Case Name: RAILWAY LABOR EXECUTIVES' ASSOCIATION, Appellant, v. CHICAGO AND NORTHWESTERN TRANSPORTATION COMPANY and Dakota, Minnesota and Eastern Railroad, Appellees. State of South Dakota, Amicus Curiae/Appellee
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1989-11-29
Citations: 890 F.2d 1024
Docket Number: No. 87-5071
Parties: RAILWAY LABOR EXECUTIVES’ ASSOCIATION, Appellant, v. CHICAGO AND NORTHWESTERN TRANSPORTATION COMPANY and Dakota, Minnesota and Eastern Railroad, Appellees. State of South Dakota, Amicus Curiae/Appellee.
Judges: Before LAY, Chief Judge, HEANEY, Senior Circuit Judge, and MAGILL, Circuit Judge.
Reporter: Federal Reporter 2d Series
Volume: 890
Pages: 1024–1033

Head Matter:
RAILWAY LABOR EXECUTIVES’ ASSOCIATION, Appellant, v. CHICAGO AND NORTHWESTERN TRANSPORTATION COMPANY and Dakota, Minnesota and Eastern Railroad, Appellees. State of South Dakota, Amicus Curiae/Appellee.
No. 87-5071.
United States Court of Appeals, Eighth Circuit.
Nov. 29, 1989.
Before LAY, Chief Judge, HEANEY, Senior Circuit Judge, and MAGILL, Circuit Judge.

Opinion:
ORDER
On June 26, 1989, the Supreme Court granted a writ of certiorari in the above-entitled case. It then vacated the judgment of this court, — U.S. -, 109 S.Ct. 3207, 106 L.Ed.2d 558, and remanded the case to us for further consideration in the light of Pittsburgh & Lake Erie R.R. v. Railway Labor Executives' Ass'n, 491 U.S. -, 109 S.Ct. 2584, 105 L.Ed.2d 415 (1989) (P & LE).
This court requested the parties to file letter briefs with respect to the application of P & LE to the instant case. After a careful review of the decision of the United States Supreme Court and the letter briefs, we revise our original opinion.
I.
There is one important difference between the facts in P & LE and those in this case. In P & LE, the carrier sold all of its assets to a newly formed subsidiary. Here, the Chicago and Northwestern (C & NW) sold only a portion of its assets (826 miles of rail line and 126 miles of trackage in South Dakota) to a newly formed railway company. Thus, we must decide whether the Supreme Court's decision that a railway company need not bargain with the unions with respect to a sale of all of its assets to another corporation applies to a case in which a railway company sells only a portion of its assets.
We believe that C & NW was not required to bargain over the sale in this case prior to the sale's completion. The sale was approved by the I.C.C., the sale was for an unprofitable, discrete section of the railway that might have been abandoned but for the sale, and after the sale C & NW would have no relationship with the purchaser. Thus, we hold that C & NW was not obligated to serve a section 156 notice on the union in connection with the proposed sale nor was it obligated 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.
This holding does not, however, end the matter. We also believe that P & LE made it clear that a railroad selling all or a part of its assets is required to bargain about the effects that the sale will or might have on its employees:
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.
P & LE, 491 U.S. at -, 109 S.Ct. at 2597, 105 L.Ed.2d at 435 (emphasis added). Moreover, C & NW can bargain about the effects of the sale even after the sale is consummated.
In P & LE, the Supreme Court held that the obligation to bargain over effects existed "only until the date for closing the sale arrived," which, of course, would not occur in this case until the ex parte 392 exemption became effective and the transfer occurred. We are convinced that the Supreme Court placed a time limitation on the obligation to bargain because after that date, the selling railroad would have no assets and no employees. Here, the selling railroad will retain the major portion of its assets and will continue to employ persons who are members of the labor organizations that are parties to this case. Thus, C & NW can bargain about the effects of the sale without delaying or upsetting the sale.
II.
We reject the suggestion of the C & NW and of the dissent that the dispute between the parties is a minor dispute and thus subject to arbitration. The facts here are quite close to those in P & LE, and the Supreme Court there held that the dispute was a major one and that the railroad company was obligated to bargain with the union as to the effects of the sale. The union is not seeking an interpretation of the express or implied terms of the collective bargaining agreement nor is it seeking a ruling that a past practice should be enforced. Rather, it is seeking to negotiate over the effects of a sale on those C & NW employees who are affected by it. No clear reason has been advanced by the C & NW as to why we should categorize this dispute differently.
We have no quarrel with the test advanced by the dissent to determine whether a dispute is a major or a minor one. Post at 1029. That test was approved by the United States Supreme Court in Consolidated Rail Corp. v. Railway Labor Executives Ass'n, — U.S. -, -, 109 S.Ct. 2477, 2482, 105 L.Ed.2d 250, 264 (1989), and this court in Brotherhood of Maintenance of Way Employees v. Burlington Northern R.R., 802 F.2d 1016, 1022 (8th Cir.1986). Here, C & NW claims that the dispute over what benefits, if any, the railroad employees should receive only relates to the execution of the agreement and should be arbitrated. We disagree. This fact can be illustrated by attempting to frame the issue that would be decided by an arbitration board established under the Railway Labor Act.
C & NW suggested before the district court for the Northern District of Illinois in a case they argue is controlling, that the issue in a case such as this should be whether C & NW violated its agreements with the unions. Chicago & Northwestern Railway v. Railway Labor Executives Ass'n, No. 88 C 444, slip op. (N.D.Ill. Oct. 6, 1989). We disagree. Both parties concede that their agreements neither permit nor prohibit the C & NW from selling a portion of its business.
Nor should or would the issue be as formulated by the district court in that case: "what treatment, in terms of pay (severance or otherwise), seniority rights, benefit rights, transfer rights, etc., the employees of the C & NW (who are affected by the line sale) are entitled to in terms of contractual provisions and attendant past practices." Id. at 6. The question thus phrased would give the arbitrator a roving commission to invent terms which were never agreed to by the parties.
III.
The Supreme Court in P & LE has determined that disputes of this nature are major ones. In light of P & LE, we conclude that the C & NW is obligated to bargain with the unions with respect to the effects of the sale only. Bargaining should commence promptly and proceed in accordance with the provisions of the Railway Labor Act.
Under our decision the sale will stand, and the right of the C & NW to exercise its right to sell all or a part of its holdings will be preserved. Thus, the unions cannot prevent the sale. As in P & LE, however, the railroad company will be required to bargain over the effects of the sale on its employees, thus accomplishing the intent of Congress to balance the rights of employers and workers.
We vacate our opinion of May 31, 1988 and remand to the district court with directions that it enter an order requiring the C & NW to bargain on request of the Railway Labor Executives Association with respect to the effects of the sale on the employees of C & NW.