Source: https://supreme.justia.com/cases/federal/us/404/37/
Timestamp: 2019-04-24 08:55:29+00:00

Document:
"[n]otwithstanding any other provisions of this Act, an agreement pertaining to the protection of the interests of said employees may hereafter be entered into"
by any railroad and an employee union. A post-consolidation agreement was made between petitioner and the union under which petitioner claimed that the salary supplement was limited solely to the amount paid respondent for their seasonal Sandusky Line work. The District Court agreed with respondents that the new agreement was not enforceable, as it conflicted with the terms of the pre-merger agreement, and thus violated the Act under which the consolidation took place, and the Court of Appeals affirmed, with a modification as to damages.
ICC's adoption or approval of a pre-merger collective agreement becomes a "condition" of the ICC's approval of a consolidation under that section. Pp. 404 U. S. 41-43.
2. The "notwithstanding" proviso of § 5(2)(f) affords the machinery for the terms of a pre-merger collective agreement, and thus supplies one minimum measure of fairness required by the section. P. 404 U. S. 43.
3. The post-consolidation agreement abrogated the employees' rights and the standard of "compensation" covered by the pre-merger agreement that had come under the ICC's protective order. Pp. 404 U. S. 43-45.
DOUGLAS, J., delivered the opinion of the Court, in which BRENNAN, STEWART, and MARSHALL, JJ., joined. BLACKMUN, J., filed a dissenting opinion, in which BURGER, C.J., and WHITE, J., joined, post, p. 404 U. S. 45.
worked at other points on the Pennsylvania's Toledo Division.
"all employees of the lines involved with the guarantee that they will not be adversely affected in their employment as a result of the proposed transactions or for any reason other than furloughs due to seasonal requirements or a decline in volume of traffic or revenue."
24 I.C.C. 1, 89 (emphasis added).
Each employee was to receive a monthly supplement to his post-consolidation monthly earnings equal to the excess, if any, of his average monthly compensation for the 12 months prior to the consolidation in which he had performed services.
Some 96 Sandusky Line employees elected to accept employment.with petitioner on the terms and conditions stated. Twenty-five were junior men who had worked seasonally on the Toledo Division, and they were the plaintiffs in this action.
respondent employees should be determined by the District Court, not through arbitration. The case is here on a petition for a writ of certiorari which we granted, 402 U.S. 994.
Section 5(2)(f) [Footnote 1] of the Interstate Commerce Act as amended, 54 Stat. 906, 49 U.S.C. § 5(2)(f), provides that, in mergers and consolidations, "the Commission shall require a fair and equitable arrangement to protect the interests of the railroad employees affected" for a period of four years.
It construed the agreements as requiring "that job eliminations as a result of the proposed acquisition of control be accomplished only through normal attrition." Ibid.
The mandate of § 5(2)(f) seems clear enough: the Commission "shall require a fair and equitable arrangement to protect the interests of the railroad employees affected." The Commission, as noted, said that the conditions protective of the employees were made pursuant to and in conformity with the provisions of § 5(2)(f), and it gave its authorization "subject to such agreements."
Delaware, L. & W. R. Co. Trackage Rights, 295 I.C.C. 743, 755-756.
When there is a collective agreement and the Commission, as here, adopts or approves it, the "notwithstanding" sentence of § 5(2)(f) is not, as suggested, read out of the Act. The collective agreement then becomes a "condition" of the Commission's "approval" of the consolidation under the first sentence of § 5(2)(f), and its provisions are deemed by the Commission to be "a fair and equitable arrangement to protect the interests" of the employees within the meaning of the first sentence. Thus, the significance of the "notwithstanding" proviso is that it provides the machinery for the terms of a pre-merger collective agreement, and thus supplies the minimum measure of fairness required under the first sentence of § 5(2)(f).
"An agreement made pursuant to the last sentence of Sec. 5(2)(f) may vary the protections afforded by the I.C.C. order, but it may not substantially abrogate employees' rights grounded in an I.C.C. order."
of "compensation" covered by the pre-consolidation agreement [Footnote 6] which had come under the protective order of the Commission.
"As a condition of its approval, under this paragraph, of any transaction involving a carrier or carriers by railroad subject to the provisions of this chapter, the Commission shall require a fair and equitable arrangement to protect the interests of the railroad employees affected. In its order of approval the Commission shall include terms and conditions providing 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 carriers by railroad affected by such order being in a worse position with respect to their employment, 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 such order. Notwithstanding any other provisions of this Act, an agreement pertaining to the protection of the interests of said employees may hereafter be entered into by any carrier or carriers by railroad and the duly authorized representative or representatives of its or their employees."
"As previously stated herein and in appendix A, various agreements have been reached between employee representatives and the Norfolk & Western for the protection of employees adversely affected by these transactions. Our authorizations herein will, by reference, be made subject to such agreements. . . ."
"We find that, as conditioned herein, the transactions under consideration meet the requirements prescribed by sections 5(2) and 20a of the act, and conform generally with the purposes and objectives of the national transportation policy declared by Congress. We are convinced that the transactions should be approved."
"Norfolk & Western has entered into an agreement with 19 of the principal labor organizations, members of the Railway Labor Executives' Association, for the protection of employees of Norfolk & Western, Nickel Plate, and Wabash, as well as persons employed on the Sandusky Line of Pennsylvania, represented by these organizations. This agreement, which provides for the assumption by Norfolk & Western of all outstanding labor contracts, schedules and agreements of Nickel Plate and Wabash, as well as those having application on the Sandusky Line, basically requires that job eliminations as a result of the unification be accomplished only through normal attrition. Under its terms, Norfolk & Western agrees to take into its employment, upon consummation of the merger, lease, and purchase, all employees of the lines involved with the guarantee that they will not be adversely affected in their employment as a result of the proposed transactions or for any reason other than furloughs due to seasonal requirements or a decline in volume of traffic or revenue."
The result, of course, would be that there would be no basis for judicial review of the ICC order pursuant to 28 U.S.C. § 1336.
A synopsis of the legislative history of § 5(2)(f) is contained in an Appendix to our opinion in St. Joe Paper Co. v. Atlantic Coast Line R. Co., 347 U. S. 298, 347 U. S. 315.
"The agreement also authorized Norfolk & Western to transfer the work of employees throughout the merged system, and requires the labor organizations to enter into implementing agreements permitting employees either to follow their work or be assigned to other jobs within their craft or class within the same general locality as existing jobs, following a period of retraining, if necessary, at Norfolk & Western's expense."
The union that negotiated the Implementing Agreement disagreed with that position, as did the union's National Board of Appeals. Both, however, proceeded on a mistaken view of the law.
I am sympathetic with the respondents and with the unfortunate predicament in which, largely by their own acts, they find themselves. I feel, however, that the Court's decision to the effect that federal district court jurisdiction exists here and that the judgment of the Court of Appeals is to be affirmed amounts only to a sympathetically imposed judicial cure that is not authorized by the Interstate Commerce Act, that is violative of Congress' intent, and that ignores unusually clear legislative history.
Transportation Act of 1940, 54 Stat. 906. It is the Act's only provision relating to employee benefits. The thrust of the subsection's third and last sentence, beginning with the exclusionary word "notwithstanding," is crucial here.
"Notwithstanding any other provisions of this Act, an agreement pertaining to the protection of the interests of said employees may hereafter be entered into by any carrier or carriers by railroad and the duly authorized representative or representatives of its or their employees."
This plain and unambiguous "notwithstanding" language, obviously and necessarily directed to and affecting only the two preceding sentences, requires that an agreement entered into by the carrier and the collective bargaining representative be controlling. The two preceding sentences have application, therefore, only when an agreement "pertaining to the protection of the interests of said employees" is not executed. In the case before us, the carrier and the Brotherhood did execute an agreement of the kind specified, and the "notwithstanding" language should come into play. The Court today nullifies that sentence, and reads it out of the Act.
the assertion that the bill was given more careful and more thoughtful consideration than any other bill which has ever come before the Senate in my time."
86 Cong.Rec. 11270. It emerged from the economically distressed days of the 1930's, from the Washington Job Protection Agreement of 1936 (see Hearings on H.R. 2531 before the House Committee on Interstate and Foreign Commerce, 76th Cong., 1st Sess., vol. 1, p. 231), and from recommendations of President F. D. Roosevelt's Committee of Six (see Hearings, supra, at 259).
What is now § 5(2)(f) was not contained in the original House version (H.R. 4862, 76th Cong., 1st Sess.), or in the original Senate version (S. 2009, 76th Cong., 1st Sess.), or, indeed, in the draft contained in the initial H.R.Conf.Rep. No. 2016 of April 26, 1940, 76th Cong., 3d Sess. It surfaced as § 7 of the revised draft submitted with the supplanting H.R.Conf.Rep. No. 2832 of August 7, 1940, 76th Cong., 3d Sess. The new language replaced the earlier Harrington Amendment to the House version. The reasons for the change effected by the conferees are set forth on pages 68-69 of H.R.Conf.Rep. No. 2832. Although the comments there do not focus on the "notwithstanding" sentence, its purpose and significance are apparent from the debates.
"But this provision also contains clause that permits the industry, through the processes of collective bargaining, to work out its problems in a democratic manner."
"And, then there was also further uncertainty in the opinion of some representatives of railroad labor as to whether the language of the amendment might not preclude voluntary agreements, between management and men by collective bargaining, from being entered into."
"I want, however, to make it clear that no one who expressed the opinions I have mentioned thought for a moment that any of these possibilities were ever intended by the sponsors of the amendment."
"a provision confirming the right of employees to enter into agreements with railroads to take care of them in case of unemployment as a result of consolidations."
terms of collective bargaining agreements." Chicago & North Western R. Co. v. United Transportation Union, 402 U. S. 570, 402 U. S. 579 n. 11 (1971). In my view, the Court's decision today, and the decisions of the District Court and the Court of Appeals, overlook or choose to ignore this purpose and this legislative history. Instead, a result is achieved that is the exact opposite of the congressional intent and policy.
Respondents urge that this Court in the past has recognized the Commission's responsibility to review the sufficiency of third-sentence voluntary agreements and to "adopt" them as part of its orders, citing Railway Executives' Assn. v. United States, 339 U. S. 142 (1950), and Brotherhood of Maintenance of Way Employes v. United States, 366 U. S. 169 (1961). These are the only two decisions the Court produces to support its theory of jurisdiction. Neither is apposite. The former case presented the question whether under sentence two the Commission had the power to prescribe protective provisions extending beyond the four-year period to which that sentence refers. The holding was in the affirmative. The Court now makes much of the language of "mandatory protection" in that decision. But no pre-merger voluntary agreement had been made there, and the effect of sentence three did not enter the case. Nor had a pre-merger agreement been reached in the latter Maintenance of Way case, where the issue was whether, when the Commission formulates its own protective provisions under sentence two, it must require the carrier to retain employees for the four-year period or simply to guarantee them equivalent compensation. The disagreement between the parties there arose at the Commission hearing on what protective arrangements should be imposed by the Commission in fulfillment of its sentence two duty.
and with the clear meaning of the "notwithstanding" sentence. See, e.g., Great Northern Pacific & Burlington Lines-Merger-Great Northern R. Co., 331 I.C.C. 228, 278 (1967); Pennsylvania R. Co.-Merger-New York Central R. Co., 327 I.C.C. 475, 544 (1966); Norfolk & Western R. Co. and New York, Chicago & St. Louis R. Co.-Merger, 324 I.C.C. 1, 9, 90 (1964); Missouri Pacific R. Corp. in Nebraska Trustee Operation, 247 I.C.C. 653, 657 (1941).
respondents here. The Court's holding implies for me that any agreement between the carrier and the Brotherhood pursuant to sentence three of § 5(2)(f), however protective, is nevertheless not to be regarded as controlling if it is subsequently deemed less protective than Commissioners or judges think it should have been. Neither the language nor the legislative history warrants our espousing such judicial overview.
under the unexpected circumstances. This situation highlights the wisdom of the policy of § 5(2)(f), namely, to leave the solution of their problem to their own Brotherhood (their bargaining representative with the Norfolk & Western as well as with the Pennsylvania), rather than to the benevolent hindsight of the Commission or of a court.
All this propels me to the conclusion that the Commission may not be held to have reviewed and incorporated the 1962 agreement into it 1964 order authorizing the merger. All it did was to state that its duty to see to the protection of employee under § 5(2)(f) was satisfied by the execution of the 1962 agreement. It follows that there was no district court jurisdiction and that the respondents' complaint should have been dismissed.
* Respondents refer to Florida East Coat R. Co. Reorganization, 307 I.C.C. 5 (1958), aff'd, 312 I.C.C. 744, aff'd, 171 F.Supp. 512 (SD Fla.1959), but the District Court's decision in that case plainly sustained the Commission's determination that because a bankruptcy reorganization was involved, no part of § 5(2)(f) was applicable.

References: § 5
 § 5
 § 5
 § 5
 § 5
 § 5
 § 5
 § 1336
 § 5
 v. 
 § 5
 § 7
 v. 
 v. 
 v. 
 § 5
 § 5
 § 5
 § 5