Source: https://openjurist.org/491/us/490/pittsburgh-lake-erie-railroad-company-v-railway-labor-executives-association-pittsburgh-and-lake-eri
Timestamp: 2020-04-02 04:06:09
Document Index: 203100147

Matched Legal Cases: ['§ 156', '§ 156', '§ 156', '§ 156', '§ 156', '§ 156', '§ 8', 'art,16', '§ 8', '§ 8', '§ 8', 'arte 392', '§ 156', '§ 156', '§ 156', 'arte 392', '§ 10101', '§ 151', '§ 6', '§ 156', '§ 2', '§ 152', '§ 11347', '§ 10901', '§ 156', '§ 10901', '§ 156', '§ 61', '§ 51', '§ 6', '§ 6']

491 U.S. 490 - Pittsburgh Lake Erie Railroad Company v. Railway Labor Executives' Association Pittsburgh & Lake Erie Railroad Company
PITTSBURGH & LAKE ERIE RAILROAD COMPANY, Petitioner,
RAILWAY LABOR EXECUTIVES' ASSOCIATION. PITTSBURGH & LAKE ERIE RAILROAD COMPANY, Petitioner, v. RAILWAY LABOR EXECUTIVES' ASSOCIATION, et al.
The facts of Shore Line, briefly stated, were these: Shore Line operated 50 miles of rail line between Lang Yard in Toledo, Ohio, and Dearoad Yard near Detroit, Michigan. For many years, all train and engine crews reported for duty and finished the day at Lang Yard. When it was necessary to perform switching and other operations at other points, crews were transported at railroad expense to those outlying points. The company proposed to establish outlying work assignments at Trenton, Michigan, some 35 miles north of Lang Yard. Crews assigned there would have to report there. The proposed change was not forbidden by, and would not have violated, the parties' collective-bargaining agreement. The union filed a § 156 notice seeking to amend the agreement to forbid the railroad to make outlying assignments. The issue was not settled by the parties and the union called for mediation. While the Mediation Board proceedings were pending, the railroad posted a bulletin creating the disputed assignment at Trenton. The union threatened a strike, the company sued to restrain the strike, and the union counterclaimed for an injunction relying on the status quo provision of § 156. The District Court and the Court of Appeals held for the union, and we affirmed over a dissent by Justice Harlan, joined by Chief Justice Burger. We held that even though Shore Line did not propose to change any of its agreements, the status quo provision of § 156—"rates of pay, rules, or working conditions shall not be altered" pending exhaustion of the required procedure—forbade any change by Shore Line in the "objective working conditions" then existing. 396 U.S., at 153, 90 S.Ct., at 301. We noted that had it been the practice to make outlying work assignments, the company would have been within its rights to make the Trenton assignment; but the prior practice, the objective working condition, was to have crews report for work and come back to Lang Yard. That working condition could not be changed pending resolution of the dispute without violating the status quo provision of § 156 even though there was nothing in the agreement between the parties to prevent outlying assignments. Id., at 153-154, 90 S.Ct., at 301-302.
Shore Line, in our view, does not control these cases. In the first place, our conclusion in that case that the status quo provision required adherence not only to working conditions contained in express or implied agreements between the railroad and its union but also to conditions "objectively" in existence when the union's notice was served, and that otherwise could be changed without violating any agreement, extended the relevant language of § 156 to its outer limits, and we should proceed with care before applying that decision to the facts of these cases.15 Second, reporting at Lang Yard, we thought, had been the unquestioned practice for many years, and we considered it reasonable for employees to deem it sufficiently established that it would not be changed without bargaining and compliance with the status quo provisions of the RLA. Third, and more fundamentally, the decision did not involve a proposal by the railroad to terminate its business. Here, it may be said that the working condition existing prior to the § 156 notice was that P & LE was operating a railroad through the agency of its employees, but there was no reason to expect, simply from the railroad's long existence, that it would stay in business, especially in view of its losses, or that rail labor would have a substantial role in the decision to sell or in negotiating the terms of the sale. Whatever else Shore Line might reach, it did not involve the decision of a carrier to quit the railroad business, sell its assets, and cease to be a railroad employer at all, a decision that we think should have been accorded more legal significance than it received in the courts below. Our cases indicate as much.
In Textile Workers v. Darlington Mfg. Co., 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed.2d 827 (1965), an employer closed its textile mill when a union won a representation election. The National Labor Relations Board concluded that this action was an unfair labor practice under §§ 8(a)(1) and (3) of the National Labor Relations Act (NLRA). The Court of Appeals disagreed, holding that the complete or par ial liquidation of an employer's business even though motivated by antiunion animus was not an unfair practice. We affirmed in part,16 ruling that insofar as the NLRA is concerned, an employer "has an absolute right to terminate his entire business for any reason he pleases. . . ." 380 U.S., at 268, 85 S.Ct., at 998. Whatever may be the limits of § 8(a)(1), we said, an employer's decision to terminate its business is one of those decisions "so peculiarly matters of management prerogative that they would never constitute violations" of that section. Id., at 269, 85 S.Ct., at 999. Neither would ceasing business and refusing to bargain about it violate § 8(a)(3) or § 8(a)(5) even if done with antiunion animus. Id., at 267, n. 5, 269-274, 85 S.Ct., at 998, n. 5, 999-1002. "A proposition that a single businessman cannot choose to go out of business if he wants to would represent such a startling innovation that it should not be entertained without the clearest manifestation of legislative intent or unequivocal judicial precedent so construing the Labor Relations Act." Id., at 270, 85 S.Ct., at 999. We found neither.17
Here P & LE agreed to sell its assets to Railco. The transaction was presented to the ICC and an Ex Parte 392 exemption was requested. The ICC rejected the unions' applications to stay or reject the exemption, which became effective seven days after it was requested. The unions then successfully sought an injunction delaying the closing of the transaction based on their § 156 notices. The Court of Appeals several times noted the tension between the two regimes, but concluded that the provisions of the RLA left no room for a construction easing those tensions. This was the case even though the injunction that was affirmed would likely result in cancellation of P & LE's sale and the frustration of Congress' intent through ICA amendments to deregulate the rail and air industries generally and more specifically to assist small rail lines with financial problems. We disagree with that conclusion, for as we have said, we are confident that the RLA is reasonably subject to a construction that would, at least to a degree, harmonize the two statutes.18 The injunction, which effectively prevented the sale from going forward, should not have been granted.
Our holding in these cases, which rests on our construction of the RLA and not on the pre-emptive force of the ICA, is that petitioner was not obligated to serve its own § 156 notice on the unions in connection with the proposed sale. We also conclude that the unions' notices did not obligate P & LE to maintain the status quo and postpone the sale beyond the time the sale was approved by the Commission and was scheduled to be consummated. We do not hold, however, that P & LE had no duty at all to bargain in response to the unions' § 156 motions. The courts below held, and RLEA agrees, that P & LE's decision to sell, as such, was not a bargainable subject. The disputed issue is whether P & LE was required to bargain about the effects that the sale would or might have upon its employees. P & LE, in our view, was not entirely free to disregard the unions' demand that it bargain about such effects. When the unions' notices were served, however, the terms of P & LE's agreement with Railco were more or less settled, and P & LE's decision to sell on those terms had been made. To the extent that the unions' demands could be satisfied only by the assent of the buyers, they sought to change or dictate the terms of the sale, and in effect challenged the decision to sell itself. At that time, P & LE was under no obligation to bargain about the terms it had already negotiated. To the extent that the unions' proposals could be satisfied by P & LE itself, those matters were bargainable but only until the date for closing the sale arrived, which, of course, could not occur until the Ex Parte 392 exemption became effective.19 We are therefore constrained to reverse the Court of Appeals in No. 87-1888.
Regulated utilities do not have the same freedom to respond to market pressures that unregulated firms have.1 They may not raise rates or cut services, for example, without permission from a regulatory agency. Most significantly for these cases, they may neither enter nor leave the market without agency approval. Ignoring this principle, the Court in Part II of its opinion arrives at a result that, while perhaps preferable as a matter of policy, contradicts our previous interpretations of the relevant statute.2
The railroad industry long has been the subject of governmental regulation.3 A year after this Court held that individual States were powerless to regulate rail lines extending beyond their boundaries, Wabash, S.L. & P.R. Co. v. Illinois, 118 U.S. 557, 7 S.Ct. 4, 30 L.Ed. 244 (1886), Congress established the Interstate Commerce Commission (ICC) to regulate economic aspects of the rail industry. Interstate Commerce Act, 49 U.S.C. § 10101 et seq. (1982 ed. and Supp. V). Regulation of employment relationships within the rail industry followed,4 and in 1926, Congress enacted the Railway Labor Act (RLA), 45 U.S.C. § 151 et seq.
The intervening six decades were marked by relatively peaceful coexistence between the two statutes. During the course of the employment relationship, the RLA provided the means for resolving disputes. See ante, at 496, n. 4; Consolidated Rail Corporation v. Railway Labor Executives' Assn., 491 U.S. 299, 302-304, 109 S.Ct. 2477, 2479-2481, 105 L.Ed.2d 250 (1989). If a railroad sought to end that relationship by sale, consolidation, or abandonment, the ICC routinely conditioned approval on the railroad's acceptance of either job protection or some form of severance pay for employees who would be affected by the change. See United States v. Lowden, 308 U.S. 225, 60 S.Ct. 248, 84 L.Ed. 208 (1939).5 Cf. ante, at 498.
This symbiosis ended in 1985, when the ICC announced that it no longer would impose labor protective conditions on sales of short-line railroads unless exceptional circumstances were shown. Ex Parte No. 392 (Sub. No. 1), Class Exemption for the Acquisition and Operation of Rail Lines Under 49 U.S.C. 10901, 1 I.C.C.2d 810, 815 (1985), review denied sub nom. Illinois Commerce Comm'n v. ICC, 260 U.S.App.D.C. 38, 817 F.2d 145 (1987); see ante, at 498-501. Suddenly it became important for railroad unions to obtain such labor protections through collective bargaining. Unlike other employment contracts, however, rail labor agreements are altered not by periodic renegotiation but by notification, pursuant to § 6 of the RLA, 45 U.S.C. § 156, of a desire to change terms in the agreements. See Tr. of Oral Arg. 66-67. Thus it is not surprising that the unions in this litigation did not seek labor protective provisions until—just 18 months after the ICC abdicated its traditional protective role—plans to sell the railroad surfaced.6
There is no disagreement that labor protective provisions related to the effects of an abandonment or sale may be the subject of collective bargaining. It follows, I believe, that when railway labor unions request the inclusion of such provisions in their collective-bargaining agreements by proper statutory notice, see ante, at 496-497, and n. 5, the employer must maintain the status quo during the statutorily mandated negotiating process or risk a strike as a consequence of its breach of that duty. See §§ 2 First, Seventh of the RLA, 45 U.S.C. §§ 152 First, Seventh. The Court adm ts the force of this proposition and acknowledges that an employer has some duty to bargain when a sale is announced. Ante, at 504, 512. Nevertheless, it indicates that this particular dispute did not obligate the railroad to preserve the status quo, for the Court would prohibit any bargaining that "in effect challenged the decision to sell," and would allow negotiations to cease as soon as the sale is closed. Ante, at 512.7 This diminution of the employer's duty contravenes two of our decisions interpreting the RLA.
Third, and most importantly, the Court points out that in contrast with these cases, the railroad in Shore Line had not proposed "to quit the railroad business, sell its assets, and cease to be a railroad employer at all," ante, at 507. The simple reply is that, in spite of claims of " 'managerial prerogative' " much like those advanced here,8 the Court in Tele- graphers y held that the effects of a railroad's decision to terminate a part of its business constituted a proper subject of bargaining. There is no relevant difference between the partial abandonment in Telegraphers and the transfer of ownership proposed in these cases: in both, rail service would continue as before, but many employees would lose their jobs.
To evade the natural result of adherence to Shore Line and Telegraphers, the Court relies on two later opinions declaring that "an employer has the absolute right to terminate his entire business for any reason he pleases," Textile Workers v. Darlington Mfg. Co., 380 U.S. 263, 268, 85 S.Ct. 994, 998, 13 L.Ed.2d 827 (1965), and that the consequences of a partial closure are not a mandatory subject of bargaining, First National Maintenance Corp. v. NLRB, 452 U.S. 666, 101 S.Ct. 2573, 69 L.Ed.2d 318 (1981). See ante, at 507-509, and n. 17. But those opinions interpreted the strictures that the National Labor Relations Act places on an unregulated industry. As we noted in First National Maintenance Corp., that is a situation far different from the RLA's governance of a regulated industry.9
Attempts to interest major rail lines in the property were unavailing b cause of the high cost of labor protection that would have been mandatory under the section of the ICA applicable to purchases by an existing carrier. 49 U.S.C. § 11347 (1982 ed., Supp. V), which is set forth in n. 7, infra.
"(a) In a matter related to a rail carrier providing transportation subject to the jurisdiction of the Interstate Commerce Commission under this subchapter, the Commission shall exempt a person, class of persons, or a transaction or service when the Commission finds that the application of a provision of this subtitle—
P & LE argues that the RLA injunction was an impermissible collateral attack on the ICC order approving the sale. But the ICA, 49 U.S.C. § 10901, and the RLA, 45 U.S.C. § 156, as we construe them, are complementary regimes. Here, the ICC simply granted an exemption from the strictures of § 10901, which permitted, but did not order, the consummation of the sale. It made no finding that would prevent enforcement of § 156.
See, e.g., Hours of Service Act of 1907, as amended, 45 U.S.C. §§ 61-66; Federal Employers' Liability Act of 1908, as amended, 45 U.S.C. §§ 51-60. See also Sharfman 180-182; L. Lecht, Experience under Railway Labor Legislation 14-46 (1955).
The railroad might have had a greater duty to bargain, the Court suggests, had the unions served notice before sale negotiations had commenced. See ante, at 512, n. 19. Yet in the two opinions that I believe should control these cases, we did not fault the unions for filing § 6 notices in reaction to—rather than in anticipation of—the railroads' initiatives. Compare Railroad Telegraphers v. Chicago & N.W.R. Co., 362 U.S. 330, 332, 80 S.Ct. 761, 762, 4 L.Ed.2d 774 (1960), with id., at 349, 80 S.Ct., at 771 (Whittaker, J., dissenting) (majority rejects railroad's argument that § 6 notices were improper because filed after railroad petitioned state regulatory commissions for permission to abolish jobs). See also Detroit & Toledo Shore Line R. Co. v. Transportation Union, 396 U.S. 142, 146, 90 S.Ct. 294, 297, 24 L.Ed.2d 325 (1969). In light of the ICC's abrupt halt to its practice of requiring labor protections, moreover, the Court's distinction unfairly penalizes the unions in this litigation.