Case Name: INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, DISTRICT LODGE NO. 19, an unincorporated labor organization, Appellee, v. SOO LINE RAILROAD COMPANY, a Minnesota corporation, Appellant
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1987-11-12
Citations: 833 F.2d 730
Docket Number: No. 86-5355
Parties: INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, DISTRICT LODGE NO. 19, an unincorporated labor organization, Appellee, v. SOO LINE RAILROAD COMPANY, a Minnesota corporation, Appellant.
Judges: Before HEANEY, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and MAGILL, Circuit Judge.
Reporter: Federal Reporter 2d Series
Volume: 833
Pages: 730–741

Head Matter:
INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, DISTRICT LODGE NO. 19, an unincorporated labor organization, Appellee, v. SOO LINE RAILROAD COMPANY, a Minnesota corporation, Appellant.
No. 86-5355.
United States Court of Appeals, Eighth Circuit.
Submitted May 14, 1987.
Decided Nov. 12, 1987.
Rehearing En Banc Granted Jan. 13, 1988.
Richard T. Conway, Washington, D.C., for appellant.
Roger A. Jensen, Minneapolis, Minn., for appellee.
Before HEANEY, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and MAGILL, Circuit Judge.
Opinion and judgment vacated.

Opinion:
HEANEY, Circuit Judge.
The Soo Line Railroad Company (Soo Line) appeals from a decision of the United States District Court for the District of Minnesota enjoining the Soo Line from entering into separation agreements with individual members of the International Association of Machinists and Aerospace Workers, District Lodge No. 19, (Machinists' Union) in violation of the Railway Labor Act (RLA), 45 U.S.C. § 151-188, until such time as the Soo Line complies with the notice and bargaining procedures set forth in the RLA.
The Soo Line contends on appeal that the district court did not have jurisdiction over the subject matter of the dispute between the Soo Line and the Union for the reason that the dispute between them was not a major dispute subject to the mandatory bargaining procedures of the RLA, but was rather a matter personal to each employee and did not concern rates of pay, rules or working conditions. Alternatively, the Soo Line argues that if there is a dispute within the meaning of the RLA, it is a minor dispute subject to resolution by the National Railroad Adjustment Board. In our view, the findings of the district court are not clearly erroneous, and its legal conclusions are correct. We thus affirm.
FACTS
On February 19, 1985, the Soo Line acquired the core rail assets of the Chicago, Milwaukee, St. Paul and Pacific Railroad Company (Milwaukee). On January 1, 1986, the Milwaukee was merged into the Soo Line system. On September 10, 1985, the Soo Line entered into an employee protective agreement with the Machinists' Union. The preamble of the agreement states:
The purpose of this agreement is to provide pursuant to 49 U.S.C. § 11347 of the Interstate Commerce Act, as amended, and the Milwaukee Restructuring Act, for joint and equitable arrangements to protect the interest of Employees adversely affected by the acquisition; and to provide for expedited changes in services, facilities, operations, seniority and existing collective bargaining agreements . [Emphasis added.]
The agreement provides that existing collective bargaining agreements shall be preserved. It states that any employee of the merged railroad company laid off as a result of the acquisition of the Milwaukee is entitled to certain benefits from the Soo Line, including a severance allowance which, depending on the employee's length of service, could exceed $38,000.
In December, 1985, the Soo Line decided to reduce the number of employees on its payroll. It offered voluntary separation pay plans to certain employees represented by unions other than the Machinists' Union. Under this plan, employees who accepted separation would receive $15,000 in severance pay and, if they were older than 60, would have their health and welfare benefits continued for a period of five years. To take advantage of the plan, each employee was required to:
Release all rights under labor protective conditions, including but not limited to, statutory, contract, or agreement labor protection and those conditions commonly referred to as Appendix B. [R]esign and relinquish all rights of or claims to employment with the Soo Line Railroad and release and discharge said railroad company, parent or subsidiaries, from any and all claims of whatsoever kind and nature growing out of or in connection with said employment.
No negotiations were held with the unions representing these employees. Many employees accepted the separation plan and terminated their services with the Soo Line. The Machinists' Union learned of the program and questioned the Soo Line with respect to the applicability of the program to machinists. The Company said it was not applicable. Thereafter, eight machinists, all over sixty years of age, contacted the Soo Line asking to participate in the severance plan. Their requests were honored and, after signing the necessary releases, their services with the railroad were terminated. Each received a separation allowance of $15,000 and became eligible to continue to receive certain health benefits until age sixty-five.
When the Machinists' Union learned that the severance plan was being offered to some of its members, it objected. In response to the objection, the Soo Line and the Union negotiated, in March and April of 1986, in an effort to reach an acceptable separation agreement. The negotiations were unsuccessful. At no time prior to or during the series of meetings between the Soo Line and the Machinists' Union did the Soo Line issue a notice pursuant to section 6 of the RLA, 45 U.S.C. § 156, triggering the dispute resolution procedures of the RLA. The Soo Line thereafter announced its intention to solicit machinists pursuant to its own separation agreement containing essentially the same terms as the agreements signed by other machinists. The Machinists Union then filed this action seeking to restrain the Soo Line from entering into separation agreements with individual machinists.
The matter was submitted to the district court on affidavits, exhibits, and abbreviated oral testimony. The parties stipulated that the hearing on the preliminary injunction could be considered as the hearing for a permanent injunction. The district court held that the dispute between the parties was a major one. It reasoned that section 6 of the RLA
establishes a comprehensive series of bargaining procedures, complete with detailed timetables and provisions for notice, to be followed by employers and bargaining representatives in effecting changes in rates of pay, rules, and working conditions. 45 U.S.C. § 156. When employers wish to make changes in any regulated areas, the statute mandates written notice of the desired modification, after which conferences between management and labor take place, with the optional assistance of the National Mediation Board.
It then reviewed the cases which have defined the difference between major and minor disputes and found that the dispute between the parties was major. It stated:
[T]he Court is not called upon to review the status of either labor or management at the interstices of an agreement. Instead, the case presents fundamental issues of whether or not a person may even be an employee or a member of a union. We are not defining an interem-ployment relationship, but the fundamental nature of the employment relationship itself.
Both parties agree that there is no provision in the existing agreements between the Union and Soo Line allowing solicitation of individual union members or for individual lump-sum separation agreements. Under the Elgin definition and the decisions of the other courts which have faced the jurisdictional issue in the present context, this dispute is major, and this Court therefore has jurisdiction over it.
The court then went on to hold that individual agreements such as those proposed by the Soo Line are impermissible. In reaching its decision, it relied on J.L Case Co. v. National Labor Relations Board, 321 U.S. 332, 337, 64 S.Ct. 576, 580, 88 L.Ed. 762 (1944), Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 345, 64 S.Ct. 582, 584, 88 L.Ed. 788 (1944), and on two district court cases, Brotherhood of Railway Airline Clerks and Steamship Clerks v. Chesapeake and Ohio Railway Co., 115 LRRM 3635 (N.D. Ohio 1983) [Available on WEST-LAW, DCT database] (prohibiting negotiation of individual severance agreements), and Southern Pacific Transportation Company v. Brotherhood of Railway, Airline and Steamship Clerks, 636 F.Supp. 57 (D.Utah 1986) (same). The district court stated that like the present case, both C & 0 and Southern Pacific
involved individual severance agreements where bargained-for furlough programs were in place. Because the proposed individual agreements circumvented the union's involvement in an established subject of collective bargaining, and because this circumvention occurred in areas occupied by existing collective agreements, those courts found the railroads' conduct to be illegal.
This Court sees no significant difference between those cases and the present one. If these company/individual agreements were to be allowed, the union would be denied the right of access to formal negotiation concerning compensation for severance; a right secured to it by Section 6. Further, these events occur in a setting in which an existing furlough plan is in place. Under these conditions, the Court finds that Soo Line's conduct violates the RLA and its underlying policies. [Citation omitted.]
Thus, the court held that injunctive relief is appropriate and enjoined the Soo Line from entering into individual separation agreements with employees represented by the Machinists' Union until such time as the Soo Line complies with the notice and bargaining procedures of section 6 of the RLA, 45 U.S.C. § 156.
ANALYSIS
The district court properly held that it had jurisdiction over the subject matter of the dispute. Under the RLA, the Soo Line has an obligation to bargain collectively with the Machinists' Union and to refrain from interfering with that Union's representation of its members. The United States Supreme Court decided in 1944 that an employer may not, in most instances, use individual contracts to defeat the procedures prescribed by the National Labor Relations Act. It stated:
[T]he individual contract cannot be effective as a waiver of any benefit to which the employee otherwise would be entitled under the trade agreement. The very purpose of providing by statute for the collective agreement is to supercede the terms of separate agreements of employees with terms which reflect the strength and bargaining power and serve the welfare of the group. Its benefits and advantages are open to every employee of the represented unit, whatever the type or terms of his pre-existing contract of employment.
We are not called upon to say that under no circumstances can an individual enforce an agreement more advantageous than a collective agreement, but we find the mere possibility that such agreements might be made no ground for holding generally that individual contracts may survive or surmount collective ones. The practice and philosophy of collective bargaining looks with suspicion on such individual advantages. Of course, where there is great variation in circumstances of employment or capacity of employees, it is possible for the collec tive bargain to prescribe only minimum rates or maximum hours or expressly to leave certain areas open to individual bargaining. But except as so provided, advantages to individuals may prove as disruptive of industrial peace as disadvantages. They are a fruitful way of interfering with organization and choice of representatives; increased compensation, if individually deserved, is often earned at the cost of breaking down some other standard thought to be for the welfare of the group, and always creates the suspicion of being paid at the long range expense of the group as a whole.
J.I. Case Co. v. National Labor Relations Board, 321 U.S. at 338-39, 64 S.Ct. at 580-81.
The principles enunciated in J.I. Case Co. are equally applicable to employees covered by the RLA rather than the National Labor Relations Act. Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 64 S.Ct. 582, 88 L.Ed. 788 (1944). The precise evil identified in J.I. Case Co. is present here. The Machinists' Union and the Soo Line have negotiated a labor protective agreement which specifically sets forth the benefits that employees who are laid off as a result of the merger are to receive. These benefits exceed those available to employees who accept voluntary separation. It is obvious that the Soo Line will benefit if it can obtain agreements from employees to retire voluntarily and to waive their rights under the labor protective agreement signed by the company and the union. (It will pay those em--ployees voluntarily separating from service less than it would pay those employees separating as a result of the merger under the labor protective agreement.) It is equally obvious that voluntary retirement under the company's terms is attractive to some employees. As might be expected, the eight machinists who initially accepted voluntary separation were older employees to whom separation was attractive. They were eligible for retirement benefits, were paid $15,000, and guaranteed continuation of their health benefits in exchange for, in effect, retiring a few years early. These employees were not necessarily those who would have been eligible to receive benefits under the labor protective agreement. The fact that the Soo Line and certain individual employees will benefit is not, however, sufficient, in and of itself, to find a violation of the RLA. The important thing is that these agreements have an adverse impact on the machinists as a group.
The impact on the union and its members of the voluntary separation plan will be significant. As a result of the individual agreements, work has been or will be transferred from one facility to another, seniority and bidding rights of some employees will inevitably be affected, and some employees will, in all probability, be deprived of the opportunity to be separated under the terms of the labor protective agreement. Although the jobs of the remaining employees may be more secure after voluntary separation of some machinists, they would have also become more secure if employees were separated pursuant to the labor protective agreement.
The Soo Line argues that some of the layoffs were unrelated to the merger and were caused by a decline in business activity. It points out that in these circumstances the employees laid off would not be eligible for any benefits under the labor protective agreement. This is true, but at least some of the employee layoffs were a result of the merger. The bottom line is that the union, as the representative of all of the machinists, is entitled to balance the advantages and disadvantages of any proposed plan and to negotiate with respect to them. One thing is certain; every employee who accepts voluntary separation decreases the likelihood of the Soo Line being required to compensate an employee under the labor protective agreement.
The Soo Line and the Machinists' Union attempted to negotiate a new separation agreement, presumably an agreement to provide for the separation of certain employees and to establish separation allowances for affected employees. The agreement presumably would have applied to separations whether caused by loss of business or by virtue of the merger, but the parties were unable to reach an agreement. At this point, the Soo Line was requested to follow the procedure set forth in the RLA. See 45 U.S.C. § 156 (requiring 30-day notice of intended change in agreement). Instead, it proceeded unilaterally with its plan for a voluntary separation and in so doing, violated the clear and specific terms of the RLA. See id. ("carriers shall give at least thirty days' written notice of an intended change in agreements affecting rates of pay, rules, or working conditions."); 45 U.S.C. § 152 seventh ("No carrier, its officers or agents shall change the rates of pay, rules, or working conditions of its employees, as a class as embodied in agreements except in the manner prescribed in such agreements or in Section 156 of this title").
Alternatively, the Soo Line argues that if there is a labor dispute, it is a minor rather than a major dispute. The district court found to the contrary and we agree. The dispute does not involve interpretation of either the collective bargaining agreement or the labor protective agreement. It rather involves an effort on the part of the Soo Line to ignore both of these agreements and to negotiate individually with the employees on a matter which is a subject of mandatory bargaining. Therefore, the Soo Line cannot meet its "relatively light burden" of showing that its action is at most a minor change in the agreements of the parties. See Brotherhood of Maintenance of Way Employees, Lodge 16 v. Burlington Northern R.R. Co., 802 F.2d 1016, 1022 (8th Cir.1986).
The judgment of the district court is affirmed.
. The Soo Line cites Clausen v. Burlington Northern, Inc., 98 LRRM 2844 (D.Mont.1978) [Available on WESTLAW, DCT database] in support of its action. We do not believe the case supports Soo Line's position. In that case the district court simply dismissed the plaintiff's complaint without prejudice for failure to allege that the employer's actions were inconsistent with the collective bargaining agreement.
. The Soo Line argues that an employee protective agreement signed by the parties is not a collective bargaining agreement within the purview of J.I. Case Co. and therefore the Soo Line can enter into voluntary separation agreements with individual employees even if the agreements are in derogation of the terms of the protective agreement. We disagree. Once a labor protective agreement is negotiated and signed by the employer and the union, it has the same status as the collective bargaining agreement it may modify. We do not read Antonioli v. Lehigh Coal and Navigation, 451 F.2d 1171 (3rd Cir.1971) to hold to the contrary. Two of the three counts in the complaint were dismissed on statute of limitation grounds and the third count on res judicata or, alternatively, law of the case grounds. In note 15, the court states that an individual employee may waive his rights under a labor protective agreement for valid consideration. An employee may do so if the agreement between himself and the railroad company is not in derogation of the rights of others. No such claim was asserted in Antonio-li.