conditions it wished within the bounds of the law. N.J. Transit 

did behave in a civilized fashion towards these two discharged 

employees. It gave them all the process to which they would have 

been entitled under the unratified agreement. Nonetheless, to 

infer a federally enforceable de facto agreement between the 

union and N.J. Transit, simply because these parties behaved as 

they did, creates the possibility of much mischief and may well 

discourage employers from giving employees any perquisites or 

processes to which they are not entitled by law while contracts 

are pending. 

 The majority's conclusion that such a de facto

agreement comes within the Act is unsupported by any authority. 

The majority modestly admits that "[m]ost decisional law in this 

area discusses situations where a collective bargaining agreement 

already exists." (Maj. typescript at 8.) It should be noted 

that in each Railway Labor Act case cited in the majority 

opinion, the parties either had a collective bargaining agreement 

which controlled and defined their rights, or were operating 

under an expired collective bargaining agreement during the 

"status quo" provision of the Act. 
26 

 Under the National Labor Relations Act, a collective 

bargaining agreement must be in writing if requested by either 

party. 29 U.S.C. § 158(d). Although the record contains no 

specific request for a writing, the preliminary draft was reduced 

to writing; the written draft was submitted to the membership for 

ratification; and in this form, it was rejected by the 

membership. There is simply nothing in this record to indicate 

that an oral agreement was acceptable. Rather, the only 

supportable inference from this record is that both N.J. Transit 

and the union expected their collective bargaining contract to be 

in writing. Consequently, I cannot infer that this alleged 

agreement, which was neither in writing, signed by the 

appellants, nor ratified by their union, can confer jurisdiction 

on the Adjustment Board. 

 In sum, I agree that if there were a valid ratified 

written collective bargaining agreement, this would be a "minor" 

and hence an arbitrable dispute. I also agree that if the 

appellants' union and N.J. Transit were parties to a collective 

bargaining agreement, the issues in dispute would not need to be 

covered by an express provision of the written contract. I do 

not, however, agree that an individual agreement between the 

parties -- whether a "de facto agreement," an agreement by 

implication, or an agreement created in any fashion other than as 

contemplated by the Act -- either creates a collective bargaining 

agreement between N.J. Transit and the union, or is the type of 

"agreement" that will confer jurisdiction upon the federal courts 

or the Adjustment Board. Therefore, I conclude that unless 
27 

another, independent basis for federal jurisdiction exists, this 

case must be dismissed.